UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended October 3, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission file number 0-16255
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)
Wisconsin 39-1536083
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices)
(414) 884-1500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuan to section 12(g) of the Act:
Class A Common Stock, $.05 par value
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past
90 days. Yes. [ X ] No . [ ]
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K, or any amendment to this Form 10-K. [ ]
As of November 15, 1997, 6,881,923 shares of Class A and 1,227,915
shares of Class B common stock of the Registrant were outstanding. The
aggregate market value of voting stock of the Registrant held by
nonaffiliates of the Registrant was approximately $75,697,000 on November
15, 1997.
<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
Part and Item Number of
Document Form 10-K into which Incorporated
1. Johnson Worldwide Associates, Inc. Part I, Items 1 and 2,
1997 Annual Report and Part II, Items 5, 6,
7 and 8
2. Johnson Worldwide Associates, Inc. Part III, Items 10, 11,
Notice of Annual Meeting of 12 and 13
Shareholders and Proxy Statement for
the Annual Meeting of Shareholders to
be held January 28, 1998
ITEM 1. BUSINESS
Johnson Worldwide Associates, Inc. and its subsidiaries (the "Company")
are engaged in the manufacture and marketing of recreation products. The
Company's primary focus is on marketing and product innovation and design
to maintain its strong brand names and consumer recognition. Research and
development activities for each of the Company's principal businesses
emphasize new products and innovation to differentiate the Company's
products from those of its competitors.
The Company is controlled by Samuel C. Johnson, members of his family and
related entities.
Motors and Fishing Products
The overall motors and fishing markets in which the Company competes have
been stagnant in recent years. The Company believes it has been able to
maintain its share of most markets primarily as a result of the Company's
emphasis on marketing and product innovation. The Company controls a
majority of the electric fishing motor market. Consumer advertising and
promotion include advertising on regional television and in outdoor,
general interest and sports magazines and in-store displays. Packaging
and point-of-purchase materials are used to increase consumer appeal and
sales.
Motors and Marine Products
The Company manufactures, under its Minn Kota and Neptune names, battery
powered motors used on fishing boats and other boats for quiet trolling
power or primary propulsion. The Company's Minn Kota and Neptune motors
and related accessories are sold in the United States, Canada, Europe and
the Pacific Basin through large retail store chains such as Wal Mart and
K-Mart, catalogs, such as Bass Pro Shops and Cabelas, sporting goods
specialty stores and marine dealers. The Company's Lake Electric division
manufactures electric motors for original equipment manufacturers.
The Company's line of Airguide marine, weather and automotive instruments
is distributed primarily in the United States through large retail store
chains and original equipment manufacturers. Airguide products are
manufactured by the Company or sourced from third-party manufacturers.
The Company was a leading supplier in Europe of marine products and
accessories primarily for sailing, which the Company sold under the
Plastimo name. Plastimo products and accessories included safety products
(such as buoyancy vests and inflatable life rafts), mooring products (such
as anchors, fenders and ladders), navigational equipment (such as cockpit
instruments, automatic pilots and compasses) and jib reefing systems.
Plastimo products were sold to a lesser extent in the United States and
other markets worldwide. The Plastimo business was sold in January 1997.
Fishing Products
The Company's fishing products include Mitchell reels and rods, Johnson
reels, Beetle Spin soft body lures and Johnson spoons. In 1995, the
Company acquired the SpiderWire product line, giving it a leading brand in
the "superline" segment of the fishing line market.
The Company markets Johnson fishing reels, which are primarily closed-face
reels, as well as Mitchell reels, which are primarily open-faced spinning
and bait casting reels. Reels are sold individually and in rod and reel
combinations, primarily through large retail store chains, catalogs and
specialty fishing shops in the United States, Canada, Europe and the
Pacific Basin. The Company's closed-face reels compete in a segment of
the U.S. fishing reel market which is dominated by larger manufacturers.
Marketing support for the Company's reels is focused on building brand
names, emphasizing product features and innovation and on developing
specific segments of the reel market through advertising on television, in
national outdoor magazines and through trade and consumer support at
retail. The Company's rods and reels are primarily produced by off-shore
manufacturing sources.
The Company's artificial lure products are manufactured by third parties.
These products are sold primarily through large retail store chains.
The Company purchases, through third-party manufacturers, its SpiderWire
and SpiderWire Fusion products, which have performance characteristics
superior to those of monofilament fishing line. SpiderWire competes in
the "superline" segment of the fishing line category, while SpiderWire
Fusion is positioned just above the high end of the monofilament market.
Late in 1997, the Company introduced a monofilament product under the
SpiderWire brand. These products are sold through large retail store
chains, catalogs and specialty stores.
Outdoor Equipment Products
The Company's outdoor equipment products include Eureka! and Camp Trails
camping tents and backpacks, Jack Wolfskin camping tents, backpacks and
outdoor clothing, and Silva field compasses.
Eureka! and Camp Trails camping tents and backpacks compete primarily in
the mid- to high-price range of their respective markets and are sold in
the United States and Canada through independent sales representatives
primarily to sporting goods stores, catalog and mail order houses and
camping and backpacking specialty stores. Marketing of the Company's
tents and backpacks is focused on building the Eureka! and Camp Trails
brand names and establishing the Company as a leader in product design and
innovation. The Company's camping tents and backpacks are produced
primarily by off-shore manufacturing sources.
The Company markets both Eureka! camping and commercial tents. The
Company's camping tents have outside self-supporting aluminum frames
allowing quicker and easier set-up, a design approach first introduced by
the Company. Most Eureka! tents are made from breathable nylon. The
Company's commercial tents include party tents and tents for fairs. Party
tents are sold primarily to general rental stores while other commercial
tents are sold directly to tent erectors. Commercial tents are
manufactured by the Company in the United States. The Company was awarded
several contracts for production of both camping and commercial tents by
the U.S. Armed Forces in 1997. Eureka! products are sold under license in
Japan and Korea.
Camp Trails backpacks consist primarily of internal and external frame
backpacks for hiking and mountaineering. The Company's line of Camp
Trails backpacks also includes soft back bags, day packs and travel packs.
Jack Wolfskin, a German marketer of camping tents, backpacks and outdoor
clothing, distributes its products primarily through camping and
backpacking specialty stores in Germany with additional distribution in
other European countries and the United States and, under license, in
Japan. Certain of these stores sell Jack Wolfskin products exclusively.
Silva field compasses, which are manufactured by third parties, are
marketed exclusively in North America.
Watercraft Products
The Company's watercraft are sold under the Old Town name and consist of
whitewater, tripping, touring and general recreational purpose canoes for
the high quality and mid-price segments of the canoe market and both entry
level and higher performance kayaks. The Company has developed a
proprietary roto-molding process for manufacturing polyethylene canoes to
compete in the higher volume mid-priced range of the market. These canoes
maintain many of the design and durability characteristics of higher
priced canoes. The Company also manufactures canoes from fiberglass,
Royalex (ABS) and wood. In 1997, the Company acquired Ocean Kayak, a
leading manufacturer of sit-on-top kayaks. The Company's canoes and
kayaks are sold primarily to sporting goods stores, catalog and mail order
houses such as L. L. Bean, canoe specialty stores and marine dealers in
the United States and Europe. The United States market for canoes is
relatively constant, while the kayak market is exhibiting strong growth.
The Company believes, based on industry data, that it is the leading
manufacturer of canoes and kayaks in the United States in both unit and
dollar sales. Carlisle Paddles, a manufacturer of composite canoe
paddles, supplies certain paddles that are sold with the Company's canoes
and kayaks as well as paddles which are distributed through the same
channels as the Company's watercraft.
In October 1997, the Company acquired the stock of Plastiques L.P.A.
Limitee, the manufacturer of the Dimension brand of kayaks.
Diving Products
The Company believes that it is one of the world's largest manufacturers
and distributors of underwater diving products which it sells under the
Scubapro and SnorkelPro names. The Company markets a full line of
underwater diving and snorkeling equipment including regulators,
stabilizing jackets, tanks, depth gauges, masks, fins, snorkels, diving
electronics and other accessories. In 1997, the Company acquired the
stock of Uwatec AG, a leading manufacturer of dive computers and other
electronics under the Aladin and Uwatec names. Scubapro, Aladin and
Uwatec products are marketed to the high quality, premium priced segment
of the market. The Company maintains a marketing policy of limited
distribution and sells primarily through independent specialty diving
shops worldwide. These diving shops generally provide a wide range of
services to divers, including instruction and repair service. Scubapro,
Aladin and Uwatec products are marketed globally.
The Company focuses on maintaining Scubapro, Aladin and Uwatec as the
market leader in innovation and new products. The Company maintains
research and development functions both in the United States and Europe
and has obtained several patents on products and features. Consumer
advertising focuses on building the brand names and position as the high
quality and innovative leader in the industry. The Company advertises its
equipment in diving magazines and through in-store displays.
The Company maintains manufacturing and assembly facilities in the United
States, Switzerland, Mexico, Italy and Indonesia. The Company procures a
majority of its rubber and plastic products and components from offshore
sources.
In October 1997, the Company acquired certain assets of Soniform, Inc., a
manufacturer of diving buoyancy compensators primarily for the original
equipment market, which will expand the Company's manufacturing capability
for these products.
Sales by Category
<TABLE>
The following table depicts net sales by major product category:
<CAPTION>
Year Ended
October 3 September 27 September 29
1997 % 1996 % 1995 %
(thousands)
<S> <C> <C> <C> <C> <C> <C>
Fishing $66,313 22% $72,561 21% $71,329 21%
Motors 54,032 18 62,040 18 69,631 20
Outdoor Equipment 74,915 25 78,337 23 78,029 23
Watercraft 22,885 7 18,050 5 18,066 5
Diving 77,066 25 76,999 22 74,430 21
------- ---- ------- --- ------- ---
Subtotal 295,211 97 307,987 89 311,485 90
------- ---- ------- --- ------- ---
Divested Businesses 7,910 3 36,386 11 35,705 10
------- ---- ------- --- ------- ---
$303,121 100% $344,373 100% $347,190 100%
======== ==== ======== ==== ======== ===
</TABLE>
Sales to Wal Mart Stores, Inc. and its affiliated entities totaled
$33,799,000 in 1997 and $34,902,000 in 1995. No customer accounted for
10% or more of sales in 1996.
International Operations
See Note 12 to the Consolidated Financial Statements on page 30 of the
Company's 1997 Annual Report, which is incorporated herein by reference,
for financial information comparing the Company's domestic and
international operations.
Research and Development
The Company commits significant resources to research and new product
development. The Company expenses research and development costs as
incurred. The amounts expended by the Company in connection with research
and development activities for each of the last three fiscal years are set
forth in the Consolidated Statements of Operations on page 21 of the
Company's 1997 Annual Report, which is incorporated herein by reference.
Competition
The markets for most of the Company's products are quite competitive. The
Company believes its products compete favorably on the basis of product
innovation, product performance and strong marketing support, and to a
lesser extent, price.
Employees
At October 3, 1997, the Company had approximately 1,366 employees working
in its businesses. The Company considers its employee relations to be
excellent.
Backlog
The Company's businesses do not receive significant orders in advance of
expected shipment dates.
Patents, Trademarks and Proprietary Rights
The Company owns no single patent which is material to its business as a
whole. However, the Company holds several patents, principally for diving
products and roto-molded canoes and has filed several applications for
patents. The Company also has numerous trademarks and trade names which
the Company considers important to its business.
Sources and Availability of Materials
The Company's products use materials that are generally in adequate
supply. In 1995, however, the Company experienced shortages in the supply
of magnets, which are key components used in its electric motors. The
shortage of magnets hindered the Company's ability to meet customer demand
for its electric motor products for several months in 1995.
Seasonality
The Company's business is seasonal. The following table shows total net
sales and operating profit of the Company for each quarter, as a
percentage of the total year. Inventory writedowns of $10.3 million in
1996 are included as components of the fourth quarter operating losses.
Nonrecurring charges totaling $6.8 million impacted operating results in
the second, third and fourth quarters of 1996.
<TABLE>
<CAPTION>
Year Ended
October 3, 1997 September 27, 1996 September 29, 1995
Net Operating Net Operating Net Operating
Quarter Ended Sales Profit(Loss) Sales Profit(Loss) Sales Profit(Loss)
<S> <C> <C> <C> <C> <C> <C>
December 17% (20)% 17% (26)% 15% (8)%
March 32 66 32 169 31 50
June 29 55 32 141 34 66
September 22 (1) 19 (184) 20 (8)
--- ---- ---- ---- ---- -----
100% 100% 100% 100% 100% 100%
=== ==== ==== ==== ==== =====
</TABLE>
Executive Officers of the Registrant
The following list sets forth certain information, as of November 15,
1997, regarding the executive officers of the Company.
R. C. Whitaker, age 50, became President and Chief Executive Officer of
the Company in October 1996. From December 1995 to October 1996, Mr.
Whitaker was President and Chief Executive Officer of EWI, Inc., a
supplier to the automotive industry. From 1992 to September 1995, Mr.
Whitaker was Chairman, President and Chief Executive Officer of Colt's
Manufacturing Company, Inc., a manufacturer of firearms, and, from 1988 to
1992, was President of Wheelabrator Corporation.
Carl G. Schmidt, age 41, became Senior Vice President of the Company in
May 1995 and has been Chief Financial Officer, Secretary and Treasurer of
the Company since July 1994. From July 1994 until May 1995, Mr. Schmidt
was a Vice President of the Company. From 1988 to July 1994, he was a
partner in the firm of KPMG Peat Marwick LLP.
There are no family relationships between the above executive officers.
ITEM 2. PROPERTIES
The Company maintains both leased and owned manufacturing, warehousing,
distribution and office facilities throughout the world.
The Company prefers to lease rather than own facilities to maintain
operational flexibility and control the investment of financial resources
in property. See Note 5 to the Consolidated Financial Statements on Page
27 of the Company's 1997 Annual Report, which is incorporated herein by
reference, for a discussion of lease obligations.
The Company believes that its facilities are well maintained and have a
capacity adequate to meet the Company's current needs.
The Company's principal manufacturing locations and distribution centers
are:
Alton, Hampshire, England Ferndale, Washington Nykoping, Sweden
Antibes, France Genoa, Italy Old Town, Maine
Bad Sakingen, Germany Grayling, Michigan Racine, Wisconsin
Barcelona, Spain Hallwil, Switzerland Rancho Dominguez,
California
Basingstoke, Hampshire, Henggart, Switzerland Rickenbach-Hottingen,
England Germany
Binghamton, New York Honolulu, Hawaii San Diego, California
Brunswick, Maine Idstein, Germany Salzburg-Glasenbach,
Austria
Bruxelles, Belgium Mankato, Minnesota Silverwater, Australia
Burlington, Ontario, Marignier, France Tijuana, Mexico
Canada
Chi Wan, Hong Kong Meylan Cedex, France Tokyo (Kawasaki), Japan
The Company's corporate headquarters is located in Mount Pleasant,
Wisconsin. The Company's mailing address is Sturtevant, Wisconsin.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to various legal actions and proceedings in the
normal course of business, including those related to environmental
matters. Although litigation is subject to many uncertainties and the
ultimate exposure with respect to these matters cannot be ascertained,
management does not believe the final outcome will have a material adverse
effect on the financial condition, results of operations, liquidity or
cash flows of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
last quarter of the year ended October 3, 1997.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information with respect to this item is included on pages 27, 29, 30 and
32 and the inside back cover of the Company's 1997 Annual Report, which is
incorporated herein by reference.
There is no public market for the Registrant's Class B Common Stock.
However, the Class B Common Stock is convertible at all times at the
option of the holder into shares of Class A Common Stock on a share for
share basis. As of November 15, 1997, the Company had 742 holders of
record of its Class A Common Stock and 67 holders of record of its Class B
Common Stock.
The Company has never paid a dividend on its Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to this item is included on page 32 of the
Company's 1997 Annual Report, which is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Information with respect to this item is included on pages 17 to 19 of the
Company's 1997 Annual Report, which is incorporated herein by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information with respect to this item is not required to be disclosed by
the Company until the Company makes filings that include financial
statements for fiscal years ending after June 15, 1998.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements and supplemental data of
the Registrant and its subsidiaries, included on pages 20 to 32 of the
Company's 1997 Annual Report, are incorporated herein by reference:
Consolidated Balance Sheets - October 3, 1997 and September 27, 1996
Consolidated Statements of Operations - Years ended October 3, 1997,
September 27, 1996 and September 29, 1995
Consolidated Statements of Shareholders' Equity - Years ended October
3, 1997, September 27, 1996 and September 29, 1995
Consolidated Statements of Cash Flows - Years ended October 3, 1997,
September 27, 1996 and September 29, 1995
Notes to Consolidated Financial Statements
Independent Auditors' Report
Quarterly Financial Summary
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to this item, except for certain information on
the Executive Officers which appears at the end of Part I of this report,
is included in the Company's January 28, 1998 Proxy Statement, which is
incorporated herein by reference, under the headings "Election of
Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance."
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this item is included in the Company's January
28, 1998 Proxy Statement, which is incorporated herein by reference, under
the headings "Election of Directors - Compensation of Directors" and
"Executive Compensation;" provided, however, that the subsection entitled
"Executive Compensation - Compensation Committee Report on Executive
Compensation" shall not be deemed to be incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to this item is included in the Company's January
28, 1998 Proxy Statement, which is incorporated herein by reference, under
the heading "Stock Ownership of Management and Others."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to this item is included in the Company's January
28, 1998 Proxy Statement, which is incorporated herein by reference, under
the heading "Certain Transactions."
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) The following documents are filed as a part of this Form 10-K:
1. Financial Statements:
Included in Item 8 of Part II of this Form 10-K are the
following Consolidated Financial Statements, related notes
thereto, and independent auditors' report which are incorporated
herein by reference from the 1997 Annual Report:
Consolidated Balance Sheets - October 3, 1997 and September 27,
1996
Consolidated Statements of Operations - Years ended October 3,
1997, September 27, 1996 and September 29, 1995
Consolidated Statements of Shareholders' Equity - Years ended
October 3, 1997, September 27, 1996 and September 29, 1995
Consolidated Statements of Cash Flows - Years ended October 3,
1997, September 27, 1996 and September 29, 1995
Notes to Consolidated Financial Statements
Independent Auditors' Report
2. Financial Statement Schedules and Independent Auditors' Report:
Included in Part IV of this Form 10-K is the following financial
statement schedule and independent auditors' report:
Independent Auditors' Report
Schedule II - Valuation and Qualifying Accounts
All other schedules are omitted because they are not applicable,
are not required or equivalent information has been included in
the Consolidated Financial Statements or notes thereto.
3. Exhibits
See Exhibit Index.
(b) Reports on Form 8-K:
On July 28, 1997, the Company filed a Current Report on Form 8-K dated
July 11, 1997 to reflect (under Item 2 of Form 8-K) the acquisition by
a second-tier subsidiary of the Company all of the issued and
outstanding shares of capital stock of Uwatec AG. On September 24,
1997, the Company filed an amendment on Form 8-K/A to the Company's
Current Report on Form 8-K dated July 11, 1997. The report, as
amended, included (under Item 7 of Form 8-K) the following financial
statements: Uwatec Group -- Combined Balance Sheet as of December 31,
1996, Combined Statement of Operations for the year ended December 31,
1996, Combined Statement of Changes in Shareholders' Equity for the
year ended December 31, 1996 and Combined Statement of Cash Flows for
the year ended December 31, 1996; and the Company --Pro Forma
Condensed Consolidated Balance Sheet as of June 27, 1997 and Pro Forma
Condensed Consolidated Statements of Operations for the year ended
September 27, 1996 and for the nine months ended June 27, 1997.
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Johnson Worldwide Associates, Inc.:
Under date of November 11, 1997, we reported on the consolidated balance
sheets of Johnson Worldwide Associates, Inc. and subsidiaries as of
October 3, 1997 and September 27, 1996, and the related consolidated
statements of operations, shareholders' equity, and cash flows for each of
the years in the three-year period ended October 3, 1997, as contained in
the 1997 Annual Report. These consolidated financial statements and our
report thereon are incorporated by reference in the Annual Report on Form
10-K for the fiscal year 1997. In connection with our audits of the
aforementioned consolidated financial statements, we also audited the
related consolidated financial statement schedule as listed in Item 14(a).
This financial statement schedule is the responsibility of the Company's
management. Our responsibility is to express an opinion on this financial
statement schedule based on our audits.
In our opinion, such financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
November 11, 1997
<TABLE>
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
<CAPTION>
Additions Reserves of
Balance at Charged to Businesses Balance
Beginning Costs and Acquired or at End
of Year Expenses Sold Deductions(1) of Year
(thousands)
<S> <C> <C> <C> <C> <C>
Year ended October 3, 1997:
Allowance for doubtful accounts $ 2,235 $1,604 $ 217 1,363 $2,693
Inventory reserves 13,665 445 1,100 4,990 10,220
Year ended September 27, 1996:
Allowance for doubtful accounts 2,610 1,662 -- 2,037 2,235
Inventory reserves 5,118 12,202 -- 3,655 13,665
Year ended September 29, 1995:
Allowance for doubtful accounts 2,317 1,567 -- 1,274 2,610
Inventory reserves 7,554 1,561 -- 3,997 5,118
(1) Includes the impact of foreign currency fluctuations on this balance
sheet account.
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
Town of Mount Pleasant and State of Wisconsin, on the 18th day of December
1997.
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Registrant)
By /s/ R. C. Whitaker
R. C. Whitaker
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons in the capacities
indicated on the 18th day of December 1997.
/s/ Samuel C. Johnson Chairman of the Board
(Samuel C. Johnson) and Director
/s/ Thomas F. Pyle, Jr. Vice Chairman of the Board
(Thomas F. Pyle, Jr.) and Director
/s/ R. C. Whitaker President and Chief Executive
(R. C. Whitaker) Officer and Director
(Principal Executive Officer)
/s/ Donald W. Brinckman Director
(Donald W. Brinckman)
/s/ Raymond F. Farley Director
(Raymond F. Farley)
/s/ Helen P. Johnson-Leipold Director
(Helen P. Johnson-Leipold)
/s/ Gregory E. Lawton Director
(Gregory E. Lawton)
/s/ Glenn N. Rupp Director
(Glenn N. Rupp)
/s/ Carl G. Schmidt Senior Vice President and Chief
(Carl G. Schmidt) Financial
Officer, Secretary and Treasurer
(Principal Financial and Accounting
Officer)
<PAGE>
EXHIBIT INDEX
Exhibits Title Page
No.
3.1 Articles of Incorporation of the Company. *
(Filed as Exhibit 3.1 to the Company's Form
S-1 Registration Statement No. 33-16998, and
incorporated herein by reference.)
3.2 Amendment to Bylaws of the Company dated -
October 7, 1997.
3.3 Bylaws of the Company as amended through -
October 7, 1997.
4.1 Note Agreement dated May 1, 1993. (Filed as *
Exhibit 4 to the Company's Form 10-Q for the
quarter ended July 2, 1993 and incorporated
herein by reference.)
4.2 Letter Amendment dated September 30, 1993 to *
Note Agreement dated May 1, 1993. (Filed as
Exhibit 4.8 to the Company's Form 10-K for
the year ended October 1, 1993 and
incorporated herein by reference.)
4.3 Second Amendment dated October 31, 1996 to *
Note Agreement dated May 1, 1993. (Filed as
Exhibit 4.2 to the Company's Form 10-Q for
the quarter ended December 27, 1996 and
incorporated herein by reference.)
4.4 Third Amendment dated September 30, 1997 to -
Note Agreement dated May 1, 1993.
4.5 Fourth Amendment dated October 3, 1997 to -
Note Agreement dated May 1, 1993.
4.6 Note Agreement dated October 1, 1995. (Filed *
as Exhibit 4.1 to the Company's Form 10-Q for
the quarter ended December 29, 1995 and
incorporated herein by reference.)
4.7 First Amendment dated October 31, 1996 to *
Note Agreement dated October 1, 1995. (Filed
as Exhibit 4.3 to the Company's Form 10-Q for
the quarter ended December 27, 1996 and
incorporated herein by reference.)
4.8 Second Amendment dated September 30, 1997 to -
Note Agreement dated October 1, 1995.
4.9 Third Amendment dated October 3, 1997 to Note -
Agreement dated October 1, 1995.
4.10 Credit Agreement dated November 29, 1995. *
(Filed as Exhibit 4.2 to the Company's Form
10-Q for the quarter ended December 29, 1995
and incorporated herein by reference.)
4.11 Amendment No. 1 dated July 1, 1996 to Credit *
Agreement dated November 29, 1995. (Filed as
Exhibit 4.7 to the Company's Form 10-K for
the year ended September 27, 1996 and
incorporated herein by reference.)
4.12 Waiver and Amendment No. 2 dated November 6, -
1996 to Credit Agreement dated November 29,
1995.
4.13 Amendment No. 3 dated July 9, 1997 to Credit -
Agreement dated November 29, 1995.
4.14 Amendment No. 4 dated September 30, 1997 to -
Credit Agreement dated November 29, 1995.
4.15 Note Agreement dated as of September 15, -
1997.
9. Johnson Worldwide Associates, Inc. Class B *
Common Stock Voting Trust Agreement, dated
December 30, 1993 (Filed as Exhibit 9 to the
Company's Form 10-Q for the quarter ended
December 31, 1993 and incorporated herein by
reference.)
10.1 Asset Purchase Agreement between Johnson *
Worldwide Associates, Inc. and Safari Land
Ltd., Inc. dated as of March 31, 1995 (Filed
as Exhibit 2 to the Company's Form 10-Q for
the quarter ended March 31, 1995 and
incorporated herein by reference.)
10.2 Share Purchase Agreement by and between *
Johnson Worldwide Associates, Inc., Societe
Figeacoise de Participations and Plastimo,
S.A., dated as of January 30, 1997. (Filed
as Exhibit 2 to the Company's Form 8-K dated
January 30, 1997 and incorporated herein by
reference.)
10.3 Share Purchase Agreement by and between *
Johnson Beteiligungsgesellschaft mbH, Johnson
Worldwide Associates, Inc. and Heinz Ruchti
and Karl Leeman (the selling shareholders of
Uwatec AG), dated July 11, 1997. (Filed as
Exhibit 2 to the Company's Form 8-K dated
July 11, 1997 and incorporated herein by
reference.)
10.4+ Johnson Worldwide Associates, Inc. Amended *
and Restated 1986 Stock Option Plan. (Filed
as Exhibit 10 to the Company's Form 10-Q for
the quarter ended July 2, 1993 and
incorporated herein by reference.)
10.5 Registration Rights Agreement regarding *
Johnson Worldwide Associates, Inc. Common
Stock issued to the Johnson family prior to
the acquisition of Johnson Diversified, Inc.
(Filed as Exhibit 10.6 to the Company's Form
S-1 Registration Statement No. 33-16998, and
incorporated herein by reference.)
10.6 Registration Rights Agreement regarding *
Johnson Worldwide Associate, Inc. Class A
Common Stock held by Mr. Samuel C. Johnson.
(Filed as Exhibit 28 to the Company's Form
10-Q for the quarter ended March 29, 1991 and
incorporated herein by reference.)
10.7+ Form of Restricted Stock Agreement. (Filed *
as Exhibit 10.8 to the Company's Form S-1
Registration Statement No. 33-23299, and
incorporated herein by reference.)
10.8+ Form of Supplemental Retirement Agreement of *
Johnson Diversified, Inc. (Filed as Exhibit
10.9 to the Company's Form S-1 Registration
Statement No. 33-16998, and incorporated
herein by reference.)
10.9+ Johnson Worldwide Associates Retirement and *
Savings Plan. (Filed as Exhibit 10.9 to the
Company's Form 10-K for the year ended
September 29, 1989 and incorporated herein by
reference.)
10.10+ Form of Agreement of Indemnity and *
Exoneration with Directors and Officers.
(Filed as Exhibit 10.11 to the Company's Form
S-1 Registration Statement No. 33-16998, and
incorporated herein by reference.)
10.11 Consulting and administrative agreements with *
S. C. Johnson & Son, Inc. (Filed as Exhibit
10.12 to the Company's Form S-1 Registration
Statement No. 33-16998, and incorporated
herein by reference.)
10.12+ Johnson Worldwide Associates, Inc. 1994 Long- *
Term Stock Incentive Plan. (Filed as Exhibit
4 to the Company's S-8 Registration Statement
No. 33-59325 and incorporated herein by
reference.)
10.13+ Johnson Worldwide Associates, Inc. 1994 Non- *
Employee Director Stock Ownership Plan.
(Filed as Exhibit 4 to the Company's Form S-8
Registration Statement No. 33-52073 and
incorporated herein by reference.)
10.14+ Separation agreement, dated July 18, 1996, *
between the Company and John D. Crabb.
(Filed as Exhibit 10.13 to the Company's Form
10-K for the year ended September 27, 1996
and incorporated herein by reference.)
10.15+ Johnson Worldwide Associates Economic Value -
Added Bonus Plan
11. Statement regarding computation of per share *
earnings. (Incorporated by reference to Note
13 to the Consolidated Financial Statements
on page 30 of the Company's 1997 Annual
Report.)
13. Portions of the Johnson Worldwide Associates, -
Inc. 1997 Annual Report that are incorporated
herein by reference.
21. Subsidiaries of the Company as of October 3, -
1997.
23. Consent of KPMG Peat Marwick LLP. -
27. Financial Data Schedule (EDGAR version only) -
99. Definitive Proxy Statement for the 1998 *
Annual Meeting of Shareholders (Previously
filed via the EDGAR system and incorporated
herein by reference.) Except to the extent
incorporated herein by reference, the Proxy
Statement for the 1998 Annual Meeting of
Shareholders shall not be deemed to be filed
with the Securities and Exchange Commission
as part of this Annual Report on Form 10-K.
* Incorporated herein by reference.
+ A management contract or compensatory plan or arrangement.
EXHIBIT 3.2
AMENDMENT TO THE BYLAWS
OF JOHNSON WORLDWIDE ASSOCIATES, INC.
(Amended as of October 7, 1997)
Section 3.02 was amended to add a new paragraph (e) which reads
in its entirety as follows:
(e) Vice Chairman of the Board. The Board of Directors
may elect a director as Vice Chairman of the Board. Whenever
the Chairman is unable to perform his duties for whatever
reason, or whenever the Chairman requests that the Vice Chairman
perform such duties on behalf of the Chairman, the Vice Chairman
shall have full authority to preside at all meetings of the
shareholders and of the Board of Directors, call meetings of the
shareholders and the Board of Directors, act as Chairman of the
Executive Committee, advise and counsel the President and Chief
Executive Officer, and assume such other duties as the Chairman
is responsible to perform or as may be assigned to the Vice
Chairman by the Chairman or the Board of Directors. The Vice
Chairman shall be neither an officer nor an employee of the
corporation (by virtue of his election and service as Vice
Chairman of the Board) and may use the title Vice Chairman or
Vice Chairman of the Board interchangeably.
Exhibit 3.3
BYLAWS
OF
JOHNSON WORLDWIDE ASSOCIATES, INC.
(A Wisconsin Corporation)
(As amended through October 7, 1997)
ARTICLE ONE
Offices
1.01. Principal and Business Office. The corporation may have
such principal and other business offices, either within or without the
State of Wisconsin, as the Board of Directors may from time to time
determine or as the business of the corporation may require from time to
time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical
with the principal office in the State of Wisconsin, and the address of
the registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE TWO
Meetings of the Shareholders
2.01. Annual Meetings. An annual meeting of the shareholders
shall be held at such time and date as may be fixed by or under the
authority of the Board of Directors and as designated in the notice
thereof, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting.
2.02. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
Chairman of the Board, if any, the President or the Board of Directors of
the corporation. The Chairman of the Board, if any, or the President
shall call a special meeting of the shareholders upon demand, in
accordance with this Section 2.02, of the holders of at least ten percent
(10%) of all of the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting.
(b) In order that the corporation may determine the
shareholders entitled to demand a special meeting, the Board of Directors
may fix a record date to determine the shareholders entitled to make such
a demand (the "Demand Record Date"). The Demand Record Date shall not
precede the date upon which the resolution fixing the Demand Record Date
is adopted by the Board of Directors and shall not be more than 10 days
after the date upon which the resolution fixing the Demand Record Date is
adopted by the Board of Directors. Any shareholder of record seeking to
have shareholders demand a special meeting shall, by sending written
notice to the Secretary of the corporation by hand or by certified or
registered mail, return receipt requested, request the Board of Directors
to fix a Demand Record Date. The Board of Directors shall promptly, but
in all events within 10 days after the date on which a valid request to
fix a Demand Record Date is received, adopt a resolution fixing the Demand
Record Date and shall make a public announcement of such Demand Record
Date. If no Demand Record Date has been fixed by the Board of Directors
within 10 days after the date on which such request is received by the
Secretary, the Demand Record Date shall be the 10th day after the first
date on which a valid written request to set a Demand Record Date is
received by the Secretary. To be valid, such written request shall set
forth the purpose or purposes for which the special meeting is to be held,
shall be signed by one or more shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of
signature of each such shareholder (or proxy or other representative) and
shall set forth all information about each such shareholder and about the
beneficial owner or owners, if any, on whose behalf the request is made
that would be required to be set forth in a shareholder's notice described
in paragraph (a) (ii) of Section 2.12 of these bylaws.
(c) In order for a shareholder or shareholders to demand a
special meeting, a written demand or demands for a special meeting by the
holders of record as of the Demand Record Date of shares representing at
least 10% of all the votes entitled to be cast on any issue proposed to be
considered at the special meeting must be delivered to the corporation.
To be valid, each written demand by a shareholder for a special meeting
shall set forth the specific purpose or purposes for which the special
meeting is to be held (which purpose or purposes shall be limited to the
purpose or purposes set forth in the written request to set a Demand
Record Date received by the corporation pursuant to paragraph (b) of this
Section 2.02), shall be signed by one or more persons who as of the Demand
Record Date are shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the
name and address, as they appear in the corporation's books, of each
shareholder signing such demand and the class and number of shares of the
corporation which are owned of record and beneficially by each such
shareholder, shall be sent to the Secretary by hand or by certified or
registered mail, return receipt requested, and shall be received by the
Secretary within 70 days after the Demand Record Date.
(d) The corporation shall not be required to call a special
meeting upon shareholder demand unless, in addition to the documents
required by paragraph (c) of this Section 2.02, the Secretary receives a
written agreement signed by each Soliciting Shareholder (as defined
below), pursuant to which each Soliciting Shareholder, jointly and
severally, agrees to pay the corporation's costs of holding the special
meeting, including the costs of preparing and mailing proxy materials for
the corporation's own solicitation, provided that if each of the
resolutions introduced by any Soliciting Shareholder at such meeting is
adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is
elected, then the Soliciting Shareholders shall not be required to pay
such costs. For purposes of this paragraph (d), the following terms shall
have the meanings set forth below:
(i) "Affiliate" of any Person (as defined herein) shall
mean any Person controlling, controlled by or under common control
with such first Person.
(ii) "Participant" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term
in Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to
any Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the demand
or demands of meeting delivered to the corporation pursuant
to paragraph (c) of this Section 2.02 is 10 or fewer, each
shareholder signing any such demand;
(B) if the number of shareholders signing the demand
or demands of meeting delivered to the corporation pursuant
to paragraph (c) of this Section 2.02 is more than 10, each
Person who either (I) was a Participant in any Solicitation
of such demand or demands or (II) at the time of the
delivery to the corporation of the documents described in
paragraph (c) of this Section 2.02 had engaged or intended
to engage in any Solicitation of Proxies for use at such
Special Meeting (other than a Solicitation of Proxies on
behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a
majority of the directors then in office determine,
reasonably and in good faith, that such Affiliate should be
required to sign the written notice described in paragraph
(c) of this Section 2.02 and/or the written agreement
described in this paragraph (d) in order to prevent the
purposes of this Section 2.02 from being evaded.
(e) Except as provided in the following sentence, any special
meeting shall be held at such hour and day as may be designated by
whichever of the Chairman of the Board, if any, the President or the Board
of Directors shall have called such meeting. In the case of any special
meeting called by the Chairman of the Board, if any, or the President upon
the demand of shareholders (a "Demand Special Meeting"), such meeting
shall be held at such hour and day as may be designated by the Board of
Directors; provided, however, that the date of any Demand Special Meeting
shall be not more than 70 days after the record date for the meeting (as
established in Section 2.05 hereof); and provided further that in the
event that the directors then in office fail to designate an hour and date
for a Demand Special Meeting within 10 days after the date that valid
written demands for such meeting by the holders of record as of the Demand
Record Date of shares representing at least 10% of all the votes entitled
to be cast on each issue proposed to be considered at the special meeting
are delivered to the corporation (the "Delivery Date"), then such meeting
shall be held at 2:00 P.M. local time on the 100th day after the Delivery
Date or, if such 100th day is not a Business Day (as defined below), on
the first preceding Business Day. In fixing a meeting date for any
special meeting, the Chairman of the Board, if any, the President or the
Board of Directors may consider such factors as he or it deems relevant
within the good faith exercise of his or its business judgment, including,
without limitation, the nature of the action proposed to be taken, the
facts and circumstances surrounding any demand for such meeting, and any
plan of the Board of Directors to call an annual meeting or a special
meeting for the conduct of related business.
(f) The corporation may engage regionally or nationally
recognized independent inspectors of elections to act as an agent of the
corporation for the purpose of promptly performing a ministerial review of
the validity of any purported written demand or demands for a special
meeting received by the Secretary. For the purpose of permitting the
inspectors to perform such review, no purported demand shall be deemed to
have been delivered to the corporation until the earlier of (i) 5 Business
Days following receipt by the Secretary of such purported demand and (ii)
such date as the independent inspectors certify to the corporation that
the valid demands received by the Secretary represent at least 10% of all
the votes entitled to be cast on each issue proposed to be considered at
the special meeting. Nothing contained in this paragraph (f) shall in any
way be construed to suggest or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any demand,
whether during or after such 5 Business Day period, or to take any other
action (including, without limitation, the commencement, prosecution or
defense of any litigation with respect thereto).
(g) For purposes of these bylaws, "Business Day" shall mean any
day other than a Saturday, a Sunday or a day on which banking institutions
in the State of Wisconsin are authorized or obligated by law or executive
order to close.
2.03. Place of Meeting. The Board of Directors, the Chairman
of the Board, if any, or the President may designate any place, either
within or without the State of Wisconsin, as the place of meeting for any
annual or special meeting of the shareholders. If no designation is
made, the place of meeting shall be the principal business office of the
corporation in the State of Wisconsin. Any meeting may be adjourned to
reconvene at any place designated by the Board of Directors, the Chairman
of the Board, if any, or the President.
2.04. Notice. Written or printed notice of every annual or
special meeting of the shareholders, stating the place, date and time of
such meeting shall be delivered not less than ten nor more than sixty days
before the date of the meeting (unless a different period is required by
the Wisconsin Business Corporation Law or the Articles of Incorporation),
either personally or by mail, by or at the direction of the Board of
Directors, the Chairman of the Board, if any, the President or Secretary,
to each shareholder of record entitled to vote at such meeting and to
other shareholders as may be required by the Wisconsin Business
Corporation Law. In the event of any Demand Special Meeting, such notice
of meeting shall be sent not more than 30 days after the Delivery Date.
Notices which are mailed shall be deemed to be delivered when deposited in
the United States mail addressed to the shareholder at his or her address
as it appears on the stock record books of the corporation, with postage
thereon prepaid. Unless otherwise required by the Wisconsin Business
Corporation Law or the articles of incorporation of the corporation, a
notice of an annual meeting need not include a description of the purpose
for which the meeting is called. In the case of any special meeting, (a)
the notice of meeting shall describe any business that the Board of
Directors shall have theretofore determined to bring before the meeting
and (b) in the case of a Demand Special Meeting, the notice of meeting (i)
shall describe any business set forth in the statement of purpose of the
demands received by the corporation in accordance with Section 2.02 of
these bylaws and (ii) shall contain all of the information required in the
notice received by the corporation in accordance with Section 2.12(b) of
these bylaws. If an annual or special meeting of the shareholders is
adjourned to a different place, date or time, the corporation shall not be
required to give notice of the new place, date or time if the new place,
date or time is announced at the meeting before adjournment; provided,
however, that if a new record date for an adjourned meeting is or must be
fixed, the corporation shall give notice of the adjourned meeting to
persons who are shareholders as of the new record date.
2.05. Fixing of Record Date. The Board of Directors may fix in
advance a date not less than ten days and not more than seventy days prior
to the date of any annual or special meeting of the shareholders as the
record date for the purpose of determining shareholders entitled to notice
of and to vote at such meeting. In the case of any Demand Special
Meeting, (i) the meeting record date shall be not later than the 30th day
after the Delivery Date and (ii) if the Board of Directors fails to fix
the meeting record date within 30 days after the Delivery Date, then the
close of business on such 30th day shall be the meeting record date. If
no record date is fixed by the Board of Directors or by the Wisconsin
Business Corporation Law for the determination of the shareholders
entitled to notice of and to vote at a meeting of shareholders, the record
date shall be the close of business on the day before the first notice is
given to shareholders. The Board of Directors may also fix in advance a
date as the record date for the purpose of determining shareholders
entitled to demand a special meeting as contemplated by Section 2.02 of
these bylaws, shareholders to take any other action or shareholders for
any other purposes. Such record date shall not be more than seventy days
prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If no record date is fixed
by the Board of Directors or by the Wisconsin Business Corporation Law for
the determination of shareholders entitled to demand a special meeting as
contemplated in Section 2.02 of these bylaws, the record date shall be the
date that the first shareholder signs the demand. The record date for
determining shareholders entitled to a distribution (other than a
distribution involving a purchase, redemption or other acquisition of the
corporation's shares) or a share dividend is the date on which the Board
of Directors authorized the distribution or share dividend, as the case
may be, unless the Board of Directors fixes a different record date.
Except as provided by the Wisconsin Business Corporation Law for a court-
ordered adjournment, a determination of shareholders entitled to notice of
and to vote at a meeting of the shareholders is effective for any
adjournment of such meeting unless the Board of Directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
2.06. Shareholder Lists. After a record date for a special or
annual meeting of the shareholders has been fixed, the corporation shall
prepare a list of the names of all of the shareholders entitled to notice
of the meeting. The list shall be arranged by class or series of shares,
if any, and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the meeting is
given for which the list was prepared and continuing to the date of the
meeting, at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting will be held. A
shareholder or his agent may, on written demand, inspect and, subject to
the limitations imposed by the Wisconsin Business Corporation Law, copy
the list, during regular business hours and at his or her expense, during
the period that it is available for inspection pursuant to this Section
2.06. The corporation shall make the shareholders' list available at the
meeting and any shareholder or his or her agent or attorney may inspect
the list at any time during the meeting or any adjournment thereof.
