<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended October 28, 1995
----------------
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: 0-15077
-------
SHOREWOOD PACKAGING CORPORATION
(Exact name of registrant as specified in its Charter)
DELAWARE 11-2742734
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
277 PARK AVENUE
NEW YORK, NEW YORK 10172
(Address of principal executive offices)
(212) 371-1500
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 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 / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
DECEMBER 1, 1995 18,989,183
Date Number of Shares
<PAGE> 2
SHOREWOOD PACKAGING CORPORATION
AND SUBSIDIARIES
<TABLE>
<CAPTION>
INDEX PAGE
<S> <C>
Part I: Financial Statements
Consolidated Condensed Balance Sheets
October 28, 1995 (Unaudited) and
April 29, 1995 (Audited) 3
Consolidated Condensed Statements of Earnings
13 weeks ended October 28, 1995 (Unaudited) and
October 29, 1994 (Unaudited) 4
26 weeks ended October 28, 1995 (Unaudited) and
October 29, 1994 (Unaudited) 5
Consolidated Condensed Statement of Cash Flows
26 weeks ended October 28, 1995 (Unaudited) and
October 29, 1994 (Unaudited) 6
Notes to Consolidated Condensed Financial Statements 7 - 9
Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 12
Part II: Other Information 13 - 15
Exhibit Index 16
</TABLE>
2
<PAGE> 3
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
OCTOBER 28, APRIL 29,
1995 1995
ASSETS (UNAUDITED) (AUDITED)
- ------
<S> <C> <C>
Current Assets:
Cash and Cash Equivalents $6,204 $4,100
Accounts Receivable, net 47,246 40,801
Inventories 46,460 46,641
Deferred Tax Assets 1,424 1,424
Prepaid expenses and other current assets 3,601 3,986
-------- --------
Total Current Assets 104,935 96,952
Property, Plant and Equipment, net 150,312 129,153
Excess of Cost Over the Fair Value of Net Assets Acquired, net 19,666 14,906
Other Assets 5,785 4,253
-------- --------
$280,698 $245,264
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current Liabilities:
Accounts Payable $24,589 $28,122
Accrued Expenses 18,919 14,918
Income Taxes Payable 1,676 570
Current maturities of long-term debt 24,000 21,394
-------- --------
Total Current Liabilities 69,184 65,004
Long-Term Debt 115,550 99,793
Deferred Credit and Other Long-Term Liabilities 2,516 1,314
Deferred Income Taxes 13,446 11,744
-------- --------
Total Liabilities 200,696 177,855
-------- --------
Commitments and Contingencies
Fair Value of Warrants, net of deferred
fair value of warrants ($1,357) - -
Stockholders' Equity:
Series A Preferred Stock, $10 par value; 50,000 shares
authorized, none issued - -
Preferred Stock, $10 par value; 5,000,000 shares authorized
none issued - -
Common Stock, $.01 par value; 40,000,000 shares authorized
21,675,682 issued and 19,279,996 outstanding in October and
21,622,726 issued and 19,227,040 outstanding in April 217 216
Additional Paid-In Capital 39,228 38,670
Retained Earnings 64,398 52,255
Cumulative Foreign Currency Translation Adjustment (1,606) (1,497)
Treasury Stock (2,395,686 shares at cost in October and April) (22,235) (22,235)
-------- --------
Total Stockholders' Equity 80,002 67,409
-------- --------
$280,698 $245,264
======== ========
</TABLE>
3
<PAGE> 4
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
13 WEEKS 13 WEEKS
ENDED ENDED
OCTOBER 28, OCTOBER 29,
1995 1994
<S> <C> <C>
Net Sales $105,120 $97,050
-------- -------
Costs and Expenses:
Cost of Sales 82,322 74,598
Selling, General and Administrative 10,732 9,033
-------- -------
Earnings from Operations 12,066 13,419
Other Income, net 206 (55)
Interest Expense (2,102) (2,446)
-------- -------
Earnings Before Provision for Income Taxes 10,170 10,918
Provision for Income Taxes 3,888 4,149
-------- -------
Net Earnings $6,282 $6,769
======= =======
Net Earnings Per Common and Common
Equivalent Share $.32 $.36
======= =======
Weighted Average Common and Common Equivalent
Shares Outstanding 19,899 18,920
======= =======
</TABLE>
4
<PAGE> 5
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
(IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
26 WEEKS 26 WEEKS
ENDED ENDED
OCTOBER 28, OCTOBER 29,
1995 1994
<S> <C> <C>
Net Sales $195,819 $181,823
-------- --------
Costs and Expenses:
Cost of Sales 152,563 139,860
Selling, General and Administrative 19,832 17,554
-------- --------
Earnings from Operations 23,424 24,409
Other Income, net 415 94
Interest Expense (4,184) (4,766)
-------- --------
Earnings Before Provision for Income Taxes 19,655 19,737
Provision for Income Taxes 7,512 7,500
-------- --------
Net Earnings $12,143 $12,237
======== ========
Net Earnings Per Common and Common
Equivalent Share $.61 $.66
======= =======
Weighted Average Common and Common Equivalent
Shares Outstanding 19,871 18,676
======= =======
</TABLE>
5
<PAGE> 6
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
26 WEEKS 26 WEEKS
ENDED ENDED
OCTOBER 28, OCTOBER 29,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net earnings $12,143 $12,237
Adjustments to reconcile earnings to net cash flows
provided from operations:
Depreciation and amortization 6,863 6,998
Deferred income taxes 1,718 476
Other non-cash items (56)
Changes in operating assets and liabilities:
Accounts receivable (5,035) (13,354)
Inventories 180 (4,602)
Prepaid expenses and other current assets 767 517
Other assets (1,532) (595)
Accounts payable and accrued expenses (4,415) 7,661
Income taxes payable 1,105 637
---------- ---------
Net cash flows provided from operating activities 11,794 9,919
---------- --------
Cash Flows from Investing Activities:
Capital Expenditures (28,656) (5,201)
Other - 112
---------- --------
Net cash flows used in investing activities (28,686) (5,089)
---------- --------
