SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 30, 1997
Commission file number 1-9149
THE INTERLAKE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3428543
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
550 Warrenville Road, Lisle, Illinois 60532-4387
(Address of Principal Executive Offices) (Zip Code)
(630) 852-8800
(Registrant's telephone number, including area code)
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 ____
As of April 15, 1997, 23,151,792 shares of the Registrant's common stock
were outstanding.
THE INTERLAKE CORPORATION
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The following consolidated financial statements as of and for the periods
ended March 30, 1997 and March 31, 1996 are unaudited, but include all
adjustments which the Registrant considers necessary for a fair presentation
of results of operations and financial position for the applicable periods.
Except as noted, all adjustments are of a normal recurring nature.
<TABLE>
THE INTERLAKE CORPORATION
Consolidated Statement of Operations
For the Periods Ended
March 30, 1997 and March 31, 1996
(In thousands except per share statistics)
1997 1996
<S> <C> <C>
Net Sales from Continuing Operations $170,174 $165,222
Cost of Products Sold 131,832 127,709
Selling & Administrative Expense 24,435 24,796
Operating Profit 13,907 12,717
Non-operating (Income) Expense (455) (215)
Earnings Before Interest & Taxes 14,362 12,932
Interest Expense 11,540 11,903
Interest Income (768) (490)
Income from Continuing Operations Before Taxes,
Minority Interest, Extraordinary Loss &
Accounting Change 3,590 1,519
Provision for Income Taxes 2,245 1,422
Income from Continuing Operations Before Minority
Interest, Extraordinary Loss & Accounting Change 1,345 97
Minority Interest in Net Income of Subsidiaries 1,264 963
Income (Loss) from Continuing Operations Before
Extraordinary Loss & Accounting Change 81 (866)
Income from Discontinued Operations, Net of
Income Taxes 1,484 1,310
Extraordinary Loss, Net of Income Taxes (1,482) 0
Cumulative Effect of Change in Accounting Principle 0 1,610
Net Income $ 83 $ 2,054
Net Income (Loss) Per Share of Common Stock:
Continuing Operations Before Extraordinary Loss
& Accounting Change $ .00 $(.02)
Discontinued Operations, Net of Income Taxes .05 .04
Extraordinary Loss, Net of Income Taxes (.05) .00
Cumulative Effect of Accounting Change .00 .05
Net Income $ .00 $ .07
Average Shares Outstanding 32,311 31,413
</TABLE>
<TABLE>
THE INTERLAKE CORPORATION
Consolidated Balance Sheet
March 30, 1997 and December 29, 1996
(Dollars in thousands)
Assets 1997 1996
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 42,674 $ 70,228
Receivables, less allowances for doubtful accounts of
$1,980 at March 30, 1997 and $2,037 at December 29, 1996 116,471 128,990
Inventories - Raw materials and supplies 19,438 22,144
- Semi-finished and finished products 41,153 37,842
Other current assets 13,138 12,893
Total Current Assets 232,874 272,097
Other Assets 46,042 40,527
Property, Plant and Equipment, at cost 386,710 387,546
Less - Depreciation and amortization (242,994) (242,447)
143,716 145,099
Total Assets $422,632 $457,723
Liabilities and Shareholders' Equity (Deficit)
Current Liabilities:
Accounts payable $ 56,809 $ 65,366
Accrued liabilities 30,676 33,921
Interest payable 6,670 10,824
Accrued salaries and wages 12,202 15,675
Income taxes payable 30,826 29,591
Debt due within one year 3,341 3,759
Total Current Liabilities 140,524 159,136
Long-Term Debt 381,962 395,060
Other Long-Term Liabilities and Deferred Credits 90,882 92,506
Preferred Stock - 2,000,000 shares authorized
Convertible Exchangeable Preferred Stock - Redeemable,
par value $1 per share, issued 40,000 shares (liquidation
value $60,946 at March 30, 1997 and $59,626 at
December 29, 1996) 39,155 39,155
Shareholders' Equity (Deficit):
Common stock, par value $1 per share, authorized
100,000,000 shares, issued 23,228,695 shares 23,229 23,229
Additional paid-in capital 2,633 3,741
Cost of common stock held in treasury (76,903 shares at
March 30, 1997 and 115,696 shares at December 29, 1996) (1,794) (2,700)
Accumulated deficit (237,872) (237,955)
Unearned compensation (4,492) (5,102)