Refusal or failure to prepare or make available the shareholders' list
shall not affect the validity of any action taken at a meeting of the
shareholders.
2.07. Quorum and Voting Requirements; Postponements;
Adjournments.
(a) Shares entitled to vote as a separate voting group may take
action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. If at any time the corporation has only one
class of common stock outstanding, such class shall constitute a separate
voting group for purposes of this Section 2.07. Except as otherwise
provided in the Articles of Incorporation, any bylaw adopted under
authority granted in the Articles of Incorporation or by the Wisconsin
Business Corporation Law, a majority of the votes entitled to be cast on
the matter shall constitute a quorum of the voting group for action on
that matter. Once a share is represented for any purpose at a meeting,
other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes
of determining whether a quorum exists for the remainder of the meeting
and for any adjournment of that meeting unless a new record date is or
must be set for the adjourned meeting. If a quorum exists, except in the
case of the election of directors, action on a matter shall be approved if
the votes cast within the voting group favoring the action exceed the
votes cast within the voting group opposing the action, unless the
Articles of Incorporation, any bylaw adopted under authority granted in
the Articles of Incorporation or the Wisconsin Business Corporation Law
requires a greater number of affirmative votes. Unless otherwise provided
in the Articles of Incorporation, directors shall be elected by a
plurality of the votes cast within the voting group entitled to vote in
the election of such directors at a meeting at which a quorum is present.
For purposes of this Section 2.08, "plurality" means that the individuals
who receive the largest number of votes cast, within the voting group
entitled to vote in the election of such directors, are elected as
directors up to the maximum number of directors to be chosen at the
meeting by such voting group.
(b) The Board of Directors acting by resolution may postpone
and reschedule any previously scheduled annual meeting or special meeting;
provided, however, that a Demand Special Meeting shall not be postponed
beyond the 100th day following the Delivery Date. Any annual meeting or
special meeting may be adjourned from time to time, whether or not there
is a quorum, (i) at any time, upon a resolution of shareholders if the
votes cast in favor of such resolution by the holders of shares of each
voting group entitled to vote on any matter theretofore properly brought
before the meeting exceed the number of votes cast against such resolution
by the holders of shares of each such voting group or (ii) at any time
prior to the transaction of any business at such meeting, by the Chairman
of the Board or the President or pursuant to a resolution of the Board of
Directors. No notice of the time and place of adjourned meetings need be
given except as required by the Wisconsin Business Corporation Law. At
such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the
meeting as originally notified, provided that no business shall be
transacted at such adjourned meeting on which any class of stock is
entitled to be voted which class shall not have been permitted to
participate in the vote to adjourn the meeting.
2.08. Proxies. At all meetings of the shareholders, a
shareholder entitled to vote may vote either in person or by proxy. A
shareholder may appoint a proxy to vote or otherwise act for the
shareholder by signing an appointment form, either personally or by his or
her attorney-in-fact. An appointment of a proxy is effective when
received by the Secretary or other officer or agent of the corporation
authorized to tabulate votes. An appointment is valid for eleven months
from the date of its signing unless a different period is expressly
provided in the appointment form. Unless otherwise conspicuously stated
on the appointment form, a proxy may be revoked at any time before it is
voted, either by written notice delivered to the Secretary or other
officer or agent of the corporation authorized to tabulate votes or by
oral notice given by the shareholder to the presiding person during the
meeting. The Board of Directors shall have the power and authority to
make rules establishing presumptions as to the validity and sufficiency of
proxies.
2.09. Conduct of Meetings. The Chairman of the Board, if any,
and in his absence the President, shall call the meeting of the
shareholders to order, shall act as chairman of the meeting and shall
otherwise preside at the meeting. In the absence of the Chairman of the
Board, if any, and the President, a person designated by the Board of
Directors shall preside. The person presiding at any meeting of the
shareholders shall have the power to determine (i) whether and to what
extent proxies presented at the meeting shall be recognized as valid, (ii)
the procedure for tabulating votes at such meeting, (iii) procedures for
the conduct of such meeting, and (iv) any questions which may be raised at
such meeting. The person presiding at any meeting of the shareholders
shall have the right to delegate any of the powers contemplated by this
Section 2.09 to such other person or persons as the person presiding deems
desirable. The Secretary of the corporation shall act as secretary of all
meetings of shareholders, but, in the absence of the Secretary, the
presiding person may appoint any other person to act as secretary of the
meeting.
2.10. Acceptance of Instruments Showing Shareholder Action. If
the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and
give it effect as the act of a shareholder. If the name signed on a vote,
consent, waiver or proxy appointment does not correspond to the name of a
shareholder, the corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act
of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports
to be that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary status
acceptable to the corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(c) The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation requests,
evidence of this status acceptable to the corporation is presented with
respect to the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if the
corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder is presented with
respect to the vote, consent, waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of
the co-owners and the person signing appears to be acting on behalf of all
co-owners.
The corporation may reject a vote, consent, waiver or proxy appointment if
the Secretary or other officer or agent of the corporation who is
authorized to tabulate votes, acting in good faith, has reasonable basis
for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
2.11. Waiver of Notice by Shareholders. A shareholder may
waive any notice required by the Wisconsin Business Corporation Law, the
Articles of Incorporation or these bylaws before or after the date and
time stated in the notice. The waiver shall be in writing and signed by
the shareholder entitled to the notice, contain the same information that
would have been required in the notice under applicable provisions of the
Wisconsin Business Corporation Law (except that the time and place of the
meeting need not be stated) and be delivered to the corporation for
inclusion in the corporate records. A shareholder's attendance at a
meeting, in person or by proxy, waives objection to all of the following:
(a) lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly on arrival objects
to holding the meeting or transaction business at the meeting; and (b)
consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
2.12. Notice of Shareholder Business and Nomination of
Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be
considered by the shareholders may be made at an annual meeting (A)
pursuant to the corporation's notice of meeting, (B) by or at the
direction of the Board of Directors or (C) by any shareholder of the
corporation who is a shareholder of record at the time of giving of
notice provided for in this by-law and who is entitled to vote at the
meeting and complies with the notice procedures set forth in this
Section 2.12.
(ii) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant to clause
(C) of paragraph (a)(i) of this Section 2.12, the shareholder must
have given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be received
by the Secretary of the corporation at the principal offices of the
corporation not earlier than the 90th day prior to the date of such
annual meeting and not later than the close of business on the later
of (x) the 60th day prior to such annual meeting and (y) the 10th day
following the day on which public announcement of the date of such
meeting is first made. Such shareholder's notice shall be signed by
the shareholder of record who intends to make the nomination or
introduce the other business (or his duly authorized proxy or other
representative), shall bear the date of signature of such shareholder
(or proxy or other representative) and shall set forth: (A) the name
and address, as they appear on this corporation's books, of such
shareholder and the beneficial owner or owners, if any, on whose
behalf the nomination or proposal is made; (B) the class and number
of shares of the corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that
such shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to make the nomination or introduce the other
business specified in the notice; (D) in the case of any proposed
nomination for election or re-election as a director, (I) the name
and residence address of the person or persons to be nominated, (II)
a description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nomination is to be made by such shareholder, (III) such
other information regarding each nominee proposed by such shareholder
as would be required to be disclosed in solicitations of proxies for
elections of directors, or would be otherwise required to be
disclosed, in each case pursuant to Regulation 14A under the Exchange
Act, including any information that would be required to be included
in a proxy statement filed pursuant to Regulation 14A had the nominee
been nominated by the Board of Directors and (IV) the written consent
of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected; and (E) in the case of any
other business that such shareholder proposes to bring before the
meeting, (I) a brief description of the business desired to be
brought before the meeting and, if such business includes a proposal
to amend these bylaws, the language of the proposed amendment, (II)
such shareholder's and beneficial owner's or owners' reasons for
conducting such business at the meeting and (III) any material
interest in such business of such shareholder and beneficial owner or
owners.
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.12 to the contrary, in the event
that the number of directors to be elected to the Board of Directors
of the corporation is increased and there is no public announcement
naming all of the nominees for director or specifying the size of the
increased Board of Directors made by the corporation at least 60 days
prior to the annual meeting, a shareholder's notice required by this
Section 2.12 shall also be considered timely, but only with respect
to nominees for any new positions created by such increase, if it
shall be received by the Secretary at the principal offices of the
corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by
the corporation.
(b) Special Meetings. Only such business shall be conducted at
a special meeting as shall have been described in the notice of meeting
sent to shareholders pursuant to Section 2.04 of these bylaws.
Nominations of persons for election to the Board of Directors may be made
at a special meeting at which directors are to be elected pursuant to such
notice of meeting (i) by or at the direction of the Board of Directors or
(ii) by any shareholder of the corporation who (A) is a shareholder of
record at the time of giving of such notice of meeting, (B) is entitled to
vote at the meeting and (C) complies with the notice procedures set forth
in this Section 2.12. Any shareholder desiring to nominate persons for
election to the Board of Directors at such a special meeting shall cause a
written notice to be received by the Secretary of the corporation at the
principal offices of the corporation not earlier than 90 days prior to
such special meeting and not later than the close of business on the later
of (x) the 60th day prior to such special meeting and (y) the 10th day
following the day on which public announcement is first made of the date
of such special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. Such written notice shall be
signed by the shareholder of record who intends to make the nomination (or
his duly authorized proxy or other representative), shall bear the date of
signature of such shareholder (or proxy or other representative) and shall
set forth: (A) the name and address, as they appear on the corporation's
books, of such shareholder and the beneficial owner or owners, if any, on
whose behalf the nomination is made; (B) the class and number of shares of
the corporation which are beneficially owned by such shareholder or
beneficial owner or owners; (C) a representation that such shareholder is
a holder of record of shares of the corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to make
the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all
arrangements or understandings between such shareholder or beneficial
owner or owners and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination is to be made by
such shareholder; (F) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be otherwise
required to be disclosed, in each case pursuant to Regulation 14A under
the Exchange Act, including any information that would be required to be
included in a proxy statement filed pursuant to Regulation 14A had the
nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected.
(c) General.
(i) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.12 shall be eligible to serve
as directors. Only such business shall be conducted at an annual
meeting or special meeting as shall have been brought before such
meeting in accordance with the procedures set forth in this Section
2.12. The chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set
forth in this Section 2.12 and, if any proposed nomination or
business is not in compliance with this Section 2.12, to declare that
such defective proposal shall be disregarded.
(ii) For purposes of this Section 2.12, "public
announcement" shall mean disclosure in a press release reported by
the Dow Jones News Service, Associated Press or comparable national
news service or in a document publicly filed by the corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this
Section 2.12, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section
2.12. Nothing in this Section 2.12 shall be deemed to limit the
corporation's obligation to include shareholder proposals in its
proxy statement if such inclusion is required by Rule 14a-8 under the
Exchange Act.
ARTICLE THREE
Directors
3.01. General Powers. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of, the corporation's
Board of Directors. In addition to the powers and authorities expressly
conferred upon it by these bylaws, the Board of Directors may do all such
lawful acts and things as are not by the Wisconsin Business Corporation
Law, the Articles of Incorporation or these bylaws directed or required to
be exercised or done by the shareholders.
3.02. Number of Directorship Positions; Chairman of the Board.
(a) Number of Directors. Except as otherwise provided in
paragraph (c) of this Section 3.02, the number of directors of the
corporation shall be six (6), or such other specific number as from time
to time by resolution of the Board of Directors.
(b) Board of Directors' Power to Alter the Number of Directors.
The Board of Directors shall have the power (subject to any limitations
prescribed by the Articles of Incorporation) by a resolution adopted by
not less than a majority of all directors serving on the Board of
Directors at the time of such adoption to alter at any time and from time
to time the number of total directorship positions on the Board of
Directors. Upon the adoption of any resolution in the manner provided in
the preceding sentence, the total number of directorship positions on the
Board of Directors shall be equal to the number specified in such
resolution. If the Board of Directors shall determine to reduce the
number of directorship positions, then the term of each incumbent member
shall end upon the election of directors at the next annual meeting of
shareholders of the corporation and the persons elected to fill such
reduced number of directorship positions shall be deemed to be the
successors to all persons who shall have previously held such directorship
positions.
(c) Default. In the event that the corporation is in Default
(as defined in the Articles of Incorporation) in payment of dividends on
the 13% Senior Preferred Stock, $1.00 par value per share, of the
corporation (the "Senior Preferred Stock") or any stock on a parity with
the Senior Preferred Stock as to dividends and the holders of such stock
become entitled to elect two directors pursuant to Article Five, paragraph
A(2)(a)(iii) of the Articles of Incorporation, the number of total
directorship positions on the Board of Directors shall increase by two
effective as of the time that the holders of such stock elect two
directors pursuant to Article Five, paragraph A(2)(a)(iii) of the Articles
of Incorporation. When the Default is "cured" (as defined in the Articles
of Incorporation) or there is no longer any Senior Preferred Stock or any
stock on a parity with the Senior Preferred Stock outstanding, whichever
occurs earlier, the two directors elected pursuant to Article Five,
paragraph A(2)(a)(iii) of the Articles of Incorporation shall resign and
the total number of directorship positions shall be decreased by two
effective as of the date of the last such resignation.
(d) Chairman of the Board. The Board of Directors may elect a
director as the Chairman of the Board. The Chairman of the Board shall,
when present, preside at all meetings of the shareholders and of the Board
of Directors, may call meetings of the shareholders and the Board of
Directors, shall be the Chairman of the Executive Committee, shall advise
and counsel with the President, and shall perform such other duties as set
forth in these bylaws and as determined by the Board of Directors. Except
as provided in this paragraph (d), the Chairman shall be neither an
officer nor an employee of the corporation (by virtue of his election and
service as Chairman of the Board) and may use the title Chairman or
Chairman of the Board interchangeably. During the absence or disability
of the President, or while that office is vacant, the Chairman shall
exercise all of the powers and discharge all of the duties of the
President.
(e) Vice Chairman of the Board. The Board of Directors may
elect a director as Vice Chairman of the Board. Whenever the Chairman is
unable to perform his duties for whatever reason, or whenever the Chairman
requests that the Vice Chairman perform such duties on behalf of the
Chairman, the Vice Chairman shall have full authority to preside at all
meetings of the shareholders and of the Board of Directors, call meetings
of the shareholders and the Board of Directors, act as Chairman of the
Executive Committee, advise and counsel the President and Chief Executive
Officer, and assume such other duties as the Chairman is responsible to
perform or as may be assigned to the Vice Chairman by the Chairman or the
Board of Directors. The Vice Chairman shall be neither an officer nor an
employee of the corporation (by virtue of his election and service as Vice
Chairman of the Board) and may use the title Vice Chairman or Vice
Chairman of the Board interchangeably.
3.03. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of the shareholders and until his
successor shall have been elected and, if necessary, qualified, or until
his prior death, resignation or removal. A director may be removed by the
shareholders only at a meeting of the shareholders called for the purpose
of removing the director, and the meeting notice shall state that the
purpose, or one of the purposes, of the meeting is the removal of the
director. A director may be removed from office with or without cause
only by the voting group entitled to vote in the election of such
director. A director shall be removed if the number of votes cast to
remove the director exceeds the number of votes cast not to remove such
director. A director may resign at any time by delivering written notice
which complies with the Wisconsin Business Corporation Law to the Board of
Directors, to the Chairman of the Board, if any, or to the corporation. A
director's resignation is effective when the notice is delivered unless
the notice specifies a later effective date. Directors need not be
residents of the State of Wisconsin or shareholders of the corporation.
3.04. Regular Meetings. The Board of Directors shall provide,
by resolution, the date, time and place, either within or without the
State of Wisconsin, for the holding of regular meetings of the Board of
Directors without other notice than such resolution.
3.05. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board,
if any, the President or any three directors. The Chairman of the Board,
if any, or the President may fix the time, date and place, either within
or without the State of Wisconsin, for holding any special meeting of the
Board of Directors, and if no other place is fixed, the place of the
meeting shall be the principal business office of the corporation in the
State of Wisconsin.
3.06. Notice; Waiver. Notice of each special meeting of the
Board of Directors shall be given (a) by oral notice delivered or
communicated to the director by telephone or in person not less than
twenty-four hours prior to the meeting or (b) by written notice delivered
to the director in person, by telegram, teletype, facsimile or other form
of wire or wireless communication, or by mail or private carrier, to each
director at his business address or at such other address as the person
sending such notice shall reasonably believe appropriate, in each case not
less than forty-eight hours prior to the meeting. The notice need not
prescribe the purpose of the special meeting of the Board of Directors or
the business to be transacted at such meeting. If given by telegram, such
notice shall be deemed to be effective when the telegram is delivered to
the telegraph company. If given by teletype, facsimile or other wire or
wireless communication, such notice shall be deemed to be effective when
transmitted. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If given by private carrier, such notice shall be deemed to be
effective when delivered to the private carrier. Whenever any notice
whatever is required to be given to any director of the corporation under
the Articles of Incorporation or these bylaws or any provision of the
Wisconsin Business Corporation Law, a waiver thereof in writing, signed at
any time, whether before or after the date and time of meeting, by the
director entitled to such notice shall be deemed equivalent to the timely
giving of such notice. The corporation shall retain any such waiver as
part of the permanent corporate records. A director's attendance at or
participation in a meeting waives any required notice to him or her of the
meeting unless the director at the beginning of the meeting or promptly
upon his or her arrival objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
action taken at the meeting.
3.07. Quorum. Except as otherwise provided in the Articles of
Incorporation or these bylaws or by the Wisconsin Business Corporation
Law, directors holding a majority of the positions on the Board of
Directors established pursuant to Section 3.02 of these bylaws shall
constitute a quorum for transaction of business at any meeting of the
Board of Directors. A majority of the directors present (though less than
a quorum) may adjourn any meeting of the Board of Directors from time to
time without further notice.
3.08. Manner of Acting. The affirmative vote of a majority of
the directors present at a meeting of the Board of Directors at which a
quorum is present shall be the act of the Board of Directors unless the
Wisconsin Business Corporation Law, the Articles of Incorporation or these
bylaws require the vote of a greater number of directors.
3.09. Presumption of Assent. A director who is present and is
announced as present at a meeting of the Board of Directors or any
committee thereof created in accordance with Article IV of these bylaws,
when corporate action is taken on a particular matter, assents to the
action taken unless any of the following occurs: (a) the director objects
at the beginning of the meeting or promptly upon his or her arrival to
holding the meeting or transacting business at the meeting; (b) the
director dissents or abstains from an action taken and minutes of the
meeting are prepared that show the director's dissent or abstention from
the action taken; (c) the director delivers written notice that complies
with the Wisconsin Business Corporation Law of his or her dissent or
abstention from the action taken on the particular matter to the presiding
person of the meeting before its adjournment or to the corporation
immediately after adjournment of the meeting; or (d) the director dissents
or abstains from an action taken, minutes of the meeting are prepared that
fail to show the director's dissent or abstention from the action taken,
and the director delivers to the corporation a written notice of that
failure that complies with the Wisconsin Business Corporation Law promptly
after receiving the minutes. Such right of dissent or abstention shall
not apply to a director who votes in favor of the action taken on the
particular matter.
3.10. Action by Directors Without a Meeting. Any action
required or permitted by the Articles of Incorporation, these bylaws or
the Wisconsin Business Corporation Law to be taken at any meeting of the
Board of Directors or any committee thereof created pursuant to Article IV
of these bylaws may be taken without a meeting if the action is taken by
all members of the Board of Directors or such committee, as the case may
be. The action shall be evidenced by one or more written consents
describing the action taken, signed by each director or committee member,
as the case may be, and retained by the corporation. In the event one or
more positions on the Board of Directors or any committee thereof shall be
vacant at the time of the execution of any such consent, such consent
shall nevertheless be effective if it shall be signed by all persons
serving as members of the Board of Directors or of such committee, as the
case may be, at such time and if the persons signing the consent would be
able to take the action called for by the consent at a properly
constituted meeting of the Board of Directors or such committee, as the
case may be.
3.11. Compensation. The Board of Directors, irrespective of
any personal interest of any of its members, may establish reasonable
compensation of all directors for services to the corporation as directors
or may delegate such authority to an appropriate committee of the Board of
Directors. The Board of Directors also shall have authority to provide
for or delegate authority to an appropriate committee of the Board of
Directors to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and
employees and to their estates, families, dependents or beneficiaries on
account of prior services rendered by such directors, officers and
employees to the corporation.
3.12. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these
bylaws, members of the Board of Directors (and any committees thereof
created pursuant to Article IV hereof) may participate in regular or
special meetings by, or through the use of, any means of communication by
which (a) all participants may simultaneously hear each other, such as by
conference telephone, or (b) all communication is immediately transmitted
to each participant, and each participant can immediately send messages to
all other participants. If a meeting is conducted by such means, then at
the commencement of such meeting the presiding person shall inform the
participating directors that a meeting is taking place at which official
business may be transacted. Any participant in a meeting by such means
shall be deemed present in person at such meeting. Notwithstanding the
foregoing, no action may be taken at any meeting held by such means on any
particular matter which the presiding person determines, in his or her
sole discretion, to be inappropriate under the circumstances for action at
a meeting held by such means. Such determination shall be made and
announced in advance of such meeting.
3.13. Conduct of Meetings. The Chairman of the Board, if any,
and in his or her absence, the President, and in their absence, any
director chosen by the directors present, shall call meetings of the Board
of Directors to order, shall act as chairman of the meeting and shall
otherwise preside at the meeting. The Secretary of the corporation shall
act as secretary of all meetings of the Board of Directors but in the
absence of the Secretary, the presiding person may appoint any other
person present to act as secretary of the meeting. Minutes of any regular
or special meeting of the Board of Directors shall be prepared and
distributed to each director.
ARTICLE FOUR
Committees of the Board of Directors
4.01. General.
(a) Establishment. The Board of Directors by resolution
adopted by the affirmative vote of a majority of all of the directors then
in office pursuant to Section 3.02 of these bylaws may establish one or
more committees, each committee to consist of two or more directors of
this corporation elected by the Board of Directors. The term "Board
Committee" as used in these bylaws means any committee comprised
exclusively of directors of the corporation which is identified as a
"Board Committee" either in these bylaws or in any resolutions adopted by
the Board of Directors.
(b) Membership. The Board of Directors by resolution adopted
by the affirmative vote of a majority of all directors then in office
shall have the power to: (i) establish the number of membership positions
on each Board Committee from time to time and change the number of
membership positions on such Committee from time to time; provided each
Board Committee shall consist of at least two members; (ii) appoint any
director to membership on any Board Committee who shall be willing to
serve on such Committee; (iii) remove any person from membership on any
Board Committee with or without cause; and (iv) appoint any director to
membership on any Board Committee as an alternate member. A person's
membership on any Board Committee shall automatically terminate when such
person ceases to be a director of the corporation.
(c) Powers. Except as otherwise provided in Section 4.01(d) of
these bylaws, each Board Committee shall have and may exercise all the
powers and authority of the Board of Directors, when the Board of
Directors is not in session, in the management of the business and affairs
of the corporation to the extent (but only to the extent) such powers
shall be expressly delegated to it by the Board of Directors or by these
bylaws. Unless otherwise provided by the Board of Directors in creating
the committee, a committee may employ counsel, accountants and other
consultants to assist it in the exercise of its authority.
(d) Reserved Powers. No Board Committee shall have the right
or power to do any of the following: (i) authorize distributions; (ii)
approve or propose to shareholders action that the Wisconsin Business
Corporation Law requires to be approved by shareholders; (iii) fill
vacancies on the Board of Directors, or, unless the Board of Directors
provides by resolution that vacancies on a committee shall be filled by
the affirmative vote of a majority of the remaining committee members, on
any Board Committee; (iv) amend the Articles of Incorporation; (v) adopt,
amend or repeal these bylaws; (vi) approve a plan of merger not requiring
shareholder approval; (vii) authorize or approve reacquisition of shares,
except according to a formula or method prescribed by the Board of
Directors; and (viii) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative
rights, preferences and limitations of a class or series of shares, except
that the Board of Directors may authorize a committee to do so within
limits prescribed by the Board of Directors.
(e) Vote Required. Except as provided by the Wisconsin
Business Corporation Law or in the Articles of Incorporation or these
bylaws, the members holding at least a majority of the membership
positions on any Board Committee shall constitute a quorum for purposes of
any meeting of such committee. The affirmative vote of the majority of
the members of a Board Committee present at any meeting of the Board
Committee at which a quorum is present shall be necessary and sufficient
to approve any action within the Board Committee's power, and any action
so approved by such a majority shall be deemed to have been taken by the
Board Committee and to be the act of such Board Committee.
(f) Governance. The Board of Directors may designate the
person who is to serve as chairman of and preside over any Board
Committee, and in the absence of any such designation by the Board of
Directors, the members of the Board Committee may either designate one
member of the Board Committee as its chairman to preside at any meeting or
elect to operate without a chairman, except as otherwise required by these
bylaws. Each Board Committee may appoint a secretary who need not be a
member of the Committee or a member of the Board of Directors. Each Board
Committee shall have the right to establish such rules and procedures
governing its meetings and operations as such committee shall deem
desirable provided such rules and procedures shall not be inconsistent
with the Articles of Incorporation, these bylaws, or any direction to such
committee issued by the Board of Directors.
(g) Alternate Committee Members. The Board of Directors may
designate one or more directors as alternate members of any Board
Committee, and any such director may replace any regular member of such
Board Committee who for any reason is absent from a meeting of such Board
Committee or is otherwise disqualified from serving on such Board
Committee.
4.02. Executive Committee. The corporation shall have an
Executive Committee. The Executive Committee shall be a Board Committee
and shall be subject to the provisions of Section 4.01 of these bylaws.
The Executive Committee shall assist the Board of Directors in developing
and evaluating general corporate policies and objectives. The Executive
Committee shall perform such specific assignments as shall be expressly
delegated to it from time to time by the Board of Directors and shall
(subject to the limitations specified in Section 4.01(d) of these bylaws
or imposed by the Wisconsin Business Corporation Law) have the power to
exercise, when the Board of Directors is not in session, the powers of the
Board of Directors except to the extent expressly limited or precluded
from exercising such powers in resolutions from time to time adopted by
the Board of Directors. Meetings of the Executive Committee may be called
at any time by any two members of the Committee. The time and place for
each meeting shall be established by the members calling the meeting. The
Chairman of the Board, when present, shall preside at all meetings of the
Executive Committee.
4.03. Audit Committee. The corporation shall have an Audit
Committee. The Audit Committee shall be a Board Committee and shall be
subject to the provisions of Section 4.01 of these bylaws. The Audit
Committee shall: (a) recommend to the Board of Directors annually a firm
of independent public accountants to act as auditors of the corporation;
(b) review with the auditors in advance the scope of their annual audit;
(c) review with the auditors and the management, from time to time, the
corporation's accounting principles, policies and practices and its
reporting policies and practices; (d) review with the auditors annually
the results of their audit; (e) review from time to time with the auditors
and the corporation's financial personnel the adequacy of the
corporation's accounting, financial and operating controls; (f) review
transactions between the corporation or any subsidiary of the corporation
and any shareholder who holds at least fifty percent of the total number
of shares outstanding of the corporation's Class A Common Stock or Class B
Common Stock (a "Controlling Shareholder") or any subsidiary of a
Controlling Shareholder in accordance with policies adopted by the Board
of Directors; and (g) perform such other duties as shall from time to time
be delegated to the Committee by the Board of Directors. The membership
of the Audit Committee shall always be such that a majority of the members
of the Audit Committee shall not be full-time employees of any Controlling
Shareholder, the corporation or any of their respective subsidiaries.
Within the limitations prescribed in the preceding sentence, the
membership on the Audit Committee shall be determined by the Board of
Directors as provided in Section 4.01 of these bylaws.
4.04. Compensation Committee. The corporation shall have a
Compensation Committee. The Compensation Committee shall be a Board
Committee and shall be subject to the provisions of Section 4.01 of these
bylaws. The Compensation Committee shall have the authority to establish
the compensation and benefits for directors, officers and, at the option
of the Compensation Committee, other managerial personnel of the
corporation and its subsidiaries, including, without limitation, fixing
the cash compensation of such persons, establishing and administering
compensation and benefit plans for such persons and determining awards
thereunder, and entering into (or amending existing) employment and
compensation agreements with any such persons. The Compensation Committee
may also recommend persons to be elected as officers of the corporation or
any of its subsidiaries to the Board of Directors. The Compensation
Committee shall perform such other duties as shall from time to time be
delegated to the Compensation Committee by the Board of Directors. The
authority of the Compensation Committee shall be subject to such
limitations and restrictions as may be imposed by the Board of Directors,
which may delegate the authority to establish or administer specific
employee compensation or benefit plans to one or more other Board
Committees or one or more persons designated by the Board of Directors.
The Compensation Committee shall consist solely of members of the Board of
Directors who are not officers of the corporation. The membership of the
Compensation Committee shall be determined by the Board of Directors as
provided in Section 4.01 of these bylaws.
ARTICLE FIVE
Officers
5.01. Number. The principal officers of the corporation shall
be appointed by the Board of Directors and shall consist of a President,
one or more Vice Presidents, a Secretary and a Treasurer. Such other
officers and assistant officers as may be deemed necessary or desirable
may be appointed by the Board of Directors. The President must be a
member of the Board of Directors, but no other officer need be a member of
the Board of Directors. Any two or more offices may be held by the same
person. In its discretion, the Board of Directors may choose not to fill
any office for any period as it may deem advisable, except the principal
offices of President, Vice President, Treasurer and Secretary. The Board
of Directors may authorize any officer to appoint one or more officers or
assistant officers.
5.02. Appointment and Term of Office. The officers of the
corporation to be appointed by the Board of Directors shall be appointed
annually by the Board of Directors at its first meeting following the
annual meeting of shareholders. If the appointment of officers shall not
occur at such meeting, such appointment shall occur as soon thereafter as
conveniently may be. Each officer shall hold office until the earlier of:
(a) the time at which a successor is duly appointed and, if necessary,
qualified, or (b) his or her death, resignation or removal as hereinafter
provided. The Board of Directors shall have the right to enter into
employment contracts providing for the employment of any officer for a
term longer than one year, but no such contract shall preclude the Board
of Directors from removing any person from any position with the
corporation whenever in the judgment of the Board of Directors the best
interests of the corporation would be served thereby.
5.03. Removal. The Board of Directors may remove any officer
and, unless restricted by the Board of Directors or these bylaws, an
officer may remove any officer appointed by that officer, at any time,
with or without cause and notwithstanding the contract rights, if any, of
the officer removed. The appointment of an officer does not of itself
create contract rights.
5.04. Resignation. An officer may resign at any time by
delivering notice to the corporation that complies with the Wisconsin
Business Corporation Law. The resignation shall be effective when the
notice is delivered, unless the notice specifies a later effective date
and the corporation accepts the later effective date.
5.05. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term.
If a resignation of an officer is effective at a later date as
contemplated by Section 5.04 of these bylaws, the Board of Directors may
fill the pending vacancy before the effective date if the Board provides
that the successor may not take office until the effective date.
5.06. General Powers of Officers. For purposes of these
bylaws, the corporation's President and each Vice President shall be
deemed to be a "senior officer". Whenever any resolution adopted by the
corporation's shareholders, Board of Directors or Board Committee shall
authorize the "proper" or "appropriate" officers of the corporation to
execute any note, contract or other document or to take any other action
or shall generally authorize any action without specifying the officer or
officers authorized to take such action, any senior officer acting alone
and without countersignatures may take such action on behalf of the
corporation. Any officer of the corporation may on behalf of the
corporation sign contracts, reports to governmental agencies, or other
instruments which are in the regular course of business, except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these bylaws to some other officer or agent of the
corporation, or shall be required by the Wisconsin Business Corporation
Law or other applicable law to be otherwise signed or executed.
5.07. The President. The President shall be the chief
executive officer of the corporation and, subject to the control of the
Board of Directors, shall in general supervise and control all of the
business and affairs of the corporation. He shall, when present, in the
absence of the Chairman of the Board, if any, preside at all meetings of
the shareholders. In general he shall perform all duties incident to the
office of chief executive officer and such other duties as may be
prescribed by the Board of Directors from time to time. During the
absence or disability of the President, or while that office is vacant,
the Chairman of the Board shall exercise all of the powers and discharge
all of the duties of the President. The Board of Directors may authorize
the Chairman of the Board to appoint one or more officers or assistant
officers to perform the duties of the President during the absence or
disability of the President, or while that office is vacant.
5.08. Vice Presidents. Each Vice President shall perform such
duties and have such powers as the Board of Directors may from time to
time prescribe. The Board of Directors may designate any Vice President
as being senior in rank or degree of responsibility and may accord such a
Vice President an appropriate title designating his senior rank such as
"Executive Vice President" or "Senior Vice President" or "Group Vice
President". The Board of Directors may assign a certain Vice President
responsibility for a designated group, division or function of the
corporation's business and add an appropriate descriptive designation to
his title.
5.09. Secretary. The Secretary shall (subject to the control
of the Board of Directors): (a) keep the minutes of the shareholders' and
the Board of Directors' meetings in one or more books provided for that
purpose (including records of actions taken without a meeting); (b) see
that all notices are duly given in accordance with the provisions of these
bylaws or as required by the Wisconsin Business Corporation Law; (c) be
custodian of the corporate records and of the seal of the corporation and
see that the seal of the corporation is affixed to all documents, the
execution of which on behalf of the corporation under its seal is duly
authorized; (d) maintain a record of the shareholders of the corporation
in a form that permits preparation of a list of the names and address of
all shareholders by class or series of shares and showing the number and
class or series of shares held by each shareholder; (e) have general
charge of the stock transfer books of the corporation; (f) supply in such
circumstances as the Secretary deems appropriate to any governmental
agency or other person a copy of any resolution adopted by the
corporation's shareholders, Board of Directors or Board Committee, any
corporate record or document, or other information concerning the
corporation and its officers and certify on behalf of the corporation as
to the accuracy and completeness of the resolution, record, document or
information supplied; and (g) in general, perform all duties incident to
the office of Secretary and perform such other duties and have such other
powers as the Board of Directors or the President may from time to time
prescribe.
5.10. Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) maintain appropriate accounting records; (c) receive and
give receipts for monies due and payable to the corporation from any
source whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies or other depositories as shall
be selected by or under authority of the Board of Directors; and (d) in
general, perform all of the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the
President. The Treasurer shall give a bond if required by the Board of
Directors for the faithful discharge of his duties in a sum and with one
or more sureties satisfactory to the Board of Directors.
5.11. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the President or a Vice-President certificates
for shares of the corporation, the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such
duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
5.12. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint, or to authorize any duly
appointed officer of the corporation to appoint, any person to act as
assistant to any officer, or as agent for the corporation in his or her
stead, or to perform the duties of such officer whenever for any reason it
is impracticable for such officer to act personally, and such assistant or
acting officer or other agent so appointed by the Board of Directors or an
authorized officer shall have the power to perform all the duties of the
office to which he or she is so appointed to be an assistant, or as to
which he or she is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors or the
appointing officer.
ARTICLE SIX
Contracts, Loans, Checks and Deposits
6.01. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute or deliver any instrument in the name of and on behalf of the
corporation, and such authorization may be general or confined to specific
instances. In the absence of other designation, all deeds, mortgages and
instruments of assignment or pledge made by the corporation shall be
executed in the name of the corporation by the President or one of the
Vice Presidents and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; the Secretary or an Assistant
Secretary, when necessary or required, shall affix the corporate seal
thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of
the signing officer or officers.
6.02. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the corporation and no evidences of such
indebtedness shall be issued in its name unless authorized by or under the
authority of a resolution of the Board of Directors. Such authorization
may be general or confined to specific instances.
6.03. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation and in such manner as shall
from time to time be determined by or under the authority of a resolution
of the Board of Directors.
6.04. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositaries as may be
selected by or under the authority of a resolution of the Board of
directors.
6.05. Voting of Securities Owned by this Corporation. Subject
always to the specific directions of the Board of Directors, (a) any
shares or other securities issued by any other corporation and owned or
controlled by this corporation may be voted at any meeting of security
holders of such other corporation by the President of this corporation, if
he or she be present, or in his or her absence by any Vice President of
this corporation who may be present, and (b) whenever, in the judgment of
the President, or in his or her absence, of any Vice President, it is
desirable for this corporation to execute a proxy or written consent in
respect to any share or other securities issued by any other corporation
and owned by this corporation, such proxy or consent shall be executed in
the name of this corporation by the President or one of the Vice
Presidents of this corporation, without necessity of any authorization by
the Board of Directors, affixation of corporate seal, if any, or
countersignature or attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power and authority to vote the shares
or other securities issued by such other corporation and owned by this
corporation the same as such shares or other securities might be voted by
this corporation.
6.06. No Nominee Procedures. The corporation has not
established, and nothing in these bylaws shall be deemed to establish, any
procedure by which a beneficial owner of the corporation's shares that are
registered in the name of a nominee is recognized by the corporation as
the shareholder under Section 180.0723 of the Wisconsin Business
Corporation Law.
6.07. Performance Bonds. The President and the Treasurer of
the corporation, and either one of them, shall have the continuing
authority to take all actions and to execute and deliver any and all
documents or instruments (including, without limitation, reimbursement
agreements and agreements of indemnity) in favor of such parties, in such
amounts and on such terms and conditions as may be necessary or useful for
the corporation or any of its direct or indirect subsidiaries to obtain
performance bonds, surety bonds, completion bonds, guarantees, indemnities
or similar assurances (collectively referred to as "Performance Bonds")
from third parties as such officer shall, in his sole discretion, deem
necessary or useful to facilitate and promote the business of the
corporation or any of its subsidiaries; provided, however, that the
contingent liability of the corporation with respect to Performance Bonds
for the corporation's subsidiaries shall not exceed $200,000 in any single
transaction or $1 million in the aggregate without the specific
authorization of the Board of Directors. Any action taken or document or
instrument executed and delivered by any such officer after December 31,
1993, that is within the scope of the authority granted in this Section
6.07 is hereby ratified, approved and confirmed. If any party shall
require resolutions of the Board of Directors with respect to the approval
of any actions of any officer of the corporation or documents or
instruments related to the Performance Bonds and within the scope of and
generally consistent with this Section 6.07, such resolutions shall be
deemed to have been duly approved and adopted by the Board of Directors,
and may be certified by the Secretary whenever approved by the President
or the Treasurer, in his sole discretion, and a copy thereof has been
inserted in the minute book of the corporation.
ARTICLE SEVEN
Corporate Stock
7.01. Certificates for Shares. Certificates representing
shares of any class of stock issued by the corporation shall be in such
form, consistent with the Wisconsin Business Corporation Law, as shall be
determined by the Board of Directors. Such certificates shall be signed
by the President or a Vice President and by the Secretary or an Assistant
Secretary and shall be sealed with the seal, or a facsimile of the seal,
of the corporation. If a certificate is countersigned by a transfer agent
or registrar, other than the corporation itself or its employees, any
other signature or countersignature on the certificate may be a facsimile.
In case any officer of the corporation, or any officer or employee of the
transfer agent or registrar who has signed or whose facsimile signature
has been placed upon such certificate ceases to be an officer of the
corporation, or an officer or employee of the transfer agent or registrar
before such certificate is issued, the certificate may be issued by the
corporation with the same effect as if the officer of the corporation, or
the officer or employee of the transfer agent or registrar had not ceased
to be such at the date of its issue. All certificates for shares shall be
consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares
and date of issue, shall be entered on the books of the corporation. All
certificates surrendered to the corporation for transfer shall be
canceled, and no new certificate shall be issued in replacement until the
former certificate for a like number of shares shall have been surrendered
and canceled, except as otherwise provided in Section 7.04 of these bylaws
with respect to lost, stolen or destroyed certificates.
7.02. Transfer Agent and Registrar. The Board of Directors may
from time to time with respect to each class of stock issuable by the
corporation appoint such transfer agents and registrars in such locations
as it shall determine, and may, in its discretion, appoint a single entity
to act in the capacity of both transfer agent and a registrar in any one
location.
7.03. Transfers of Shares. Transfers of shares shall be made
only on the books maintained by the corporation or a transfer agent
appointed as contemplated by Section 7.02 of these bylaws at the request
of the holder of record thereof or of his attorney, lawfully constituted
in writing, and on surrender for cancellation of the certificate for such
shares. Prior to due presentment of a certificate for shares for
registration of transfer, the corporation may (but shall not be required
to) treat the person in whose name corporate shares stand on the books of
the corporation as the only person having any interest in such shares and
as the only person having the right to receive dividends on and to vote
such shares, and the corporation shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of the
other person, whether or not it shall have express or other notice
thereof. Where a certificate for shares is presented to the corporation
or a transfer agent with a request to register for transfer, the
corporation or the transfer agent, as the case may be, shall not be liable
to the owner or any other person suffering loss as a result of such
registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation or the transfer agent had
no duty to inquire into adverse claims or has discharged any such duty.
The corporation or transfer agent may require reasonable assurance that
such endorsements are genuine and effective and compliance with such other
regulations as may be prescribed by or under the authority of the Board of
Directors.
7.04. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require
the person requesting such new certificate or certificates, or his or her
legal representative, to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost,
stolen or destroyed.
7.05. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of
any restriction imposed by the corporation upon the transfer of such
shares.
7.06. Consideration for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any tangible
or intangible property or benefit to the corporation, including cash,
promissory notes, services performed, contracts for services to be
performed or other securities of the corporation. Before the corporation
issues shares, the Board of Directors shall determine that the
consideration received or to be received for the shares to be issued is
adequate. The determination of the Board of Directors is conclusive
insofar as the adequacy of consideration for the issuance of shares
relates to whether the shares are validly issued, fully paid and
nonassessable. The corporation may place in escrow shares issued in whole
or in part for a contract for future services or benefits, a promissory
note, or otherwise for property to be received in the future, or make
other arrangements to restrict the transfer of the shares, and may credit
distributions in respect of the shares against their purchase price, until
the services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits
or property are not received or the promissory note is not paid, the
corporation may cancel, in whole or in part, the shares escrowed or
restricted and the distributions credited.
7.07 Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the Wisconsin Business Corporation Law as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE EIGHT
General Provisions
8.01. Fiscal Year. The fiscal year of the corporation shall
begin and end on such dates as the Board of Directors shall determine by
resolution.
8.02. Seal. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the words
"Corporate Seal, Wisconsin." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE NINE
Amendments
9.01. By Directors. Except as otherwise provided by the
Wisconsin Business Corporation Law or the Articles of Incorporation, these
bylaws may be amended or repealed and new bylaws may be adopted by the
Board of Directors at any meeting at which a quorum is in attendance;
provided, however, that the shareholders in adopting, amending or
repealing a particular bylaw may provide therein that the Board of
Directors may not amend, repeal or readopt that bylaw.
9.02. By Shareholders. Except as otherwise provided in the
Articles of Incorporation, these bylaws may also be amended or repealed
and new bylaws may be adopted by the shareholders at any annual or special
meeting of the shareholders at which a quorum is in attendance.
9.03. Implied Amendments. Any action taken or authorized by
the shareholders or by the Board of Directors, which would be inconsistent
with the bylaws then in effect but is taken or authorized by affirmative
vote of not less than the number of votes or the number of directors
required to amend the bylaws so that the bylaws would be consistent with
such action, shall be given the same effect as though the bylaws had been
temporarily amended or suspended so far, but only so far, as is necessary
to permit the specific action so taken or authorized.
ARTICLE TEN
Indemnification
10.01. Certain Definitions. All capitalized terms used in this
Article X and not otherwise hereinafter defined in this Section 10.01
shall have the meaning set forth in Section 180.0850 of the Statute. The
following capitalized terms (including any plural forms thereof) used in
this Article X shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise that, directly or indirectly through
one or more intermediaries, controls or is controlled by, or is
under common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the
Director or Officer to determine his or her right to
indemnification pursuant to Section 10.04.
(c) "Board" shall mean the entire then elected and serving
Board of Directors of the Corporation, including all members
thereof who are Parties to the subject Proceeding or any related
Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer
breached or failed to perform his or her duties to the
Corporation and his or her breach of or failure to perform those
duties is determined, in accordance with Section 10.04, to
constitute misconduct under Section 180.0851(2)(a) 1, 2, 3 or 4
of the Statute.
(e) "Corporation," as used herein and as defined in the
Statute and incorporated by reference into the definitions of
certain capitalized terms used herein, shall mean this
Corporation, including, without limitation, any successor
corporation or entity to the Corporation by way of merger,
consolidation or acquisition of all or substantially all of the
capital stock or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set forth
in the Statute; provided, that, for purposes of this Article X,
it shall be conclusively presumed that any Director or Officer
serving as a director, officer, partner, trustee, member of any
governing or decision-making committee, employee or agent of an
Affiliate shall be so serving at the request of the Corporation.
(g) "Disinterested Quorum" shall mean a quorum of the
Board who are not Parties to the subject Proceeding or any
related Proceeding.
(h) "Party" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article X, the
term "Party" shall also include any Director, Officer or
employee who is or was a witness in a Proceeding at a time when
he or she has not otherwise been formally named a Party thereto.
(i) "Proceeding" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article X,
"Proceeding" shall include all Proceedings (i) brought under (in
whole or in part) the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, their respective
state counterparts, and/or any rule or regulation promulgated
under any of the foregoing; (ii) brought before an Authority or
otherwise to enforce rights hereunder; (iii) any appeal from a
Proceeding; and (iv) any Proceeding in which the Director or
Officer is a plaintiff or petitioner because he or she is a
Director or Officer; provided, however, that such Proceeding is
authorized by a majority vote of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.0850 through
180.0859, inclusive, of the Wisconsin Business Corporation Law,
Chapter 180 of the Wisconsin Statutes, including any amendments
thereto, but, in the case of any such amendment, only to the
extent such amendment permits or requires the Corporation to
provide broader indemnification rights than the Statute
permitted or required the Corporation to provide prior to such
amendment.
10.02. Mandatory Indemnification. To the fullest extent
permitted or required by the Statute, the Corporation shall indemnify a
Director or Officer against all Liabilities incurred by or on behalf of
such Director or Officer in connection with a Proceeding in which the
Director or Officer is a Party because he or she is a Director or Officer.
10.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification under
Section 10.02 shall make a written request therefor to the Corporation.
Subject to Section 10.03(b), within sixty days of the Corporation's
receipt of such request, the Corporation shall pay or reimburse the
Director or Officer for the entire amount of Liabilities incurred by the
Director or Officer in connection with the subject Proceeding (net of any
Expenses previously advanced pursuant to Section 10.05).
(b) No indemnification shall be required to be paid by the
Corporation pursuant to Section 10.02 if, within such sixty-day period:
(i) a Disinterested Quorum, by a majority vote thereof, determines that
the Director or Officer requesting indemnification engaged in misconduct
constituting a Breach of Duty; or (ii) a Disinterested Quorum cannot be
obtained.
(c) In either case of nonpayment pursuant to Section 10.03(b),
the Board shall immediately authorize by resolution that an Authority, as
provided in Section 10.04, determine whether the Director's or Officer's
conduct constituted a Breach of Duty and, therefore, whether
indemnification should be denied hereunder.
(d) (i) If the Board does not authorize an Authority to
determine the Director's or Officer's right to indemnification hereunder
within such sixty-day period and/or (ii) if indemnification of the
requested amount of Liabilities is paid by the Corporation, then it shall
be conclusively presumed for all purposes that a Disinterested Quorum has
determined that the Director or Officer did not engage in misconduct
constituting a Breach of Duty and, in the case of subsection (i) above
(but not subsection (ii)), indemnification by the Corporation of the
requested amount of Liabilities shall be paid to the Officer or Director
immediately.
10.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a
Director's or Officer's right to indemnification pursuant to Section
10.03, then the Director or Officer requesting indemnification shall have
the absolute discretionary authority to select one of the following as
such Authority:
(i) An independent legal counsel; provided, that such
counsel shall be mutually selected by such Director or Officer
and by a majority vote of a Disinterested Quorum or, if a
Disinterested Quorum cannot be obtained, then by a majority vote
of the Board;
(ii) A panel of three arbitrators selected from the panels
of arbitrators of the American Arbitration Association in
Milwaukee, Wisconsin; provided, that (A) one arbitrator shall be
selected by such Director or Officer, the second arbitrator
shall be selected by a majority vote of a Disinterested Quorum
or, if a Disinterested Quorum cannot be obtained, then by a
majority vote of the Board, and the third arbitrator shall be
selected by the two previously selected arbitrators; and (B) in
all other respects, such panel shall be governed by the American
Arbitration Association's then existing Commercial Arbitration
Rules; or
(iii) A court pursuant to and in accordance with Section
180.0854 of the Statute.
(b) In any such determination by the selected Authority there
shall exist a rebuttable presumption that the Director's or Officer's
conduct did not constitute a Breach of Duty and that indemnification
against the requested amount of Liabilities is required. The burden of
rebutting such a presumption by clear and convincing evidence shall be on
the Corporation or such other party asserting that such indemnification
should not be allowed.
(c) The Authority shall make its determination within sixty
days of being selected and shall submit a written opinion of its
conclusion simultaneously to both the Corporation and the Director or
Officer.
(d) If the Authority determines that indemnification is
required hereunder, the Corporation shall pay the entire requested amount
of Liabilities (net of any Expenses previously advanced pursuant to
Section 10.05), including interest thereon at a reasonable rate, as
determined by the Authority, within ten days of receipt of the Authority's
opinion; provided, that, if it is determined by the Authority that a
Director or Officer is entitled to indemnification as to some claims,
issues or matters, but not as to other claims, issues or matters, involved
in the subject Proceeding, the Corporation shall be required to pay (as
set forth above) only the amount of such requested Liabilities as the
Authority shall deem appropriate in light of all of the circumstances of
such Proceeding.
(e) The determination by the Authority that indemnification is
required hereunder shall be binding upon the Corporation regardless of any
prior determination that the Director or Officer engaged in a Breach of
Duty.
(f) All Expenses incurred in the determination process under
this Section 10.04 by either the Corporation or the Director or Officer,
including, without limitation, all Expenses of the selected Authority,
shall be paid by the Corporation.
10.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse, within ten days
after the receipt of the Director's or Officer's written request therefor,
the reasonable Expenses of the Director or Officer as such Expenses are
incurred, provided the following conditions are satisfied:
(i) The Director or Officer furnishes to the Corporation
an executed written certificate affirming his or her good faith
belief that he or she has not engaged in misconduct which
constitutes a Breach of Duty; and
(ii) The Director or Officer furnishes to the Corporation
an unsecured executed written agreement to repay any advances
made under this Section 10.05 if it is ultimately determined by
an Authority that he or she is not entitled to be indemnified by
the Corporation for such Expenses pursuant to Section 10.04.
(b) If the Director or Officer must repay any previously
advanced Expenses pursuant to this Section 10.05, such Director or Officer
shall not be required to pay interest on such amounts.
10.06. Indemnification and Allowance of Expenses of Certain
Others.
(a) The Corporation shall indemnify a director or officer of an
Affiliate (who is not otherwise serving as a Director or Officer) against
all Liabilities, and shall advance the reasonable Expenses, incurred by
such director or officer in a Proceeding to the same extent hereunder as
if such director or officer incurred such Liabilities because he or she
was a Director or Officer, if such director or officer is a Party thereto
because he or she is or was a director or officer of the Affiliate.
(b) The Corporation shall indemnify an employee who is not a
Director or Officer, to the extent that he or she has been successful on
the merits or otherwise in defense of a Proceeding, for all reasonable
Expenses incurred in the Proceeding if the employee was a Party because he
or she was an employee of the Corporation.
(c) The Board may, in its sole and absolute discretion as it
deems appropriate, pursuant to a majority vote thereof, indemnify (to the
extent not otherwise provided in Section 10.06(b)) against Liabilities
incurred by, and/or provide for the allowance of reasonable Expenses of,
an authorized employee or agent of the Corporation acting within the scope
of his or her duties as such and who is not otherwise a Director or
Officer.
10.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of a Director or Officer or any individual who is or
was an authorized employee or agent of the Corporation against any
Liability asserted against or incurred by such individual in his or her
capacity as such or arising from his or her status as such, regardless of
whether the Corporation is required or permitted to indemnify against any
such Liability under this Article X.
10.08. Notice to the Corporation. A Director, Officer or
employee shall promptly notify the Corporation in writing when he or she
has actual knowledge of a Proceeding which may result in a claim of
indemnification against Liabilities or allowance of Expenses hereunder,
but the failure to do so shall not relieve the Corporation of any
liability to the Director, Officer or employee hereunder unless the
Corporation shall have been irreparably prejudiced by such failure (as
determined, in the case of Directors and Officers only, by an Authority).
10.09. Severability. If any provision of this Article X shall
be deemed invalid or inoperative, or if a court of competent jurisdiction
determines that any of the provisions of this Article X contravene public
policy, this Article X shall be construed so that the remaining provisions
shall not be affected, but shall remain in full force and effect, and any
such provisions which are invalid or inoperative or which contravene
public policy shall be deemed, without further action or deed by or on
behalf of the Corporation, to be modified, amended and/or limited, but
only to the extent necessary to render the same valid and enforceable.
10.10. Nonexclusivity of Article X. The rights of a Director,
Officer or employee (or any other person) granted under this Article X
shall not be deemed exclusive of any other rights to indemnification
against Liabilities or advancement of Expenses which the Director, Officer
or employee (or such other person) may be entitled to under any written
agreement, Board resolution, vote of shareholders of the Corporation or
otherwise, including, without limitation, under the Statute. Nothing
contained in this Article X shall be deemed to limit the Corporation's
obligations to indemnify a Director, Officer or employee under the
Statute.
10.11. Contractual Nature of Article X; Repeal or Limitation of
Rights. This Article X shall be deemed to be a contract between the
Corporation and each Director, Officer and employee of the Corporation and
any repeal or other limitation of this Article X or any repeal or
limitation of the Statute or any other applicable law shall not limit any
rights of indemnification against Liabilities or allowance of Expenses
then existing or arising out of events, acts or omissions occurring prior
to such repeal or limitation, including, without limitation, the right of
indemnification against Liabilities or allowance or Expenses for
Proceedings commenced after such repeal or limitation to enforce this
Article X with regard to acts, omissions or events arising prior to such
repeal or limitation.
Exhibit 4.4
JOHNSON WORLDWIDE ASSOCIATES, INC.
THIRD AMENDMENT TO NOTE AGREEMENTS
Dated as of September 30, 1997
Re:
Note Agreements Dated as of May 1, 1993
and
$15,000,000 6.58% Senior Notes
Due September 25, 1999
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES
1326 Willow Road
Sturtevant, Wisconsin 53177
THIRD AMENDMENT TO NOTE AGREEMENTS
Dated as of September 30, 1997
Re:Note Agreements Dated as of May 1, 1993
and
$15,000,000 6.58% Senior Notes
Due September 25, 1999
To the Noteholders named in
Schedule I hereto which are also
signatories to this Third Amendment
to Note Agreement.
Ladies and Gentlemen:
Reference is made to the separate Note Agreements each dated as of
May 1, 1993, as amended by the Amendment Agreement dated as of September
30, 1993 and the Second Amendment Agreement dated as of October 31, 1996
(the "Note Agreements"), between Johnson Worldwide Associates, Inc., a
Wisconsin corporation (the "Company"), and the Purchasers named therein,
under and pursuant to which $15,000,000 aggregate principal amount of
6.58% Senior Notes due September 25, 1999 (the "Notes") of the Company
were originally issued. Terms used but not otherwise defined herein shall
have the meanings set forth in the Note Agreements.
The Company hereby requests that you accept each of the amendments
set forth below in the manner herein provided:
ARTICLE 1. AMENDMENTS OF NOTE AGREEMENTS
Section 1.1. Amendment of Section 8.1. Section 8.1 of the Note
Agreements shall be amended by amending the definition of "Consolidated
Net Worth" in its entirety so that the same shall read as follows:
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus, and retained earnings of the
Company and its Restricted Subsidiaries, net of all cumulative foreign
currency translation adjustments and contingent compensation adjustments
determined on a consolidated basis in accordance with GAAP; provided
that for the fiscal quarters ending October 3, 1997 and January 2, 1998,
the cumulative foreign currency translation account of the Company shall
be excluded in calculating Consolidated Net Worth.
ARTICLE 2. MISCELLANEOUS
Section 2.1. No Legend Required. References in the Note Agreements
or in any Note, certificate, instrument or other document to the Note
Agreements shall be deemed to be references to the Note Agreements as
amended hereby and as further amended from time to time.
Section 2.2. Effect of Amendment. Except as expressly amended
hereby, the Company agrees that the Note Agreements, the Notes and all
other documents and agreements executed by the Company in connection with
the Note Agreements in favor of the Noteholders are ratified and confirmed
and shall remain in full force and effect and that it has no set-off,
counterclaim or defense with respect to any of the foregoing.
Section 2.3. Successors and Assigns. This Third Amendment to Note
Agreements shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of the Noteholders and to the
benefit of the Noteholders' successors and assigns, including each
successive holder or holders of any Notes.
Section 2.4. Requisite Approval; Expenses. This Third Amendment to
Note Agreements shall not be effective until (a) the Company and the
holders of 66-2/3% in aggregate principal amount of all Notes outstanding
on the date hereof shall have executed this Third Amendment to Note
Agreements, and (b) the Company shall have paid all out-of-pocket expenses
incurred by the Noteholders in connection with the consummation of the
transactions contemplated by this Third Amendment to Note Agreements,
including, without limitation, the fees, expenses and disbursements of
Chapman and Cutler which are reflected in statements of such counsel
rendered on or prior to the effective date of this Third Amendment to Note
Agreements.
Section 2.5. Counterparts. This Third Amendment to Note Agreements
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
IN WITNESS WHEREOF, the Company has executed this Third Amendment to
Note Agreements as of the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By_____________________________________
Its
This Third Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
BY: CIGNA Investments, Inc.
By____________________________________
Its
This Third Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
LIFE INSURANCE COMPANY OF NORTH
AMERICA
BY: CIGNA Investments, Inc.
By__________________________________
Its
<PAGE>
SCHEDULE I
OUTSTANDING
PRINCIPAL AMOUNT
OF NOTES
Connecticut General Life Insurance Company $12,000,000
Life Insurance Company of North America $3,000,000
------------
TOTAL $15,000,000
Exhibit 4.5
JOHNSON WORLDWIDE ASSOCIATES, INC.
FOURTH AMENDMENT TO NOTE AGREEMENTS
Dated as of October 3, 1997
Re:
Note Agreements Dated as of May 1, 1993
and
$15,000,000 6.58% Senior Notes
Due September 25, 1999
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES
1326 Willow Road
Sturtevant, Wisconsin 53177
FOURTH AMENDMENT TO NOTE AGREEMENTS
Dated as of October 3, 1997
Re:Note Agreements Dated as of May 1, 1993
and
$15,000,000 6.58% Senior Notes
Due September 25, 1999
To the Noteholders named in
Schedule I hereto which are also
Johnson Worldwide Associates, Inc.
signatories to this Fourth Amendment
to Note Agreement.
Ladies and Gentlemen:
Reference is made to the separate Note Agreements each dated as of
May 1, 1993, as amended by the Amendment Agreement dated as of September
30, 1993 and the Second Amendment Agreement dated as of October 31, 1996,
and the Third Amendment Agreement dated as of September 30, 1997, (the
"Note Agreements"), between Johnson Worldwide Associates, Inc., a
Wisconsin corporation (the "Company"), and the Purchasers named therein,
under and pursuant to which $15,000,000 aggregate principal amount of
6.58% Senior Notes due September 25, 1999 (the "Notes") of the Company
were originally issued. Terms used but not otherwise defined herein shall
have the meanings set forth in the Note Agreements.
The Company hereby requests that you accept each of the amendments
set forth below in the manner herein provided:
ARTICLE 1. AMENDMENTS OF NOTE AGREEMENTS
Section 1.1. Amendment of Section 5.11. Section 5.11 of the Note
Agreements shall be amended in its entirety so that the same shall read as
follows:
Section 5.11. Fixed Charge Coverage Ratio. (a) On October 3, 1997
and January 2, 1998 the Company will have kept and maintained the ratio
of Net Income Available for Fixed Charges to Fixed Charges for the
fiscal quarter ending on each such date at not less than 1.20 to 1.00.
(b) On April 3, 1998 and on the last day of each fiscal quarter
thereafter, the Company will have kept and maintained the ratio of Net
Income Available for Fixed Charges to Fixed Charges for the period of
four consecutive fiscal quarters ending on each of such dates at not
less than 1.50 to 1.00.
ARTICLE 2. MISCELLANEOUS
Section 2.1. No Legend Required. References in the Note Agreements
or in any Note, certificate, instrument or other document to the Note
Agreements shall be deemed to be references to the Note Agreements as
amended hereby and as further amended from time to time.
Section 2.2. Effect of Amendment. Except as expressly amended
hereby, the Company agrees that the Note Agreements, the Notes and all
other documents and agreements executed by the Company in connection with
the Note Agreements in favor of the Noteholders are ratified and confirmed
and shall remain in full force and effect and that it has no set-off,
counterclaim or defense with respect to any of the foregoing.
Section 2.3. Successors and Assigns. This Fourth Amendment to Note
Agreements shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of the Noteholders and to the
benefit of the Noteholders' successors and assigns, including each
successive holder or holders of any Notes.
Section 2.4. Requisite Approval; Expenses. This Fourth Amendment to
Note Agreements shall not be effective until (a) the Company and the
holders of 66-2/3% in aggregate principal amount of all Notes outstanding
on the date hereof shall have executed this Fourth Amendment to Note
Agreements, and (b) the Company shall have paid all out-of-pocket
expenses incurred by the Noteholders in connection with the consummation
of the transactions contemplated by this Fourth Amendment to Note
Agreements, including, without limitation, the fees, expenses and
disbursements of Chapman and Cutler which are reflected in statements of
such counsel rendered on or prior to the effective date of this Fourth
Amendment to Note Agreements.
Section 2.5. Counterparts. This Fourth Amendment to Note Agreements
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
IN WITNESS WHEREOF, the Company has executed this Fourth Amendment to
Note Agreements as of the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By_________________________________
Its
This Fourth Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
BY: CIGNA Investments, Inc.
By___________________________
Its
This Fourth Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
LIFE INSURANCE COMPANY OF NORTH
AMERICA
BY: CIGNA Investments, Inc.
By_________________________________
Its
SCHEDULE I
OUTSTANDING
PRINCIPAL AMOUNT
OF NOTES
Connecticut General Life Insurance Company $12,000,000
Life Insurance Company of North America $3,000,000
-----------
TOTAL $15,000,000
Exhibit 4.8
JOHNSON WORLDWIDE ASSOCIATES, INC.
SECOND AMENDMENT TO NOTE AGREEMENTS
Dated as of September 30, 1997
Re:
Note Agreements Dated as of October 1, 1995
and
$30,000,000 7.77% Senior Notes, Series A
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B
Due October 15, 2005
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES
1326 Willow Road
Sturtevant, Wisconsin 53177
SECOND AMENDMENT TO NOTE AGREEMENTS
Dated as of September 30, 1997
Re:Note Agreements Dated as of October 1, 1995
and
$30,000,000 7.77% Senior Notes, Series A
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B
Due October 15, 2005
To the Noteholders named in
Schedule I hereto which are also
signatories to this Second Amendment
to Note Agreement.
Ladies and Gentlemen:
Reference is made to the separate Note Agreements each dated as of
October 1, 1995, as amended by the First Amendment dated as of October 31,
1996 (the "Note Agreements"), between Johnson Worldwide Associates, Inc.,
a Wisconsin corporation (the "Company"), and the Purchasers named therein,
under and pursuant to which $30,000,000 aggregate principal amount of
7.77% Senior Notes, Series A, due October 15, 2005 and $15,000,000 6.98%
Senior Notes, Series B, due October 15, 2005 (collectively, the "Notes")
of the Company were originally issued. Terms used but not otherwise
defined herein shall have the meanings set forth in the Note Agreements.
The Company hereby requests that you accept each of the amendments
set forth below in the manner herein provided:
ARTICLE 1. AMENDMENTS OF NOTE AGREEMENTS
Section 1.1. Amendment of Section 8.1. Section 8.1 of the Note
Agreements shall be amended by amending the definition of "Consolidated
Net Worth" in its entirety so that the same shall read as follows:
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus, and retained earnings of the
Company and its Restricted Subsidiaries, net of all cumulative foreign
currency translation adjustments and contingent compensation adjustments
determined on a consolidated basis in accordance with GAAP; provided
that for the fiscal quarters ending October 3, 1997 and January 2, 1998,
the cumulative foreign currency translation account of the Company shall
be excluded in calculating Consolidated Net Worth.
ARTICLE 2. MISCELLANEOUS
Section 2.1. No Legend Required. References in the Note Agreements
or in any Note, certificate, instrument or other document to the Note
Agreements shall be deemed to be references to the Note Agreements as
amended hereby and as further amended from time to time.
Section 2.2. Effect of Amendment. Except as expressly amended
hereby, the Company agrees that the Note Agreements, the Notes and all
other documents and agreements executed by the Company in connection with
the Note Agreements in favor of the Noteholders are ratified and confirmed
and shall remain in full force and effect and that it has no set-off,
counterclaim or defense with respect to any of the foregoing.
Section 2.3. Successors and Assigns. This Second Amendment to Note
Agreements shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of the Noteholders and to the
benefit of the Noteholders' successors and assigns, including each
successive holder or holders of any Notes.
Section 2.4. Requisite Approval; Expenses. This Second Amendment to
Note Agreements shall not be effective until (a) the Company and the
holders of 66-2/3% in aggregate principal amount of all Notes outstanding
on the date hereof shall have executed this Second Amendment to Note
Agreements, and (b) the Company shall have paid all out-of-pocket
expenses incurred by the Noteholders in connection with the consummation
of the transactions contemplated by this Second Amendment to Note
Agreements, including, without limitation, the fees, expenses and
disbursements of Chapman and Cutler which are reflected in statements of
such counsel rendered on or prior to the effective date of this Second
Amendment to Note Agreements.
Section 2.5. Counterparts. This Second Amendment to Note Agreements
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
IN WITNESS WHEREOF, the Company has executed this Second Amendment to
Note Agreements as of the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By________________________________
Its
This Second Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
NATIONWIDE LIFE INSURANCE COMPANY
By__________________________________
Its
This Second Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
EMPLOYERS LIFE INSURANCE COMPANY OF
WAUSAU
By___________________________________
Its
This Second Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By_____________________________________
Its
By_____________________________________
Its
<PAGE>
SCHEDULE I
OUTSTANDING
PRINCIPAL AMOUNT
OF NOTES
Nationwide Life Insurance Company $27,000,000
Employers Life Insurance Company of Wausau $3,000,000
Great-West Life & Annuity Insurance Company $15,000,000
-----------
TOTAL $45,000,000
Exhibit 4.9
JOHNSON WORLDWIDE ASSOCIATES, INC.
THIRD AMENDMENT TO NOTE AGREEMENTS
Dated as of October 3, 1997
Re:
Note Agreements Dated as of October 1, 1995
and
$30,000,000 7.77% Senior Notes, Series A
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B
Due October 15, 2005
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES
1326 Willow Road
Sturtevant, Wisconsin 53177
THIRD AMENDMENT TO NOTE AGREEMENTS
Dated as of October 3, 1997
Re:Note Agreements Dated as of October 1, 1995
and
$30,000,000 7.77% Senior Notes, Series A
Due October 15, 2005
and
$15,000,000 6.98% Senior Notes, Series B
Due October 15, 2005
To the Noteholders named in
Schedule I hereto which are also
signatories to this Third Amendment
to Note Agreement.
Ladies and Gentlemen:
Reference is made to the separate Note Agreements each dated as of
October 1, 1995, as amended by the First Amendment dated as of October 31,
1996 and the Second Amendment to Note Agreement dated as of September 30,
1997, (the "Note Agreements"), between Johnson Worldwide Associates, Inc.,
a Wisconsin corporation (the "Company"), and the Purchasers named therein,
under and pursuant to which $30,000,000 aggregate principal amount of
7.77% Senior Notes, Series A, due October 15, 2005 and $15,000,000 6.98%
Senior Notes, Series B, due October 15, 2005 (collectively, the "Notes")
of the Company were originally issued. Terms used but not otherwise
defined herein shall have the meanings set forth in the Note Agreements.
The Company hereby requests that you accept each of the amendments
set forth below in the manner herein provided:
ARTICLE 1. AMENDMENTS OF NOTE AGREEMENTS
Section 1.1. Section 5.6(a)(3) of the Note Agreements shall be
amended in its entirety to read as follows:
(3) Current Debt or Funded Debt of the Company and its
Restricted Subsidiaries; provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after
giving effect thereto and to the application of the proceeds thereof,
Consolidated Funded Debt would not exceed 55% of Consolidated Total
Capitalization, provided that for purposes of any determination of
additional Funded Debt to be issued or incurred within the limitation
of this Section 5.6(a)(3), the Average Outstanding Balance of
Consolidated Current Debt (as defined in Section 5.6(e) below)
computed for the Compliance Period (as defined in Section 5.6(e)
below) preceding the date of any such determination shall be deemed
to constitute outstanding Funded Debt of the Company incurred as of
the last day of such Compliance Period and, except to the extent that
any such Current Debt was refinanced with Funded Debt, in which case
such Current Debt, to the extent it was refinanced with Funded Debt,
will not be deemed to constitute Funded Debt, shall be deemed
outstanding at all times prior to the end of the next Compliance
Period; and
Section 1.2. Section 5.9 of the Note Agreements shall be amended
in its entirety to read as follows:
Section 5.9. Consolidated Net Worth. The Company will at
all times keep and maintain Consolidated Net Worth at an amount not
less than $100,000,000; provided that Charges for Identified
Dispositions shall not be taken into account for purposes of
determining the amount of Consolidated Net Worth maintained by the
Company for purposes of calculations pursuant to this Section 5.9.
As used in this Section 5.9, "Charges for Identified Dispositions"
shall mean charges taken by the Company on or prior to October 2,
1998 in an aggregate amount not in excess of $5,000,000 and relating
to (i) the closing of certain distribution centers and other
facilities owned or operated by Uwatec AG and its subsidiaries, and
(ii) the disposition of the Airguide Instrument Company.
Section 1.3. Section 5.16 of the Note Agreements shall be amended
in its entirety to read as follows:
5.16. Fixed Charge Coverage Ratio. The Company will keep
and maintain the Fixed Charge Coverage Ratio at not less than 1.5 to
1; provided that on not more than four occasions (including the
quarter ending October 3, 1997) the Fixed Charge Coverage Ratio can
be less than 1.5 to 1 so long as it is greater than 1.2 to 1. As
used in this Section 5.16, "Fixed Charge Coverage Ratio" shall mean
the ratio of (i) Net Income Available for Fixed Charges to (ii) Fixed
Charges determined as of the end of each fiscal quarter for the
period consisting of the immediately preceding four fiscal quarters
(each such rolling four fiscal quarter period being treated as a
single accounting period).
ARTICLE 2. MISCELLANEOUS
Section 2.1. No Legend Required. References in the Note Agreements
or in any Note, certificate, instrument or other document to the Note
Agreements shall be deemed to be references to the Note Agreements as
amended hereby and as further amended from time to time.
Section 2.2. Effect of Amendment. Except as expressly amended
hereby, the Company agrees that the Note Agreements, the Notes and all
other documents and agreements executed by the Company in connection with
the Note Agreements in favor of the Noteholders are ratified and confirmed
and shall remain in full force and effect and that it has no set-off,
counterclaim or defense with respect to any of the foregoing.
Section 2.3. Successors and Assigns. This Third Amendment to Note
Agreements shall be binding upon the Company and its successors and
assigns and shall inure to the benefit of the Noteholders and to the
benefit of the Noteholders' successors and assigns, including each
successive holder or holders of any Notes.
Section 2.4. Requisite Approval; Expenses. This Third Amendment to
Note Agreements shall not be effective until (a) the Company and the
holders of 70% in aggregate principal amount of all Notes outstanding on
the date hereof shall have executed this Third Amendment to Note
Agreements, (b) the Company shall have paid a fee in the aggregate amount
of $225,000 (pro rata based on the unpaid principal amount of the Notes
held by each holder) to the holders of the Notes, and (c) the Company
shall have paid all out-of-pocket expenses incurred by the Noteholders in
connection with the consummation of the transactions contemplated by this
Third Amendment to Note Agreements, including, without limitation, the
fees, expenses and disbursements of Chapman and Cutler which are reflected
in statements of such counsel rendered on or prior to the effective date
of this Third Amendment to Note Agreements.
Section 2.5. Counterparts. This Third Amendment to Note Agreements
may be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.
IN WITNESS WHEREOF, the Company has executed this Third Amendment to
Note Agreements as of the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By__________________________
Its
This Third Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
NATIONWIDE LIFE INSURANCE COMPANY
By_______________________________
Its
This Third Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
EMPLOYERS LIFE INSURANCE COMPANY OF
WAUSAU
By_____________________________
Its
This Third Amendment to Note Agreements is accepted and agreed to as
of the day and year first above written.
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By _____________________________
Its
By ____________________________
Its
<PAGE>
SCHEDULE I
OUTSTANDING
PRINCIPAL AMOUNT
OF NOTES
Nationwide Life Insurance Company $27,000,000
Employers Life Insurance Company of Wausau $3,000,000
Great-West Life & Annuity Insurance Company $15,000,000
-----------
TOTAL $45,000,000
EXHIBIT 4.12
WAIVER AND AMENDMENT NO. 2
THIS WAIVER AND AMENDMENT NO. 2 (the "Amendment") is entered
into as of November 6, 1996 by and among JOHNSON WORLDWIDE ASSOCIATES,
INC. (the "Company"), the undersigned Banks and THE FIRST NATIONAL BANK OF
CHICAGO, as Agent.
W I T N E S S E T H :
WHEREAS, the Company, the Banks and the Agent are parties to
that certain Revolving Credit Agreement dated as of November 29, 1995, as
amended prior to the date hereof (as so amended, the "Agreement");
WHEREAS, the Company is in default under Section 6.03 of the
Agreement due to the Company's failure to maintain, for the four fiscal
quarters ending September 27, 1996, the ratio of Net Income Available for
Fixed Charges to Fixed Charges required to be maintained pursuant to said
Section;
WHEREAS, the Company is in default under certain agreements
(collectively, the "1991 and 1993 Note Agreements") under which the
Company has incurred Indebtedness in excess of $5,000,000 ("Other
Specified Indebtedness") due, in each case, to the Company's failure to
maintain, for the period of four consecutive fiscal quarters ending
September 27, 1996, a certain minimum fixed charge coverage ratio ("Fixed
Charge Coverage Defaults"), and such Fixed Charge Coverage Defaults permit
the maturity of such Other Specified Indebtedness to be accelerated by the
holders thereof;
WHEREAS, Events of Default have occurred under the terms of the
Agreement due to the default under Section 6.03 of the Agreement and the
Fixed Charge Coverage Defaults and the Company has requested that the
Banks waive such Events of Default;
WHEREAS, subject to the terms and conditions hereof, the
undersigned Banks have agreed to grant such waiver; and
WHEREAS, the Company and the undersigned Banks also desire to
amend the Agreement in certain respects more fully described hereinafter;
NOW, THEREFORE, in consideration of the premises herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Defined Terms. Capitalized terms used herein and not
otherwise defined herein shall have the meanings attributed to such terms
in the Agreement.
2. Waiver. The undersigned Banks hereby waive the Events of
Default arising under clauses (d) and (e) of Article VII of the Agreement
to the extent that such Events of Default result solely from the Company's
default under Section 6.03 of the Agreement and the Fixed Charge Coverage
Defaults, respectively, in each case as at September 27, 1996; provided,
however, that the foregoing waiver shall be effective only until the
occurrence of any acceleration of the maturity of any of the Other
Specified Indebtedness.
3. Amendments to the Agreement.
3.1. The definition of "Net Income Available for Fixed Charges"
set forth in Section 1.01 of the Agreement is hereby amended by deleting
the period at the end thereof and inserting the following in lieu thereof:
"plus (d) (to the extent taken into account in determining
Consolidated Net Income) in the case of the period of time prior
to October 2, 1998, special charges not to exceed $5,000,000
taken in respect of certain distribution center closings and, if
Uwatec A.G. is acquired, certain plant closings, in each case
during such period."
3.2. Section 1.01 of the Agreement is hereby amended by
inserting in proper alphabetical order the following definition:
"Quarterly Date" shall mean the last day of each fiscal
quarter of the Company."
3.3. Section 6.03 of the Agreement is hereby amended to read in
its entirety as follows:
"SECTION 6.03. Fixed Charges Coverage Ratio. The Company
will, as at each Quarterly Date set forth below, have kept and
maintained for the immediately preceding four (or, as at
December 27, 1996, one, or as at March 28, 1997, two, or as at
June 27, 1997, three) fiscal quarters ending on such Quarterly
Date, a ratio of Net Income Available for Fixed Charges to Fixed
Charges of not less than the ratio set forth below opposite such
Quarterly Date:
Quarterly Date Ratio
December 27, 1996 (1.25):1.00
March 28, 1997 1.00:1.00
June 27, 1997 and each Quarterly
Date thereafter 1.50:1.00;
provided that on any four (but only four) Quarterly Dates
occurring during the period from June 27, 1997 to but excluding
the Expiration Date, the ratio of Net Income Available for Fixed
Charges to Fixed Charges for the immediately preceding four
fiscal quarters ending on such Quarterly Dates may be less than
1.5 to 1.0, but must be greater than 1.2 to 1.0."
4. Effective Date. This Amendment shall become effective as
of the date first above written (the "Effective Date") upon receipt by the
Agent of the following:
(i) Counterparts of this Amendment duly executed by the
Company and the Majority Banks.
(ii) For the account of each Bank, an amendment fee in the
amount of 0.10% of the sum of such Bank's Eurocurrency
Commitment and Revolving Loan Commitment.
(iii) Such other documents, in each case in form and
substance satisfactory to the Agent, as the Agent may reasonably
request.
5. Ratification. The Agreement (including, without
limitation, Article XI thereof), as modified and amended hereby, shall
remain in full force and effect and is hereby ratified, approved and
confirmed in all respects.
6. Reference to Agreement. From and after the Effective Date,
each reference in the Agreement to "this Agreement", "hereof", or
"hereunder" or words of like import, and all references to the Agreement
in any and all agreements, instruments, documents, notes, certificates and
other writings of every kind and nature shall be deemed to mean the
Agreement, as modified and amended by this Amendment.
7. Costs and Expenses. The Company agrees to pay all
reasonable costs, fees and out-of-pocket expenses (including attorneys'
fees and time charges of attorneys for the Agent, which attorneys may be
employees of the Agent) incurred by the Agent in connection with the
preparation, execution and enforcement of this Amendment.
8. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAWS OF CONFLICTS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.
9. Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the Company, the undersigned Banks and the
Agent have executed this Amendment as of the date first above written.
JOHNSON WORLDWIDE ASSOCIATES,
INC.
By: _________________________________
Title: ______________________
THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
By: _________________________________
Title: ______________________
FIRSTAR BANK MILWAUKEE, N.A.
By: _________________________________
Title: ______________________
SOCIETE GENERALE
By: _________________________________
Title: ______________________
WACHOVIA BANK OF GEORGIA, N.A.
By: _________________________________
Title: ______________________
M&I MARSHALL & ILSLEY BANK
By: _________________________________
Title: ______________________
THE NORTHERN TRUST COMPANY
By: _________________________________
Title: ______________________
EXHIBIT 4.13
AMENDMENT NO. 3 TO CREDIT AGREEMENT
Dated as of July 9, 1997
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT ("Amendment") is made
as of July 9, 1997 by and among JOHNSON WORLDWIDE ASSOCIATES, INC., a
Wisconsin corporation (the "Company"), the financial institutions listed
on the signature pages hereof (the "Banks") and THE FIRST NATIONAL BANK OF
CHICAGO, in its individual capacity as a Bank and as agent (the "Agent")
on behalf of the Banks under that certain Credit Agreement dated as of
November 29, 1995 by and among the Company, the Banks and the Agent (as
amended, the "Credit Agreement"). Defined terms used herein and not
otherwise defined herein shall have the meaning given to them in the
Credit Agreement.
W I T N E S S E T H :
WHEREAS, the Company, the Banks and the Agent are parties to the
Credit Agreement;
WHEREAS, the Company has requested that the Banks amend the
Credit Agreement to provide for the issuance of letters of credit
thereunder and in certain other respects; and
WHEREAS, the Banks and the Agent are willing to amend the Credit
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Banks and the Agent have agreed to the
following amendments to the Credit Agreement.
1. Amendments to Credit Agreement. Effective as of July 9,
1997 and subject to the satisfaction of the conditions precedent set forth
in Section 2 below, the Credit Agreement is hereby amended as follows:
1.1. Article I of the Credit Agreement is hereby amended to add
alphabetically the following defined terms:
"Issuance Date" means, with respect to any Letter of Credit, the
date on which such Letter of Credit is issued hereunder.
"Issuer" means any Bank which has issued a Letter of Credit
pursuant to the Letter of Credit Facility, and its successors and assigns.
"Issuer's Fee" is defined in Section 2.18(g).
"Letter of Credit" means any standby letter of credit
denominated in Dollars issued for the account of the Company under the
Letter of Credit Facility.
"Letter of Credit Facility" means the Letter of Credit Facility
provided in Section 2.18.
"Letter of Credit Fee" is defined in Section 2.18(g).
"Letter of Credit Obligations" means, at any date of
determination thereof, all liabilities, whether actual or contingent, of
the Company in respect of the Letters of Credit, including without
limitation, the sum of (a) the Dollar Amount of the Reimbursement
Obligations; and (b) the Dollar Amount of the aggregate undrawn face
amount of the outstanding Letters of Credit.
"Letter of Credit Request" is defined in Section 2.18(c).
"Purchase Agreement" means that certain Share Purchase Agreement
dated as of March 17/26, 1997 by and among the Company, Uwatec AG, Heinze
Ruchti and Karl Leemann.
"Reimbursement Obligations" means, at any time, the aggregate of
the obligations of the Company to the Issuers and the Banks in respect of
all unreimbursed payments or disbursements made by an Issuer and the Banks
under or in respect of the Letters of Credit.
1.2. Article I of the Credit Agreement is hereby amended by
amending the definition of "Dollar Amount" to add the following at the end
thereof:
"Dollar Amount shall mean in relation to any Letter of
Credit Obligation, the equivalent in Dollars of any such Letter
of Credit Obligation denominated in an Alternative Currency
computed as prescribed in Section 2.18(d)(i), or, if such
methods are for any reason inapplicable, in the manner deemed
most appropriate and customary by the Agent."
1.3. Article I of the Credit Agreement is hereby amended by
amending the definition of "Funded Debt" to insert immediately after the
phrase "shall mean" the following: ", without duplication,", to insert
immediately after "the date of origin)," the following: "including
without limitation the portion of the "Fixed Purchase Price" (as defined
in the Purchase Agreement) which has been deferred in accordance with
Section 2.4 of the Purchase Agreement", and to add the following at the
end thereof: "and (e) all obligations of such Person with respect to
Letters of Credit with an expiry date more than one year from the Issuance
Date (or which can be extended at the option of the account party to an
expiry date more than one year from the Issuance Date)".
1.4. Article I of the Credit Agreement is hereby amended by
amending the definition of "Indebtedness" to insert immediately after the
phrase "shall mean and include" the following: ", without duplication,",
to insert immediately after "and similar agreements)," the following:
"including without limitation the portion of the "Fixed Purchase Price"
(as defined in the Purchase Agreement) which has been deferred in
accordance with Section 2.4 of the Purchase Agreement", and to add the
following at the end thereof: "and (g) all obligations of such Person
with respect to the Letter of Credit Obligations."
1.5. Article I of the Credit Agreement is hereby amended by
amending the definition of "Majority Banks" to add the following at the
end thereof: "and Letter of Credit Obligations".
1.6. Section 2.01(a) of the Credit Agreement is hereby amended
to insert immediately after the phrase "Absolute Rate Loans to" in the
seventh line, the following: "and Letter of Credit Obligations of" and to
add immediately after the phrase "pursuant to Section 2.01(a)" in the
ninth line, the following: "and Letter of Credit Obligations of the
Company".