Accumulated foreign currency translation adjustments (11,595) (9,347)
(229,891) (228,134)
Total Liabilities and Shareholders' Equity (Deficit) $422,632 $457,723
</TABLE>
<TABLE>
THE INTERLAKE CORPORATION
Consolidated Statement of Cash Flows
For the Periods Ended March 30, 1997 and March 31, 1996
(In thousands)
1997 1996
<S> <C> <C>
Cash flows from (for) operating activities:
Net income $ 83 $ 2,054
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 4,838 5,093
Discontinued operations (1,484) 0
Extraordinary loss 1,482 0
Cumulative effect of change in accounting principle 0 (1,876)
Other operating adjustments 87 654
(Increase) decrease in working capital:
Accounts receivable 11,171 (75)
Inventories (932) (7,848)
Other current assets (273) (1,755)
Accounts payable (7,840) (129)
Other accrued liabilities (11,774) (12,760)
Income taxes payable 1,250 (479)
Total working capital change (8,398) (23,046)
Net cash provided (used) by operating activities (3,392) (17,121)
Cash flows from (for) investing activities:
Capital expenditures (3,736) (3,674)
Proceeds from disposal of PP&E 21 64
Acquisitions (5,000) 0
Divestitures 1,703 0
Other investment flows 79 121
Net cash provided (used) by investing activities (6,933) (3,489)
Cash flows from (for) financing activities:
Retirements of long-term debt (15,377) (707)
Debt retirement costs (1,504) 0
Other financing flows 268 503
Net cash provided (used) by financing activities (16,613) (204)
Effect of exchange rate changes (616) (56)
Increase (Decrease) in cash and cash equivalents (27,554) (20,870)
Cash and cash equivalents, beginning of period 70,228 41,562
Cash and cash equivalents, end of period $ 42,674 $ 20,692
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Financial Statements
The information furnished in these financial statements is unaudited.
The Registrant and its subsidiaries are referred to herein on a consolidated
basis as the Company.
Note 2 - Discontinued Operations
In the first quarter of 1997, the Company received additional proceeds in
respect of the October, 1996 sale of its packaging businesses. Income from
discontinued operations of $1.5 million, net of applicable income taxes, was
recorded in the quarter.
Note 3 - Extraordinary Loss
In 1997 the Company repurchased $14.5 million in principal amount of its 12%
Senior Notes at a premium of $1.5 million. In addition, debt issuance costs
of $.3 million related to the repurchased Notes which were originally
deferred to be amortized over the life of the Notes were written off. An
extraordinary loss of $1.5 million, net of applicable income taxes, was
reported in the quarter.
Note 4 - Accounting Change
In the second quarter of 1996, the Company changed its method of amortizing
unrecognized actuarial gains and losses with respect to its postretirement
benefits to amortize them over a five-year period. The method previously
used was to amortize any unrecognized gain or loss in excess of 10% of the
Accumulated Postretirement Benefit Obligation amount over 15 years. This
change was accounted for as a change in accounting principle, the cumulative
effect of which was recorded as of the beginning of the year. As a result,
net income for the first quarter of 1996 was increased by $1.6 million in
respect of continuing operations and $.3 million in respect of discontinued
operations.
Note 5 - Computation of Common Share Data
The weighted average number of common shares outstanding used to compute net
income per share was 32,311,000 for 1997 and 31,413,000 for 1996.
Note 6 - Income Taxes
The effective tax rate on income from continuing operations was 62.5% and
93.6% for 1997 and 1996, respectively. Because most of the Company's
interest expense is borne in the United States at the parent company level,
the Company had substantial taxable income in foreign and state
jurisdictions. Taxes due to foreign authorities were not offset by U.S.
federal income tax benefits.
Note 7 - Acquisitions
In the first quarter of 1997, the Company purchased ARC Metals Corporation.
In addition to a cash payment of $5.0 million, long-term liabilities of $2.8
million were established in association with this acquisition.