1.7. Section 2.01(b) of the Credit Agreement is hereby amended
to insert immediately after the phrase "all Eligible Subsidiaries" in the
eighth line, the following: "and Letter of Credit Obligations of the
Company".
1.8. Section 2.11 of the Credit Agreement is hereby amended to
add a new subsection (e) at the end thereof:
(e) If, as of the last Business Day of any fiscal
quarter,the sum of (i) the aggregate outstanding principal
amount of Revolving Loans made pursuant to Section 2.01(a) and
(ii) the Letter of Credit Obligations exceeds the Aggregate
Revolving Commitment, then the Company shall make a mandatory
prepayment of the Revolving Loans in an amount sufficient to
eliminate such excess.
1.9. Section 2.13(a)(i) of the Credit Agreement is hereby
amended to insert immediately after the phrase "its Loans or Notes" the
following: "or its Letters of Credit".
1.10. Section 2.13(a)(iv) of the Credit Agreement is hereby
amended to insert the following immediately after the phrase "its Loan or
Loans", the following: "or its Letters of Credit".
1.11. Section 2.13(c) of the Credit Agreement is hereby
amended to insert immediately after the phrase "its Loans" the following:
"or its Letters of Credit".
1.12. Section 2.15(a) of the Credit Agreement is hereby
amended to insert immediately after the phrase "and the Aggregate
Eurocurrency Commitment", the following: "(treating the Dollar Amount of
the Letter of Credit Obligations as usage of the Aggregate Revolving
Commitment)".
1.13. The Credit Agreement is hereby amended to insert
immediately after Section 2.17, the following new Section 2.18:
2.18. Letters of Credit. Subject to the terms and
conditions of this Agreement, the Company may obtain Letters of
Credit, from time to time during the period commencing on the
date hereof and ending on the Business Day prior to the
Expiration Date. The Company may request any Bank to issue a
Letter of Credit and such Bank may, but is not required to,
issue a Letter of Credit. If no other Bank is willing to issue
a Letter of Credit, First Chicago shall issue such Letter of
Credit. Any Bank issuing a Letter of Credit shall be an Issuer.
Nothing herein contained shall prohibit the Company from
obtaining letters of credit outside of this Credit Agreement.
(a) Types and Amounts. No Issuer (including First Chicago)
shall:
(i) issue any letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit, after
giving effect to the Letter of Credit requested hereunder, shall
exceed any limit imposed by law or regulation upon the Issuer;
(ii) issue any Letter of Credit if, after giving effect
thereto, the sum of (a) the Dollar Amount of the Letter of
Credit Obligations and (b) the aggregate unpaid principal
balance of the Revolving Loans would exceed the Revolving Loan
Commitment;
(iii) issue any Letter of Credit if, after giving
effect thereto, the sum of (a) the Dollar Amount of the Letter
of Credit Obligations and (b) the aggregate unpaid principal
balance of the Revolving Loans, Eurocurrency Loans and Absolute
Rate Loans would exceed the Aggregate Commitment;
(iv) issue any Letter of Credit which has an expiration
date on or after the Expiration Date; or
(v) issue any Letter of Credit if the Dollar Amount of the
Letter of Credit Obligations, after giving effect to the Letter
of Credit requested hereunder, shall exceed $20,000,000.
(b) Conditions. In addition to being subject to the
satisfaction of the conditions contained in Article IV, the
obligation of the Issuer to issue any Letter of Credit is subject to
the satisfaction in full of the following conditions:
(i) the Company shall have delivered to the Issuer, with a
copy to the Agent, at such times and in such manner as the
Issuer may reasonably prescribe such documents and materials as
may be required pursuant to the terms of the proposed Letter of
Credit and the proposed Letter of Credit shall be reasonably
satisfactory to the Issuer as to form and content; and
(ii) as of the Issuance Date, no order, judgment or decree
of any court, arbitrator or Governmental Authority shall purport
by its terms to enjoin or restrain the Issuer from issuing the
proposed Letter of Credit and no law, rule or regulation
applicable to the Issuer and no request or directive (whether or
not having the force of law) from any Governmental Authority
with jurisdiction over the Issuer shall prohibit or request that
the Issuer refrain from the issuance of Letters of Credit
generally or the issuance of such proposed Letter of Credit in
particular.
(c) Procedure for Issuance of Letters of Credit.
(i) The Company shall give the Issuer and the Agent
three (3) Business Days' prior written notice of any requested
issuance of a Letter of Credit (except that, in lieu of such
written notice, the Company may give the Issuer (x) notice of
such request by tested telex or other tested arrangement
satisfactory to the Issuer or (y) telephonic notice of such
request if confirmed in writing by delivery to the Issuer
(i) immediately (A) of a telecopy of the written notice required
hereunder which has been signed by an authorized signatory of
the Company or (B) of a telex containing all information
required to be contained in such written notice and
(ii) promptly (but in no event later than the requested time of
issuance) of a copy of the written notice required hereunder
containing the original signature of an authorized signatory of
the Company). Each such notice (each a "Letter of Credit
Request") shall be irrevocable once the relevant Letter of
Credit is issued and shall specify the stated amount of the
Letter of Credit requested, the Issuance Date (which day shall
be a Business Day) of such requested Letter of Credit, the date
on which such requested Letter of Credit is to expire (which
date shall be a Business Day and shall in no event be on or
after the Expiration Date), the purpose for which such Letter of
Credit is to be issued, and the Person for whose benefit the
requested Letter of Credit is to be issued. Promptly after
receipt thereof, the Agent shall notify each Bank of the
contents of each Letter of Credit Request. At the time such
Letter of Credit Request is made, the Company shall also provide
the Issuer and the Agent with a copy of the form of the Letter
of Credit it is requesting be issued. Such Letter of Credit
Request, to be effective, must be received by the Issuer and the
Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this
Section 2.18(c).
(ii) Subject to the terms and conditions of this
Section 2.18(c) and provided that the applicable conditions set
forth in Section 4.01(c), Section 4.01(d) and Section 2.18(b)
have been satisfied, the Issuer shall, on the requested Issuance
Date, issue the requested Letter of Credit for the account of
the Company in accordance with the Issuer's usual and customary
business practices.
(iii) An Issuer shall not amend, renew, extend, or
permit an extension of any Letter of Credit unless the
requirements of this Section 2.18(c) are met as if a new Letter
of Credit were being requested and issued.
(d) Reimbursement Obligations.
(i) The Issuer shall promptly notify the Company and the
Agent and each Bank of any draw under a Letter of Credit. The
Company shall reimburse the Agent for the account of the Issuer,
in immediately available funds, for draws under a Letter of
Credit no later than the Business Day next succeeding the date
of the payment by the Issuer. In the case of any draw under a
Letter of Credit in an Alternative Currency, the Company shall
reimburse the Agent for the account of the Issuer on demand at
the Agent's head office (or at such other place as may be
specified by the Agent) the amount in such Alternative Currency
drawn under such Letter of Credit or the equivalent of the
amount in Dollars at the rate of exchange then quoted by the
Agent for the electronic transfer to the place of payment in the
currency in which such draw was made or, if so required by the
Agent, to pay the Agent at its head office in advance, following
a documentary presentation, in Dollars the equivalent of the
amount required to pay the same. If, for any cause whatsoever,
there exists at the time in question no rate of exchange
generally available to the Agent for effective electronic
transfers of the sort provided for above, the Company agrees to
pay the Agent on demand an amount in Dollars equivalent to the
actual cost of settlement of the Issuer's obligation to the
person presenting the applicable draft under the applicable
Letter of Credit, however and whenever such settlement may be
made by the Issuer.
(ii) Any Reimbursement Obligation with respect to any
Letter of Credit shall bear interest form the date of the
relevant draws under the relevant Letter of Credit at the
interest rate for Borrowings not paid at maturity as calculated
in accordance with Section 2.07(a).
(iii) Any action taken or omitted to be taken by the
Issuer under or in connection with any Letter of Credit, if
taken or omitted in the absence of willful misconduct or gross
negligence, shall not put the Issuer under any resulting
liability to any Bank or, assuming that the Issuer has complied
with the procedures specified in Section 2.18(c) and such Bank
has not given a notice contemplated by Section 2.18(e) that
continues in full force and effect, relieve such Bank of its
obligations hereunder to the Issuer. In determining whether to
pay under any Letter of Credit, the Issuer shall have no
obligation relative to the Banks, the Agent or the Company other
than to confirm that any documents required to be delivered
under such Letter of Credit appear to comply on their face with
the requirements of such Letter of Credit.
(e) Participation; Receipt of Payments.
(i) Immediately upon issuance or extension or renewal by
an Issuer of any Letter of Credit in accordance with the
procedures set forth in Section 2.18(c), each Bank shall be
deemed to have irrevocably and unconditionally purchased and
received from the Issuer, without recourse or warranty, an
undivided interest and participation equal to its Applicable
Percentage in such Letter of Credit (including, without
limitation, all obligations of the Company with respect thereto)
and any security therefor or guaranty pertaining thereto, if
any; provided, that a Letter of Credit issued by the Issuer
shall not be deemed to be a Letter of Credit for purposes of
this Section 2.18(e) if the Issuer and the Agent shall have
received written notice from any Bank on or before one Business
Day prior to the date of its issuance of such Letter of Credit
that one or more of the conditions contained in Article IV is
not then satisfied, and, in the event the Issuer and the Agent
receive such a notice, there shall be no further obligation on
the part of First Chicago or any Issuer to issue any Letter of
Credit until such notice is withdrawn by that Bank or such
condition has been effectively waived in accordance with the
provisions of this Agreement.
(ii) In the event that an Issuer makes any payment under
any Letter of Credit and the Company shall not have repaid such
amount to the Issuer pursuant to Section 2.18(d), the Issuer
shall promptly notify the Agent and each Bank of such failure,
and each Bank shall promptly and unconditionally pay to the
Agent for the account of the Issuer the Dollar Amount of such
Bank's Applicable Percentage of the unreimbursed amount of any
such payment, and the Company's obligations to repay the Banks
with respect to such amounts shall be deemed to be, and treated
as, a Revolving Loan or Loans which shall bear interest at the
interest rate for Borrowings not paid at maturity as calculated
in accordance with Section 2.07(a) unless and until such amounts
are repaid or refinanced pursuant to Section 2.08. The failure
of any Bank to make available to the Agent, in immediately
available funds, its Applicable Percentage of the unreimbursed
amount of any such payment shall not relieve any other Bank of
its obligation hereunder to make available to the Agent, in
immediately available funds, its Applicable Percentage of the
unreimbursed amount of any payment on the date such payment is
to be made, but no Bank shall be responsible for the failure of
any other Bank to make available to the Agent its Applicable
Percentage of the unreimbursed amount of any payment on the date
such payment is to be made.
(iii) Whenever the Agent or an Issuer receives a
payment on account of a Reimbursement Obligation, including any
interest thereon, it shall promptly pay to each Bank which has
funded its participating interest therein, in immediately
available funds, an amount equal to such Bank's Applicable
Percentage thereof.
(iv) The obligations of a Bank to make payments to the
Agent for the account of an Issuer with respect to a Letter of
Credit shall be absolute, unconditional and irrevocable, shall
not be subject to any counterclaim, set-off, qualification or
exception whatsoever and shall be made without any requirement
that the Company satisfy the conditions set forth in
Section 4.01.
(f) Payment of Reimbursement Obligations.
(i) The Company agrees to pay to the Agent for the account
of the Issuer the amount of all Reimbursement Obligations,
interest and other amounts payable to the Issuer under or in
connection with any Letter of Credit immediately when due,
irrespective of any claim, set-off, defense or other right which
the Company or any Subsidiary may have at any time against the
Issuer or any other Person, under all circumstances, including
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other documents, instruments or
agreements executed by the Company in connection therewith;
(B) the existence of any claim, setoff, defense or
other right which the Company or any Subsidiary may have at
any time against a beneficiary named in a Letter of Credit
or any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), any Issuer,
any Bank, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions
(including any underlying transactions between the Company
or any Subsidiary and the beneficiary named in any Letter
of Credit);
(C) any draft, certificate or any other document
presented under the Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect
(provided any such draft, certificate or other document
appeared valid on its face when presented to the Issuer);
(D) the surrender or impairment of any security for
the performance or observance of any of the terms of this
Agreement or any of the documents, instruments or
agreements executed by the Company in connection therewith;
or
(E) the occurrence of any Default or Event of
Default.
(ii) In the event any payment by the Company received by
the Agent or an Issuer with respect to a Letter of Credit and
distributed to the Banks on account of their participations is
thereafter set aside, avoided or recovered from the Agent or an
Issuer in connection with any receivership, liquidation,
reorganization or bankruptcy proceeding, each Bank which
received such distribution shall, upon demand by the Agent,
contribute to the Agent or such Issuer such Bank's Applicable
Percentage of the amount set aside, avoided or recovered
together with interest at the ate required to be paid by the
Agent or such Issuer upon the amount required to be repaid by
it.
(g) Compensation for Letters of Credit. The Company shall pay
to the Agent, for the ratable account of each Bank, a Letter of
Credit Fee ("Letter of Credit Fee") in respect of the Letter of
Credit then being issued equal to the LIBOR Margin on such day times
the Dollar Amount on such day (and recalculated on the first Business
Day of each quarter for such quarter) of the maximum face amount of
such Letter of Credit from the Issuance Date thereof until such
Letter of Credit expires or is terminated. Promptly upon its receipt
of such Letter of Credit Fee, the Agent shall pay to each Bank, in
immediately available funds, an amount equal to such Bank's
Applicable Percentage thereof. Any Issuer shall have the right to
receive, for its own account (i) in respect of each Letter of Credit
issued by it, a fee in the amount of 1/8 of 1% per annum of the
Dollar Amount of the maximum face amount of such Letter of Credit
("Issuer's Fee"), and (ii) all of its reasonable and customary costs
of issuing and servicing the Letters of Credit. The Letter of Credit
Fee and the Issuer's Fee shall begin to accrue on the Issuance Date
and shall be payable quarterly in arrears.
1.14. Article IV of the Credit Agreement is hereby amended
to insert immediately after the phrase "to make Loans" in the first
sentence thereof, the following: "or to issue Letters of Credit".
1.15. Section 4.01 of the Credit Agreement is hereby amended
to insert immediately after the phrase "on the date of each Borrowing",
the following: "or the Issuance Date of each Letter of Credit".
1.16. Section 4.01(d) is hereby amended to insert
immediately after the phrase "or refinancing", the following: "or the
Issuance Date of each Letter of Credit".
1.17. Article V of the Credit Agreement is hereby amended to
insert immediately after the phrase "or the Loans," in the first sentence
thereof, the following: "Letter of Credit Obligations,".
1.18. Section 5.08 of the Credit Agreement is hereby amended
to insert immediately after the phrase "of the Loans", the following:
"and Letters of Credit".
1.19. Article VI of the Credit Agreement is hereby amended
to insert immediately after the phrase "of the Loans" in the first
sentence thereof, the following: "Letter of Credit Obligations,".
1.20. Section 6.01(a) of the Credit Agreement is hereby
amended by adding the following language at the end thereof:
"except to the extent any such Current Debt was refinanced with
Funded Debt, in which case such Current Debt, to the extent it
was refinanced with Funded Debt, will not be deemed to
constitute Funded Debt".
1.21. Article VII(b) of the Credit Agreement is hereby
amended to insert immediately after the phrase "of the Notes", the
following: "or the Reimbursement Obligations".
1.22. Article VII(c) of the Credit Agreement is hereby
amended to insert immediately after the phrase "of the Commitment Fee",
the following: ", the Letter of Credit Fee, the Issuer's Fee"; and to
insert immediately after the phrase "(other than principal payments on the
Notes", the following: "or the Reimbursement Obligations."
1.23. Article VII of the Credit Agreement is hereby amended
to add immediately following the phrase in the final paragraph thereof
"terminate forthwith the Revolving Loan Commitments and the Eurocurrency
Commitments", the following "and the obligations to issue Letters of
Credit"; and to insert immediately after the phrase "whereupon the
Revolving Loan Notes, the Eurocurrency Notes and the Competitive Bid
Notes", the following: "and the Letter of Credit Obligations"; and to
insert immediately after the phrase "shall automatically terminate, and
the Revolving Loan Notes, the Eurocurrency Notes and the Competitive Bid
Notes", the following: "and the Letter of Credit Obligations".
1.24. Section 8.04 of the Credit Agreement is hereby amended
to insert immediately after the phrase "the principal of or interest on
any Note", the following: "or with respect to any Letter of Credit
Obligation"; and to insert immediately after the phrase "or the Commitment
Fee" in the third sentence, the following: "the Letter of Credit Fee or
the Issuer's Fee".
1.25. Section 8.05 of the Credit Agreement is hereby amended
to insert immediately after the phrase "of the Notes", the following:
"and the Letter of Credit Obligations"; and to insert immediately after
the phrase "arising out of this Agreement, the Notes," the following:
"the Letters of Credit".
1.26. Section 8.06 of the Credit Agreement is hereby amended
to insert immediately after the phrase "the Notes evidencing such Loans",
the following: "and the Letters of Credit".
1.27. Article IX of the Credit Agreement is hereby amended
to inset immediately after the phrase "of this Agreement or any Note", the
following: "or Letter of Credit"; and to insert immediately after the
phrase "any Revolving Note or Eurocurrency Note", the following: "or
Letter of Credit"; and to insert immediately after the phrase "payment of
any Commitment Fee", the following: "or other fee" and to add the
following at the end thereof: "No amendment of any provision of this
Agreement relating in any way to any Issuing Banks or any or all of the
Letters of Credit shall be effective without the written consent of each
Issuing Bank affected thereby".
1.28. Section 10.02 of the Credit Agreement is hereby
amended to insert immediately after the phrase "obtain payment in respect
of any Note held by it as a result of which the unpaid portion of such
Note is proportionately less than the unpaid portion of the Notes held by
each of the other Banks", the following: "or obtain payment in respect of
any Reimbursement Obligations owed to it as a result of which the unpaid
portion of such Reimbursement Obligations is proportionately less than the
unpaid portion of the Reimbursement Obligations held by each of the other
Banks"; and to insert immediately after the phrase "so that the aggregate
unpaid principal amount of the Notes", the following: "and Reimbursement
Obligations"; and to insert immediately after the phrase "shall be in the
same proportion to the aggregate unpaid principal amount of the Notes",
the following: "and Reimbursement Obligations"; and to insert immediately
after the phrase "then outstanding as the principal amount of the Note",
the following: "and Reimbursement Obligations"; and to insert immediately
after the phrase "to the principal amount of all the Notes", the
following: "and Reimbursement Obligations"; and to insert immediately
after the phrase "agrees that any holder of a participation in any Loan or
Note", the following: "and Reimbursement Obligations".
1.29. Section 10.10 of the Credit Agreement is hereby
amended by inserting immediately after the phrase "the proceeds of any
Loan" in the next to the last sentence thereof, the following: "or Letter
of Credit".
2. Conditions of Effectiveness. This Amendment shall become
effective and be deemed effective as of the date hereof, if, and only if,
the Agent shall have received each of the following:
(a) duly executed originals of this Amendment from the Company
and each of the Banks; and
(b) such other documents, instruments and agreements as the
Agent may reasonably request.
3. Representations and Warranties of the Company. The Company
hereby represents and warrants as follows:
(a) This Amendment and the Credit Agreement as previously
executed and as amended hereby, constitute legal, valid and binding
obligations of the Company and are enforceable against the Company in
accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Company
hereby reaffirms all covenants, representations and warranties made
in the Credit Agreement, to the extent the same are not amended
hereby, and agrees that all such covenants, representations and
warranties shall be deemed to have been remade as of the effective
date of this Agreement.
4. Reference to the Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after
the date hereof, each reference in the Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the Credit Agreement dated as of November 29,
1995, as amended previously and as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
dated as of November 29, 1995 and all other documents, instruments and
agreements executed and/or delivered in connection therewith shall remain
in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a wavier of any
right, power or remedy of the Agent or any of the Banks, nor constitute a
waiver of any provision of the Credit Agreement or any other documents,
instruments and agreements executed and/or delivered in connection
therewith.
5. Costs and Expenses. The Company agrees to pay all
reasonable costs, fees and out-of-pocket expenses (including attorneys'
fees and expenses charged to the Agent) incurred by the Agent in
connection with the preparation, execution and enforcement of this
Amendment.
6. Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws (as opposed to the conflict
of law provisions) of the State of Illinois.
7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose.
8. Counterparts. This Amendment may be executed by one or
more of the parties to the Amendment on any number of separate
counterparts and all of said counterparts taken together shall be deemed
to constitute one and the same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: _________________________________
Title: SENIOR VICE PRESIDENT & CFO
THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
By: _________________________________
Title:________________________________
FIRSTAR BANK MILWAUKEE, N.A.
By: ________________________________
Title: ___________________________
SOCIETE GENERALE
By: ______________________________
Title: _________________________
WACHOVIA BANK OF GEORGIA, N.A.
By: ________________________________
Title: Vice President
M&I MARSHALL & ILSLEY BANK
By: _______________________________
Title: __________________________
THE NORTHERN TRUST COMPANY
By: ______________________________
Title: _________________________
Exhibit 4.14
AMENDMENT NO. 4 TO CREDIT AGREEMENT
Dated as of September 30, 1997
THIS AMENDMENT NO. 4 TO CREDIT AGREEMENT ("Amendment") is made
as of September 30, 1997 by and among JOHNSON WORLDWIDE ASSOCIATES, INC.,
a Wisconsin corporation (the "Company"), the financial institutions listed
on the signature pages hereof (the "Banks") and THE FIRST NATIONAL BANK OF
CHICAGO, in its individual capacity as a Bank and as agent (the "Agent")
on behalf of the Banks under that certain Credit Agreement dated as of
November 29, 1995 by and among the Company, the Banks and the Agent (as
amended, the "Credit Agreement"). Defined terms used herein and not
otherwise defined herein shall have the meaning given to them in the
Credit Agreement.
WITNESSETH
WHEREAS, the Company, the Banks and the Agent are parties to the
Credit Agreement;
WHEREAS, the Company has requested that the Banks amend the
Credit Agreement in certain respects; and
WHEREAS, the Banks and the Agent are willing to amend the Credit
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company, the Banks and the Agent have agreed to the
following amendments to the Credit Agreement.
1. Amendment to Credit Agreement. Effective as of September 30,
1997 and subject to the satisfaction of the conditions precedent set forth
in Section 2 below, the Credit Agreement is hereby amended as follows:
1.1. Section 6.01(a) of the Credit Agreement is hereby amended
by adding the following language at the end thereof:
"and provided further that for purposes of calculating
compliance with this Section 6.01 for the fiscal
quarters ending October 3, 1997 and January 2, 1998,
the cumulative foreign currency translation account of
the Company shall be excluded in calculating
Consolidated Total Capitalization."
2. Conditions of Effectiveness. This Amendment shall become
effective and be deemed effective as of the date hereof, if, and only if,
the Agent shall have received each of the following:
(a) duly executed originals of this Amendment from the Company
and the Majority Banks; and
(b) such other documents, instruments and agreements as the
Agent may reasonably request.
3. Representations and Warranties of the Company. The Company
hereby represents and warrants as follows:
(a) This Amendment and the Credit Agreement as previously
executed and amended and as amended hereby, constitute legal, valid and
binding obligations of the Company and are enforceable against the Company
in accordance with their terms.
(b) Upon the effectiveness of this Amendment, the Company
hereby reaffirms all covenants, representations and warranties made in the
Credit Agreement, to the extent the same are not amended hereby, and
agrees that all such covenants, representations and warranties shall be
deemed to have been remade as of the effective date of this Amendment.
4. Reference to the Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after
the date hereof, each reference in the Credit Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import shall
mean and be a reference to the Credit Agreement dated as of November 29,
1995, as amended previously and as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
dated as of November 29, 1995 and all other documents, instruments and
agreements executed and/or delivered in connection therewith shall remain
in full force and effect, and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Agent or any of the Banks, nor constitute a
waiver of any provision of the Credit Agreement or any other documents,
instruments and agreements executed and/or delivered in connection
therewith.
5. Costs and Expenses. The Company agrees to pay all reasonable
costs, fees and out-of-pocket expenses (including attorneys' fees and
expenses charged to the Agent) incurred by the Agent in connection with
the preparation, execution and enforcement of this Amendment.
6. Governing Law. This Amendment shall be governed by and
construed in accordance with the internal laws (as opposed to the conflict
of law provisions) of the State of Illinois.
7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose.
8. Counterparts. This Amendment may be executed by one or more of
the parties to the Amendment on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
IN WITNESS WHEREOF, this Amendment has been duly executed as of
the day and year first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: /s/
Title: SENIOR VICE PRESIDENT & CFO
THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as Agent
By:
Title:
FIRSTAR BANK MILWAUKEE, N.A.
By:
Title:
SOCIETE GENERALE
By:
Title:
WACHOVIA BANK OF GEORGIA, N.A.
By:
Title:
M & I MARSHALL & ILSLEY BANK
By:
Title:
THE NORTHERN TRUST COMPANY
By:
Title:
Signature Page Johnson Worldside Associates, Inc.
Amendment to Credit Agreement
Johnson Worldwide Associates, Inc.
Note Agreement
Dated as of September 15, 1997
Re: $25,000,000 7.15% Senior Notes
Due October 15, 2007
<PAGE>
Table of Contents
Section Heading Page
Section 1. Description of Notes and Commitment . . . . . . . . . . 1
Section 1.1. Description of Notes . . . . . . . . . . . . . . . 1
Section 1.2. Commitment, Closing Date . . . . . . . . . . . . . 1
Section 2. Prepayment of Notes . . . . . . . . . . . . . . . . . . 2
Section 2.1. Required Prepayments . . . . . . . . . . . . . . . 2
Section 2.2. Optional Prepayments of Notes . . . . . . . . . . . 3
Section 2.3. Prepayment of Notes upon Change of Control . . . . 3
Section 2.4. Notice of Optional Prepayments . . . . . . . . . . 4
Section 2.5. Allocation of Prepayments . . . . . . . . . . . . . 5
Section 2.6. Direct Payment . . . . . . . . . . . . . . . . . . 5
Section 3. Representations . . . . . . . . . . . . . . . . . . . . 5
Section 3.1. Representations of the Company . . . . . . . . . . 5
Section 3.2. Representations of the Purchaser . . . . . . . . . 5
Section 4. Closing Conditions . . . . . . . . . . . . . . . . . . . 6
Section 4.1. Closing Certificate . . . . . . . . . . . . . . . . 6
Section 4.2. Legal Opinions . . . . . . . . . . . . . . . . . . 6
Section 4.3. Company's Existence and Authority . . . . . . . . . 6
Section 4.4. Consent of Holders of Other Securities . . . . . . 6
Section 4.5. Legality of Investment . . . . . . . . . . . . . . 7
Section 4.6. Satisfactory Proceedings . . . . . . . . . . . . . 7
Section 4.7. Waiver of Conditions . . . . . . . . . . . . . . . 7
Section 4.8. Private Placement Numbers . . . . . . . . . . . . . 7
Section 4.9. Payment of Closing Costs . . . . . . . . . . . . . 7
Section 5. Company Covenants . . . . . . . . . . . . . . . . . . . 7
Section 5.1. Corporate Existence, Etc . . . . . . . . . . . . . 7
Section 5.2. Insurance . . . . . . . . . . . . . . . . . . . . . 8
Section 5.3. Taxes, Claims for Labor and Materials,
Compliance with Laws . . . . . . . . . . . . . . . 8
Section 5.4. Maintenance, Etc . . . . . . . . . . . . . . . . . 8
Section 5.5. Nature of Business . . . . . . . . . . . . . . . . 8
Section 5.6. Limitations on Indebtedness . . . . . . . . . . . . 9
Section 5.7. Limitation on Liens . . . . . . . . . . . . . . . . 10
Section 5.8. Mergers, Consolidations, Sales of Assets,
Etc . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.9. Consolidated Net Worth . . . . . . . . . . . . . . 16
Section 5.10. Fixed Charge Coverage Ratio . . . . . . . . . . . . 16
Section 5.11. Distributions . . . . . . . . . . . . . . . . . . . 16
Section 5.12. Investments . . . . . . . . . . . . . . . . . . . . 17
Section 5.13. Repurchase of Notes . . . . . . . . . . . . . . . . 19
Section 5.14. Transactions with Affiliates . . . . . . . . . . . 19
Section 5.15. ERISA Complianc . . . . . . . . . . . . . . . . . . 19
Section 5.16. Reports and Rights of Inspection . . . . . . . . . 20
Section 6. Events of Default and Remedies Therefor . . . . . . . . 23
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . 23
Section 6.2. Notice to Holders . . . . . . . . . . . . . . . . . 25
Section 6.3. Acceleration of Maturities . . . . . . . . . . . . 25
Section 6.4. Rescission of Acceleration . . . . . . . . . . . . 26
Section 7. Amendments, Waivers And Consents . . . . . . . . . . . . . 26
Section 7.1. Consent Required . . . . . . . . . . . . . . . . . 26
Section 7.2. Effect of Amendment or Waiver . . . . . . . . . . . 26
Section 7.3. Solicitation of Holders . . . . . . . . . . . . . . 26
Section 8. Interpretation of Agreement; Definitions . . . . . . . . . 27
Section 8.1. Definitions . . . . . . . . . . . . . . . . . . . . 27
Section 8.2. Accounting Principles . . . . . . . . . . . . . . . 35
Section 8.3. Directly or Indirectly . . . . . . . . . . . . . . 35
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . 35
Section 9.1. Registration of Notes . . . . . . . . . . . . . . . 35
Section 9.2. Exchange of Notes . . . . . . . . . . . . . . . . . 35
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . . . . . . 36
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . . 36
Section 9.5. Powers and Rights Not Waived; Remedies
Cumulative . . . . . . . . . . . . . . . . . . . . 36
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . . 37
Section 9.7. Successors and Assigns . . . . . . . . . . . . . . 37
Section 9.8. Survival of Covenants and Representations . . . . . 37
Section 9.9. Severability . . . . . . . . . . . . . . . . . . . 37
Section 9.10. Reproduction of Documents . . . . . . . . . . . . . 37
Section 9.11. Governing Law . . . . . . . . . . . . . . . . . . . 38
Section 9.12. Captions . . . . . . . . . . . . . . . . . . . . . 38
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Attachments to Note Agreement:
Schedule I - Name and Address of Purchaser
Schedule II - Description of Subsidiaries and Indebtedness of the
Company and its Restricted Subsidiaries
Exhibit A - Form of 7.15% Senior Note
Exhibit B - Closing Certificate of the Company
Exhibit C - Description of Closing Opinion of Special Counsel
Exhibit D - Description of Closing Opinion of Independent Counsel
to Company
<PAGE>
Johnson Worldwide Associates, Inc.
1326 Willow Road
P.O. Box 901
Sturtevant, Wisconsin 53177
Note Agreement
Re: $25,000,000 7.15% Senior Notes
Due October 15, 2007
Dated as of September 15, 1997
The Northwestern Mutual
Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Ladies and Gentlemen:
The undersigned, Johnson Worldwide Associates, Inc., a Wisconsin
corporation, its successors and assigns (the "Company"), agrees with you
(the "Purchaser") as follows:
Section 1. Description of Notes and Commitment.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $25,000,000 aggregate principal amount 7.15% Senior
Notes due October 15, 2007 (the "Notes") to be dated the date of issue, to
bear interest from such date at the rate of 7.15% per annum, payable
semiannually on the fifteenth day of October and April in each year
(commencing April 15, 1998) and at maturity and to bear interest on
overdue principal (including any overdue required or optional prepayment
of principal) and Make-Whole Amount, if any, and (to the extent legally
enforceable) on any overdue installment of interest at the Overdue Rate
(as hereinafter defined) after the due date thereof, whether by
acceleration or otherwise, until paid, to be expressed to mature on
October 15, 2007, and to be substantially in the form attached hereto as
Exhibit A.
Interest on the Notes shall be computed on the basis of a 360-day
year of twelve 30-day months. The Notes are not subject to prepayment or
redemption at the option of the Company prior to their express maturity
dates except on the terms and conditions and in the amounts and with the
Make-Whole Amount, if any, set forth in Section 2 of this Agreement. The
terms which are capitalized herein shall have the meanings set forth in
Section 8.l hereof unless the context shall otherwise require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to the
Purchaser, and the Purchaser agrees to purchase from the Company, on the
Closing Date mentioned below, Notes in the aggregate principal amount of
$25,000,000 at a price of 100% of the principal amount thereof.
Delivery of the Notes to be purchased by the Purchaser will be made
at the offices of Chapman and Cutler, 111 West Monroe, Chicago, Illinois
60603, against payment therefor by wire transfer of Federal or other funds
current and immediately available at the principal office of Huntington
National Bank, ABA #044000024 for Account No._0189-170494-1, in the amount
of the purchase price, at or about 10:00 a.m., on October 15, 1997 (the
"Closing Date"). The Notes delivered to the Purchaser on the Closing Date
will be delivered to the Purchaser in the form of a single registered Note
in the form attached hereto as Exhibit A (unless different denominations
are specified by the Purchaser), registered in the Purchaser's name or in
the name of the Purchaser's nominee, all as the Purchaser may specify at
any time prior to the date fixed for delivery.
Section 2. Prepayment of Notes.
No prepayment of the Notes may be made except to the extent and in
the manner expressly provided in this Agreement.
Section 2.1. Required Prepayments.
(a) Required Prepayment of Notes. In addition to paying the entire
remaining outstanding principal amount and the interest due on the Notes
on the maturity date thereof, the Company agrees to prepay and apply and
there shall become due and payable the following sums in respect of the
aggregate principal indebtedness evidenced by the Notes:
Applicable Amount of
Required
Required Payment Date Principal Payment
October 15, 2001 $2,000,000
October 15, 2002 $2,000,000
October 15, 2003 $2,000,000
October 15, 2004 $2,000,000
October 15, 2005 $3,000,000
October 15, 2006 $7,000,000
(b) Effects of Required Prepayments.
No Make-Whole Amount shall be payable in connection with any required
prepayment made pursuant to Section 2.1(a). Except as set forth in the
next succeeding paragraph, any payment of less than all the Notes pursuant
to the provisions of Section 2.2 shall not relieve the Company of the
obligation to make required payments or prepayments on the Notes in
accordance with the terms of Section 2.1(a).
In the event the Company shall prepay less than all of the Notes
pursuant to Section 2.2 or repurchase any Notes in accordance with Section
5.12, the amount of the prepayments required by Section 2.1(a) shall be
reduced by an amount which is the same percentage of such required
prepayment as the percentage that the principal amount of Notes so prepaid
or repurchased is of the aggregate principal amount of outstanding Notes
immediately prior to such prepayment or repurchase.
Section 2.2. Optional Prepayments of Notes. In addition to the
prepayments required by Section 2.1(a) and Section 2.3, the Company shall
have the privilege at any time of prepaying the then outstanding Notes,
either in whole or in part (but if in part then in units of $100,000 in
the aggregate or an integral multiple of $10,000 in the aggregate in
excess thereof) by payment of the principal amount of the Notes and
accrued interest thereon to the date of such prepayment, together with an
amount equal to the then applicable Make-Whole Amount, determined as of
three business days prior to the date of such prepayment pursuant to this
Section 2.2.
Section 2.3. Prepayment of Notes upon Change of Control. In the
event that any Change of Control (as hereinafter defined) shall occur, the
Company will give written notice (the "Company Notice") of such fact in
the manner provided in Section 9.6 of this Agreement to the holders of the
Notes. The Company Notice shall be delivered promptly and in any event no
later than three business days following the occurrence of any Change of
Control. The Company Notice shall (a) describe the facts and
circumstances of such Change of Control in reasonable detail, (b) make
reference to this Section 2.3 and the right of the holders of the Notes to
require payment on the terms and conditions provided for in this Section
2.3, (c) offer in writing to prepay the outstanding Notes, together with
accrued interest to the date of prepayment and an amount equal to the then
applicable Make-Whole Amount and (d) specify the date for such prepayment
(the "Change of Control Prepayment Date") which Change of Control
Prepayment Date shall be no earlier than fifteen (15) days after the
receipt of the Company Notice and no later than thirty (30) days after the
date the Change of Control occurred. The holders of at least 40% in
aggregate principal amount of outstanding Notes shall have the right, by
written notice given to the Company not later than three business days
prior to the Change of Control Prepayment Date, to demand that the Company
prepay all (but not less than all) of the Notes then held by such holders
on such Change of Control Prepayment Date. If no such request shall be
made by a holder, such holder shall be deemed to have declined the
Company's offer of prepayment. The prepayment price of any Notes payable
upon the Change of Control Prepayment Date shall be an amount equal to
100% of the principal amount of the Notes so to be prepaid and accrued
interest thereon to the date of such prepayment, together with an amount
equal to the then applicable Make-Whole Amount, determined as of three
business days prior to the date of such prepayment pursuant to this
Section 2.3.
Without limiting the foregoing, notwithstanding any failure on the
part of the Company to give the Company Notice herein required as a result
of the occurrence of a Change of Control, each holder of the Notes shall
have the right by delivery of written notice to the Company to require the
Company to prepay, and the Company will prepay, such holder's Notes in
full, together with accrued interest thereon to the date of prepayment and
an amount equal to the Make-Whole Amount at any time within ninety days
after such holder has actual knowledge of any such Change of Control.
Notice of any required prepayment pursuant to this Section 2.3 shall be
delivered by any holder of Notes which was entitled to, but did not
receive, such Company Notice to the Company after such holder has actual
knowledge of such Change of Control. On the date (the "Delayed Prepayment
Date") designated in such holder's notice (which shall be not earlier than
10 business days after the date of such holder's notice), the Company
shall prepay in full all Notes held by such holder together with accrued
interest thereon to the date of prepayment and an amount equal to the
Make-Whole Amount, determined as of three business days prior to the date
of such prepayment pursuant to this Section 2.3. If the holder of any
Note gives any notice pursuant to this second paragraph of Section 2.3,
the Company shall give a Company Notice within two business days of
receipt of such notice and identify the Delayed Prepayment Date to all
holders of the Notes and each of such holders shall then and thereupon
have the rights with respect to the prepayment of its Notes as set forth
in this Section 2.3; provided only that any date for prepayment of such
holder's Notes shall be the Delayed Prepayment Date.
As used in this Section 2.3, a "Change of Control" of the Company
shall be deemed to have occurred at such time or times as the Johnson
Family (as hereinafter defined), shall fail to own, directly or
indirectly, with full power to vote or to direct the voting of, more than
51% of the voting power of the Voting Stock of the Company.
The term "Johnson Family" shall mean, collectively, (i) Samuel C.
Johnson, his spouse, their children or grandchildren; (ii) any trust
directly or indirectly controlled by any one or more of such persons
described in (i) or any corporation described in (iii) below or any
present or former officer of any such corporation; (iii) any corporation
or partnership in which voting control as to such entity is held, directly
or indirectly, by any one or more of such persons described in (i) or such
trusts described in (ii) or by the executor or administrator of the estate
or other legal representative of any such person described in (i); and
(iv) the executor or administrator of the estate or other legal
representative of any person described in (i).
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (a) such date, (b) the
principal amount of the holder's Notes to be prepaid on such date, (c)
that a Make-Whole Amount may be payable, (d) the date when such Make-Whole
Amount will be calculated which shall be the date three business days
prior to the prepayment date, (e) the estimated Make-Whole Amount and (f)
the accrued interest applicable to such prepayment. Notice of prepayment
having been so given, the aggregate principal amount of the Notes
specified in such notice, together with the Make-Whole Amount, if any, and
accrued interest thereon shall become due and payable on the prepayment
date. Not later than two business days prior to the prepayment date
specified in such notice, the Company shall provide each holder of a Note
written notice of the Make-Whole Amount, if any, payable in connection
with such prepayment and, whether or not any Make-Whole Amount is payable,
a reasonably detailed computation thereof.
Section 2.5. Allocation of Prepayments. All partial prepayments of
Notes shall be applied on all outstanding Notes being prepaid ratably in
accordance with the unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary in this Agreement or the Notes, in the case of any Note owned by
the Purchaser or the Purchaser's nominee or owned by any other
Institutional Holder or its nominee which has given written notice to the
Company requesting that the provisions of this Section 2.6 shall apply,
the Company will promptly and punctually pay when due the principal
thereof and the Make-Whole Amount, if any, and interest thereon, without
any presentment thereof directly to the Purchaser, the Purchaser's nominee
or any such subsequent Institutional Holder or its nominee at its address
or such nominee's address set forth in Schedule I or at such other address
as the Purchaser, the Purchaser's nominee or any such subsequent
Institutional Holder may from time to time designate in writing to the
Company or, if an account with a United States bank is designated for the
Purchaser or the Purchaser's nominee on Schedule I hereto or in any
written notice to the Company from the Purchaser, the Purchaser's nominee
or any such subsequent Institutional Holder, the Company will make such
payments in immediately available funds to such bank account before 10:00
A.M., marked for attention as indicated, or in such other manner or to
such other account in any bank in the United States as the Purchaser, the
Purchaser's nominee or any such subsequent Institutional Holder may from
time to time direct in writing.
Section 3. Representations.
Section 3.1. Representations of the Company. The Company
represents and warrants that all representations set forth in the form of
Closing Certificate attached hereto as Exhibit B are true and correct as
of the date of the execution and delivery hereof by the Company and are
incorporated herein by reference with the same force and effect as though
herein set forth in full.
Section 3.2. Representations of the Purchaser. (a) The Purchaser
represents, and in entering into this Agreement the Company understands,
that the Purchaser is acquiring the Notes for the purpose of investment
and not with a view to the distribution thereof; provided that the
disposition of the Purchaser's property shall at all times be and remain
within its control. The Purchaser acknowledges that the Notes have not
and will not be registered under the Act and hereby agrees that it will
not reoffer, resell, pledge or otherwise transfer the Notes purchased by
it under this Agreement except pursuant to any available exemption from
the requirements of Section 5 of the Act and in accordance with any
applicable state securities laws.
(b) The Purchaser represents that the source of funds to be used by
the Purchaser to pay the purchase price of the Notes to be purchased
hereunder is an "insurance company general account" within the meaning of
Department of Labor Prohibited Transaction Exemption 95-60 (issued
July_12, 1995) and there is no employee benefit plan, treating as a single
plan, all plans maintained by the same employer or employee organization,
with respect to which the amount of the general account reserves and
liabilities for all contracts held by or on behalf of such plan, exceed
ten percent (10%) of the total reserves and liabilities of such general
account (exclusive of separate account liabilities) plus surplus, as set
forth in the NAIC Annual Statement filed with the state of Wisconsin.