Note 8 - Environmental Matters
In connection with the reorganization of the old Interlake, Inc. (now Acme
Steel Company ("Acme")) in 1986, the Company, then newly-formed, indemnified
Acme against certain environmental liabilities relating to properties which
had been shut down or disposed of by Acme's iron and steel division prior
to the 1986 reorganization. As of March 30, 1997, the Company's reserves
for environmental liabilities totaled $2.1 million, most of which relates
to the Acme indemnification.
Based on its current estimate of its potential environmental liabilities,
including all contingent liabilities, individually and in the aggregate,
asserted and unasserted, the Company believes that, subject to the
uncertainty with respect to the Duluth Site discussed below, the costs of
environmental matters have been fully provided for or are unlikely to have
a material adverse effect on the Company's business, future results of
operations, liquidity or financial condition. In arriving at its current
estimate of its potential environmental liabilities, the Company has relied
upon the estimates and analysis of its environmental consultants and legal
advisors, as well as its own evaluation, and has considered: the probable
scope and cost of investigations and remediations for which the Company
expects to have liability; the likelihood of the Company being found liable
for the claims asserted or threatened against it; and the risk of other
responsible parties not being able to meet their obligations with respect
to clean-ups. The Company's estimate has not been discounted to reflect the
time-value of money, although a significant delay in implementation of
certain of the remedies thought to be probable could result in cost
estimates increasing due to inflation.
In May 1994, the Company instituted an action seeking a declaratory judgment
against and recoveries from insurers under policies covering nearly 30
years. This action has been stayed pending appeal of a ruling that the
Company's notice to the insurers of environmental claims in connection with
the Duluth Site was late. The Company has entered into settlement
agreements with certain of the defendants in the litigation pursuant to
which the Company has recovered certain amounts. In estimating its
potential environmental liabilities, the Company has not reflected any
future recoveries from insurance companies which could, but will not
necessarily, result from this litigation.
The Company's current estimates of its potential environmental liabilities
are subject to considerable uncertainty due to continuing uncertainty
surrounding one of the sites for which the Company is responsible pursuant
to its indemnity of Acme -- namely, the Superfund site on the St. Louis
River in Duluth, Minnesota (the "Duluth Site"). These uncertainties relate
to both the clean-up of certain contaminated soils at the site, as well as
the remediation of certain underwater sediments. In the light of these
uncertainties, the Company's estimates could be subject to change in the
future.
With respect to the contaminated soils, the Minnesota Pollution Control
Agency ("MPCA") on September 27, 1995, issued a Record of Decision selecting
a remedy consistent with the anticipated industrial development of the site.
The Company has contracted for and implemented most of the portions of the
soils remedy for which it is responsible. Based on estimates of consultants
and work to date, the Company expects the cost of such implementation to be
between $4 and $5 million, the majority of which has been incurred. The
Company expects the soils remediation to be substantially completed in the
first half of 1997.
With respect to the underwater sediments, the MPCA has requested the Company
to undertake an investigation and to evaluate remedial alternatives. The
Company's consultants have substantially completed their initial
investigation. Based on this investigation, the Company is reviewing
possible remedial alternatives for the underwater sediments with the MPCA
and other interested parties. The Company believes that, until this review
is completed, any estimate of remediating the underwater sediments will not
be meaningful. The Company also continues to believe that the range of
reasonable remedial alternatives for the underwater sediments includes that
of taking no action, thereby avoiding the disruption of the natural
remediation of the underwater sediments which has been underway for over 30
years. Thus, the Company believes the minimum of the range of costs of
remedial alternatives to be zero, and to date has made provision for only
the investigation, and not for the clean-up, of underwater sediments. If
a clean-up is ultimately determined to be appropriate, the range of costs
would likely be dependent in part upon whether the remedy selected called
for treating contamination in place, which might cost several millions of
dollars, or provided for removal and treatment of contaminated sediments,
which could cost tens of millions of dollars.
In March 1996, the citizens' board of the MPCA named the successors to
certain coal tar processors at the Duluth Site (the "tar companies") as
additional responsible parties for a portion of the underwater sediments
operable unit. The Company believes that the tar companies are the cause
of a significant portion of the underwater contamination at the site, while
the tar companies to date have maintained that their contributions were
minimal.
The Company's current expectation is that cash outlays related to its
outstanding reserves for environmental matters largely will be made during
1997 and 1998. If the Company ultimately determines that additional charges
are necessary in connection with the Duluth Site, the Company believes it
is likely that cash outlays would occur near the end of the decade, or
later.
Note 9 - Commitments and Contingencies
The Company is engaged in certain routine litigation arising in the ordinary
course of business. Based upon its evaluation of available information,
management does not believe that any such matters are likely, individually
or in the aggregate, to have a material adverse effect upon the Company's
business future, results of operations, liquidity or consolidated financial
condition.
On July 9, 1990, the City of Toledo, Ohio (the "City"), brought an action
(the "Primary Action") in federal district court (the "Court") in Toledo
against the Company, Acme Steel Company ("Acme" or the "old Interlake" and,
together with the Company, the "Interlake defendants"), Beazer Materials and
Services, Inc., succeeded by Beazer East, Inc. ("Beazer") and Toledo Coke
Corporation ("Toledo Coke") in connection with the alleged contamination of
a 1.7 acre parcel of land the City had purchased from Toledo Coke for
purposes of widening a road. Pursuant to a memorandum of understanding
dated September 30, 1996, among Beazer, the City, and the Toledo-Lucas
County Port Authority (the "Port Authority"), setting forth certain
obligations of Beazer, the City and the Port Authority for the completion
and funding of the road widening project and related environmental work, the
City, Beazer and the Interlake defendants entered into a settlement
agreement pursuant to which the City released the Interlake defendants and
Beazer from, and agreed to dismiss with prejudice, all claims in the Primary
Action. On October 10, 1996, the Court entered a consent order dismissing
with prejudice all claims in the Primary Action. The Court did not dismiss
pending cross-claims between Beazer and the Interlake defendants. In
November 1995, the Court granted the Interlake defendants' motion for
summary judgment seeking indemnification by Beazer for the liabilities
alleged by the City and related costs and expenses. Beazer appealed the
indemnification ruling and, on November 22, 1996, the United States Sixth
Circuit Court of Appeals reversed the Court's summary judgment rule in favor
of the Interlake defendants and remanded for trial on the indemnification
issue. The outcome of this indemnification action will impact who bears
responsibility for in excess of $2 million of legal fees incurred by
Interlake in the Primary Action and for the implementation of remedial
action estimated to cost $1.5 to $3 million in connection with the City's
Front Street expansion. Trial is scheduled to begin in June 1997.
On March 10, 1995, SC Holdings, Inc., a subsidiary of Waste Management
International Plc ("SC Holdings"), filed a complaint in federal district
court in Trenton, New Jersey, against Hoeganaes Corporation, an Interlake
subsidiary, and numerous other defendants, seeking to recover amounts
expended or to be expended in the remediation of the Cinnaminson Groundwater
Contamination Site in Burlington County, New Jersey. SC Holdings claims to
have spent approximately $10 million in investigation and remediation, and
purportedly estimates the total costs of investigation and remediation to
be approximately $60 million. The site is a broadly-defined Superfund site
which encompasses a landfill formerly operated by SC Holdings and may also
include the groundwater under Hoeganaes' Riverton, New Jersey facility.
Hoeganaes may have shipped certain materials to the landfill. SC Holdings
alleges that Hoeganaes has liability as both an owner/operator and a
generator. The parties to the litigation are presently engaged in a
court-supervised non-binding allocation process which is presently expected to
be completed in late 1997. The Company believes Hoeganaes has meritorious
defenses to both of the alleged bases of liability.
Note 10 - Possible Sale of Handling Businesses
In the first quarter of 1997, the Company announced that it would explore
the sale of all of its Handling businesses.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
First Quarter 1997 Compared with First Quarter 1996
Net sales from continuing operations of $170.2 million in the quarter ended
March 30, 1997, compared with sales of $165.2 million in the prior year
period. Sales in the Engineered Materials segment grew by 18% to $72.8
million, due to increased sales of metal powder at Special Materials and
higher fabrication sales at Aerospace Components. In the Handling segment,
sales declined 6% to $97.4 million, due to lower sales in North America and
Europe. Operating profit increased 9% to $13.9 million, from $12.7 million
in 1996. Income from continuing operations was $.1 million, compared with
a loss of $.9 million in the 1996 quarter. Net income of $.1 million for
the 1997 quarter included income from discontinued operations of $1.5
million and an extraordinary loss of $1.5 million on the early retirement
of a portion of the Company's debt. Net income of $2.1 million in the first
quarter of 1996 included $1.3 million income from discontinued operations
and a $1.6 million benefit from the cumulative effect of a change in
accounting policy.