As used in this Section 3.2(b), the terms "employee benefit plan" and
"separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
Section 4. Closing Conditions.
The obligation of the Purchaser to purchase the Notes on the Closing
Date shall be subject to the performance by the Company of its agreements
hereunder which by the terms hereof are to be performed at or prior to the
time of delivery of the Notes and to the following further conditions
precedent:
Section 4.1. Closing Certificate. Concurrently with the delivery
of Notes to the Purchaser on the Closing Date, the Purchaser shall have
received a Closing Certificate dated the Closing Date, signed by the Chief
Financial Officer of the Company, substantially in the form attached
hereto as Exhibit B, the truth and accuracy of which on the Closing Date
shall be a condition to the Purchaser's obligation to purchase the Notes
proposed to be purchased by the Purchaser.
Section 4.2. Legal Opinions. Concurrently with the delivery of
Notes to the Purchaser on the Closing Date, the Purchaser shall have
received from Chapman and Cutler, who are acting as special counsel to the
Purchaser in this transaction and from Foley_& Lardner, independent
counsel to the Company, their respective opinions dated the Closing Date,
in form and substance satisfactory to the Purchaser, and covering the
matters set forth in Exhibits C and D, attached hereto.
Section 4.3. Company's Existence and Authority. On or prior to the
Closing Date, the Purchaser shall have received, in form and substance
reasonably satisfactory to the Purchaser, such documents and evidence with
respect to the Company as the Purchaser may reasonably request in order to
establish the existence and good standing of the Company and the
authorization of the transactions contemplated by this Agreement.
Section 4.4. Consent of Holders of Other Securities. Any consents
or approvals required to be obtained from any holder or holders of any
outstanding Security of the Company and any amendments of agreements
pursuant to which any Securities may have been issued which will be
necessary to permit the consummation of the transactions contemplated
hereby on the Closing Date shall have been obtained and all such consents
or amendments shall be satisfactory in form and substance to the
Purchaser.
Section 4.5. Legality of Investment. The Notes to be purchased by
the Purchaser shall be a legal investment for the Purchaser under the laws
of each jurisdiction to which the Purchaser may be subject (without resort
to any so-called basket provisions to such laws).
Section 4.6. Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement, and all
documents necessary to the consummation thereof, shall be satisfactory in
form and substance to the Purchaser, and the Purchaser shall have received
a copy (executed or certified as may be appropriate) of all legal
documents or proceedings taken in connection with the consummation of such
transactions.
Section 4.7. Waiver of Conditions. If on the Closing Date the
Company fails to tender to the Purchaser the Notes to be issued to the
Purchaser on such date or if the conditions specified in this Section 4
have not been fulfilled, the Purchaser may thereupon elect to be relieved
of all further obligations under this Agreement. Without limiting the
foregoing, if the conditions specified in this Section 4 have not been
fulfilled, the Purchaser may waive compliance by the Company with any such
condition to such extent as the Purchaser may in its sole discretion
determine. Nothing in this Section 4.7 shall operate to relieve the
Company of any of its obligations hereunder or to waive the Purchaser's
rights against the Company.
Section 4.8. Private Placement Numbers. The Company shall have
obtained for the Notes a Private Placement Number issued by Standard &
Poor's CUSIP Bureau (in cooperation with the Securities Valuation office
of the National Association of Insurance Commissioners).
Section 4.9. Payment of Closing Costs. The Company shall have paid
the costs, expenses and disbursements of the Purchaser's special counsel
which are reflected in statements of such counsel rendered prior to the
Closing pursuant to Section 9.4; and thereafter (without limiting the
provisions of Section 9.4) the Company will pay, promptly upon receipt of
any supplemental statements therefor, additional costs or fees, if any,
and expenses and disbursements of the Purchaser's counsel in connection
with the Closing (including disbursements unposted as of the Closing Date)
and attention to post-Closing matters.
Section 5. Company Covenants.
From and after the date of this Agreement and continuing so long as
any amount remains unpaid on any date:
Section 5.1. Corporate Existence, Etc. The Company will preserve
and keep in force and effect, and will cause each Restricted Subsidiary to
preserve and keep in force and effect, its corporate existence. The
Company will preserve and keep in force and effect, and will cause each
Restricted Subsidiary to preserve and keep in force and effect, all
franchises, licenses and permits necessary to the proper conduct of its
business. The foregoing provisions of this Section 5.1 shall not,
however, prevent any transaction not prohibited by Section 5.8.
Section 5.2. Insurance. The Company will maintain, and will cause
each Restricted Subsidiary to maintain, insurance coverage by financially
sound and reputable insurers consistent with such forms and amounts and
against such risks as are presently maintained by the Company and its
Restricted Subsidiaries provided that, notwithstanding the foregoing, the
Company and its Restricted Subsidiaries shall maintain insurance coverage
in such forms and amounts and against such risks as are customary for
business entities of established reputation engaged in the same or a
similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials, Compliance with
Laws. (a) The Company will promptly pay and discharge, and will cause
each Restricted Subsidiary promptly to pay and discharge, all lawful
taxes, assessments and governmental charges or levies imposed upon it or
upon or in respect of all or any part of its property or business, all
trade accounts payable in accordance with usual and customary business
terms, and all claims for work, labor or materials, which if unpaid might
become a Lien or charge upon any of its property; provided the Company or
such Restricted Subsidiary shall not be required to pay any such tax,
assessment, charge, levy, account payable or claim if (1) the validity,
applicability or amount thereof is being contested in good faith by
appropriate actions or proceedings which will prevent the forfeiture or
sale of any property of the Company or such Restricted Subsidiary or any
material interference with the use thereof by the Company or such
Restricted Subsidiary, (2) the Company or such Restricted Subsidiary shall
set aside on its books, reserves deemed by the Company to be adequate with
respect thereto and (3) the nonpayment of all such taxes and assessments
in the aggregate could not reasonably be expected to have a material
adverse effect on the Company and its Restricted Subsidiaries.
(b) The Company will promptly comply, and will cause each Restricted
Subsidiary to comply, in all material respects with all laws, ordinances
or governmental rules and regulations to which it is subject, including
without limitation, the Occupational Safety and Health Act of 1970, as
amended, ERISA, and all laws, ordinances, governmental rules and
regulations relating to environmental protection in all applicable
jurisdictions, the violation of which would materially and adversely
affect the properties, business, prospects, profits or condition of the
Company and its Restricted subsidiaries, taken as whole, or would result
in any Lien not permitted under Section 5.7.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Restricted Subsidiary to maintain, preserve
and keep, its material properties which are used or useful in the conduct
of its business (whether owned in fee or a leasehold interest) in good
repair and working order, ordinary wear and tear excepted, and from time
to time will make all necessary repairs, replacements, renewals and
additions so that at all times the efficiency thereof shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Restricted Subsidiary will engage in any business if, as a result, the
general nature of the business, taken on a consolidated basis, which would
then be engaged by the Company and its Restricted Subsidiaries would be
substantially changed from the general nature of the business engaged by
the Company and its Restricted Subsidiaries on the date of this Agreement.
Section 5.6. Limitations on Indebtedness. (a) The Company will
not, and will not permit any Restricted Subsidiary to, create, issue,
assume, guarantee or otherwise incur or in any manner become liable in
respect of any additional Current Debt or Funded Debt except:
(1) the Notes;
(2) Current Debt and Funded Debt of the Company and its
Restricted Subsidiaries outstanding as of the date of this Agreement
and described on Schedule II attached hereto;
(3) Current Debt or Funded Debt of the Company and its
Restricted Subsidiaries; provided that at the time of creation,
issuance, assumption, guarantee or incurrence thereof and after
giving effect thereto and to the application of the proceeds thereof,
Consolidated Funded Debt would not exceed 55% of Consolidated Total
Capitalization, provided that for purposes of any determination of
additional Funded Debt to be issued or incurred within the limitation
of this Section 5.6(a)(3), the Average Outstanding Balance of
Consolidated Current Debt (as defined in Section 5.6(e) below)
computed for the Compliance Period (as defined in Section 5.6(e)
below) preceding the date of any such determination shall be deemed
to constitute outstanding Funded Debt of the Company incurred as of
the last day of such Compliance Period and, except to the extent that
any such Current Debt was refinanced with Funded Debt, in which case
such Current Debt, to the extent it was refinanced with Funded Debt,
will not be deemed to constitute Funded Debt, shall be deemed
outstanding at all times prior to the end of the next Compliance
Period; and
(4) additional Current Debt or Funded Debt of a Restricted
Subsidiary to the Company or to an Eighty Percent-Owned Restricted
Subsidiary.
(b) The Company will not at any time permit the sum of (i) Current
Debt and Funded Debt of Restricted Subsidiaries (other than Current Debt
and Funded Debt owed to the Company or an Eighty Percent-Owned Restricted
Subsidiary), plus (ii) Funded Debt of the Company and Restricted
Subsidiaries secured by Liens permitted by Section 5.7(a)(9) to exceed 25%
of Consolidated Tangible Assets.
(c) Any Person which becomes a Restricted Subsidiary after the date
hereof shall for all purposes of this Section 5.6 be deemed to have
created, assumed or incurred or issued at the time it becomes a Restricted
Subsidiary all Current Debt and Funded Debt of such Person existing
immediately after it becomes a Restricted Subsidiary.
(d) The renewal, extension or refunding of any Current Debt or
Funded Debt issued or incurred in accordance with the limitations of this
Section 5.6 shall constitute the issue of additional Current Debt or
Funded Debt, as the case may be, which is, in turn, subject to the
limitations of the applicable provisions of this Section 5.6.
(e) For the purposes of Section 5.6(a) hereof, the following terms
shall have the meanings ascribed to them below:
"Average Outstanding Balance of Consolidated Current Debt" shall
mean the average of the aggregate unpaid principal amounts of
Consolidated Current Debt outstanding on each of the Company's July
fiscal month-end, August 15, the Company's August fiscal month-end,
September 15 and the Company's September fiscal month-end for each
Compliance Period.
"Compliance Period" shall mean the period beginning on the date
of the Company's July fiscal month-end and ending on the date of the
Company's September fiscal month-end in each calendar year.
Section 5.7. Limitation on Liens. (a) The Company will not, and
will not permit any Restricted Subsidiary to, create or incur, or suffer
to be incurred or to exist, any Lien on its or their property or assets,
whether now owned or hereafter acquired, or upon any income or profits
therefrom, or transfer any property for the purpose of subjecting the same
to the payment of obligations in priority to the payment of its or their
general creditors, or acquire or agree to acquire or permit any Restricted
Subsidiary to acquire any property or assets pursuant to conditional sales
agreements or other title retention devices, except:
(1) Liens for property taxes and assessments or governmental
charges or levies and Liens securing claims or demands of mechanics
and materialmen; provided that payment thereof is not at the time
required by Section 5.3;
(2) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Restricted
Subsidiary shall at any time in good faith be prosecuting an appeal
or proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall have
been secured;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including, without limitation,
warehousemen's and attorneys' liens, statutory landlords' liens,
workers' compensation liens and ERISA liens) and deposits, pledges or
Liens to secure the performance of bids, tenders or trade contracts,
or to secure statutory obligations, surety or appeal bonds or other
Liens of like general nature incurred in the ordinary course of
business and not in connection with the borrowing of money; provided
that the aggregate amount of the obligations so secured will not
materially impair the value of the assets so secured or the use
thereof in the ordinary course of business and provided, further,
that in each case, the obligation so secured will not exceed
$1,000,000 and is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(4) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of the Company and its Restricted Subsidiaries or which
customarily exist on properties of Persons engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Company and its Restricted Subsidiaries;
(5) Liens securing Indebtedness of a Restricted Subsidiary to
the Company or to an Eighty Percent-Owned Restricted Subsidiary;
(6) Liens existing as of the date of this Agreement securing
Indebtedness of the Company or any Restricted Subsidiary outstanding
on such date and described on Schedule II attached to this Agreement;
(7) Liens incurred after the date of this Agreement given to
secure the payment of the cost of the acquisition or construction of
fixed assets useful and intended to be used in carrying on the
business of the Company or a Restricted Subsidiary; provided that (i)
the Lien shall attach solely to the fixed assets acquired or
constructed, (ii) the Lien shall have been created or incurred within
twelve (12) months of the date of acquisition or the date of
completion of construction, as the case may be, of such fixed assets,
(iii) at the time of the acquisition or construction of such fixed
assets the aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such fixed assets whether or not assumed by the
Company or a Restricted Subsidiary shall not exceed an amount equal
to the lesser of the total cost or fair market value at the time of
acquisition or completion of construction of such fixed assets (as
determined in good faith by the Board of Directors of the Company)
and (iv) all such Indebtedness shall have been incurred within the
applicable limitations of Section 5.6;
(8) Liens existing on any assets at the time of acquisition
thereof or at the time of acquisition by the Company or a Restricted
Subsidiary of any business entity then owning such assets, whether or
not such existing Liens were given to secure the payment of the
purchase price of the assets to which they attach, so long as they
were not incurred, extended or renewed in contemplation of such
acquisition; provided that (i) any such Lien shall attach solely to
the assets acquired or the assets of such business entity and (ii) at
the time of the acquisition of the assets or business entity, as the
case may be, the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such assets (whether or not assumed
by the Company or such Restricted Subsidiary) shall not be in excess
of the fair market value of such assets at the time of such
acquisition (as determined in good faith by the Board of Directors of
the Company);
(9) Liens incurred after the date of this Agreement given to
secure Funded Debt of the Company or any Restricted Subsidiary in
addition to the Liens permitted by the preceding clauses (1) through
(8) hereof; provided that all Indebtedness secured by such Liens
shall have been incurred within the applicable limitations of Section
5.6; and
(10) any extension, renewal or replacement of any Lien permitted
by the preceding clauses (6), (7) and (8) of this Section 5.7 in
respect of the same property theretofore subject to such Lien in
connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (i) such Lien shall
attach solely to the same such property and (ii) such extension,
renewal or refunding of such Indebtedness shall have been incurred
within the applicable limitations of Section 5.6.
(b) In the event any property or assets of the Company or any
Restricted Subsidiary are subjected to a Lien not otherwise permitted by
this Section 5.7, the Company will make or cause to be made provision
whereby the Notes will be secured, to the full extent permitted under
applicable law, equally and ratably with all other obligations secured
thereby, and in any case the Notes shall (but only in such event) have the
benefit, to the full extent that the holders may be entitled thereto under
applicable law, of an equitable Lien on such property or assets equally
and ratably securing the Notes. Compliance with the provisions of this
paragraph shall not be deemed to constitute a waiver of, or consent to,
any Default or Event of Default caused by any violation of the provisions
of this Section 5.7.
Section 5.8. Mergers, Consolidations, Sales of Assets, Etc. (a)
The Company will not, and will not permit any Restricted Subsidiary to,
consolidate with or be a party to a merger with or liquidate into any
other Person; provided, however, that:
(1) any Restricted Subsidiary may merge or consolidate with or
liquidate into the Company, any Wholly-Owned Subsidiary or any
Restricted Subsidiary that is the direct or indirect parent of such
Restricted Subsidiary and any Restricted Subsidiary (other than a
Principal Subsidiary) may merge or consolidate with or liquidate into
any other Restricted Subsidiary so long as (i) in any merger or
consolidation involving the Company, the Company shall be the
surviving corporation and (ii) in any merger, consolidation or
liquidation involving a Domestic Restricted Subsidiary and a non-
Domestic Restricted Subsidiary, the Domestic Restricted Subsidiary
shall be the surviving corporation; and
(2) the Company or any Restricted Subsidiary may consolidate or
merge with any other corporation if (i) (in the case of a merger or
consolidation involving the Company) the surviving or acquiring
corporation (if other than the Company) (A) is organized and existing
under the laws of any State of the United States of America or the
District of Columbia, (B) shall expressly assume in writing the due
and punctual performance of all obligations of the Company under this
Agreement and the due and punctual payment of the principal of and
Make-Whole Amount if any, and interest on all the Notes, according to
their tenor, and (C) the Company or such surviving or acquiring
corporation shall furnish to the holders of the Notes an opinion of
counsel satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed and
delivered and constitutes the legal, valid and binding contract and
agreement of the surviving or acquiring corporation enforceable in
accordance with its terms, except as enforcement of such terms may be
limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law),
or (ii) (in the case of a merger or consolidation involving a
Restricted Subsidiary) such Restricted Subsidiary shall be the
surviving corporation and (iii) in the case of any consolidation or
merger described in either (i) or (ii), at the time of such
consolidation or merger, and after giving effect thereto (A) no
Default or Event of Default shall have occurred and be continuing and
(B) the Company, such surviving or acquiring corporation or such
Restricted Subsidiary, as the case may be, would be permitted to
incur at least $1 of additional Funded Debt under the applicable
provisions of Section 5.6.
(b) The Company will not, and will not permit any Restricted
Subsidiary to, sell, lease, transfer, abandon or otherwise dispose of,
assets (other than (x) sales of goods, products, inventory or services in
the ordinary course of business to customers, (y) the sale, lease,
transfer or disposition of assets to the Company or a Domestic Restricted
Subsidiary if a merger between such transferor and such Domestic
Restricted Subsidiary would be permitted under Section 5.8(a)(1), and (z)
sales or other dispositions of assets, having a fair market value (as
determined in good faith by the chief financial officer of the Company) in
any single sale or disposition of not greater than $250,000 which the
Company determines have become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary in the conduct of its business); provided that
the foregoing restrictions do not apply to the sale of assets for cash or
property to a Person or Persons if all of the following conditions are
met:
(1) either (i) the net book value of such assets, when added to
the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Restricted Subsidiaries
pursuant to this Section 5.8(b)(1) during the immediately preceding
twelve-month period do not constitute 10% of Consolidated Total
Assets (determined as of the end of the immediately preceding fiscal
quarter) or (ii) the sum of the portions of Consolidated Net Income
contributed for the immediately preceding twelve-month period (each
as determined in good faith by the chief financial officer of the
Company) by (A) such assets, (B) each Restricted Subsidiary (or
portion thereof) disposed of during such period and (C) other assets
of the Company and its Restricted Subsidiaries disposed of during
such period pursuant to this Section 5.8(b)(1) do not constitute 10%
of Consolidated Net Income for such period; and
(2) immediately after the consummation of the transaction and
after giving effect thereto, (i) no Default or Event of Default would
exist and (ii) the Company would be permitted to incur at least $1 of
additional Funded Debt under the provisions of Section 5.6(a)(3).
Computations made pursuant to Section 5.8(b)(1) shall include
dispositions made pursuant to Section Section 5.8(c)(3) and 5.8(c)(4) and
computations pursuant to Section Section 5.8(c)(3) and 5.8(c)(4) shall
include dispositions made pursuant to Section 5.8(b)(1).
(c) The Company will not, and will not permit any Restricted
Subsidiary to, sell, transfer or otherwise dispose of any shares of
capital stock (including as "stock" for the purposes of this Section
5.8(c), any warrants, rights or options to purchase or otherwise acquire
stock or other Securities exchangeable for or convertible into such stock)
of any Restricted Subsidiary, and the Company will not permit any
Restricted Subsidiary to issue any shares of stock of such Restricted
Subsidiary (except for any sale, transfer, issuance or other disposition
of stock to the Company or a Restricted Subsidiary if a merger between
such transferor or issuer and such Restricted Subsidiary would be
permitted under Section 5.8(a)(1); provided that the foregoing
restrictions do not apply to:
(1) the sale, transfer or issuance of directors' qualifying
shares of capital stock;
(2) the sale, transfer or issuance of any de minimis number of
shares of capital stock to foreign domiciliaries as may be required
by law;
(3) the sale, transfer or other disposition of all or any part
of the shares of capital stock of any Restricted Subsidiary (other
than a Principal Subsidiary);
(4) the sale, transfer or other disposition of all shares of
capital stock of a Principal Subsidiary held by the Company and its
Restricted Subsidiaries if all of the following conditions are met:
(i) simultaneously with such sale, transfer, or disposition,
all shares of stock and all Indebtedness of such Principal Subsidiary
at the time owned by the Company and by every other Restricted
Subsidiary shall be sold, transferred or disposed of as an entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the proposed
sale, transfer or disposition of said shares of stock and
Indebtedness is in the best interests of the Company;
(iii) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person or Persons, for cash
and/or tangible assets and on terms reasonably deemed by the Board of
Directors of the Company to be adequate and satisfactory; and
(iv) the Principal Subsidiary being disposed of shall not have
any continuing investment in the Company or any other Restricted
Subsidiary not being simultaneously disposed of;
(5) the sale, transfer or issuance of shares of capital stock
of a Restricted Subsidiary in connection with the purchase or other
acquisition by the Company or a Restricted Subsidiary of all or
substantially all of the capital stock, properties or assets of any
Person or all or substantially all of the properties or assets of any
Person which constitute a distinct product line, division or other
operating segment; provided that:
(i) after giving effect to such sale, transfer or issuance and
such purchase or other acquisition, no Default or Event of Default
would then exist;
(ii) the aggregate fair value of all such capital stock,
properties or assets so acquired attributable to the issuance, sale
or transfer of such shares of capital stock in each sale, transfer or
issuance of such shares shall equal or exceed the fair value of such
shares (in each case as determined in good faith by the Board of
Directors of the Company at the time of such acquisition taking into
consideration the terms of any written agreement described in Section
5.8(c)(5)(iii) below); and
(iii) the shares of capital stock are sold, transferred or
issued pursuant to a written agreement which (A) contemplates the
subsequent purchase or redemption of such shares by the Company or
the Restricted Subsidiary whose shares have been so sold, transferred
or issued or any direct or indirect parent of such Restricted
Subsidiary upon request of the transferee of such shares or upon
demand by the Company or such Restricted Subsidiary or any direct or
indirect parent of such Restricted Subsidiary made pursuant to the
terms of such written agreement at a price or prices computed by
reference to such formulas or indices or other references as are
determined in good faith by the Board of Directors of the Company at
the time of such acquisition to be in the best interests of the
Company and its Restricted Subsidiaries and (B) prohibits the
transfer of such shares to any Person other than the Company or the
Restricted Subsidiary whose shares have been so sold, transferred or
issued or any direct or indirect parent of such Restricted
Subsidiary; and
(6) the sale, transfer or issuance of capital stock to
employees of Restricted Subsidiaries as part of any incentive stock
arrangement other than any incentive stock agreement entered into in
connection with any purchase or acquisition contemplated by Section
5.8(c)(5) provided that:
(i) after giving effect to such issuance no Restricted
Subsidiary shall cease to be a Restricted Subsidiary; and
(ii) the aggregate fair value (in each case determined in good
faith at the time of such issuance by the Board of Directors of the
Company or such person or committee as the Board of Directors of the
Company may authorize to make such determination pursuant to the
terms of any such incentive stock arrangement) of all shares of
capital stock of such Restricted Subsidiaries issued to such
employees shall not exceed $2,000,000;
provided, however, that notwithstanding the foregoing, any sale, transfer,
issuance or other disposition of shares pursuant to Section Section
5.8(c)(3) or 5.8(c)(4) may not be consummated if either (y) the net book
value of the assets of such Restricted Subsidiary attributable to such
sale, transfer, issuance or other disposition of shares when added to the
net book value of all other assets sold, leased, transferred or otherwise
disposed of by the Company and its Restricted Subsidiaries during the
immediately preceding twelve-month period would constitute more than 10%
of Consolidated Total Assets (determined as of the end of the immediately
preceding fiscal quarter) or (z) the portions of Consolidated Net Income
for the immediately preceding twelve-month period contributed (each as
determined in good faith by the chief financial officer of the Company) by
(1) such assets, (2) each Restricted Subsidiary (or portion thereof)
disposed of during such period and (3) other assets of the Company and its
Restricted Subsidiaries sold, leased, transferred or otherwise disposed of
by the Company and its Restricted Subsidiaries during such period would
exceed 10% of Consolidated Net Income for such period.
Computations made with respect to Section Section 5.8(c)(3) and
5.8(c)(4) as contemplated by this Section 5.8(c) shall include
dispositions made within the provisions of Section Section 5.8(b)(1) and
computations made pursuant to Section Section 5.8(b)(1) shall include
dispositions made pursuant to Section Section 5.8(c)(3) and 5.8(c)(4).
(d) Notwithstanding any other provision of this Section 5.8, the
Company may sell stock or assets of Airguide Instrument Co. Sales of
stock or assets permitted by this Section 5.8(d) shall not be taken into
account for purposes of calculating the limitations on permitted sales of
assets and stock set forth in Section 5.8(b)(1) and the proviso at the end
of Section 5.8(c).
Section 5.9. Consolidated Net Worth. The Company will at all times
keep and maintain Consolidated Net Worth at an amount not less than
$90,000,000; provided that Charges for Identified Dispositions shall not
be taken into account for purposes of determining the amount of
Consolidated Net Worth maintained by the Company for purposes of
calculations pursuant to this Section 5.9.
Section 5.10. Fixed Charge Coverage Ratio. The Company will keep
and maintain the Fixed Charge Coverage Ratio at not less than 1.5 to 1;
provided that on not more than four occasions the Fixed Charge Coverage
Ratio can be less than 1.5 to 1 so long as it is greater than 1.2 to 1.
Section 5.11. Distributions. (a) The Company will not, and will not
permit any Restricted Subsidiary to, except as hereinafter provided:
(1) declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or
other distributions payable solely in shares of capital stock of the
Company and dividends paid by Restricted Subsidiaries to the Company
or other Restricted Subsidiaries in respect of capital stock of
Restricted Subsidiaries owned by the Company or such other Restricted
Subsidiaries); or
(2) directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of any
class or any warrants, rights or options to purchase or acquire any
shares of its capital stock (other than (i) in exchange for or out of
the net cash proceeds to the Company obtained within three months of
such purchase, redemption or retirement from the issue or sale of
other shares of capital stock of the Company or warrants, rights or
options to purchase or acquire any shares of its capital stock, or
(ii) in connection with any purchase or redemption of any shares of
capital stock sold, transferred or issued in accordance with Section
Section 5.8(c)(1), 5.8(c)(2) or 5.8(c)(5)); or
(3) make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock;
(such declarations or payments of dividends, purchases, redemptions or
retirements of capital stock and warrants, rights or options and all such
other payments or distributions being herein collectively called
"Distributions"), unless after giving effect thereto no Default or Event
of Default would exist and the aggregate amount of Distributions made
during the period from and after June 14, 1991 to and including the date
of the making of the Distributions in question would not exceed the sum of
(1) $5,000,000, plus (2) 50% of Consolidated Net Income for such period,
computed on a cumulative basis for said entire period (or if such
Consolidated Net Income is a deficit figure, then minus 100% of such
deficit).
(b) For the purposes of this Section 5.11, the amount of any
Distribution declared, paid or distributed in property shall be deemed to
be the greater of the book value or fair market value (as determined in
good faith by the Board of Directors of the Company) of such property at
the time of the making of the Distribution in question.
(c) The Company will not authorize or make a Distribution on its
capital stock if after giving effect to the proposed Distribution:
(1) a Default or Event of Default would exist, or
(2) the Company could not incur at least $1.00 of additional
Funded Debt pursuant to Section 5.6(a)(3).
Section 5.12. Investments. The Company will not, and will not
permit any Restricted Subsidiary to, make any Investments, other than:
(a) Investments by the Company or a Restricted Subsidiary in
and to Restricted Subsidiaries, including any Investment in a Person
which, after giving effect to such Investment, will become a
Restricted Subsidiary;
(b) Investments in property or assets to be used in the usual
and ordinary course of business of the Company or its Restricted
Subsidiaries; provided that, after giving effect to any such
Investment, the Company remains in compliance with Section 5.5
hereof;
(c) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by
the Company or any Restricted Subsidiary, is accorded the highest
rating by Standard & Poor's Corporation, Moody's Investors Service,
Inc. or another credit rating agency of recognized national standing;
(d) Investments in direct obligations of the federal
governments of the United States of America, Canada or England and
Wales or any direct agency or instrumentality of any thereof, the
payment or guarantee of which constitutes a full faith and credit
obligation of the federal governments of the United States of
America, Canada or England and Wales or any direct agency or
instrumentality of any thereof, as the case may be, in each case,
maturing in twelve months or less from the date of acquisition
thereof;
(e) Term Federal funds and banker's acceptances maturing within
180 days from the date of acquisition thereof and issued by a bank
organized under the laws of the United States, Canada, or England and
Wales, having capital, surplus and undivided profits aggregating at
least U.S. $l00,000,000; provided that the issuing institution has a
rating of A- or better by Keefe Bank Watch Service;
(f) Investments in certificates of deposit maturing within one
year from the date of acquisition thereof, issued by a bank or trust
company organized under the laws of the United States, having
capital, surplus and undivided profits aggregating at least
$100,000,000 and whose long-term certificates of deposit are, at the
time of acquisition thereof by the Company or a Restricted
Subsidiary, rated A or better by Standard & Poor's Corporation or by
Moody's Investors Service, Inc.;
(g) loans or advances in the usual and ordinary course of
business to officers, directors, and employees incidental to carrying
on the business of the Company or any Restricted Subsidiary;
(h) receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Restricted
Subsidiaries; and
(i) other Investments (in addition to those permitted by the
foregoing provisions of this Section 5.12); provided that (1) all
such other Investments shall not exceed in the aggregate 25% of
Consolidated Tangible Net Worth Available for Investments and (2)
after giving effect to such other Investments, no Default or Event of
Default would exist.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 5.12, such Investments shall be
taken at the original cost thereof, without allowance for any subsequent
write-offs or appreciation or depreciation therein, but less any amount
repaid or recovered on account of capital or principal.
For purposes of this Section 5.12, at any time when a Person becomes
a Restricted Subsidiary, all Investments of such Person at such time shall
be deemed to have been made by such Person, as a Restricted Subsidiary, at
such time.
Section 5.13. Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate, directly or indirectly, may repurchase or make
any offer to repurchase any Notes unless the offer has been made in
writing to repurchase Notes, pro rata, from all holders of the Notes at
the same time and upon the same terms. In case the Company or any
Subsidiary repurchases any Notes, such Notes shall thereafter be canceled
and no Notes shall be issued in substitution therefor.
Section 5.14. Transactions with Affiliates. The Company will not,
and will not permit any Restricted Subsidiary to, enter into or be a party
to any material transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate), except
transactions reasonably deemed by the Company in good faith to be in the
best business interests of the Company or the concerned Restricted
Subsidiary and upon fair and reasonable terms no less favorable to the
Company or such Restricted Subsidiary than would obtain in a comparable
arm's-length transaction with a Person other than an Affiliate.
Section 5.15. ERISA Compliance. The Company will not, and will not
permit any Subsidiary to:
(a) permit any Plans at any time maintained by the Company or
any such Subsidiary to have any Unfunded Vested Pension Liabilities
in excess of $1,000,000 in the aggregate. As used herein, "Unfunded
Vested Pension Liability" shall mean an excess of the actuarial
present value of accumulated vested Plan benefits as at the end of
the immediately preceding Plan year of such Plans (or as of any more
recent valuation date) over the net assets allocated to such Plans
which are available for benefits, all as determined and disclosed in
the most recent actuarial valuation report for such Plans;
(b) cause any Plan which it or any Subsidiary maintains or in
which it or any Subsidiary participates at any time to:
(1) engage in any "prohibited transaction" (as such term is
defined in ERISA);
(2) incur any "accumulated funding deficiency" (as such term is
defined in ERISA) whether or not waived; or
(3) terminate any such Plan in a manner which could result in
the imposition of a lien on any property of the Company or any of its
Subsidiaries pursuant to ERISA;
(c) permit any condition to exist in connection with any Plan
which might constitute grounds for the PBGC to institute proceedings
to have such Plan terminated or a trustee appointed to administer
such Plan; or
(d) withdraw from any Multiemployer Plan if such withdrawal
shall subject the Company or any Subsidiary to withdrawal liability
(as described under Part 1 of Subtitle E of Title IV of ERISA) in
excess of $100,000.
All assumptions and methods used to determine the actuarial valuation
of vested employee benefits under any Plan at any time maintained by the
Company or any Subsidiary and the present value of assets of such Plans
shall be reasonable in the good faith judgment of the Company and shall
comply with all requirements of law.
Section 5.16. Reports and Rights of Inspection. The Company will
keep, and will cause each Restricted Subsidiary to keep, proper books of
record and account in which full and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs, in
accordance with relevant accounting principles consistently applied and in
the case of the Company and any Domestic Restricted Subsidiaries in
accordance with GAAP (except for changes disclosed in the financial
statements furnished to the Holders pursuant to this Section 5.16 and
concurred in by the independent public accountants referred to in Section
5.16(b)), and will furnish to each Institutional Holder of the outstanding
Notes (in duplicate if so specified below or otherwise requested) and, in
the case of the financial statements delivered pursuant to paragraph (b)
of this Section 5.16, to the Securities Valuation Office, National
Association of Insurance Commissioners, 67 Wall Street, New York, New York
10005:
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal period
(except the last) of each fiscal year, duplicate copies of:
(1) a consolidated balance sheet of the Company and its
Restricted Subsidiaries as of the close of such quarterly period,
setting forth in comparative form the consolidated figures for the
corresponding period for the preceding fiscal year,
(2) a consolidated statement of income of the Company and its
Restricted Subsidiaries for such quarterly fiscal period and for the
portion of the fiscal year ending with such quarterly fiscal period,
in each case setting forth in comparative form the consolidated
figures for the corresponding periods of the preceding fiscal year,
and
(3) a consolidated statement of cash flows of the Company and
its Restricted Subsidiaries for the portion of the fiscal year ending
with such quarterly fiscal period, setting forth in comparative form
the consolidated figures for the corresponding period of the
preceding fiscal year, all in reasonable detail and certified as
complete and correct by an authorized financial officer of the
Company;
(b) Annual Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company,
duplicate copies of:
(1) consolidated balance sheets of the Company and its
Restricted Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income and retained earnings and
cash flows of the Company and its Restricted Subsidiaries for such
fiscal year,
in each case setting forth in comparative form the consolidated figures
for the preceding fiscal year, all in reasonable detail and accompanied by
an opinion thereon of a firm of independent public accountants of
recognized national standing selected by the Company, unqualified as to
scope, to the effect that the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of
the Company and its Restricted Subsidiaries as of the end of the fiscal
year being reported on and the consolidated results of the operations and
cash flows for said year in conformity with GAAP and that the examination
of such accountants in connection with such financial statements has been
conducted in accordance with generally accepted auditing standards and
included such tests of the accounting records and such other auditing
procedures as were considered necessary in the circumstances;
(c) Audit Reports. Promptly upon initiation thereof, written
notice of each interim or special audit to be made by independent
accountants of the books of the Company or any Restricted Subsidiary
and any management letter to be delivered from such accountants in
connection therewith;
(d) SEC and Other Reports. Promptly (and in any event within
30 days) upon their becoming available, one copy of each financial
statement, report, notice, press release or proxy statement sent by
the Company to stockholders generally or made available to the public
and one copy of each regular or periodic report, registration
statement or prospectus filed by the Company or any Restricted
Subsidiary with any securities exchange or the Securities and
Exchange Commission or any successor agency, and, if the Purchaser or
any such Institutional Holder so requests, one copy of any material
order in any proceedings to which the Company or any of its
Restricted Subsidiaries is a party, issued by any governmental
agency, Federal or state, having jurisdiction over the Company or any
of its Restricted Subsidiaries;
(e) Officers' Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of an authorized
financial officer of the Company stating that such officer has
reviewed the provisions of this Agreement and setting forth: (1) the
information and computations (in sufficient detail) required in order
to establish whether the Company was in compliance with the
applicable requirements of Section Section 5.6 through 5.12 hereof at
the end of the period covered by the financial statements then being
furnished and (2) whether, to the best of his knowledge based on such
review, there existed as of the date of such financial statements or
there exists on the date of the certificate or existed at any time
during the period covered by such financial statements any Default or
Event of Default and, if any such condition or event exists on the
date of the certificate or existed during such period, specifying the
nature and extent thereof and the action the Company is taking, has
taken or proposes to take with respect thereto; provided further,
that such certificates as are delivered with respect to the period
provided for in paragraph (b) above, shall include a list of any
changes in Restricted Subsidiaries as at the end of such period;
(f) Accountants Certificates. Within the period provided in
paragraph (b) above, a certificate of the accountants who are
reporting upon such financial statements, stating that they have
reviewed this Agreement and, stating further, whether in making their
audit such accountants (1) have not become aware that the Company and
the Restricted Subsidiaries have failed to comply with the terms,
covenants, provisions, or conditions contained in Section 5 hereof
and (2) have examined the schedules to such reports or other
certificates or documents containing calculations of the financial
covenants required to be performed or observed pursuant to Section
Section 5.6 through 5.12 hereof, and in their opinion, the
information set forth in such schedules or other certificates or
documents is fairly stated in all material respects in relation to
the annual consolidated financial statements taken as a whole;
(g) ERISA Notices. Promptly upon learning of the occurrence of
any of the following, written notice thereof, describing the same and
the steps being taken by the Company or any Subsidiary affected with
respect thereto, and when known, any action taken or threatened by
the Internal Revenue Service, Department of Labor or the PBGC with
respect thereto: (1) a Reportable Event with respect to any Plan; (2)
the institution of any steps by the Company, any ERISA Affiliate, the
PBGC or any other person to terminate any Plan other than a "standard
termination" under Section 4041(b) of ERISA; (3) the institution of
any steps by the Company or any ERISA Affiliate to withdraw from any
Multiemployer Plan; (4) a "prohibited transaction" within the meaning
of Section 406 of ERISA in connection with any Plan; or (5) any
material increase in the contingent liability of the Company or any
subsidiary with respect to any post-retirement welfare liability; and
(h) Requested Information. With reasonable promptness, such
other data and information as the Purchaser or any such Institutional
Holder may reasonably request, including, without limitation, such
financial or other information as any holder of the Notes or any
Person designated by such holder may reasonably determine as required
to permit such holder to comply with requirements of Rule 144A
promulgated under the Act in connection with the resale by it of the
Notes.
Without limiting the foregoing, the Company will permit the Purchaser, so
long as the Purchaser is the holder of a Note, and each Institutional
Holder of the then outstanding Notes (or such agent(s) as either the
Purchaser or such Institutional Holder may designate) to visit and
inspect, under the Company's guidance, any of the properties of the
Company or any Restricted Subsidiary, and to examine all of their books
of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective officers, employees, and independent public
accountants (and by this provision the Company authorizes such accountants
to discuss with the Purchaser the finances and affairs of the Company and
its Restricted Subsidiaries) all at such reasonable times and as often as
may be reasonably requested. The Company shall be required to pay or
reimburse the Purchaser or any such Institutional Holder for reasonable
expenses which the Purchaser or any such Institutional Holder may incur in
connection with any such visitation or inspection occurring at such time
as any Event of Default shall have occurred and be continuing.
All information which is furnished to or obtained by any holder of
Notes pursuant to this Section 5.16 or otherwise pursuant to this
Agreement shall, if so requested in writing by the Company, be received
and held in confidence unless or until the same has been publicly
disclosed by the Company; provided, however, nothing herein contained
shall limit or impair the right or obligation of any Institutional Holder
of the Notes to disclose such information: (a) to its auditors, trustees,
advisors, attorneys, employees or agents, (b) when required by any law,
ordinance or governmental order, regulation, rule, policy, investigation
or any regulatory authority request, (c) as may be required or appropriate
in any report, statement or testimony submitted to any municipal, state,
provincial or Federal regulatory body having or claiming to have
jurisdiction over such Institutional Holder or to the United States
National Association of Insurance Commissioners or similar organizations
or their successors, (d) which is publicly available or readily
ascertainable from public sources, or which is received by any
Institutional Holder of the Notes from a third Person who or which is not
bound to keep the same confidential, (e) in connection with any
proceeding, case or matter pending (or on its face purported to be
pending) before any court, tribunal, arbitration board or any governmental
agency, commission, authority, board or similar entity, (f) in connection
with the enforcement by an Institutional Holder of its rights under or in
respect of this Agreement or the Notes after the occurrence of a Default
or Event of Default, or (g) to the extent necessary in connection with any
contemplated transfer of any of the Notes by an Institutional Holder
thereof (it being understood and agreed that any such transferee which
purchases such Notes shall itself be bound by the terms and provisions
hereof.)
Section 6. Events of Default and Remedies Therefor.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as the term is used herein:
(a) Default shall occur in the payment of interest on any Note
when the same shall have become due and such default shall continue
for more than five days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in Section 2; or
(c) Default shall occur in the making of any other payment of
the principal of any Note or the premium thereon at the expressed or
any accelerated maturity date or at any date fixed for prepayment; or
(d) Default shall be made in the payment of the principal of or
interest on Indebtedness for borrowed money of the Company or any
Restricted Subsidiary (other than the Notes) aggregating more than
$3,000,000 as and when the same shall become due and payable by the
lapse of time, by declaration, by call for redemption or otherwise,
and such default shall continue beyond the period of grace, if any,
allowed with respect thereto; or
(e) Default or the happening of any event shall occur under any
indentures, agreements or other instruments (other than the
Agreement) under which any Indebtedness for borrowed money of the
Company or any Restricted Subsidiary aggregating more than $3,000,000
may be issued and such defaults or events shall continue for a period
of time sufficient to permit the acceleration of the maturity of such
Indebtedness of the Company or such Restricted Subsidiaries, as the
case may be, outstanding thereunder; or
(f) Default shall occur in the observance or performance of any
covenant or agreement contained in Section 5.6 through Section 5.12
hereof; or
(g) Default shall occur in the observance or performance of any
other provision of this Agreement which is not remedied or waived
within 30 days after the chief executive officer or the chief
operating officer or the chief financial officer of the Company first
has actual knowledge of such default; or
(h) if any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company or any Subsidiary in connection with the
consummation of the issuance and delivery of the Notes or furnished
by the Company or any Subsidiary pursuant hereto, is untrue in any
material respect as of the date of the issuance or making thereof; or
(i) final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 is or are outstanding against the
Company or any Restricted Subsidiary or against any property or
assets of either and any one of such judgments has remained unpaid,
unvacated, unbonded or unstayed by appeal or otherwise for a period
of 60 days from the date of its entry; provided, however, that the
existence of such judgment or judgments shall not constitute an Event
of Default if (1) the aggregate amount of such judgment or judgments
shall be fully covered by insurance issued by financially sound and
reputable insurers and (2) within such 60 day period, the Company
shall have caused such insurers to provide the holders of the Notes
with written confirmation that such coverage (i) equals or exceeds
the amount of such judgment or judgments and (ii) is not being
contested as to amount or coverage by such insurers; or
(j) a custodian, receiver, liquidator or trustee of the Company
or any Principal Subsidiary, or of any of the property of either, is
appointed or takes possession and such appointment or possession
remains uncontested or in effect for more than 60 days; or the
Company or any Principal Subsidiary generally fails to pay its debts
as they become due or admits in writing its inability to pay its
debts as they mature; or the Company or any Principal Subsidiary is
adjudicated bankrupt or insolvent; or an order for relief is entered
under the Federal Bankruptcy Code against the Company or any
Principal Subsidiary; or any of the material property of either is
sequestered by court order and the order remains in effect for more
than 60 days; or a petition is filed against the Company or any
Principal Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or subsequently in
effect, and is not stayed or dismissed within 60 days after filing;
or
(k) the Company or any Principal Subsidiary files a petition in
voluntary bankruptcy or seeking relief under any provision of any
bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now
or subsequently in effect; or consents to the filing of any petition
against it under any such law; or consents to the appointment of or
taking possession by a custodian, receiver, trustee or liquidator of
the Company, any Principal Subsidiary, or any of the property of
either.