Segment Results
The Company's businesses are organized into two segments: Engineered
Materials and Handling. Businesses in Engineered Materials are Special
Materials (ferrous metal powders) and Aerospace Components (precision
aerospace component fabrication and aviation repair). Businesses in
Handling are North American, European and Asia Pacific handling operations.
<TABLE>
First Quarter Segment Results
Net Sales Operating Profit
1997 1996 1997 1996
(in millions)
<S> <C> <C> <C> <C>
Engineered Materials
Special Materials $ 50.5 $ 43.3
Aerospace Components 22.3 18.4
72.8 61.7 $12.2 $ 8.8
Handling 97.4 103.5 2.1 4.0
Corporate Items ( .4) ( .1)
Consolidated Totals $170.2 $165.2 $13.9 $12.7
</TABLE>
Engineered Materials
Sales in the Engineered Materials segment for the first quarter increased
18% to $72.8 million, due to stronger metal powder sales at Special
Materials and higher fabrication sales at Aerospace Components.
Special Materials' metal powder sales increased 17% compared with the same
period last year, reflecting increased industry demand. Flowthrough from
the additional volume generated a 35% earnings increase in the quarter.
Aerospace Components' sales improved 21% compared with the 1996 period, as
shipments increased on several engine programs in the fabricated components
business. Profit for the quarter increased 17%, reflecting additional volume
and improved manufacturing performance in the fabrication business,
partially offset by lower repair earnings.
Order backlogs in this segment were $173.2 million at the end of the
quarter, up from $140.9 million at the end of the first quarter of 1996.
Special Materials' backlog, which is generally short term in nature, was
down 6%. Aerospace Components' backlog increased 36%, to the highest level
since June 1989, with new and follow-on orders on a number of commercial,
military and space programs.
Handling
First-quarter sales in the Handling segment declined 6% to $97.4 million,
due mainly to lower sales in North America and Europe. Lower prices were
the major factor in a sales decrease of 10% in North America, while lower
volume resulted in a 6% sales decline in Europe. Sales in the Asia Pacific
region increased 7%. Handling's profit declined 47% compared with the first
quarter of 1996. North American profit was unfavorably affected by the
lower selling prices, though European profits improved 87% as lower steel
costs and reduced selling and administrative costs mitigated the effect of
lower revenue. Changes in exchange rates were not material during the
quarter.
Order backlogs in this segment were $89.9 million at the end of the first
quarter, up from $78.7 million at the end of the first quarter of 1996, as
the backlog at Handling Asia Pacific reached a record level.
Discontinued Operations
In the first quarter of 1997, the Company received additional proceeds in
respect of the October 1996 sale of its packaging businesses. Income from
discontinued operations of $1.5 million, net of applicable income taxes, was
recorded in the quarter.
Extraordinary Loss
An extraordinary loss of $1.5 million, net of applicable income taxes, was
recorded in the first quarter of 1997, for the premium incurred and the
write-off of deferred debt issuance costs related to the repurchase and
early retirement of $14.5 million in principal amount of the Company's 12%
Senior Notes.
Financial Condition
The Company's total debt at the end of the first quarter was $385.3 million,
down $13.5 million from year-end 1996. Cash totaled $42.7 million at the
end of the quarter, compared with $70.2 million at the end of 1996,
reflecting the repurchase of $14.5 million of 12% Senior Notes in the open
market, the acquisition of ARC Metals Corporation by Special Materials,
increased working capital requirements and capital expenditures. Capital
expenditures of $3.7 million during the quarter were comparable with capital
spending in the first three months of 1996. The Company anticipates that
1997 capital spending will be approximately $28.0 million.
Under its bank credit agreement, the Company has available revolving
facilities of up to an additional $32.8 million over the March 30, 1997
revolving indebtedness. If current levels of performance are maintained,
the Company anticipates it will be in compliance with the covenants under
its bank credit agreement. The Company believes that it will have adequate
liquidity to meet its debt service and operating requirements in 1997, based
on expected operating cash flow and the availability of additional revolver
borrowings under the Company's bank credit agreement.
Sale of Handling Businesses
As previously announced, the Company is presently exploring the sale of all
of its Handling businesses.
PART II. - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature of the Company's business is such that it is regularly involved
in legal proceedings incidental to its business. None of these proceedings
is material within the meaning of regulations of the Securities and Exchange
Commission.
The Company is a party in certain litigation and a proceeding before a
governmental agency which relate to the contamination of the environment.
These matters are described in Note 8 and Note 9 of Notes to Consolidated
Financial Statements included herein. Reference is also made to the
Company's Annual Report on Form 10-K for the fiscal year ended December 29,
1996, Part I, Item 3--Legal Proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10.l Amendment No. 3 to Restated Directors' Post-Retirement
Income Plan effective as of March 31, 1997
Exhibit 27 Financial Data Schedule for the quarter ended March 30,
1997
(b) Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
SIGNATURE
Pursuant to the requirements 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.
THE INTERLAKE CORPORATION
April 24, 1997 /s/STEPHEN GREGORY
Stephen Gregory
Vice President - Finance
and Chief Financial Officer
AMENDMENT NO. 3 TO
RESTATED DIRECTORS' POST-RETIREMENT INCOME PLAN
This Amendment No. 3 to the Restated Directors' Post-Retirement
Income Plan of The Interlake Corporation, a Delaware corporation
("Company"), effective as of March 31, 1997,
W I T N E S S E T H:
A. By a document captioned Restated Directors' Post-Retirement
Income Plan dated as of May 29, 1986 (the "Restated Plan"), the Company:
(a) acknowledged that it had assumed the obligations of Interlake, Inc.
under a Directors' Post-Retirement Income Plan of Interlake, Inc. (the
"Original Plan"); (b) made certain amendments to said Original Plan; and
(c) restated the Original Plan, as so amended.
B. At a meeting of the Board of Directors of the Company on
February 26, 1987, at which a quorum of said Board of Directors was
present, Amendment No. 1 was approved by all Company Directors in
attendance. The effective date of said Amendment No. 1 was May 29, 1986.
C. At a meeting of the Board of Directors of the Company on April
26, 1990, at which a quorum of said Board of Directors was present,
Amendment No. 2 was approved by all Company Directors in attendance.
Director Howard Hosbach was absent.
D. At a meeting of the Board of Directors of the Company on
February 27, 1997, at which a quorum of said Board of Directors was
present, the amendment hereafter set forth was approved by all Company
Directors in attendance.
NOW, THEREFORE,
1. The Restated Plan, as heretofore amended, is hereby further amended
so that Section 2.1 thereof reads in its entirety as follows:
"2.1 Participants. Each Company Director who is not an officer of
the Company ("Outside Director") who retires from the Company's Board of
Directors, with at least four years' continuous service as a Director of
the Company (together with service as a Director of Interlake, Inc. for
those Directors who transferred as Directors from Interlake, Inc. to the
Company) shall be a Participant in the Plan. For the purposes of
determining such four year period of service, concurrent service as a
Director and an officer of the Company or of Interlake, Inc. shall be
aggregated with service as an Outside Director. Notwithstanding any
other provisions in this Plan, no Director shall become a Participant
hereunder unless such Director was a Participant as of March 31, 1997."
2. This Amendment shall be effective as of March 31, 1997.
IN WITNESS WHEREOF, this Amendment No. 3 has been duly executed and
delivered.
THE INTERLAKE CORPORATION
By: /s/W. Robert Reum
W. Robert Reum
Chairman, President and
Chief Executive Officer
CONSENT
The undersigned affected Director consents to the amendment and
modification of Section 2.1 of the Restated Plan, as set forth in the
above Amendment No. 3 to the Restated Plan.
/s/John A. Canning, Jr.
John A. Canning, Jr.
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