Section 6.2. Notice to Holders. When any Event of Default
described in Section 6.1 has occurred, or if the holder of any Note or of
any other evidence of Indebtedness of the Company gives any notice or
takes any other action with respect to a claimed default, the Company
agrees to give notice within three business days of such event to all
holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section 6.1 has happened and is
continuing, any holder of any Note may, and when any Event of Default
described in paragraphs (d) through (i), inclusive, of Section 6.1 has
happened and is continuing, the holder or holders of 70% or more of the
principal amount of Notes at the time outstanding may, in addition to any
other rights and remedies available at law or in equity, by notice in
writing sent in the manner provided in Section 9.6 hereof to the Company,
declare the entire principal and all interest accrued on all Notes to be,
and all Notes shall thereupon become, forthwith due and payable, without
any presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived. When any Event of Default described in
paragraph (j) or (k) of Section 6.1 has occurred, then all outstanding
Notes shall immediately become due and payable without presentment, demand
or notice of any kind. Upon the Notes becoming due and payable as a
result of any Event of Default as aforesaid, the Company will forthwith
pay to the holders of the Notes the entire principal and interest accrued
on the Notes plus, to the extent not prohibited by law, an amount as
liquidated damages for the loss of the bargain evidenced hereby (and not
as a penalty) equal to the applicable Make-Whole Amount determined as of
the date on which the Notes shall so become due and payable. No course of
dealing on the part of any holder of the Notes nor any delay or failure on
the part of any holder of the Notes to exercise any right shall operate as
a waiver of such right or otherwise prejudice such holder's rights,
powers and remedies. The Company further agrees, to the extent permitted
by law, to pay to the holder or holders of the Notes all reasonable costs
and expenses incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith.
Section 6.4. Rescission of Acceleration. The provisions of Section
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately
due and payable by reason of the occurrence of any Event of Default
described in paragraphs (a) through (i), inclusive, of Section 6.1, the
holders of not less than 75% in aggregate principal amount of the Notes
then outstanding may, by written instrument filed with the Company,
rescind and annul such declaration and the consequences thereof; provided
that at the time such declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment of
any monies due pursuant to the Notes or the Agreement;
(b) all arrears of interest on all the Notes and all other sums
payable under the Notes and under the Agreement (except any
principal, interest or premium on the Notes which has become due and
payable solely by reason of such declaration under Section 6.3) shall
have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section 7.1;
and provided further that no such rescission and annulment shall extend to
or affect any subsequent Default or Event of Default or impair any right
consequent thereto.
Section 7. Amendments, Waivers And Consents
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the holders of at
least 70% in aggregate principal amount of outstanding Notes; provided
that without the written consent of the holders of all of the Notes then
outstanding, no such amendment or waiver shall be effective (a) which will
change the time of payment (including any prepayment required by Section
2.1) of the principal of or the interest on any Note or reduce the
principal amount thereof or change the rate of interest thereon, or (b)
which will change any of the provisions with respect to optional
prepayments, or (c) which will change the percentage of holders of the
Notes required to consent to any such amendment or waiver of any of the
provisions of this Section 7 or Section 6.
Section 7.2. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the
Company, whether or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or
affect any obligation not expressly amended or waived or impair any right
consequent thereon.
Section 7.3. Solicitation of Holders. The Company will not
solicit, request or negotiate for or with respect to any proposed waiver
or amendment of any of the provisions of the Agreement or the Notes unless
each holder of the Notes shall be informed thereof by the Company and
shall be afforded the opportunity of considering the same and shall be
supplied by the Company with sufficient information to enable it to make
an informed decision with respect thereto. Executed or true and correct
copies of any waiver or amendment effected pursuant to the provisions of
Section 7.1 shall be delivered by the Company to each registered holder of
outstanding Notes following the date on which the same shall have been
executed and delivered by the holder or holders of the requisite
percentage of outstanding Notes. The Company will not, directly or
indirectly, pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, to any holder of
the Notes as consideration for or as an inducement to the entering into by
any holder of the Notes of any waiver or amendment of any of the terms and
provisions of this Agreement unless such remuneration is concurrently
paid, on the same terms, ratably to the holders of all the Notes then
outstanding.
Section 8. Interpretation of Agreement; Definitions.
Section 8.1. Definitions. Unless the context otherwise requires,
the terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Affiliate" shall mean any Person (other than a Restricted
Subsidiary) (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company, (b) which beneficially owns or holds 5% or
more of any class of the Voting Stock of the Company or (c) 5% or
more of the Voting Stock (or in the case of a Person which is not a
corporation, 5% or more of the equity interest) of which is
beneficially owned or held by the Company or a Subsidiary. The term
"control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"Agreement" shall mean this Note Agreement.
"Capitalized Lease" shall mean any lease the obligation for
Rentals with respect to which is required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of
any determination the amount at which the aggregate Rentals due and
to become due under all Capitalized Leases under which such Person is
a lessee would be reflected as a liability on a consolidated balance
sheet of such Person and its subsidiaries prepared in accordance with
GAAP.
"Charges for Identified Dispositions" shall mean charges taken
by the Company on or prior to October 2, 1998 in an aggregate amount
not in excess of $5,000,000 and relating to (i) the closing of
certain distribution centers and other facilities owned or operated
by Uwatec AG and its subsidiaries, and (ii) the disposition of the
Airguide Instrument Company.
"Company" shall mean Johnson Worldwide Associates, Inc., a
Wisconsin corporation, and any Person who succeeds to all, or
substantially all, of the assets and business of Johnson Worldwide
Associates, Inc.
"Consolidated Current Debt" shall mean, without duplication,
Current Debt of the Company and its Restricted Subsidiaries
determined on a consolidated basis eliminating intercompany items.
"Consolidated Funded Debt" shall mean, without duplication,
Funded Debt of the Company and its Restricted Subsidiaries determined
on a consolidated basis eliminating intercompany items.
"Consolidated Net Income" for any period shall mean net income
of the Company, and its Restricted Subsidiaries from continuing
operations determined on a consolidated basis in accordance with GAAP
consistently applied, and excluding net earnings and losses of any
Person (other than a Restricted Subsidiary) with which the Company or
a Restricted Subsidiary shall have consolidated or which shall have
merged or liquidated into or with the Company or a Restricted
Subsidiary prior to the date of such consolidation, merger or
liquidation.
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus, and retained earnings of
the Company and its Restricted Subsidiaries, net of all cumulative
translation adjustments and contingent compensation adjustments
determined on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the
Company and its Restricted Subsidiaries on a consolidated basis after
deducting therefrom all Investments incurred pursuant to and within
the limitations of Section 5.12(i).
"Consolidated Tangible Net Worth" shall mean as of the date of
any determination thereof Consolidated Net Worth less (a) all assets
of the Company and its Restricted Subsidiaries that are properly
classified as "intangible assets" all determined in accordance with
GAAP and (b) all Investments incurred pursuant to and within the
limitations of Section 5.12(i).
"Consolidated Tangible Net Worth Available for Investments"
shall mean as of the date of any determination thereof the sum of (a)
Consolidated Tangible Net Worth and (b) all Investments incurred
pursuant to and within the limitations of Section 5.12(i) hereof.
"Consolidated Total Assets" of the Company and its Restricted
Subsidiaries shall mean as of the date of any determination thereof
the total assets of the Company and its Restricted Subsidiaries as of
such date determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of
any determination thereof the sum of (a) Consolidated Net Worth and
(b) Consolidated Funded Debt.
"Current Debt" of any Person shall mean as of the date of any
determination thereof (a) all Indebtedness for borrowed money or
which has been incurred in connection with the acquisition of
property or assets other than Funded Debt, provided that any portion
of such obligations incurred in connection with the acquisition of
property or assets specifically including, without limitation,
obligations which have been incurred by such Person in connection
with any sale, transfer or issuance of stock pursuant to and in
compliance with Section 5.8(c)(5) and which are at the date of any
determination of Current Debt contingent as to amount or as to
payment shall not be treated as Current Debt on such date, (b)
Guaranties of Current Debt of others and (c) all obligations of such
Person with respect to receivables sold or otherwise discounted with
recourse which would not constitute Funded Debt pursuant to the terms
of the definition thereof.
"Default" shall mean any event or condition the occurrence of
which would, with the lapse of time or the giving of notice, or both,
constitute an Event of Default.
"Domestic Restricted Subsidiary" shall mean any Restricted
Subsidiary (a) which is organized under the laws of the United States
or any State thereof and (b) which conducts substantially all of its
business and has substantially all of its assets within the United
States.
"Eighty Percent-Owned Restricted Subsidiary" shall mean a
Subsidiary of which 80% or more (by number of votes) of the Voting
Stock shall be beneficially owned, directly or indirectly, by the
Company.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect
from time to time. References to sections of ERISA shall be
construed to also refer to any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business
that is, along with the Company, a member of a controlled group of
corporations or a controlled group of trades or businesses, as
described in Section 414(b) and 414(c), respectively, of the Internal
Revenue Code of 1986, as amended or Section 4001 of ERISA.
"Event of Default" is defined in Section 6.1.
"Fixed Charges" for any period shall mean on a consolidated
basis the sum of (i) all Rentals (other than Rentals on Capitalized
Leases) payable during such period by the Company and its Restricted
Subsidiaries, and (ii) all Interest Charges on all Indebtedness
(including the interest component of Rentals on Capitalized Leases)
of the Company and its Restricted Subsidiaries.
"Fixed Charge Coverage Ratio" shall mean the ratio of (i) Net
Income Available for Fixed Charges to (ii) Fixed Charges determined
as of the end of each fiscal quarter for the period consisting of the
immediately preceding four fiscal quarters (each such rolling four
fiscal quarter period being treated as a single accounting period).
"Funded Debt" of any Person shall mean (a) all Indebtedness for
or in respect of borrowed money or which has been incurred in
connection with the acquisition of property or assets, in each case
having a final maturity of more than one year from the date of origin
thereof (or which is renewable or extendible at the option of the
obligor for a period or periods of more than one year from the date
of origin), including all payments in respect thereof that are
required to be made within one year from the date of any
determination of Funded Debt, whether or not the obligation to make
such payment shall constitute a current liability of the obligor
under GAAP, provided that any portion of such obligations incurred in
connection with the acquisition of property or assets specifically
including, without limitation, obligations which have been incurred
by such Person in connection with any sale, transfer or issuance of
capital stock pursuant to and in compliance with Section 5.8(c)(5)
and which are at the date of any determination of Funded Debt
contingent as to amount or as to payment shall not be treated as
Funded Debt on such date, (b) all Capitalized Rentals, (c) all
Guaranties by such Person of Funded Debt of others and (d) all
obligations of such Person with respect to receivables sold or
otherwise discounted with recourse.
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time. Notwithstanding the
foregoing, in the event that any Accounting Changes (as defined
below) shall occur, all financial covenants, standards and terms in
this Agreement shall continue to be calculated or construed as if
such Accounting Changes had not occurred. "Accounting Changes"
means: changes in accounting principles required by the promulgation
of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants or, if applicable, the Securities and Exchange
Commission (or successors thereto or agencies with similar
functions).
"Guaranties" by any Person shall mean all obligations (other
than endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or
in effect guaranteeing any Indebtedness, dividend or other
obligation, of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent
or otherwise, by such Person: (a) to purchase such Indebtedness or
obligation or any property or assets constituting security therefor,
(b) to advance or supply funds (1) for the purchase or payment of
such Indebtedness or obligation, (2) to maintain working capital or
other balance sheet condition or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or
obligation, or (c) to lease property or to purchase Securities or
other property or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation of the ability of the
primary obligor to make payment of the Indebtedness or obligation, or
(d) otherwise to assure the owner of the Indebtedness or obligation
of the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a Guaranty in
respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for
borrowed money which has been guaranteed, and a Guaranty in respect
of any other obligation or any dividend shall be deemed to be
Indebtedness equal to the maximum aggregate amount of such obligation
or dividend.
"Indebtedness" of any Person shall mean and include (a)
obligations of such Person for borrowed money or which have been
incurred in connection with the acquisition of property or assets
(except for obligations under bona fide employment, consulting, non-
competition, lease and similar agreements), provided that any portion
of such obligations which have been incurred in connection with the
acquisition of property or assets specifically including, without
limitation, obligations which have been incurred by such Person in
connection with any sale, transfer or issuance of stock pursuant to
and in compliance with Section 5.8(c)(5) and which are at the date of
any determination of Indebtedness contingent as to amount or as to
payment shall not be treated as Indebtedness on such date, (b)
obligations secured by any Lien upon property or assets owned by such
Person, even though such Person has not assumed or become liable for
the payment of such obligations, (c) obligations created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person, notwithstanding the fact
that the rights and remedies of the seller, lender or lessor under
such agreement in the event of default are limited to repossession or
sale of property, (d) all Guaranties by such Person of obligations of
others of the character referred to in this definition, (e)
Capitalized Rentals, and (f) all obligations of such Person with
respect to receivables sold or otherwise discounted with recourse.
"Institutional Holder" shall mean any of the following Persons:
(a) any bank or any savings and loan association, savings
institution, trust company or other institution acting for its own
account or in a fiduciary capacity, (b) any insurance company, (c)
any pension, retirement or profit sharing trust or fund within the
meaning of Title I of ERISA or for which any bank, trust company,
national banking association or investment adviser registered under
the Investment Advisers Act of 1940, as amended, is acting as trustee
or agent, (d) any investment company or business development company,
as defined in the Investment Company Act of 1940, as amended, (e) any
broker or dealer registered under the Securities Exchange Act of
1934, as amended, who is a member of a national securities exchange
or any investment adviser registered under the Investment Adviser Act
of 1940, as amended, (f) any government, any public employees'
pension or retirement system, or any other governmental agency
supervising the investment of public funds, (g) any other entity all
of the equity owners of which are Institutional Holders or (h) any
other Person which may be within the definition of "qualified
institutional buyer" as such term is used in Rule 144A, as from time
to time in effect, promulgated under the Act.
"Interest Charges" for any period shall mean all interest and
all amortization of debt discount and expense on any particular
Indebtedness for which such calculations are being made.
"Investments" of any Person shall mean all investments, in cash
or by delivery of property made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock,
indebtedness or any other obligations or Securities or by loan,
advance, capital contributions or otherwise.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of
the property, whether such interest is based on the common law,
statute or contract, including, without limitation, the security
interest arising from a mortgage, encumbrance, pledge, conditional
sale or trust receipt or a lease, consignment or bailment for
security purposes and including any Capitalized Lease. The term
"Lien" shall include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, lease
and other similar title exceptions and encumbrances affecting real
property. For the purpose of this Agreement, the Company or a
Restricted Subsidiary shall be deemed to be the owner of any property
which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the
property has been retained by or vested in another Person for
security purposes.
"Make-Whole Amount" shall mean with respect to any amounts to be
paid pursuant to the provisions of Section Section 2.2 or 2.3 hereof
or upon acceleration of the Notes the excess, if any, of (1) the
aggregate present value as of the date of such prepayment or payment
of each dollar of principal being prepaid or paid (taking into
account the application of such prepayment required by Section 2.1)
and the amount of interest (exclusive of interest accrued to the date
of prepayment or payment) that would have been payable in respect of
such dollar if such prepayment or payment had not been made,
determined by discounting such amounts at the Reinvestment Rate from
the respective dates on which they would have been payable, over (2)
100% of the principal amount of the outstanding Notes being prepaid
or paid. If the Reinvestment Rate with respect to prepayment of the
Notes is equal to or higher than 7.15%, the Make-Whole Amount shall
be zero. For purposes of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean as of the time of any
determination thereof .50% plus the yield on actively traded U.S.
Treasury Securities with a maturity corresponding to the Weighted
Average Life to Maturity of the principal then being prepaid or paid
(taking into account the application of any such prepayment required
by Section 2.1) as set forth on page Government C4 (or any successor
page) of the Bloomberg screen or, if such page or screen is not
available at the time of any determination hereunder, then such other
reasonably comparable index which shall be designated by the holders
of 66-2/3% in aggregate principal amount of the outstanding Notes.
If no maturity exactly corresponds to such Weighted Average Life to
Maturity, yields for the two published maturities most closely
corresponding to such Weighted Average Life to Maturity shall be
calculated pursuant to the immediately preceding sentence and the
Reinvestment Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding in each of such relevant
periods to the nearest month.
"Weighted Average Life to Maturity" of the principal amount of
the Notes being prepaid or paid shall mean, as of the time of any
determination thereof, the number of years obtained by dividing the
then Remaining Dollar-Years of such principal by the aggregate amount
of such principal. The term "Remaining Dollar-Years" of such
principal shall mean the amount obtained by (a) multiplying (1) the
remainder of (i) the amount of principal that would have become due
on each scheduled prepayment or payment date if such prepayment or
payment had not been made less (ii) the amount of principal on the
Notes scheduled to become due on such date after giving effect to
such prepayment or payment and the application thereof in accordance
with the provisions of Section 2.1, by (2) the number of years
(calculated to the nearest one-twelfth) which will elapse between the
date of determination and such scheduled prepayment or payment date,
and (b) totaling the products obtained in (a).
"Multiemployer Plan" shall have the meaning as in ERISA.
"Net Income Available for Fixed Charges" for any period shall
mean the sum of (i) Consolidated Net Income during such period plus
(to the extent deducted in determining Consolidated Net Income), (ii)
all provisions for any Federal, state or other income taxes made by
the Company and its Restricted Subsidiaries during such period, (iii)
Fixed Charges of the Company and its Restricted Subsidiaries during
such period, and (iv) Charges for Identified Dispositions.
"Overdue Rate" shall mean as of the date of any determination
thereof the lesser of (a) the maximum rate permitted by law and (b)
9.15% per annum.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and
any entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, and a government or agency or
political subdivision thereof.
"Plan" shall mean a plan that is both a "pension plan," as such
term is defined in Section 3(2) of ERISA, and a "defined benefit
pension plan" as defined in Section 414(j) of the Internal Revenue
Code of 1986 which is established or maintained by the Company or any
ERISA Affiliate or as to which the Company or any ERISA Affiliate
contributed or is a member or otherwise may have any liability.
"Principal Subsidiary" shall mean any Restricted Subsidiary
which had (a) total assets, on a consolidating basis, as of the last
day of the most recently ended fiscal quarter of the Company, of an
amount equal to or greater than 2% of Consolidated Total Assets of
the Company as of the last day of such fiscal quarter, or (b) net
income, on a consolidating basis, for the Company's most recent
fiscal year, equal to or greater than 2% of Consolidated Net Income
of the Company for such year.
"Rentals" of any Person shall mean and include all fixed rents
(including as such all payments which the lessee is obligated to make
to the lessor on termination of the lease or surrender of the
property) payable by such Person, as lessee or sublessee under a
lease of real or personal property, but shall be exclusive of any
amounts required to be paid by such Person (whether or not designated
as rents or additional rents) on account of maintenance, repairs,
insurance, taxes and similar charges. Fixed rents under any so-
called "percentage leases" shall be computed solely on the basis of
the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Reportable Event" shall have the same meaning as in ERISA.
"Restricted Subsidiary" shall mean any Subsidiary of which more
than 50% (by number of votes) of the Voting Stock is beneficially
owned, directly or indirectly, by the Company.
"Security" shall have the same meaning as in Section 2(l) of the
Securities Act of 1933, as amended.
The term "subsidiary" shall mean, as to any particular parent
corporation, any corporation of which more than 50% (by number of
votes) of the Voting Stock shall be owned by such parent corporation
and/or one or more corporations which are themselves subsidiaries of
such parent corporation. The term "Subsidiary" shall mean a
subsidiary of the Company.
"Tangible Assets" of any Person shall mean, as of the date of
any determination thereof, the total amount of all assets of such
Person (less depreciation, depletion, and other properly deductible
valuation reserves) after deducting the following: good will,
patents, trade names, trade marks, copyrights, franchises,
experimental expense, organization expense, unamortized debt discount
and expense, deferred charges, the excess of cost of shares acquired
over book value of related assets, any write up in the book value of
any asset resulting from a revaluation thereof subsequent to March
29, 1991 (except in connection with the acquisition of such assets)
and such other assets as are properly classified as "intangible
assets" in accordance with GAAP.
"Voting Stock" shall mean Securities of any class or classes,
the holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or Persons
performing similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall
mean a Subsidiary of which all of the issued and outstanding shares
of stock (other than directors' qualifying shares or shares owned by
foreign domiciliaries as required by law) shall be owned by the
Company and/or one or more of its Wholly-Owned Restricted
Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the specific provisions of this
Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
Section 9. Miscellaneous.
Section 9.1. Registration of Notes. The Company shall cause to be
kept at its principal office a register for the registration and transfer
of the Notes (hereinafter called the "Note Register"), and the Company
will register or transfer or cause to be registered or transferred, as
hereinafter provided any Note issued pursuant to this Agreement.
The Person in whose name any registered Note shall be registered
shall be deemed and treated as the owner and holder thereof for all
purposes of this Agreement. Payment of or on account of the principal,
premium, if any, and interest on any registered Note shall be made to or
upon the written order of such registered holder.
Section 9.2. Exchange of Notes. At any time and from time to time,
upon not less than ten days' notice to that effect given by the holder of
any Note initially delivered or of any Note substituted therefor pursuant
to Section 9.1, this Section 9.2 or Section 9.3, and upon surrender of
such Note at its office, the Company will deliver in exchange therefor,
without expense to the holder, except as set forth below, Notes, in
registered form, for the same aggregate principal amount as the then
unpaid principal amount of the Note so surrendered, in the denomination of
$3,000,000 or any multiple of $100,000 in excess thereof as such holder
shall specify, dated as of the date to which interest has been paid on the
Note so surrendered or, if such surrender is prior to the payment of any
interest thereon, then dated as of the date of issue, payable to such
Person or Persons, as may be designated by such holder, and otherwise of
the same form and tenor as the Notes so surrendered for exchange.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction
of any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond or indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver, without expense to the holder thereof, a new Note, of like tenor,
in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent Institutional Holder is the owner of any such
lost, stolen or destroyed Note, then the affidavit of an authorized
officer of such owner, setting forth the fact of loss, theft or
destruction and of its ownership of the Note at the time of such loss,
theft or destruction, shall be accepted as satisfactory evidence thereof
and no further indemnity shall be required as a condition to the execution
and delivery of a new Note other than the written agreement of such owner
to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees
to pay directly all reasonable costs and expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to all investment banking
and similar fees, the reasonable charges and disbursements of Chapman and
Cutler, special counsel to the Purchaser, duplicating and printing costs
and charges for shipping the Notes, adequately insured to the Purchaser's
home office or at such other place as the Purchaser may designate, and all
reasonable out-of-pocket costs and expenses relating to any amendments,
waivers or consents pursuant to the provisions hereof (whether or not the
same are actually executed and delivered), including, without limitation,
any amendments, waivers or consents resulting from any work-out,
renegotiation or restructuring relating to the performance by the Company
of its obligations under this Agreement and the Notes. The Company also
agrees that it will pay and save the Purchaser harmless against any and
all liability with respect to obtaining a "private placement number" for
the Notes from Standard & Poor's Corporation in accordance with the
requirements of the National Association of Insurance Commissioners and
with respect to stamp and other taxes, if any, which may be payable or
which may be determined to be payable in connection with the execution and
delivery of this Agreement or the initial issuance of the Notes, whether
or not any Notes are then outstanding. The Company agrees to protect and
indemnify the Purchaser against any liability for any and all brokerage
fees and commissions payable or claimed to be payable to any Person in
connection with the transactions contemplated by this Agreement, other
than any such fees or commissions claimed by any Person engaged by the
Purchaser. The Purchaser hereby represents to the Company that no broker
or finder was employed or retained by it in connection with its purchase
of the Notes.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single
or partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to and are not exclusive
of any rights or remedies any such holder would otherwise have, and no
waiver or consent, given or extended pursuant to Section 7, shall extend
to or affect any obligation or right not expressly waived or consented to.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to the Purchaser, delivered or mailed by
overnight courier or by facsimile communication, in each case addressed to
the Purchaser at the Purchaser's address appearing on Schedule I to this
Agreement or such other address as the Purchaser or the subsequent holder
of any Note initially issued to the Purchaser may designate to the Company
in writing, and, if to the Company, delivered or mailed by prepaid
overnight courier or by facsimile communication to the Company at the
address specified on page 1 hereof, Attention: Treasurer, or to such other
address as the Company may in writing designate to the Purchaser or to a
subsequent holder of the Note initially issued to the Purchaser; provided,
however, that a notice to you by overnight courier shall only be effective
if delivered to you at a street address designated for such purpose in
Schedule I attached hereto, and a notice to the Purchaser by facsimile
communication shall only be effective if confirmed by prepaid overnight
courier, or, in either case, as the Purchaser or a subsequent holder of
any Note initially issued to the Purchaser may designate to the Company in
writing.
Section 9.7. Successors and Assigns. This Agreement shall be
binding upon the Company and its successors and assigns and shall inure to
the benefit of the Purchaser and to the benefit of its successors and
assigns, including each successive holder or holders of any Notes;
provided, however, that notwithstanding any other provisions of this
Agreement or the Notes, the Notes shall not be transferable to any Person
that is not an Institutional Holder.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and
in any certificates delivered pursuant hereto, whether or not in
connection with the Closing Date, shall survive the closing and the
delivery of this Agreement and the Notes.
Section 9.9. Severability. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which
remaining portion shall remain in force and effect as if this Agreement
had been executed with the invalid portion thereof eliminated and it is
hereby declared the intention of the parties hereto that they would have
executed the remaining portion of this Agreement without including therein
any such part which may, for any reason, be declared invalid.
Section 9.10. Reproduction of Documents. This Agreement and all
documents relating thereto, including without limitation, (a) consents,
waivers and modifications which may hereafter be executed, (b) documents
received by the Purchaser at the closing of their respective purchases of
the Notes (except the Notes themselves), and (c) financial statements,
certificates and other information previously or hereafter furnished to
the Purchaser, may be reproduced by the Purchaser by any photographic,
photostatic, microfilm, micro-card, miniature photographic or other
similar process and the Purchaser may destroy any original document so
reproduced. The Company agrees and stipulates that any such reproduction
shall be admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence and
whether or not such reproduction was made by the Purchaser in the regular
course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
Section 9.11. Governing Law; Waiver of Jury Trial. (a) This
Agreement and the Notes issued and sold hereunder shall be governed by and
construed in accordance with Wisconsin law. Notwithstanding the preceding
sentence, nothing in this Agreement shall be construed to subject the
holder of any Notes that is an insurance company to the laws of the State
of Wisconsin.
(b) The Company and the Purchaser each hereby irrevocably and
unconditionally waive trial by jury.
Section 9.12. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
The execution hereof by the Purchaser shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this
Agreement may be executed in any number of counterparts, each executed
counterpart constituting an original but all together only one agreement.
Johnson Worldwide Associates, Inc.
By: /s/
Its: Senior Vice President & CFO
Accepted as of the first date written above.
The Northwestern Mutual Life Insurance
Company
By: /s/ Richard A. Strait
Its: Vice President
<PAGE>
Name and Address of Purchaser
Principal Amount
Name and Address of Notes
of Purchaser to Be Purchased
The Northwestern Mutual $25,000,000
Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Securities Department
Telecopier Number: (414) 299-7124
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Johnson Worldwide Associates, Inc., 7.15% Senior Notes Due October 15,
2007, PPN 479254 B @ 2, principal, premium or interest") to:
Bankers Trust Company (ABA #0210-01033)
16 Wall Street
Insurance Unit, 4th Floor
New York, New York 10005
for credit to: The Northwestern Mutual Life Insurance Company
Account Number 00-000-027
Notices
All notices and communications to be addressed as first provided above,
except notices with respect to payments and written confirmation of each
such payment to be addressed, Attention: Investment Operations.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: 39-0509570
<PAGE>
Subsidiaries of the Company
The following lists the direct and indirect subsidiaries of Johnson
Worldwide Associates, Inc. as of August 1, 1997:
Jurisdiction in Which
Name of Subsidiary(1)(2) Incorporated
Airguide Instruments Company Illinois
America Outdoors, Inc.(3) Alabama
Johnson Fishing, Inc.(3) Delaware
Johnson Leisure Incentives, Inc.(3) Delaware
Johnson Worldwide Associates Australia Pty. Ltd. Australia
Johnson Worldwide Associates Canada Inc. Canada
Mitchell Sports, S.A. France
Old Town Canoe Company Delaware
Porelon, Inc.(3) Delaware
Microfoam, Inc.(3) New York
Scubapro Sweden AB Sweden
Seaco/Elliot, Inc.(3) Delaware
Under Sea Industries, Inc. Delaware
JWA Holding B.V. Netherlands
Johnson Beteiligungsgesellschaft GmbH Germany
Jack Wolfskin Ausrustung fur Draussen GmbH Germany
Johnson Outdoors V GmbH Germany
Scubapro Taucherauser GmbH Germany
Uwatec AG Switzerland
Uwatec Instruments Deutschland Germany
Uwatec USA, Inc. Maine
Uwatec Espana, S.A. Spain
Uwatec U.K., Ltd. United Kingdom
Uwatec Asia, Ltd.(4) Hong Kong
Uwatec Batam Indonesia
Uwatec France France
Uwaplast AG Switzerland
Scubapro Asia, Ltd. Japan
Scubapro Espana, S.A.(5) Spain
Scubapro Eu AG Switzerland
Scubapro Europe Benelux, S.A. Belgium
Scubapro Europe S.R.L. Italy
Scubapro Italy S.R.L. Italy
Scubapro Norge AS Norway
Scubapro Taucherausrustungen Gesellschaft Austria
GmbH
Scubapro (UK) Ltd.(6) United Kingdom
(1) Unless otherwise indicated in brackets, each company does business
only under its legal name.
(2) Unless otherwise indicated by footnote, each company is a wholly-
owned subsidiary of Johnson Worldwide Associates, Inc. (through
direct or indirect ownership).
(3) Inactive
(4) Percentage of stock owned is 60%.
(5) Percentage of stock owned is 98%.
(6) Percentage of stock owned is 99%
<PAGE>
Description of Debt and Leases
as of August 1, 1997
($000's omitted, U.S. Dollars)
1. Current Debt for borrowed money of the Company and its Restricted
Subsidiaries is as follows:
Johnson Worldwide Associates, Inc. $9,482
Jack Wolfskin Ausrustung fur Draussen GmbH 2,668
Johnson Worldwide Associates Canada Inc. 2,150
Mitchell Sports, S.A. 1,632
Old Town Canoe Company 357
Scubapro Taucherauser GmbH 280
Scubapro Asia, Ltd. 760
Johnson Worldwide Associates Australia Pty. 15
Ltd.
Scubapro Italy S.R.L. 2,105
Scubapro Sweden AB 187
Scubapro (UK) Ltd. 245
Uwatec AG (and certain subsidiaries) 994
----
Uwatec USA, Inc. 900
----
Other (29)
Total Current Debt for borrowed money 21,746
======
2. Funded Debt for borrowed money (including Capitalized Leases and
Guarantees relating to the obligations of persons other than the
Company and its Restricted Subsidiaries) of the Company and its
Restricted Subsidiaries is as follows:
Johnson Worldwide Associates, Inc. 92,000*
Mitchell Sports, S.A. 1,247
Uwatec AG 1,609
Scubapro Europe Benelux 264
Johnson Beteiligugsquesellscheft GmbH 10,000
-------
Total Funded Debt for borrowed
money $105,120
=======
3. Capitalized Leases of the Company and its Restricted Subsidiaries
outstanding on the Closing Date are as follows:
None
4. Guaranties of the Company and its Restricted Subsidiaries relating to
the obligations of Persons other than the Company and its Restricted
Subsidiaries outstanding on the Closing Date are as follows:
None
5. Liens existing as of the date of this Agreement securing Indebtedness
of the Company or any Restricted Subsidiary outstanding on such date:
None
<PAGE>
Johnson Worldwide Associates, Inc.
7.15% Senior Note
Due October 15, 2007
PPN 479254 B@ 2
No. R-
____________, 1997
$
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of October, 2007
the principal amount of
Dollars ($_________)
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 7.15% per annum from the date hereof until maturity,
payable semiannually on the fifteenth day of each October and April in
each year commencing April 15, 1998, and at maturity. The Company agrees
to pay interest on overdue principal (including any overdue optional
prepayment of principal) and Make-Whole Amount, if any, and (to the extent
legally enforceable) on any overdue installment of interest, at the
Overdue Rate after the due date thereof, whether by acceleration or
otherwise, until paid. "Overdue Rate" means the lesser of (a) the maximum
rate permitted by law or (b) 9.15%.
Except as provided in Section 2.6 of the Note Agreement (as
hereinafter defined), both the principal hereof and interest hereon are
payable at the principal office of the Company in Racine, Wisconsin, in
coin or currency of the United States of America which at the time of
payment shall be legal tender for the payment of public and private debts.
If any amount of principal, Make-Whole Amount, if any, or interest on or
in respect of this Note becomes due and payable on any date which is not a
business day in New York, New York, Chicago, Illinois and Racine,
Wisconsin, such amount shall be payable on the next preceding business
day.
This Note is one of the 7.15% Senior Notes due October 15, 2007 (the
"Notes") of the Company in the aggregate principal amount of $25,000,000
issued under and pursuant to the terms and provisions of the Note
Agreement dated as of, September 15, 1997 (the "Note Agreement"), entered
into by the Company with the original purchaser therein referred to, and
this Note and the holder hereof are entitled equally and ratably with all
other Notes outstanding under the Note Agreement and the holders thereof
to all the benefits provided for thereby or referred to therein, to which
Note Agreement reference is hereby made for a statement thereof.
This Note and the other Notes outstanding under the Note Agreement
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreement.
The Notes are not subject to prepayment or redemption at the option
of the Company prior to their expressed maturity dates except on the terms
and conditions and in the amounts and with the Make-Whole Amount, if any,
set forth in Section 2 of the Note Agreement.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, Make-Whole
Amount, if any, and interest on this Note shall be made only to or upon
the order in writing of the registered holder.
This Note and said Note Agreement are governed by and construed in
accordance with the laws of Wisconsin.
Johnson Worldwide Associates, Inc.
By:
Its
<PAGE>
Johnson Worldwide Associates, Inc.
Closing Certificate
The Northwestern Mutual
Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Gentlemen:
This certificate is delivered to you in compliance with the
requirements of the Note Agreement dated as of October 15, 1997 (the
"Agreement"), entered into by the undersigned, Johnson Worldwide
Associates, Inc., a Wisconsin corporation (the "Company"), with you, and
as an inducement to and as part of the consideration for your purchase on
this date of $25,000,000 aggregate principal amount of its 7.15% Senior
Notes due October 15, 2007 (the "Notes") of the Company, pursuant to the
Agreement.
The terms which are capitalized herein shall have the same meanings
as in the Agreement.
The Company represents and warrants to each of you as follows:
1. Subsidiaries. Schedule II to the Agreement, states the name of
each of the Company's Subsidiaries, its jurisdiction of incorporation and
the percentage of its Voting Stock owned by the Company and/or its
Subsidiaries. Those Subsidiaries listed in Section 1 of said Schedule II
constitute all of the Subsidiaries of the Company. The Company and each
Subsidiary has good and marketable title to all of the shares it purports
to own of the stock of each Subsidiary, free and clear in each case of any
Lien. All such shares have been duly issued and are fully paid and non-
assessable, except (in the case of a Wisconsin corporation) as provided by
Section 180.0622(2)(b) of the Wisconsin Statutes.
2. Corporate Organization and Authority. The Company, and each
Restricted Subsidiary,
(a) is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to carry
on its business as now conducted and as presently proposed to be
conducted except where the failure to obtain such licenses or permits
would not have a material adverse effect on the condition (financial
or otherwise) of the Company and its Restricted Subsidiaries taken as
a whole or on the ability of the Company to perform its obligations
under this Agreement or the Notes; and
(c) is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction wherein the nature of the
business transacted by it or the nature of the property owned or
leased by it makes such licensing or qualification necessary except
where the failure to be so licensed or qualified would not have a
material adverse effect on the condition (financial or otherwise) of
the Company and its Restricted Subsidiaries taken as a whole or on
the ability of the Company to perform its obligations under this
Agreement or the Notes.
3. Business and Property. You have heretofore been furnished with
a copy of the Confidential Offering Memorandum dated July, 1997 (the
"Memorandum") prepared by Cleary Gull Reiland & McDevitt Inc. which
generally sets forth the business conducted and proposed to be conducted
by the Company and its Subsidiaries and the principal properties of the
Company and its Subsidiaries.
4. Financial Statements. (a) The consolidated balance sheets of
the Company and its consolidated Subsidiaries as of the last day of the
fiscal year in each of the fiscal years ended 1992 through 1996 and the
statements of operations and cash flows for the fiscal years ended on said
dates, each accompanied by a report thereon containing an opinion
unqualified as to scope or limitations imposed by the Company and
otherwise without qualification except as therein noted, by KPMG Peat
Marwick LLP, have been prepared in accordance with GAAP except as therein
noted, and present fairly the financial position of the Company and its
Subsidiaries as of such dates and the results of their operations and cash
flows for such periods, except to the extent modified pursuant to a
restatement thereof in a subsequent financial statement. The unaudited
consolidated balance sheet of the Company and its consolidated
Subsidiaries as of June 27, 1997, and the unaudited statements of
operations and cash flows for the nine-month period ended on said date
prepared by the Company have been prepared in accordance with GAAP, and
present fairly the financial position of the Company and its consolidated
Subsidiaries as of said date and the results of their operations and their
cash flows for such period subject to normal, recurring year-end audit
adjustments
(b) Since June 27, 1997, there has been no change in the condition,
financial or otherwise, of the Company and its consolidated Subsidiaries
as shown on the consolidated balance sheet as of such date except changes
in the ordinary course of business, none of which individually or in the
aggregate has been materially adverse except as disclosed in a footnote in
the Company's third quarter Form 10-Q ended on such date.
5. Indebtedness. Schedule II attached to the Agreement correctly
describes all Current Debt for borrowed money and Funded Debt for borrowed
money (including Capitalized Leases and Guaranties relating to the
obligations of Persons other than the Company and its Restricted
Subsidiaries) of the Company and its Restricted Subsidiaries outstanding
on August 1, 1997 and there have been no material increases in such
Current Debt, Funded Debt and Guarantees since such date.
6. Full Disclosure. The financial statements referred to in
paragraph 4 hereof, the Agreement, the Memorandum and all other written
documents and statements furnished by the Company to you in connection
with the negotiation of the sale of the Notes, taken together, do not
contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein not
misleading.
7. Pending Litigation. There are no proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any Restricted Subsidiary in any court or before any governmental
authority or arbitration board or tribunal which could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise) of the Company and its Restricted Subsidiaries taken as a whole
or on the ability of the Company to perform its obligations under this
Agreement or the Notes.
8. Title to Property. The Company and each Restricted Subsidiary
has good and marketable title in fee simple (or its equivalent under
applicable law) to all material parcels of real property and has good
title to all the other material items of property it purports to own,
including that reflected in the most recent balance sheet referred to in
paragraph 4 hereof, except as sold or otherwise disposed of in the
ordinary course of business and except for Liens permitted by the
Agreement.
9. Patents and Trademarks. The Company and each Restricted
Subsidiary owns or possesses adequate licenses for the use of all the
patents, trademarks, trade names, service marks, copyright, licenses and
rights with respect to the foregoing necessary for the present conduct of
its business, without any known conflict with the rights of others.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreement and
the Notes--
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order of
any court or governmental authority or agency and will not conflict
with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under the Articles of
Incorporation or By-laws of the Company or any indenture or other
agreement or instrument to which the Company is a party or by which
it may be bound or result in the imposition of any Liens or
encumbrances on any property of the Company; and
(c) have been duly authorized by proper corporate action on the
part of the Company (no action by the stockholders of the Company
being required by law, by the Articles of Incorporation or By-laws of
the Company or otherwise), executed and delivered by the Company and
the Agreement and the Notes constitute the legal, valid and binding
obligations, contracts and agreements of the Company enforceable in
accordance with their respective terms.
11. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Funded Debt or Current Debt and is not in default under
any instrument or instruments or agreements under and subject to which any
Funded Debt or Current Debt has been issued and no event has occurred and
is continuing under the provisions of any such instrument or agreement
which with the lapse of time or the giving of notice, or both, would
constitute an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreement or the Notes or compliance by the Company with any of the
provisions of the Agreement or the Notes.
13. Taxes. All tax returns required to be filed by the Company or
any Restricted Subsidiary in any jurisdiction have, in fact, been filed,
and all taxes, assessments, fees and other governmental charges upon the
Company or any Restricted Subsidiary or upon any of their respective
properties, income or franchises, which are shown to be due and payable in
such returns have been paid. For all taxable years ending on or before
September 30, 1994, the Federal income tax liability of the Company and
its Restricted Subsidiaries has been satisfied and either the period of
limitations on assessment of additional Federal income tax has expired or
the Company and its Restricted Subsidiaries have entered into an agreement
with the Internal Revenue Service closing conclusively the total tax
liability for the taxable year. The Company does not know of any proposed
additional tax assessment against it for which adequate provision has not
been made on its accounts, and no material controversy in respect of
additional Federal or state income taxes due since said date is pending or
to the knowledge of the Company threatened. The provisions for taxes on
the books of the Company and each Restricted Subsidiary are adequate for
all open years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to refinance existing bank debt and for other corporate
purposes. None of the transactions contemplated in the Agreement
(including, without limitation thereof, the use of proceeds from the
issuance of the Notes) will violate or result in a violation of Section 7
of the Securities Exchange Act of 1934, as amended, or any regulation
issued pursuant thereto, including, without limitation, Regulations G, T
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter 11. Neither the Company nor any Subsidiary owns or intends to
carry or purchase any "margin stock" within the meaning of said Regulation
G.
15. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any
similar Security with any Person other than the Purchaser and not more
than twenty other institutional investors, each of whom was offered a
portion of the Notes at private sale for investment. Neither the Company,
directly or indirectly, nor any agent on its behalf has offered or will
offer the Notes or any similar Security or has solicited or will solicit
an offer to acquire the Notes or any similar Security from any Person so
as to bring the issuance and sale of the Notes within the provisions of
Section 5 of the Securities Act of 1933, as amended.
16. ERISA. The consummation of the transactions provided for in the
Agreement and compliance by the Company with the provisions thereof and
the Notes issued thereunder will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Internal Revenue Code
of 1986, as amended. Each Plan complies in all material respects with all
applicable statutes and governmental rules and regulations, and (a) no
Reportable Event has occurred and is continuing with respect to any Plan,
(b) neither the Company nor any ERISA Affiliate has withdrawn from any
Plan or Multiemployer Plan or instituted steps to do so, and (c) no steps
have been instituted to terminate any Plan. No condition exists or event
or transaction has occurred in connection with any Plan which could result
in the incurrence by the Company or any ERISA Affiliate of any material
liability, fine or penalty. No Plan maintained by the Company or any
ERISA Affiliate, nor any trust created thereunder, has incurred any
"accumulated funding deficiency" as defined in Section 302 of ERISA nor
does the present value of all benefits vested under all Plans exceed, as
of the last annual valuation date, the value of the assets of the Plans
allocable to such vested benefits by an amount greater than $1,000,000 in
the aggregate. Neither the company nor any ERISA Affiliate has any
contingent liability with respect to any post-retirement "welfare benefit
plan" (as such term is defined in ERISA) except as has been disclosed to
the Purchaser.
17. Compliance with Law. Neither the Company nor any Restricted
Subsidiary (a) is in violation of any law, ordinance, franchise,
governmental rule or regulation to which it is subject; or (b) has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct
of its business, which violation or failure to obtain would materially
adversely affect the business, prospects, profits, properties or condition
(financial or otherwise) of the Company and its Restricted Subsidiaries,
taken as a whole, or impair the ability of the Company to perform its
obligations contained in the Agreement or the Notes. Neither the Company
nor any Restricted Subsidiary is in default with respect to any order of
any court or governmental authority or arbitration board or tribunal.
18. Compliance with Environmental Laws. The Company is not in
violation of any applicable Federal, state, or local laws, statutes,
rules, regulations or ordinances relating to public health, safety or the
environment, including, without limitation, relating to releases,
discharges, emissions or disposals to air, water land or ground water, to
the withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls (PCB's), asbestos or urea formaldehyde, to the
treatment, storage, disposal or management of hazardous substances
(including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure
to toxic, hazardous or other controlled, prohibited or regulated
substances which violation could have a material adverse effect on the
business, prospects, profits, properties or condition (financial or
otherwise) of the Company and its Restricted Subsidiaries, taken as a
whole. The Company does not know of any liability or class of liability
of the Company or any Restricted Subsidiary under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
(42 U.S.C. Section 9601 et seq.), or the Resource Conservation and
Recovery Act of 1976, as amended (42 U.S.C. Section 6901 et seq.).
Dated:
Johnson Worldwide Associates, Inc.
By:
Its
<PAGE>
Description of Special Counsel's Closing Opinion
The closing opinion of Chapman and Cutler, special counsel to the
Purchaser, called for by Section 4.1 of the Note Agreement, shall be dated
the Closing Date and addressed to the Purchaser, shall be satisfactory in
form and substance to the Purchaser and shall be to the effect that:
1. The Company is a corporation, validly existing under the
laws of the State of Wisconsin and has the corporate power and the
corporate authority to execute and deliver the Note Agreement and to
issue the Notes.
2. The Note Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal,
valid and binding contract of the Company enforceable in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance and similar laws affecting creditors' rights generally,
and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in
equity or at law).
3. The Notes have been duly authorized by all necessary
corporate action on the part of the Company, and the Notes being
delivered on the date hereof have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations
of the Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement do not, under
existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an
indenture under the Trust Indenture Act of 1939, as amended.
The opinion of Chapman and Cutler shall also state that the opinion
of Foley & Lardner is satisfactory in scope and form to Chapman and Cutler
and that, in their opinion, the Purchaser is justified in relying thereon.
In rendering the opinion set forth in paragraph 1 above, Chapman and
Cutler may rely, as to matters referred to in paragraph 1, solely upon an
examination of the Articles of Incorporation certified by, and a
certificate of good standing of the Company from, the Secretary of State
of the State of Wisconsin, the By-laws of the Company and the general
business corporation law of the State of Wisconsin. The opinion of
Chapman and Cutler is limited to the laws of the State of Illinois, the
general business corporation law of the State of Wisconsin and the Federal
laws of the United States.
With respect to matters of fact upon which such opinion is based,
Chapman and Cutler may rely on appropriate certificates of public
officials and officers of the Company and upon representations of the
Company and the Purchaser delivered in connection with the issuance and
sale of the Notes.
<PAGE>
Description of Closing Opinion of
Independent Counsel to the Company
The closing opinion of Foley & Lardner, independent counsel for the
Company, which is called for by Section 4.2 of the Note Agreement, shall
be dated the Closing Date and addressed to the Purchaser, shall be
satisfactory in scope and form to the Purchaser and shall be to the effect
that:
(1) The Company is a corporation legally existing under the
laws of the State of Wisconsin, has corporate power and authority and
is duly authorized to enter into and perform the Note Agreement and
to issue the Notes and incur the Indebtedness to be evidenced thereby
and has full corporate power and authority to conduct the activities
in which it is now engaged and is duly licensed or qualified and is
in good standing as a foreign corporation in each jurisdiction in
which the character of the properties owned or leased by it or the
nature of the business transacted by it makes such licensing or
qualification necessary;
(2) The Note Agreement has been duly authorized by proper
corporate action on the part of the Company, have been duly executed
and delivered by an authorized officer of the Company and constitutes
the legal, valid and binding contract and agreement of the Company
enforceable in accordance with its terms, except as enforceability
thereof may be limited by (a) bankruptcy, insolvency or similar laws,
affecting the enforcement of creditors' rights generally and (b)
equitable principles of general applicability (regardless of whether
such enforceability is considered in a proceeding in equity or at
law);
(3) The Notes have been duly authorized by proper corporate
action on the part of the Company, have been duly executed by an
authorized officer of the Company and delivered and constitute the
legal, valid and binding obligations of the Company enforceable in
accordance with their terms, except as enforceability thereof may be
limited by (a) bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and (b) equitable
principles of general applicability (regardless of whether such
enforceability is considered in a proceeding in equity or at law);
(4) The issuance and sale of the Notes and the execution,
delivery and performance by the Company of the Note Agreement do not
conflict with or result in any breach of any of the provisions of or
constitute a default under or result in the creation or imposition of
any lien or encumbrance upon any of the property of the Company
pursuant to the provisions of the Articles of Incorporation or By-
laws of the Company or any agreement or other instrument known to
such counsel to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary may be bound;
(5) No approval, consent or withholding of objection of or on
the part of, or filing registration or qualification with, any
governmental body, Federal, state or local, is necessary in
connection with the execution and delivery of the Note Agreement by
the Company or the issuance, sale and delivery of the Notes by the
Company;
(6) The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreement is an exempt
transaction under the Securities Act of 1933, as amended, and does
not under existing law require the registration of the Notes under
the Securities Act of 1933, as amended, or the qualification of an
indenture in respect thereof under the Trust Indenture Act of 1939 as
amended;
(7) There are no proceedings pending or threatened, against or
affecting the Company or any Principal Subsidiary in any court or
before any governmental authority or arbitration board or tribunal
which involve the reasonable possibility of materially and adversely
affecting the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries; and
(8) None of the transactions contemplated in the Note Agreement
(including, without limitation thereof, the use of the proceeds from
the sale of the Notes) will violate or result in a violation of
Section 7 of the Securities Exchange Act of 1934, as amended, or any
regulations issued pursuant thereto, including, without limitation,
Regulations G, T or X of the Board of Governors of the Federal
Reserve System (12 C.F.R., Chapter II).
The opinion of Foley & Lardner may also set forth such qualifications
and assumptions which are acceptable to the Purchaser and shall cover such
other matters relating to the sale of the Notes as the Purchaser may
reasonably request. With respect to matters of fact on which such opinion
is based, such counsel shall be entitled to rely on appropriate
certificates of public officials and officers of the Company. With
respect to matters of laws of any foreign jurisdiction, such counsel shall
be entitled to rely upon the opinion of local counsel for such
jurisdiction.
JOHNSON WORLDWIDE ASSOCIATES, INC.
ECONOMIC VALUE ADDED
BONUS PLAN
PLAN SUMMARY
The following is a summary of the terms and conditions of Johnson
Worldwide Associates Economic Value Added Bonus Plan ("the Plan").
A. 1. Purpose of the EVA Bonus Plan
To provide incentive compensation to executives and key
managers of JWA employees in a Plan which directly relates the
financial reward to an increase in the value of the Company to
our shareholders. The key philosophy behind the Plan is that
value must continue to be created overtime in order for
bonuses to be paid.
2. Eligibility
Eligibility for the Plan is limited to designated eligible
executive and key management employees within Johnson
Worldwide Associates. Selection of such employees, if any,
for any fiscal year will be subject to nomination by the Chief
Executive Officer to the Compensation Committee of the Board
of Directors.
Eligibility of executive positions or current incumbents for
inclusion in the Plan does not guarantee their participation
in any future year.
3. Performance Versus Targets
The Plan has unlimited upside and downside performance
potential. Your incentive earnings are based on EVA
improvement. If you achieve your targeted level of EVA
improvement, you will achieve your target bonus, i.e. a
1.0 x EVA Bonus Multiple.
Given these assumptions, the EVA improvement required to
double your bonus (achieve 2.0 bonus multiple) would be
$3.5 million.
Your upside potential is limited only by your ability to drive
EVA performance upward. EVA performance and incentive
earnings are directly linked: the better your EVA performance,
the more you earn.
The leverage factor works the same on the downside. If you
underperform versus your EVA target, you will fall short of
your target incentive.
Does this mean that base pay could be taken away from you?
incentive payouts could be reduced to account for the
negative bonus earned in the current year.
4. EVA Bonus Declaration
A participants EVA Bonus Declaration for a plan year (JWA's
fiscal year) will be determined by a combination of Company,
geographic area, and/or business unit(s) performance, a
determined for each individual based upon their
responsibilities.
A participant's initial declared EVA bonus will be computed as
follows:
EVA
Bonus = Base X Target X Bonus
Declaration Salary Incentive Multiple
The Bonus Multiple will be determined based on EVA
improvement.
The Bonus Multiple is determined as follows:
Bonus Multiple = 1 + Actual EVA - Target EVA
-----------------------
EVA Leverage Amount
The leverage amount is the change in EVA over and above the
target required to double your target Bonus (i.e., a 2.0
Bonus Multiple). The leverage factor varies by business based
on the historic volatility of operating results. For example,
assume the following:
- Target EVA = $1,000,000
- Leverage Factor = $400,000
Based upon these parameters, an EVA Bonus Multiple of 2.0x
(two times target bonus) would be declared for actual EVA
performance of $1,400,000 ( Target EVA plus the Leverage
Factor). Likewise, an EVA Bonus Multiple of 0.0x ( a zero
bonus) would be declared for actual EVA performance of
$600,000.
The target EVA for subsequent plan years shall be the average
of the target EVA and actual EVA for the prior Plan year, plus
the expected improvement.
Expected improvement in EVA and leverage amounts will be
determined at the inception of the Plan and adjusted
periodically based on actual results of the businesses.
5. Payment of Bonus and Banking
The amount of any positive Bonus shall be paid in cash to the
participant subject to a banking system for two thirds of the
amount in excess of the target. The total Bonus payment for
each Plan year will be determined as follows:
Beginning Balance
+ Bonus Declared
= Available Balance
- Bank Payout (Target plus 33 1/3% of balance)
= Ending Balance (Annual payment)
The banking of bonuses serves to smooth Bonus payouts over
the business cycle. This banking system also ensures that
performance is sustained by making the payout of bank balances
contingent on sustained performance.
The payment will be made (net of tax withholding) on or before
the end of the third month following the end of the relevant
Plan year.
<TABLE>
EVA Bonus Declaration & Payout
Bonus Bank Example
<CAPTION>
(Thousands) 1996 1997 1998 1999 2000
<S> <C> <C> <C> <C> <C>
Annual Salary 100 100 150 150 200
x Percentage Target Bonus 15% 15% 15% 15% 15%
= EVA Target Bonus 15.0 15.0 22.5 22.5 30.0
x EVA Bonus Multiple 1.24x 1.61x (0.19x) 0.10x 1.13x
------ ----- ------ ----- -----
= EVA Bonus Declaration 18.7 24.1 (4.3) 2.3 33.9
Payout Threshold Multiple 1.00x 1.00x 1.00x 1.00x 1.00x
Payout Threshold 15.0 15.0 22.5 22.5 30.0
EVA Bonus Payout: Threshold [1] 15.0 15.0 0.0 2.3 30.0
Beginning Bank Balance 0.0 2.5 7.7 2.3 1.5
+ Addition to the Bank 3.7 9.1 (4.3) 0.0 3.9
----- ----- ----- ------ ------
= Bank Balance Available for Payout 3.7 11.5 3.5 2.3 5.4
x Payout Percentage 33% 33% 33% 33% 33%
= Bonus Bank Payout: Reserve [2] 1.2 3.8 1.1 0.8 1.8
Ending Bank Balance 2.5 7.7 2.3 1.5 3.7
Total EVA Bonus Payout [1] + [2] 16.2 18.8 1.1 3.1 31.8
</TABLE>
B. Administration and Guidelines of the Plan
Administration of the Plan is the sole province of the
Compensation Committee of the Board of Directors. Guidelines for
its administration are:
1. Determination of Targeted Bonus Exposure Under the Bonus Plan
In each year the Compensation Committee of the Board of
Directors will establish a targeted bonus level for
participants in the Plan ranging from 10% to 100% of the
eligible executive's base salary as defined in this Plan.
Participant Tier Target Bonus %
Chief Executive Officer 1 70%
Executive Officers 2 55%
Vice Presidents &
Business Unit Managers 3 30% - 40%
Directors & Managers 4 10% - 20%
2. Individual Awards
Individual awards shall be based on the total base salary
received by an incumbent in an eligible executive position
during the fiscal year. For this purpose, the term "base
salary" shall not include allowances or any other payments or
benefits, whether legally required or not. At the time of
selection of eligible positions the target bonus for the
upcoming year shall be recommended by the Chief Executive
Officer of JWA to the Board of Directors.
The only factor to be considered in determining the individual
awards is results against all annual EVA objectives.
3. Determination of EVA Objectives
All EVA objectives used for purposes of this Plan must be
finally determined by the Chief Executive Officer of JWA and
approved prior to the beginning of the fiscal year (or as soon
thereafter as possible), and may only be changed in the event
of a significant change in the business, such as a significant
acquisition, divestiture or other major event. Guidelines for
alteration of objectives are set forth in Exhibit A.
4. Determination of Bonus Awards
After the close of the fiscal year each eligible executive's
performance against EVA objectives will be evaluated by the
Chief Executive Officer of JWA.
The Chief Executive Officer of JWA will then submit these
evaluations of performance against objectives along with his
bonus recommendations to the Compensation Committee of
the JWA Board of Directors for review and final approval. The
JWA Compensation Committee shall have the final authority to
approve individual bonuses and may, at its sole discretion,
reduce or eliminate the recommended bonuses.
5. New Hires/Promotion
An individual who is hired/promoted into a position that
participates in the Bonus Plan may be eligible for a bonus
award on a pro-rata basis in the year of entry.
6. Transfers
A participant who transfers his or her employment from one
business to another shall have his or her EVA Bonus Bank
transferred to the new unit. At the time of transfer, the
participant will have his or her bonus award based on time
spent in each particular operation/unit on a pro-rata basis
for the portion of year the individual worked in each unit.
The participant's pro-rata share will be based on the
operation's/unit's full year EVA performance.
7. Death or Disability
A participant who dies or becomes disabled while in the
employment of Johnson Worldwide Associates, Inc. shall receive
full payment of his or her Bonus Bank balance net of the
impact of a pro-rata bonus for the year in which he or she
dies or becomes disabled. Such payment shall be made at the
regular time for making bonus payments in respect to the year
of such death or disability, and shall be paid to the
designated beneficiary or estate in the case of death.
8. Retirement
A participant who retires from Johnson Worldwide Associates,
Inc. shall receive full payment of his or her Bonus Bank
balance and may be eligible for a pro-rata bonus for the year
in which he or she retires. Such payment shall be made in a
lump sum at the regular time for making bonus payments or over
two years as he or she so chooses. Negative Bonus Bank
balances are waived. An individual whose age and full years
of service total 70 will be considered to meet the definition
of retirement.
9. Involuntary Termination without Cause
A participant who is involuntarily terminated without cause
and who has a positive Bonus Bank balance shall become vested
with respect to such balance and shall be paid in full at the
regular time for making bonus payments net of the impact of a
pro-rata bonus for the year in which he or she is terminated.
Negative Bonus Bank balances are waived.
10. Voluntary Resignation or Termination with Cause
Except as provided for above, voluntary termination of
employment with Johnson Worldwide Associates, Inc. or
termination with cause shall result in forfeiture of the
participant's Bonus Bank balance and pro-rata bonus for the
year of voluntary termination or termination with cause.
11. No Guarantee
Participation in the Plan provides no guarantee that a bonus
under the Plan will be paid. The success of Johnson Worldwide
Associates, Inc., its business units and individual employees,
as measured by the achievement of EVA and individual
contribution, shall determine the extent to which Participants
shall be entitled to receive bonuses thereunder.
12. General Provisions
a) Withholding of Taxes
Johnson Worldwide Associates, Inc. shall have the right to
withhold the amount of taxes, which in the determination
of Johnson Worldwide Associates, Inc., are required to be
withheld under law with respect to any amount due or paid
under the Plan.
b) Expenses
All expenses and costs in connection with the adoption and
administration of the Plan shall be borne by Johnson
Worldwide Associates, Inc.
c) No Prior Right or Offer
Except and until expressly granted pursuant to the Plan,
nothing in the Plan shall be deemed to give any employee
any contractual or other right to participate in the
benefits of the Plan. No award to any such participant in
any Plan Period shall be deemed to create a right to
receive any award or to participate in the benefits of the
Plan in any subsequent Plan Period.
13. Limitations
a) No Continued Employment
Neither the establishment of the Plan or the grant of
an award thereunder shall be deemed to constitute an
express or implied contract of employment of any
participant for any period of time or in any way abridge
the rights of Johnson Worldwide Associates, Inc. to
determine the terms and conditions of employment or to
terminate the employment of any employee with or without
cause at any time.
b) Not Part of Other Benefits
The benefits provided in this Plan shall not be deemed a
part of any other benefit provided by Johnson Worldwide
Associates, Inc. to its employees. Johnson Worldwide
Associates, Inc. assumes and shall have no obligation to
participants except as expressly provided in the Plan.
c) Other Plans
Nothing contained herein shall limit Johnson Worldwide
Associates, Inc.'s power to grant bonuses to employees of
Johnson Worldwide Associates, Inc., whether or not they
are participants in this Plan.
14. a) Bonus Payments
Bonus payments shall be excluded from the computation of
other parts of the eligible executive's personal benefit
and compensation packages, such as, for example, that
executive's retirement contributions and life insurance.
b) Deferral of Bonus Payments
i) Election to Defer - An incumbent in an eligible
executive position may elect to defer all or part of any
bonus that may be awarded to that executive by action of
the Chief Executive Officer of JWA. Such election shall
be irrevocable during the full period of deferral unless
the Chief Executive Officer of JWA, in his sole
discretion, decides to modify it upon a clear showing of
financial hardship suffered or likely to be suffered by
that executive.
ii) Period of Deferral - Normally, all deferrals shall be
for the full term of employment, e.g., until termination
or death. However, each executive may elect to defer his
bonus award for a set period of years subject to the
approval of the Chief Executive Officer of JWA. If the
executive who chose deferral for a specific period
terminates employment before the end of such period, the
Deferred Bonus Account of that executive shall, upon
termination, be distributed in accordance with the
Distribution Provisions in paragraph (iv) below.
iii) Interest Rate - Deferred Bonus awards shall increase
in value during the years prior to deferral at a rate to
be established at the discretion of the Chief Executive
Officer of JWA. Such increase in value shall be credited
to such executive's Deferred Bonus Account as of the end
of each quarter and shall thereafter become part of that
executive's Deferred Bonus Account.
iv) Distribution from Deferred Bonus Accounts - Upon
termination of the executive's employment or the end of
the set period of deferral, the Deferred Bonus Account of
that executive shall be paid to that executive in full in
a single cash payment or in installments over a period of
up to ten (10) years, as detailed below.
If the executive's employment with JWA terminates for any
reason other than death or retirement, the entire unpaid
balance of the Bonus, plus any added value or accrued
interest, shall be paid within ninety (90) days following
the effective date of termination of employment.
If the executive's employment with JWA terminates due to
this retirement, payment of the Deferred Bonus awarded, if
any, plus any added value or accrued interest, for the
fiscal year to which this Plan applies, shall be made, or
continue to be made, as indicated by the executive in his
"Request for Payment" form and as previously approved by
the Chief Executive Officer of JWA.
If the executive dies before he receives the entire bonus,
the entire unpaid balance of the bonus, plus any added
value or accrued interest, shall be paid either within one
hundred twenty (120) days following receipt of notice of
his death by the Director-Human Resources of JWA, or in
such installments over a period of not more than ten (10)
years following his death, as determined by the Chief
Executive Officer of JWA. Bonuses paid in installments
shall bear interest on the unpaid amount during the
installment payment period at a rate to be established at
the discretion of the Chief Executive Officer of JWA.
Bonuses awarded to an executive may not be assigned,
transferred or pledged by the executive either voluntarily
or involuntarily.
The executive may, however, submit a written designation
of beneficiary of the Deferred Bonus Account to the
Director-Human Resources of JWA at any time. In the
absence of a properly designated beneficiary, payment
shall be made to the executive's estate.
15. Board of Directors' Actions
Prior to the beginning of each fiscal year the JWA Board
shall in a meeting or by written consent:
a. Select the eligible positions in the Plan, if any, for
the next fiscal year;
b. Establish the targeted bonus objective for the next
fiscal year; and
c. Establish the tentative allocation (if any) between
specific EVA objectives and JWA total EVA performance
for the next year. Within 90 days after the close of
the fiscal year, the Compensation Committee of the JWA
Board of Directors will, by resolution at a meeting,
or by consent establish the awards, if any, to be
given for performance in the preceding year.
16. Plan Terms
In all cases the terms as set forth in the Plan
document shall have control over this summary.
<PAGE>
EXHIBIT A
GUIDELINES FOR AMENDMENT TO EVA TARGET PERFORMANCE LEVELS AND
CAPITALIZATION OF EXPENSES
AMENDMENT TO EVA TARGET PERFORMANCE LEVELS
The EVA performance targets established in the Bonus Plan are intended to
achieve long term improvements in shareholder value. These targets have
been objectively determined based on the historical performance of the
operating units and allocated appropriately to achieve overall corporate
objectives. Changes to these targets are expected to be infrequent.
Nonetheless, situations will arise in which it is appropriate to revise
such objectives. Generally, a target may be revised only in the event of
a significant acquisition or divestiture. All such revisions are at the
discretion of the Chief Executive Officer and the Compensation Committee
of the Board of Directors.
CAPITALIZATION OF EXPENSES
Similarly, certain expenses should not be considered annual expenses due
to their nature. These expenses should be "capitalized" so as to not
distort operating results calculated under EVA in any given year. These
expenses are to be added to the capital base of the business and thus
required to earn a return as long as these capitalized expenses remain a
part of the capital base. The criteria for capitalization of expenses are
as follows:
- Material to the business
- Unusual
- Nonrecurring
- Result in tangible, measurable, long-term benefit to the business.
Some examples of expenses that might be capitalized are as follows:
- Expenses related to consolidation of operating units following an
acquisition
- Expenses related to a plant closing where closing the plant is expected
to lead to operating cost reductions
Some examples of costs that should not be capitalized are as follows:
- Significant advertising campaigns
- Research and development expenses
- Recruiting expenses
All requests for capitalization of expenses will be reviewed by the Chief
Financial Officer. Any revisions to EVA calculations are at the
discretion of the Chief Executive Officer and the Compensation Committee
of the Board of Directors.
1997 Annual Report
Johnson Worldwide Associates, Inc.
Special note regarding forward-looking statements
Certain matters discussed in this 1997 Annual Report are "forward-looking
statements" intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can generally be identified as such because the
context of the statement includes phrases such as "we expect" or other
words of similar import. Similarly, statements that describe the Company's
future plans, objectives or goals are also forward-looking statements.
Such forward-looking statements are subject to certain risks and
uncertainties which could cause actual results or outcomes to differ
materially from those currently anticipated. Factors that could affect
actual results or outcomes include adverse weather conditions, changes in
consumer spending patterns, the success of the Company's acquisitions and
EVA and JWAction programs, actions of companies that compete with JWA and
the Company's success in managing inventory.
Shareholders, potential investors and other readers are urged to consider
these factors in evaluating the forward-looking statements and are
cautioned not to place undue reliance on such forward-looking statements.
The forward-looking statements included herein are only made as of the
date of this 1997 Annual Report and the Company undertakes no obligation
to publicly update such forward-looking statements to reflect subsequent
events or circumstances.
Management's Discussion and Analysis
Johnson Worldwide Associates, Inc. and Subsidiaries
The following discussion includes comments and analysis relating to the
Company's results of operations and financial condition for the three
years ended October 3, 1997. This discussion should be read in conjunction
with the consolidated financial statements and related notes that
immediately follow this section.
FOREIGN OPERATIONS
The Company has significant foreign operations, for which the functional
currencies are denominated primarily in Swiss and French francs, German
marks, Italian lire, Japanese yen and Canadian dollars. As the values of
the currencies of the foreign countries in which the Company has
operations increase or decrease relative to the U.S. dollar, the sales,
expenses, profits, assets and liabilities of the Company's foreign
operations, as reported in the Company's consolidated financial
statements, increase or decrease, accordingly. The Company mitigates a
portion of the fluctuations in certain foreign currencies through the
purchase of foreign currency swaps, forward contracts and options to hedge
known commitments, primarily for purchases of inventory and other assets
denominated in foreign currencies. The significant appreciation of the
U.S. dollar and the sale of the Plastimo business reduced the cumulative
translation component of shareholders' equity by $10.5 million in 1997.
RESULTS OF OPERATIONS
Summary consolidated financial results are as follows:
[millions, except per
share data] 1997 1996 1995
Net sales $303.1 $344.4 $347.2
Gross profit 111.3 119.7 138.2
Operating expenses(1) 99.3 121.2 114.4
Operating profit (loss) 12.0 (1.5) 23.7
Interest expense 8.8 10.2 7.6
Net income (loss) 2.1 (11.4) 10.1
Per common share 0.25 (1.40) 1.25
(1) Includes nonrecurring charges of $0.3 million and $6.8 million in 1997
and 1996, respectively.
1997 vs 1996
Net Sales
Net sales were $303.1 million in 1997 compared to $344.4 million in 1996,
a decrease of 12%. The sale of the Company's Plastimo marine business in
January 1997 accounted for $28.5 million of the shortfall in sales. Sales
as measured in U.S. dollars were also negatively impacted by the effect of
weaker foreign currencies relative to the U.S. dollar in comparison to
1996. Excluding the effects of foreign currency movements and the sale of
the Plastimo business, worldwide sales decreased $0.2 million from 1996.
The remainder of the shortfall was due primarily to decreases in sales of
motors and fishing products, as the overall market for such products
declined, offset by sales of businesses acquired in 1997.
Operating Results
The Company recognized an operating profit of $12 million in 1997 compared
to an operating loss of $1.5 million in 1996. Several factors accounted
for the turnaround. Gross profit margins increased from 34.8% in 1996 to
36.7% in 1997. Unusual charges related to reduction of inventories to
their net realizable value reduced the 1996 gross profit by $10.5 million,
or 3.1%. Underabsorption of overhead expenses due to lower sales volume
and sales of excess inventory at lower than normal margins mitigated the
increase in gross margins in 1997. The Company also continues to
experience margin pressure in all of its businesses due to competition
from other businesses.
Operating expenses, excluding nonrecurring charges, totaled
$99 million, or 32.7% of sales, in 1997 compared to $114.4 million, or
33.2% of sales, in 1996. The sale of the Company's Plastimo marine
business accounted for $8 million of the reduction in operating expenses.
The remainder of the decrease was attributable to management's efforts to
control such expenses and the impact of weaker foreign currencies, all of
which were offset by operating expenses of businesses acquired in 1997.
Virtually all categories of expenses declined in the aggregate and as a
percentage of sales.
The Company recognized nonrecurring charges totaling $0.3 million in 1997.
These charges resulted primarily from severance and other costs related to
the integration of acquired businesses. The Company anticipates additional
nonrecurring charges of $3 to $4 million will be incurred over the next
two years to integrate recent acquisitions into its business.
Other Income and Expenses
Interest expense decreased $1.4 million in 1997, reflecting lower debt
levels resulting from the sale of the Plastimo marine business and due to
lower levels of working capital, primarily inventory and accounts
receivable. Offsetting the decline was additional interest expense from
debt used to consummate acquisitions.
Overall Results
The Company recognized net income of $2.1 million in 1997, or $0.25 per
share, compared to a loss of $11.4 million, or $1.40 per share, in 1996.
The Company recognized income tax expense of $1.9 million in 1997, an
effective rate of 48.1%, due to earnings in foreign jurisdictions that are
taxed at higher rates than in the U.S. The tax benefit of operating losses
generated in the U.S. did not fully offset the taxes in these foreign
jurisdictions.
1996 vs 1995
Net Sales
Net sales were $344.4 million in 1996 compared to $347.2 million in 1995,
a decrease of 1%. Sales as measured in U.S. dollars were negatively
impacted by the effect of weaker foreign currencies relative to the U.S.
dollar in comparison to 1995. Excluding the effects of foreign currency
movements, worldwide sales increased nominally over 1995.
Poor spring weather in North America contributed to a decline in sales of
4% in that region in 1996. Both the fishing and outdoor equipment
businesses were impacted. The delay, until February 1996, in the
introduction of a new fishing line product due to production problems
encountered by the supplier also negatively impacted revenue in 1996.
European sales as measured in U.S. dollars increased 6% in 1996, led by
strong growth in the outdoor equipment and diving businesses. Excluding
currency effects, European sales increased 7% in 1996.
The Company's Asian business, which is concentrated in Japan and
Australia, recognized a decline in sales of 11% in 1996 due to the
significant decline in the Japanese yen relative to the U.S. dollar.
Excluding the impact of foreign currencies, sales in Asia increased 2% as
the Australian business generated significant sales growth.
Operating Results
The Company recognized an operating loss of $1.5 million in 1996 compared
to operating profit of $23.7 million in 1995. Several factors accounted
for the operating loss. Gross profit margins declined from 39.8% in 1995
to 34.8% in 1996. Unusual charges related to reduction of inventories to
their net realizable value reduced gross profit by $10.3 million, or 3%.
Most significantly impacted was the North American fishing business, which
had the most significant buildup of inventory and recognized the bulk of
the losses. Changes in management and the end of the peak selling season
contributed to the timing of the loss, which was recognized in the fourth
quarter.
Operating expenses, excluding nonrecurring charges, totaled $114.4
million, or 33% of sales in both 1996 and 1995. While overall operating
expenses remained level, financial and administrative management expenses
increased $0.8 million. Amortization expense increased $0.5 million in
1996 due to a full year of amortization of intangible assets related to
acquisitions completed in 1995.
The Company recognized nonrecurring charges totaling $6.8 million in 1996.
These charges resulted from writedowns of long-lived assets totaling $2.9
million, the expected loss of $2 million on the sale of the Company's
Plastimo marine business, and charges totaling $1.9 million related to the
relocation of one of its manufacturing locations and the outsourcing of
the distribution function of another business.
Other Income and Expenses
Interest expense increased $2.6 million in 1996, reflecting higher debt
levels resulting from the full year impact of acquisitions consummated in
1995 and due to higher levels of working capital, primarily inventory. The
issuance of long-term senior notes in October 1995 increased the average
interest rate of the Company's indebtedness, as this debt was used to
repay short-term debt which generally carried lower interest rates.
Overall Results
The Company recognized a net loss of $11.4 million in 1996, or $1.40 per
share, compared to earnings of $10.1 million, or $1.25 per share, in 1995.
The Company recognized income tax expense of $0.2 million in 1996, despite
a pretax loss, due to earnings in foreign jurisdictions that are taxed at
higher rates than in the U.S. The tax benefit of operating losses
generated in the U.S. did not fully offset the taxes in these foreign
jurisdictions. In addition, the Company recognized income tax expense
totaling $0.5 million on the expected disposition of the Plastimo
business, despite a pretax loss of $2 million, due to differences between
the tax basis and financial statement carrying values of the related
assets. The disproportionate contribution of earnings from foreign
businesses is attributable to the inventory writedowns and nonrecurring
charges noted above, which are largely being recognized in the United
States.
FINANCIAL CONDITION
The following discusses changes in the Company's liquidity and capital
resources.
OPERATIONS
The following table sets forth the Company's working capital position at
the end of each of the past three years:
[millions] 1997 1996 1995
Current assets $152.7 $189.7 $185.4
Current liabilities 66.1 88.4 63.9
Working capital $86.6 $101.3 $121.5
Current ratio 2.3 to 1 2.1 to 1 2.9 to 1
Cash flows provided by operations totaled $20 million in 1997 versus usage
of $6.5 million of cash in 1996. Proactive management efforts, which led
to reduction of inventories of $13.1 million in 1997 versus growth of
$17.6 million in 1996, accounted for a significant amount of the net
change in cash flows. The Company's profitability in 1997 also contributed
to the positive cash flow. Sales below expectations contributed to the
growth in inventory in 1996.
Accounts receivable increased $2.7 million in 1997, offsetting the net
increase in cash, and decreased $2.4 million in 1996. Accounts payable and
accrued liabilities decreased $3.7 million in 1997 and $1.1 million in
1996, negatively impacting the net flow of cash from operations.
Depreciation and amortization charges were $11.9 million in 1997, $10.6
million in 1996 and $8.3 million in 1995. Amortization of intangible
assets arising from the Company's 1997 and 1995 acquisitions and increased
depreciation from capital spending in 1997, 1996 and 1995 accounted for
the increases in these charges.
INVESTING ACTIVITIES
Expenditures for property, plant and equipment were $10.8 million in 1997,
$10.7 million in 1996 and $15.5 million in 1995. The Company's recurring
investments are made primarily for tooling for new products and
information systems improvements. In 1998, capital expenditures are
anticipated to total approximately $9 million. These expenditures are
expected to be funded by working capital or existing bank lines of credit.
A portion of the Company's 1998 capital expenditures is designated for
information systems improvements to comply with Year 2000 issues. The
Company anticipates no disruption of its business related to these issues.
The Company completed the acquisitions of two businesses in 1997, which
increased tangible and intangible assets and debt by $37 million. The sale
of the Company's Plastimo business in January 1997 provided $13.9 million
of cash, which was used to reduce short-term debt.
FINANCING ACTIVITIES
The following table sets forth the Company's debt and capital structure at
the end of the past three years:
[millions] 1997 1996 1995
Current debt $ 26.1 $ 43.1 $ 18.6
Long-term debt 88.7 61.5 68.9
Total debt 114.8 104.6 87.5
Shareholders' equity 117.7 126.4 141.3
Total capitalization $232.5 $231.0 $228.8
Total debt to total
capital ratio 49.4% 45.3% 38.2%
Cash flows from financing activities totaled $6.9 million in 1997 and
$17.6 million in 1996. In October 1997, the Company consummated a private
placement of long-term debt totaling $25 million. In anticipation of this
financing, short-term debt to be repaid totaling $25 million at October 3,
1997 was classified as long-term. Payments on long-term debt required to
be made in 1998 total $8 million. At October 3, 1997, the Company had
available unused credit facilities in excess of $93 million, which is
believed to be adequate for its needs.
OTHER FACTORS
The Company has not been significantly impacted by inflationary pressures
over the last several years. However, from time to time the Company faces
changes in the prices of commodities. Price increases and, in certain
situations, price decreases are implemented for individual products, when
appropriate. The Company anticipates that rising costs of basic raw
materials may impact 1998 operating costs and, accordingly, the prices of
its products. Fluctuations in foreign currencies may also impact the cost
of the Company's products. The Company is involved in continuing programs
to mitigate the impact of cost increases through changes in product
design, identification of sourcing and manufacturing efficiencies and
foreign currency hedges.
PENDING ACCOUNTING CHANGES
In 1997, the FASB issued Statement 128, Earnings Per Share, which requires
changes in the current method of computation of, and disclosures with
regard to, earnings per share. The Company will adopt Statement 128 in
1998, as required. The calculation of basic earnings per share required
under Statement 128 will be substantially the same as the amounts of
earnings per common share currently being reported by the Company. The
amounts calculated as diluted earnings per share under Statement 128 will
be nominally lower than the related basic earnings per share.
The FASB has issued a number of other pronouncements related to financial
statement disclosure. These pronouncements will not impact the financial
position, results of operations or cash flows of the Company, when
adopted.
Consolidated Balance Sheets
Johnson Worldwide Associates, Inc. and Subsidiaries
[thousands, except share data] October 3, 1997 September 27, 1996
ASSETS
Current assets:
Cash and temporary cash
investments $7,130 $12,697
Accounts receivable, less
allowance for doubtful
accounts of $2,693 and
$2,235, respectively 51,168 55,847
Inventories 78,694 101,903
Deferred income taxes 7,976 8,896
Other current assets 7,781 10,336
------- -------
Total current assets 152,749 189,679
Property, plant and equipment 31,360 30,154
Deferred income taxes 10,221 5,844
Intangible assets 82,127 54,422
Other assets 562 669
------- -------
Total assets $277,019 $280,768
======= =======
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current
maturities of long-term debt $26,082 $43,118
Accounts payable 10,672 11,086
Accrued liabilities:
Salaries and wages 4,974 6,260
Income taxes 2,076 4,283
Other 22,305 23,659
------- -------
Total current liabilities 66,109 88,406
Long-term debt, less current
maturities 88,753 61,501
Other liabilities 4,426 4,437
------- -------
Total liabilities 159,288 154,344
------- -------
Shareholders' equity:
Preferred stock: none issued - -
Common stock:
Class A shares issued:
October 3, 1997, 6,905,523;
September 27, 1996, 6,901,801 345 345
Class B shares issued
(convertible into Class A):
October 3, 1997, 1,227,915;
September 27, 1996, 1,228,137 61 61
Capital in excess of par value 44,186 44,084
Retained earnings 79,882 77,940
Contingent compensation (85) (121)
Cumulative translation
adjustment (6,356) 4,115
Treasury stock, at cost:
October 3, 1997: 23,600
Class A shares (302) -
------- -------
Total shareholders' equity 117,731 126,424
------- -------
Total liabilities and
shareholders' equity $277,019 $280,768
======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
Consolidated Statements of Operations
Johnson Worldwide Associates, Inc. and Subsidiaries
Year Ended
[thousands, except October 3, September 27, September 29,
per share data] 1997 1996 1995
Net sales $303,121 $344,373 $347,190
Cost of sales 191,789 224,649 209,035
------- ------- -------
Gross profit 111,332 119,724 138,155
------- ------- -------
Operating expenses:
Marketing and selling 66,259 78,348 78,743
Financial and
administrative
management 23,031 26,139 25,304
Research and
development 5,453 6,537 6,531
Amortization of
acquisition costs 2,631 2,500 2,003
Profit sharing 1,612 908 1,830
Nonrecurring charges 335 6,768 -
------- ------- -------
Total operating expenses 99,321 121,200 114,411
------- ------- -------
Operating profit (loss) 12,011 (1,476) 23,744
Interest income (471) (612) (774)
Interest expense 8,780 10,181 7,613
Other (income)
expenses, net (257) 116 (87)
------- ------- -------
Income (loss) before
income taxes 3,959 (11,161) 16,992
Income tax expense 1,903 194 6,903
------- ------- -------
Net income (loss) $2,056 $(11,355) $10,089
======= ======= =======
EARNINGS (LOSS) PER
COMMON SHARE $0.25 $(1.40) $1.25
======= ======= =======
The accompanying notes are an integral part of the consolidated financial
statements.
<TABLE>
<CAPTION>
Consolidated Statements of Shareholders' Equity
Johnson Worldwide Associates, Inc. and Subsidiaries
Capital in Cumulative
Common Excess of Retained Contingent Translation Treasury
[thousands] Stock Par Value Earnings Compensation Adjustment Stock
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1994 $ 405 $43,330 $79,538 $ (242) $5,166 $ -
Net income - - 10,089 - - -
Exercise of stock options 1 384 (95) - - 910
Tax benefit of stock
options exercised - 118 - - - -
Issuance of restricted stock - - (7) (222) - 229
Issuance of stock under
employee stock purchase plan - 136 - - - -
Amortization of contingent
compensation - - - 200 - -
Other treasury stock
transactions - - - - - (1,381)
Translation adjustment - - - - 2,703 -
------- ------- ------- ------ ------ ------
BALANCE AT SEPTEMBER 29, 1995 406 43,968 89,525 (264) 7,869 (242)
Net loss - - (11,355) - - -
Exercise of stock options - - (98) - - 295
Tax benefit of stock
options exercised - 61 - - - -
Issuance of restricted
stock - - - (67) - 67
Issuance of stock under
employee stock purchase
plan - 55 (132) - - 291
Amortization of contingent
compensation - - - 210 - -
Other treasury stock
transactions - - - - - (411)
Translation adjustment - - - - (3,754) -
------- ------- ------- ------ ------ ------
BALANCE AT SEPTEMBER 27, 1996 406 44,084 77,940 (121) 4,115 -
Net income - - 2,056 - - -
Exercise of stock options - - (114) - - 284
Tax benefit of stock
options exercised - 58 - - - -
Issuance of restricted
stock - 44 - (67) - 23
Amortization of
contingent compensation - - - 103 - -
Other treasury stock
transactions - - - - - (609)
Translation adjustment - - - - (10,471) -
------- ------- ------- ------ ------ ------
BALANCE AT OCTOBER 3, 1997 $ 406 $44,186 $79,882 $ (85) $(6,356) $ (302)
======= ======= ======= ====== ====== ======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Consolidated Statements of Cash Flows
Johnson Worldwide Associates, Inc. and Subsidiaries
Year Ended
October 3, September 27, September 29,
[thousands] 1997 1996 1995
CASH PROVIDED BY (USED
FOR) OPERATIONS
Net income (loss) $ 2,056 $ (11,355) $ 10,089
Noncash items:
Depreciation and
amortization 11,949 10,561 8,314
Provision for
doubtful accounts
receivable 1,604 1,662 1,567
Provision for
inventory reserves 445 12,202 1,561
Deferred income taxes (4,127) (6,842) 179
Writedown of property,
plant and equipment - 1,846 -
Writedown of intangible
assets - 1,070 -
Loss on sale of
business - 2,000 -
Change in assets and
liabilities, net of
effect of businesses
acquired or sold:
Accounts receivable (2,747) 2,412 (6,637)
Inventories 13,071 (17,571) (23,386)
Accounts payable and
other accrued
liabilities (3,749) (1,128) 7,256
Restructuring accrual - - (1,077)
Other, net 1,489 (1,332) (4,147)
------- ------ ------
19,991 (6,475) (6,281)
------- ------ ------
CASH USED FOR
INVESTING ACTIVITIES
Net assets of businesses
acquired, net of cash (37,169) - (28,070)
Proceeds from sale of
business, net of cash 13,937 - -
Additions to property,
plant and equipment (10,816) (10,685) (15,501)
Sales of property, plant
and equipment 2,596 3,583 3,403
------- ------- -------
(31,452) (7,102) (40,168)
------- ------- -------
CASH PROVIDED BY
FINANCING ACTIVITIES
Issuance of senior notes - 45,000 -
Issuance of other long-term
notes 10,543 - -
Principal payments on
senior notes and other
long-term notes (7,358) (7,341) (6,662)
Proceeds from revolving
credit facilities - - 13,172
Repayment of revolving
credit facilities - (13,412) -
Net change in short-term
debt 4,085 (6,717) 32,928
Common stock transactions (382) 61 73
------- ------ ------
6,888 17,591 39,511
Effect of foreign currency
fluctuations on cash (994) (261) 294
------- ------ ------
Increase (decrease) in cash
and temporary cash
investments (5,567) 3,753 (6,644)
CASH AND TEMPORARY CASH
INVESTMENTS
Beginning of year 12,697 8,944 15,588
------- ------ ------
End of year $ 7,130 $12,697 $ 8,944
======= ====== =======
The accompanying notes are an integral part of the consolidated financial
statements.
Notes to Consolidated Statements
Johnson Worldwide Associates, Inc. and Subsidiaries
Johnson Worldwide Associates, Inc. is an integrated, global outdoor
recreation products company engaged in the design, manufacture and
marketing of brand name motors and fishing, watercraft, outdoor equipment
and diving products.
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
All amounts, other than share and per share amounts, are stated in
thousands.
Principles of Consolidation
The consolidated financial statements include the accounts of Johnson
Worldwide Associates, Inc. and all majority owned subsidiaries (the
Company). Significant intercompany accounts and transactions have been
eliminated in consolidation.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that impact the reported amounts of assets, liabilities and
operating results and the disclosure of commitments and contingent
liabilities. Actual results could differ significantly from those
estimates. For the Company, significant estimates include the allowance
for doubtful accounts receivable and reserves for inventory valuation.
The Company's fiscal year ends on the Friday nearest September 30. The
fiscal year ended October 3, 1997 (hereinafter 1997) comprises 53 weeks.
The fiscal years ended September 27, 1996 and September 29, 1995
(hereinafter 1996 and 1995, respectively) each comprise 52 weeks.
Cash and Temporary Cash Investments
For purposes of the consolidated statements of cash flows, the Company
considers all short-term investments in interest-bearing bank accounts,
securities and other instruments with an original maturity of three months
or less, to be equivalent to cash.
Inventories
Inventories are stated at the lower of cost (determined using the
first-in, first-out method) or market.
Inventories at the end of the respective years consist of the following:
1997 1996
Raw materials $27,032 $ 30,102
Work in process 5,036 6,167
Finished goods 56,846 79,299
------ -------
88,914 115,568
Less reserves 10,220 13,665
------ -------
$78,694 $101,903
====== =======
In 1996, the Company recorded charges totaling $10,304 to reduce the
carrying value of certain elements of inventory to their net realizable
value.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated
depreciation. Depreciation of plant and equipment is determined by
straight-line and accelerated methods over estimated useful lives, which
range from 3 to 30 years.
Upon retirement or disposition, cost and the related accumulated
depreciation are removed from the accounts and any resulting gain or loss
is recognized in operating results.
Property, plant and equipment at the end of the respective years consist
of the following:
1997 1996
Property and improvements $ 956 $ 987
Buildings and improvements 16,086 15,685
Furniture, fixtures and equipment 63,853 61,009
------ ------
80,895 77,681
Less accumulated depreciation 49,535 47,527
------ ------
$31,360 $30,154
====== ======
Intangible Assets
Intangible assets are stated at cost less accumulated amortization.
Amortization is computed using the straight-line method with periods
ranging from 15 to 40 years for goodwill and 3 to 16 years for patents,
trademarks and other intangible assets.
The Company annually assesses the recoverability of intangible assets,
primarily by determining whether the amortization of the balance over its
remaining life can be recovered through projected undiscounted future
operating cash flows of the acquired operation. The amount of impairment,
if any, is measured primarily based on the deficiency of projected
discounted future operating cash flows relative to the value of the asset,
using a discount rate reflecting the Company's cost of capital, which is
currently approximately 11%.
Intangible assets at the end of the respective years consist of the
following:
1997 1996
Goodwill $94,274 $66,260
Patents, trademarks and other 4,113 4,357
------ ------
98,387 70,617
Less accumulated amortization 16,260 16,195
------ ------
$82,127 $54,422
====== ======
Income Taxes
The Company provides for income taxes currently payable, and deferred
income taxes resulting from temporary differences between financial
statement and taxable income, using the asset and liability method.
Federal and state income taxes are provided on foreign subsidiary income
distributed to or taxable in the United States during the year. At October
3, 1997, net undistributed earnings of foreign subsidiaries total
approximately $42,123. A substantial portion of these unremitted earnings
have been permanently invested abroad and no provision for federal or
state taxes is made on these amounts. With respect to that portion of
foreign earnings which may be returned to the United States, provision is
made for taxes if the amounts are significant.
The Company's United States entities file a consolidated federal income
tax return.
Employee Benefits
The Company and certain of its subsidiaries have various retirement and
profit sharing plans. U.S. pension obligations, which are generally based
on compensation and years of service, are funded by payments to pension
fund trustees. Other foreign pensions are funded as expenses are incurred.
The Company's policy is generally to fund the minimum amount required
under the Employee Retirement Income Security Act of 1974 for plans
subject thereto. Profit sharing costs are funded at least annually.
Foreign Operations and Derivative Financial Instruments
The Company operates internationally, which gives rise to exposure to
market risk from movements in foreign exchange rates. The Company uses
foreign currency forward contracts and options in its selective hedging of
foreign exchange exposure. Gains and losses on contracts that qualify as
hedges are recognized as an adjustment of the carrying amount of the item
hedged. The Company primarily hedges assets, inventory purchases and loans
denominated in foreign currencies. The Company does not enter into foreign
exchange contracts for trading purposes. Gains and losses on unhedged
exposures are recorded in operating results.
At October 3, 1997, foreign currency forward contracts and options with a
notional value of approximately $4,499 are in place, hedging existing and
anticipated transactions. Substantially all of these contracts mature in
1998. Failure of the counterparties to perform their obligations under
these contracts would expose the Company to the risk of foreign currency
rate movements for those contracts. The Company does not believe the risk
is significant. At October 3, 1997, the fair value of these instruments is
not significant.
Foreign currency swaps effectively denominate, in foreign currencies,
existing U.S. dollar denominated debt of the Company. This foreign
currency debt serves as a hedge of foreign assets. Accordingly, gains and
losses on such swaps are recorded in shareholders' equity.
Assets and liabilities of foreign operations are translated into U.S.
dollars at the rate of exchange existing at the end of the year. Results
of operations are translated at monthly average exchange rates. Gains and
losses resulting from the translation of foreign currency financial
statements are classified as a separate component of shareholders' equity.
Revenue Recognition
Revenue from sales is recognized on the accrual basis, primarily upon the
shipment of products, net of estimated costs of returns and allowances.
Advertising
The Company expenses substantially all costs of production of advertising
the first time the advertising takes place. Cooperative promotional
arrangements are accrued in relation to sales.
Advertising expense in 1997, 1996 and 1995 totals $21,512, $26,657 and
$26,151, respectively. Capitalized costs at October 3, 1997 and September
27, 1996 total $1,947 and $2,036, respectively, and primarily include
catalogs and costs of advertising which has not yet run for the first
time.
Research and Development
Research and development costs are expensed as incurred.
Stock-Based Compensation
The Company adopted FASB Statement 123, Accounting for Stock-Based
Compensation, in 1997. Statement 123 allows the Company to continue to
account for stock options using the intrinsic value based method. The fair
value of restricted shares awarded in excess of the amount paid for such
shares is recognized as contingent compensation and is being amortized
over 1-3 years from the date of award, the period after which all
restrictions lapse.
Reclassifications
Certain reclassifications have been made to prior years' amounts to
conform with the current year presentation.
Pending Accounting Changes
In 1997, the FASB issued Statement 128, Earnings Per Share, which requires
changes in the current method of computation of, and disclosures with
regard to, earnings per share. The Company will adopt Statement 128 in
1998, as required. The calculation of basic earnings per share required
under Statement 128 will be substantially the same as the amounts of
earnings per common share currently being reported by the Company. The
amounts calculated as diluted earnings per share under Statement 128 will
be nominally lower than the related basic earnings per share.
The FASB has issued a number of other pronouncements related to financial
statement disclosure. These pronouncements will not impact the financial
position, results of operations or cash flows of the Company, when
adopted.
2 NONRECURRING CHARGES
In 1997, the Company recorded severance and other exit costs totaling $335
related to the integration of acquired businesses.
In 1996, the Company adopted FASB Statement 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of, and determined that certain of its products would be discontinued. As
a result, assets totaling $1,846, consisting primarily of tooling, were
written off. The Company also determined that the carrying value of
goodwill of one of its subsidiaries, which the Company subsequently
closed, could not be recovered through undiscounted future cash flows.
Accordingly, the related intangible assets, totaling $1,070, were written
off.
In 1996, the Company recorded involuntary severance and other exit costs
totaling $1,852 related to the relocation of one of its manufacturing
locations and the outsourcing of the distribution function of another
business. Substantially all of the $1,389 remaining accrued liability at
September 27, 1996 was disbursed in 1997. Approximately 80 employees were
impacted by these actions.
In 1996, the Board of Directors approved a plan to divest the Company's
Plastimo business. The Company estimated the sale of this business would
result in a loss of approximately $2,000. Accordingly, this loss was
recognized in 1996 operating results. The Company completed the sale of
this business in 1997 without recognizing any additional gain or loss. Net
sales and operating losses of this business, to the date of disposition,
were $7,910 and $1,184, respectively, in 1997.
3 ACQUISITIONS
In October 1997, subsequent to the end of the 1997 fiscal year, the
Company completed the acquisition of certain assets of Soniform, Inc., a
manufacturer of diving buoyancy compensators, and the common stock of
Plastiques L.P.A. Limite, a privately held Canadian manufacturer of
kayaks. The purchase prices for the acquisitions total approximately
$3,256.
In July 1997, the Company completed the acquisition of the common stock of
Uwatec AG (Uwatec), a privately held manufacturer and marketer of diving
computers and other electronic instruments. The initial purchase price,
including direct expenses, for the acquisition was approximately $33,448,
of which $32,800 was recorded as intangible assets and is being amortized
over 25 years. Additional payments in 1998 through 2000 are dependent upon
achievement of specified levels of profitability of the acquired business.
In connection with the acquisition, the Company entered into a long-term
product development and intellectual property agreement with an
unaffiliated party with which Uwatec conducts business and an employment
agreement with a key employee and former shareholder of Uwatec.
In July 1997, the Company completed the acquisition of substantially all
of the assets of Ocean Kayak, Inc., a privately held manufacturer and
marketer of kayaks. The initial purchase price, including direct expenses,
for the acquisition was approximately $4,961, of which $2,704 was recorded
as intangible assets and is being amortized over 25 years. Additional
payments in 1998 and 1999 are dependent upon achievement of specified
levels of sales of the acquired business.
The following pro forma operating results are unaudited and reflect
purchase accounting adjustments assuming the acquisition of Uwatec and
sale of Plastimo had been consummated at the beginning of each year
presented:
1997 1996
Net sales $312,081 $332,700
Net loss (1,018) (12,526)
Loss per common share (0.13) (1.54)
In 1995, the Company acquired substantially all the assets of a line of
fishing tackle products. The initial purchase price, including direct
expenses, of the acquisition was $25,470, of which $22,042 was recorded as
intangible assets and is being amortized over 25 years. Additional
payments in the years 1998 through 2001 are dependent upon the achievement
of specified levels of sales and profitability of certain of the acquired
products. No additional payments were required in either 1997 or 1996.
In 1995, the Company acquired substantially all the assets of a line of
electric motors and marine accessories. The purchase price of the
acquisition was $2,600 of which $2,231 was recorded as intangible assets
and is being amortized over 15 years. Additional payments in the years
1998 through 2000 are dependent upon achievement of specified levels of
sales of the acquired product line. No additional payments were required
in either 1997 or 1996.
All acquisitions were accounted for using the purchase method and,
accordingly, the consolidated financial statements include the results of
operations since the respective dates of acquisition. Additional payments,
if required, will increase intangible assets in future years.
4 INDEBTEDNESS
Short-term debt at the end of the respective years consists of the
following:
1997 1996
Commercial paper and bank loans $43,118 $35,599
Current maturities of long-term debt 7,964 7,519
------ ------
51,082 43,118
Less short-term debt to be refinanced 25,000 -
------ ------
$26,082 $43,118
====== ======
Short-term credit facilities provide for borrowings with interest rates
set periodically by reference to market rates. Commercial paper rates are
set by competitive bidding. The weighted average interest rate on
short-term indebtedness was 5.6% and 5.8% at October 3, 1997 and September
27, 1996, respectively. The Company's primary facility is a $100,000
revolving credit agreement expiring in 2001, which includes $70,000 in
support of commercial paper issuance. The Company has lines of credit,
both foreign and domestic, totaling $136,324, of which $93,430 is
available at October 3, 1997. The Company also utilizes letters of credit
for trade financing purposes.
Long-term debt at the end of the respective years consists of the
following:
1997 1996
1996 Senior notes $45,000 $45,000
1993 Senior notes 15,000 15,000
1991 Senior notes - 7,000
Short-term debt to be refinanced 25,000 -
Other long-term notes, 4.6% to 10.9%,
maturing through December 2005 11,717 2,020
------ ------
96,717 69,020
Less current maturities 7,964 7,519
------ ------
$88,753 $61,501
====== ======
In October 1997, subsequent to the end of the 1997 fiscal year, the
Company issued unsecured senior notes totaling $25,000 with an interest
rate of 7.15%. The funding commitment for the senior notes was received in
July 1997. The senior notes have annual principal payments of $2,000 to
$7,000 beginning October 2001 with a final payment due October 2007.
Simultaneous with the commitment of the senior notes, the Company executed
a foreign currency swap, denominating in Swiss francs all of the principal
and interest payments required under the senior notes. The fixed,
effective interest rate to be paid on the senior notes as a result of the
currency swap is 4.32%. Proceeds from issuance of the senior notes were
used to reduce outstanding indebtedness under the Company's primary
revolving credit facility. Outstanding short-term debt totaling $25,000 at
October 3, 1997 is classified as long-term in anticipation of refinancing
with the proceeds of the senior notes.
$10,020 of the initial purchase price of Uwatec was deferred with
principal payments of $2,004 and $8,016 due in 2000 and 2002,
respectively. Interest on the deferred amount is payable annually at 6%.
This obligation is denominated in Swiss francs. $10,020 of the Company's
revolving credit agreement is reserved in support of this obligation
through issuance of a letter of credit.
In 1996, the Company issued unsecured senior notes totaling $30,000 with
an interest rate of 7.77% and $15,000 with an interest rate of 6.98%.
Total annual principal payments ranging from $5,500 to $7,500 are due
beginning in 2000 through 2006.
In 1993, the Company issued unsecured senior notes totaling $15,000 with
an interest rate of 6.58%. Equal annual principal payments of $7,500 are
due in 1998 and 1999.
Aggregate scheduled maturities of long-term debt in each of the five years
ending September 2002 are as follows:
Year
1998 $7,964
1999 7,730
2000 7,945
2001 6,197
2002 16,175
Interest paid was $9,046, $8,853 and $6,775 for 1997, 1996 and 1995,
respectively.
Based on the borrowing rates currently available to the Company for debt
with similar terms and average maturities, the fair value of the Company's
long-term debt as of October 3, 1997 and September 27, 1996 is $98,691 and
$69,151, respectively. The carrying value of all other financial
instruments approximates the fair value.
Certain of the Company's loan agreements require that Samuel C. Johnson,
members of his family and related entities (Johnson Family) continue to
own stock having votes sufficient to elect a 51% majority of the
directors. At October 3, 1997, the Johnson Family held approximately
2,477,000 shares or 36% of the Class A common stock, approximately
1,168,000 shares or 95% of the Class B common stock and approximately 74%
of the voting power of both classes of common stock taken as a whole. The
agreements also contain restrictive covenants regarding the Company's net
worth, tangible net worth, indebtedness, fixed charge coverage and
distribution of earnings. The Company is in compliance with the
restrictive covenants of such agreements, as amended from time to time.
5 LEASES AND OTHER COMMITMENTS
The Company leases certain operating facilities and machinery and
equipment under long-term, noncancelable operating leases. Future minimum
rental commitments under noncancelable operating leases having an initial
term in excess of one year at October 3, 1997 are as follows:
Year
1998 $3,826
1999 3,151
2000 2,402
2001 1,918
2002 1,551
Thereafter 1,022
Rental expense under all leases was approximately $4,338, $5,309 and
$5,141 for 1997, 1996 and 1995, respectively.
The Company makes commitments in a broad variety of areas, including
capital expenditures, contracts for services, sponsorship of broadcast
media and supply of finished products and components, all of which are in
the ordinary course of business.
6 INCOME TAXES
Income tax expense (benefit) for the respective years consists of the
following:
1997 1996 1995
Current:
Federal $ 242 $ 518 $ 309
State (11) 346 (100)
Foreign 5,847 6,239 6,489
Deferred (4,175) (6,909) 205
----- ----- -----
$1,903 $ 194 $6,903
===== ===== =====
The significant components of deferred tax expense (benefit) are as
follows:
1997 1996 1995
Deferred tax expense
(benefit) (exclusive
of effects of other
components listed
below) $(4,121) $(7,304) $ 325
Adjustments to
deferred tax assets
and liabilities for
enacted changes
in tax laws or rates - - 10
Increase (decrease) in
beginning of the
year balance of
the valuation
allowance for
deferred tax assets (54) 395 (130)
------ ------ ----
$(4,175) $(6,909) $ 205
====== ====== ====
In assessing the realizability of deferred tax assets, the Company
considers whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable
income during the years in which those temporary differences become
deductible. The Company considers the scheduled reversal of deferred tax
liabilities, projected future taxable income and tax planning strategies
in making this assessment.
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at the end of
the respective years are presented below:
1997 1996 1995
Deferred tax assets:
Inventories $ 4,773 $ 6,126 $ 1,867
Compensation 2,555 2,240 1,782
Foreign income taxes 1,100 595 988
Foreign tax credit
carryforwards 4,211 2,681 1,129
Net operating loss
carryforwards 9,487 2,996 407
Other 3,645 5,250 4,607
Total gross deferred
tax assets 25,771 19,888 10,780
Less valuation allowance 4,417 2,941 1,107
------ ------ ------
21,354 16,947 9,673
------ ------ ------
Deferred tax liabilities:
Foreign statutory reserves 2,041 1,371 1,204
Acquisition accounting 1,116 836 638
------ ------ ------
Total deferred tax
liabilities 3,157 2,207 1,842
------ ------ ------
Net deferred tax asset $18,197 $14,740 $ 7,831
====== ====== ======
Following is the income (loss) before income taxes for domestic and
foreign operations:
1997 1996 1995
United States $(6,998) $(25,276) $ 1,164
Foreign 10,957 14,115 15,828
------ ------- ------
$ 3,959 $(11,161) $16,992
====== ======= ======
The significant differences between the statutory federal tax rate and the
effective income tax rates are as follows:
1997 1996 1995
Statutory U.S. federal
income tax rate 34.0% (34.0)% 34.0%
State income taxes,
net of federal
income tax benefit (6.2) (3.4) (0.9)
Foreign rate differential 23.9 22.8 7.9
Basis difference on
divestiture of business - 7.5 -
Change in beginning
of year valuation
allowance for
foreign tax credits - 3.9 -
Foreign operating
losses (benefit) (2.0) 1.2 0.9
Tax credits - - (1.6)
Other (1.6) 3.7 0.3
---- ---- -----
48.1% 1.7% 40.6%
==== ==== =====
At October 3, 1997, the Company has $4,211 of foreign tax credit
carryforwards available to be offset against future U.S. tax liability.
The credits begin expiring in 1999 if not utilized.
During 1997, 1996 and 1995, foreign net operating loss carryforwards were
utilized, resulting in a reduction in income tax expense of $54, $34 and
$130, respectively. At October 3, 1997, the Company has a U.S. federal
operating loss carryforward of $23,495. In addition, certain of the
Company's foreign subsidiaries have net operating loss carryforwards
totaling $650. These amounts are available to offset future taxable income
over the next 14 to 20 years and are anticipated to be utilized during
this period.
Taxes paid were $8,328, $6,816 and $7,318 for 1997, 1996 and 1995,
respectively.
7 EMPLOYEE BENEFITS
Net periodic pension cost for noncontributory pension plans includes the
following components:
1997 1996 1995
Service cost $ 292 $ 282 $ 254
Interest on projected
benefit obligation 638 599 582
Return on plan assets (1,075) (436) (457)
Net amortization
and deferral 547 (72) (19)
---- ---- -----
$ 402 $ 373 $ 360
==== ==== =====
The funded status of the plans is as follows at the end of each year:
1997 1996
Actuarial present value of
benefit obligations:
Vested benefits $ 6,962 $ 7,031
Non-vested benefits 234 187
------ ------
Accumulated benefit obligation 7,196 7,218
Effect of projected compensation
levels 1,466 1,779
------ ------
Projected benefit obligation 8,662 8,997
Plan assets at fair value 6,998 6,235
------ ------
Projected benefit obligation
in excess of plan assets (1,664) (2,762)
Unrecognized net loss 605 1,756
Unrecognized prior service cost 226 252
Unrecognized net asset (534) (584)
------ ------
Pension liability recognized in
the consolidated balance sheets $(1,367) $(1,338)
====== ======
Plan assets are invested primarily in stock and bond mutual funds and
insurance contracts.
Actuarial assumptions used to determine the projected benefit obligation
and the expected net periodic pension cost are as follows:
1997 1996 1995
Discount rate 8% 8% 8%
Rate of increase in
compensation levels 5 5 5
Expected long-term rate
of return on plan assets 8 8 8
A majority of the Company's full-time employees are covered by profit
sharing and defined contribution programs. Participating entities
determine profit sharing distributions under various performance and
service based formulas.
8 PREFERRED STOCK
The Company is authorized to issue 1,000,000 shares of preferred stock in
various classes and series, of which there are none currently issued or
outstanding.
9 COMMON STOCK
Common stock at the end of the respective years consists of the following:
1997 1996
Class A, $.05 par value:
Authorized 20,000,000 20,000,000
Outstanding 6,881,923 6,901,801
Class B, $.05 par value:
Authorized 3,000,000 3,000,000
Outstanding 1,227,915 1,228,137
Holders of Class A common stock are entitled to elect 25% of the members
of the Board of Directors and holders of Class B common stock are entitled
to elect the remaining directors. With respect to matters other than the
election of directors or any matters for which class voting is required by
law, holders of Class A common stock are entitled to one vote per share
while holders of Class B common stock are entitled to ten votes per share.
If any dividends (other than dividends paid in shares of the Company) are
paid by the Company on its common stock, a dividend would be paid on each
share of Class A common stock equal to 110% of the amount paid on each
share of Class B common stock. Each share of Class B common stock is
convertible at any time into one share of Class A common stock. During
1997, 1996 and 1995, respectively, 222, 476, and 1,986 shares of Class B
common stock were converted into Class A common stock.
10 STOCK OWNERSHIP PLANS
The Company's current stock ownership plans provide for issuance of
options to acquire shares of Class A common stock by key executives and
non-employee directors. Current plans also allow for issuance of
restricted stock or stock appreciation rights in lieu of options. Grants
of restricted shares are not significant in any year presented. No stock
appreciation rights have been granted. All stock options have been granted
at a price not less than fair market value at the date of grant and become
exercisable over periods of one to four years from the date of grant.
Stock options generally have a term of 10 years.
A summary of stock option activity related to the Company's plans is as
follows:
Weighted
Average
Exercise
Shares Price
Outstanding at September 30, 1994 587,609 $19.76
Granted 119,000 18.76
Exercised (70,138) 17.96
Cancelled (37,525) 20.26
--------
Outstanding at September 29, 1995 598,946 19.74
Granted 162,000 22.88
Exercised (12,567) 19.35
Cancelled (182,158) 20.59
--------
Outstanding at September 27, 1996 566,221 20.37
Granted 256,000 12.09
Exercised (24,400) 6.93
Cancelled (111,300) 16.95
--------
Outstanding at October 3, 1997 686,521 $18.32
======== =====
Other information regarding the Company's stock option plans is as
follows:
1997 1996 1995
Options exercisable
at end of year 388,264 356,756 338,511
Weighted average
exercise price of
exercisable options $ 20.75 $ 19.54 $ 19.55
Weighted average fair
value of options
granted during year 4.87 8.85 8.61
At October 3, 1997, the weighted average remaining contractual lives of
stock options outstanding and those currently exercisable are
approximately 6.8 years and 5.3 years, respectively.
Had compensation cost for the Company's stock options been determined
using the fair value method, the Company's pro forma operating results
would have been as follows:
1997 1996
Net income (loss) $1,659 $(11,608)
Earnings (loss) per common share 0.20 (1.43)
The fair value of each option grant was estimated using the Black-Scholes
option pricing model with an expected volatility of 35%, a risk free rate
equivalent to five year U.S. Treasury securities and an expected life of
five years. The pro forma operating results reflect only options granted
in 1997 and 1996.
The Company's employee stock purchase plan provides for the issuance of up
to 150,000 shares of Class A common stock at a purchase price of not less
than 85% of the fair market value at the date of grant. No shares were
issued under this plan in 1997. During 1996 and 1995, 17,375 and 6,701
shares, respectively, were issued under this plan.
11 RELATED PARTY TRANSACTIONS
The Company and S.C. Johnson & Son, Inc. are controlled by the Johnson
Family. Various transactions are conducted between the Company and
organizations controlled by the Johnson Family. These include consulting
services, office rental and certain administrative activities.
Total costs of these transactions are $489, $440 and $523 for 1997, 1996
and 1995, respectively, of which $67 and $106 are payable at October 3,
1997 and September 27, 1996, respectively.
12 GEOGRAPHIC SEGMENTS OF BUSINESS
The Company conducts its worldwide operations through separate geographic
area organizations which represent major markets or combinations of
markets. The operations are conducted in the United States and various
foreign countries, primarily in Europe, Canada and the Pacific Basin.
Net sales and operating profit by geographic area include both sales to
customers, as reported in the Company's consolidated statements of
operations, and interarea transfers, which are priced to recover cost plus
an appropriate profit margin.
Identifiable assets represent assets that are used in the Company's
operations in each geographic area at the end of the years presented.
A summary of the Company's operations by geographic area is presented
below:
1997 1996 1995
Net sales:
United States:
Unaffiliated customers $175,675 $184,372 $192,426
Interarea transfers 6,426 6,718 5,749
Europe:
Unaffiliated customers 101,751 134,048 126,103
Interarea transfers 3,922 3,107 3,365
Other 25,701 25,976 28,674
Eliminations (10,354) (9,848) (9,127)
------- ------- -------
$303,121 $344,373 $347,190
======= ======= =======
Operating profit (loss):
United States $ (577) $(17,347) $ 6,004
Europe 11,796 13,013 14,409
Other 792 2,858 3,331
------- ------- -------
$ 12,011 $ (1,476) $ 23,744
======= ======= =======
Identifiable assets:
United States $138,612 $150,959
Europe 118,577 109,026
Other 19,830 20,783
------- -------
$277,019 $280,768
======= =======
Export sales in each geographic area total less than 10% of sales to
unaffiliated customers. Sales to a single customer and its affiliated
entities totaled $33,799 and $34,902 in 1997 and 1995, respectively. No
customer accounted for 10% or more of sales in 1996. Operating expenses of
the Company's headquarters are included in operating profit (loss) of the
United States.
13 EARNINGS PER SHARE
Earnings (loss) per share of common stock are computed on the basis of the
weighted average number of common shares outstanding. Primary and fully
diluted earnings per share are the same.
The weighted average common shares used in the computation of earnings per
common share are 8,111,322, 8,113,776 and 8,080,684 in 1997, 1996 and
1995, respectively. Common stock equivalents are not significant in any
year presented.
14 LITIGATION
The Company is subject to various legal actions and proceedings in the
normal course of business, including those related to environmental
matters. Although litigation is subject to many uncertainties and the
ultimate exposure with respect to these matters cannot be ascertained,
management does not believe the final outcome will have a material adverse
effect on the financial condition, results of operations, liquidity or
cash flows of the Company.
Auditors' and Management's Reports
Johnson Worldwide Associates, Inc. and Subsidiaries
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Johnson Worldwide Associates, Inc.:
We have audited the consolidated balance sheets of Johnson Worldwide
Associates, Inc. and subsidiaries as of October 3, 1997 and September 27,
1996, and the related consolidated statements of operations, shareholders'
equity, and cash flows for each of the years in the three-year period
ended October 3, 1997. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Johnson Worldwide Associates, Inc. and subsidiaries as of October 3, 1997
and September 27, 1996, and the results of their operations and their cash
flows for each of the years in the three-year period ended October 3,
1997, in conformity with generally accepted accounting principles.
As discussed in note 2 to the consolidated financial statements, the
Company adopted the provisions of the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 121 Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of during the year ended September 27, 1996.
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
November 11, 1997
REPORT OF MANAGEMENT
The management of Johnson Worldwide Associates, Inc. is responsible for
the preparation and integrity of all financial statements and other
information contained in this Annual Report. We rely on a system of
internal financial controls to meet the responsibility of providing
accurate financial statements. The system provides reasonable assurances
that assets are safeguarded, that transactions are executed in accordance
with management's authorization and that the financial statements are
prepared on a worldwide basis in accordance with generally accepted
accounting principles.
The financial statements for each of the years covered in this Annual
Report have been audited by independent auditors, who have provided an
independent assessment as to the fairness of the financial statements,
after obtaining an understanding of the Company's systems and procedures
and performing such other tests as deemed necessary.
The Audit Committee of the Board of Directors, which is composed solely of
directors who are not officers of the Company, meets with management and
the independent auditors to review the results of their work and to
satisfy itself that their respective responsibilities are being properly
discharged. The independent auditors have full and free access to the
Audit Committee and have regular discussions with the Committee regarding
appropriate auditing and financial reporting matters.
R. C. Whitaker
President and Chief Executive Officer
Carl G. Schmidt
Senior Vice President and Chief Financial Officer
<TABLE>
<CAPTION>
Five Year Financial Summary
Johnson Worldwide Associates, Inc. and Subsidiaries
Year Ended
[thousands, except October 3, September 27, September 29, September 30, October 1,
per share data] 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
OPERATING RESULTS(1)
Net sales $ 303,121 $ 344,373 $ 347,190 $ 284,343 $ 280,292
Gross profit 111,332 119,724 138,155 110,474 114,780
Operating expenses(2) 99,321 121,200 114,411 91,536 103,587
Operating profit (loss) 12,011 (1,476) 23,744 18,938 11,193
Interest expense 8,780 10,181 7,613 6,845 8,309
Other (income) expense, net (728) (496) (861) (391) 189
Income (loss) from
continuing operations
before income taxes 3,959 (11,161) 16,992 12,484 2,695
Income tax expense 1,903 194 6,903 4,338 2,055
Income (loss) from
continuing operations 2,056 (11,355) 10,089 8,146 640
Income from discontinued
operations - - - - 1,169
Gain (loss) on disposal of
discontinued operations - - - 4,052 (3,000)
Net income (loss) $2,056 $(11,355) $10,089 $12,198 $(1,191)
Earnings (loss) per common
share:
Continuing operations $0.25 $(1.40) $1.25 $1.01 $0.08
Discontinued operations - - - 0.50 (0.23)
Net income (loss) $0.25 $(1.40) $1.25 $1.51 $(0.15)
Weighted average common
shares outstanding 8,111 8,114 8,081 8,068 7,974
BALANCE SHEET DATA(1)
Total assets $277,019 $280,768 $278,353 $219,681 $239,121
Long-term debt, less
current maturities 88,753 61,501 68,948 31,190 44,543
Shareholders' equity 117,731 126,424 141,262 128,197 110,818
(1) All periods have been reclassified to reflect the discontinuation of the Company's Marking Systems group.
(2) Includes nonrecurring charges of $335, $6,768 and $13,000 in 1997, 1996 and 1993, respectively.
</TABLE>
<TABLE>
<CAPTION>
Quarterly Financial Summary
Johnson Worldwide Associates, Inc. and Subsidiaries
[thousands, except First Second Third Fourth
per share data] 1997 1996 1997 1996 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $51,817 $56,405 $96,111 $111,229 $86,894 $110,705 $68,299 $66,034
Gross profit 18,129 21,321 37,133 44,332 32,472 42,423 23,598 11,648
Net income (loss) (3,866) (2,793) 4,328 4,090 3,286 4,202 (1,692) (16,854)
Earnings (loss)
per common share $ (0.48) $ (0.34) $ 0.53 $ 0.50 $ 0.41 $ 0.52 $(0.21) $(2.08)
Stock prices:
High $ 15.00 $ 24.25 $ 14.00 $ 23.00 $ 13.25 $ 19.50 $17.50 $15.25
Low 10.75 21.75 12.00 17.50 10.50 13.50 12.25 13.75
</TABLE>
Shareholders' Information
CORPORATE HEADQUARTERS
Johnson Worldwide Associates, Inc.
1326 Willow Road
Sturtevant, Wisconsin 53177 USA
[414] 884-1500
INTERNET ADDRESSES
http://www.jwa.com
http://www.eurekatents.com (Eureka! commercial tents)
http://www.mitchell-sports.com (Mitchell)
http://www.oceankayak.com (Ocean Kayak)
http://www.otccanoe.com (Old Town)
http://www.uwatec.com (Uwatec)
http://www.wolfskin.de (Jack Wolfskin)
COMMON STOCK
Nasdaq Symbol: JWAIA
Class A Common Stock is traded on the Nasdaq Over the Counter National
Market System.
ANNUAL MEETING
The Annual Meeting of Shareholders will convene at 9:45 a.m. [CST] on
January 28, 1998, at the Company's Headquarters.
FORM 10-K
You may receive a copy of the Johnson Worldwide Associates, Inc. Form 10-K
filed with the Securities and Exchange Commission by writing to the
Secretary at Corporate Headquarters or via the internet to:
[email protected].
TRANSFER AGENT AND REGISTRAR
Firstar Trust Company
Corporate Trust Department
P.O. Box 2077
Milwaukee, Wisconsin 53201
SHAREHOLDER INQUIRIES
Communication concerning the transfer of shares, lost certificates or
changes of address should be directed to the Transfer Agent.
Executive Officers
R. C. WHITAKER, 50
President and Chief Executive Officer.
1 year of service with JWA.
CARL G. SCHMIDT, 41
Senior Vice President and Chief Financial Officer, Secretary and
Treasurer.
3 years of service with JWA.
Board of Directors
<photo>
SAMUEL C. JOHNSON, 69
Chairman of the Board.
Director since 1970.
Chairman of S.C. Johnson & Son, Inc.
Also Director of Mobil Corporation, H.J. Heinz Company and Deere &
Company.
<photo>
THOMAS F. PYLE, JR., 56
Vice Chairman of the Board.
Director since 1987.
Chairman, The Pyle Group.
Also Director of Kewaunee Scientific Corporation, Riverside Paper
Corporation and Sub Zero Corporation.
<photo>
RAYMOND F. FARLEY, 73
Director since 1970.
Retired President and Chief Executive Officer of S.C. Johnson & Son, Inc.
Also Director of Hartmarx Corporation and Snap-on Incorporated.
<photo>
DONALD W. BRINCKMAN, 66
Director since 1988.
Chairman, Chief Executive Officer and Founder of Safety-Kleen Corporation.
Also Director of Pay-Chex, Inc. and Snap-on Incorporated.
<photo>
HELEN P. JOHNSON-LEIPOLD, 40
Director since 1994.
Vice President, Personal and Home Care Products of S.C. Johnson & Son,
Inc.
<photo>
R. C. WHITAKER, 50
President and Chief Executive Officer.
Director since 1996.
Also Director of Weirton Steel Corporation.
<photo>
GREGORY E. LAWTON, 46
Director since 1997.
President and Chief Executive Officer of NuTone, Inc.
<photo>
GLENN N. RUPP, 53
Director since 1997.
Chairman and Chief Executive Officer of Converse Inc.
Also Director of Consolidated Papers, Inc.
1326 Willow Road
Sturtevant, Wisconsin
53177 USA
[414] 884-1500
EXHIBIT 21
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
The following lists the principal direct and indirect subsidiaries of
Johnson Worldwide Associates, Inc. as of October 3, 1997. Inactive
subsidiaries are not presented.
Jurisdiction in
Name of Subsidiary (1)(2) which Incorporated
Johnson Worldwide Associates Australia Pty. Ltd. Australia
Johnson Worldwide Associates Canada Inc. Canada
Mitchell Sports, S.A. France
Old Town Canoe Company Delaware
Scubapro Sweden AB Sweden
Under Sea Industries, Inc. Delaware
JWA Holding B.V. Netherlands
Johnson Beteiligungsgesellschaft GmbH Germany
Jack Wolfskin Ausrustung fur Draussen GmbH Germany
Johnson Outdoors V GmbH Germany
Scubapro Taucherauser GmbH Germany
Uwatec AG Switzerland
Uwatec Instruments Deutschland Germany
Uwatec USA, Inc. Maine
Uwatec Espana, S.A. Spain
Uwatec U.K., Ltd. United Kingdom
Uwatec Asia, Ltd. (3) Hong Kong
Uwatec Batam Indonesia
Uwatec France France
Uwaplast AG Switzerland
Scubapro Asia, Ltd. Japan
Scubapro Espana, S.A.(4) Spain
Scubapro Eu AG Switzerland
Scubapro Europe Benelux, S.A. Belgium
Scubapro Europe S.r.l. Italy
Scubapro Italy S.r.l. Italy
Scubapro Norge AS Norway
Scubapro Taucherausrustungen Gesellschaft GmbH Austria
Scubapro (UK) Ltd.(5) United Kingdom
(1) Unless otherwise indicated in brackets, each company does
business only under its legal name.
(2) Unless otherwise indicated by footnote, each company is a
wholly-owned subsidiary of Johnson Worldwide Associates, Inc.
(through direct or indirect ownership).
(3) Percentage of stock owned is 60%.
(4) Percentage of stock owned is 98%.
(5) Percentage of stock owned is 99%.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Shareholders and Board of Directors
Johnson Worldwide Associates, Inc.:
We consent to incorporation by reference in the Registration Statements
(No. 33-19804, 33-19805, 33-35309, 33-50680, 33-52073, 33-54899, 33-59325
and 33-61285) on Form S-8 of Johnson Worldwide Associates, Inc. of our
reports dated November 11, 1997, relating to the consolidated balance
sheets of Johnson Worldwide Associates, Inc. and subsidiaries as of
October 3, 1997 and September 27, 1996, and the related consolidated
statements of operations, shareholders' equity, and cash flows and related
schedule for each of the years in the three-year period ended October 3,
1997, which reports appear or are incorporated by reference in the 1997
Annual Report on Form 10-K of Johnson Worldwide Associates, Inc.
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
December 29, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF JOHNSON WORLDWIDE ASSOCIATES, INC. AS OF AND FOR THE YEAR ENDED
OCTOBER 3, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-03-1997
<PERIOD-START> SEP-27-1996
<PERIOD-END> OCT-03-1997
<CASH> 7,130
<SECURITIES> 0
<RECEIVABLES> 53,861
<ALLOWANCES> (2,693)
<INVENTORY> 78,694
<CURRENT-ASSETS> 152,749
<PP&E> 80,895
<DEPRECIATION> (49,535)
<TOTAL-ASSETS> 277,019
<CURRENT-LIABILITIES> 66,109
<BONDS> 88,753
0
0
<COMMON> 406
<OTHER-SE> 117,325
<TOTAL-LIABILITY-AND-EQUITY> 277,019
<SALES> 303,121
<TOTAL-REVENUES> 303,121
<CGS> 191,789
<TOTAL-COSTS> 191,789
<OTHER-EXPENSES> 96,989
<LOSS-PROVISION> 1,604
<INTEREST-EXPENSE> 8,780
<INCOME-PRETAX> 3,959
<INCOME-TAX> 1,903
<INCOME-CONTINUING> 2,056
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,056
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0.25
</TABLE>