Cash Flows from Financing Activities
Net proceeds from (repayments of) long-term borrowings 18,256 6,511
Purchase of treasury stock - (128)
Issuance of common stock 559 706
Proceeds from assignment of interest rate swap - 1,282
Other - 156
---------- --------
Net cash flows provided from (used in) financing activities 18,815 (4,495)
---------- --------
Effect of exchange rate changes on cash and cash equivalents 181 (97)
---------- --------
Increase in cash and cash equivalents 2,104 238
Cash and cash equivalents at beginning of year 4,100 2,735
---------- --------
Cash and cash equivalents at end of period $6,204 $2,973
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid, net of capitalized amounts $4,414 $4,657
========= ========
Income taxes paid $3,161 $6,632
========= ========
</TABLE>
6
<PAGE> 7
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
1. BASIS OF PRESENTATION
In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the financial
position, the results of operations, and the changes in cash flows at October
28, 1995 and for all periods presented.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These financial statements should be read in
conjunction with the Consolidated Financial Statements and Notes included in
the Company's April 29, 1995 Annual Report to Stockholders on Form 10-K as
filed with the Securities and Exchange Commission ("1995 Form 10-K").
The results of operations for the 13 and 26 week periods ended October 28, 1995
are not necessarily indicative of the results for the full year.
2. INCOME TAXES
The effective income tax rate is based on estimates of annual amounts of
taxable income and other factors. These estimates are updated periodically and
any increase or decrease in the provision for income taxes is reflected in the
period in which the estimate is changed.
3. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
OCTOBER 28, 1995 APRIL 29, 1995
<S> <C> <C>
Raw materials and supplies $20,682 $20,767
Work in process 9,851 12,043
Finished Goods 15,927 13,831
------- -------
$46,460 $46,641
======= =======
</TABLE>
4. OTHER ASSETS
In May 1995, the Company loaned $2.0 million to its Vice Chairman of the Board
and President (the "Executive"). The loan is due on May 4, 2000, and bears
interest payable quarterly equal to the Applicable Federal Rate as defined
(5.61% at October 28, 1995), adjusted quarterly. Mandatory prepayments of this
loan are required if the Executive's compensation exceeds certain thresholds.
5. COMMITMENTS AND CONTINGENCIES
a. Treasury Stock
In January 1993, the Company's Board of Directors authorized the purchase of up
to 2.0 million shares of the Company's common stock from time to time in the
open market. Pursuant to this authorization
7
<PAGE> 8
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
through October 28, 1995, the Company purchased approximately 1.2 million
shares of its common stock for approximately $12.6 million. Subsequent to
October 28, 1995 the Company purchased an additional 300,000 shares of its
common stock for approximately $4.7 million.
Subject to the execution of a new credit agreement as more fully described in
Note 6, the Board of Directors authorized the purchase of up to an additional
2.0 million shares of the Company's common stock from time to time in the open
market, subject to the terms of the Company's new credit agreement. As of
December 11, 1995, approximately 2,500,000 shares are authorized for purchase
under existing Board of Directors resolutions.
b. New Facility
In connection with a planned expansion of the Company's facilities, the Company
anticipates investing approximately $22.0 million in a new plant and equipment,
of which approximately $15.9 million has been disbursed as of October 28, 1995.
Funds for this expansion are to be provided from the Company's credit facility.
c. Legal Matters
In January 1995, the Company commenced a civil action in the Supreme Court of
the State of New York against Heminway Packaging Corporation ("Heminway") and
certain of its affiliates seeking compensatory and punitive damages and other
relief in connection with the January 1994 acquisition by the Company of
Heminway's rigid set-up box and thermoforming business (the "Heminway
Business"). The suit contends that the defendants misrepresented the financial
condition and operational capabilities of the acquired business. The Company
is seeking damages in excess of $5.0 million. In June 1995, the defendants
filed an answer and a counterclaim to the Company's complaint, seeking
compensatory damages exceeding $10.0 million and punitive damages of $7.7
million. Heminway's counter-claim also seeks a declaratory judgment and
damages with respect to certain escrowed rents. The remaining defendants moved
to dismiss the complaint. On June 29, 1995. the Company moved to dismiss the
counter-claims. The pending motions have been submitted to the court and are
awaiting decision.
Management believes that the ultimate outcome of this claim will not have a
material adverse effect on the operations or financial condition of the
Company.
d. Environmental Matters
On a continuing basis, the Company monitors its compliance with applicable
environmental laws and regulations. As part of this process the Company
cooperates with appropriate governmental authorities to perform any necessary
testing and compliance procedures. The purchase agreements relating to the
acquisition of certain acquired companies indemnify the Company from all costs
and expenses relating to environmental matters which existed at the related
acquired facilities on or prior to the respective closing dates. The Company
is not currently aware of any environmental compliance matters that it believes
will have a material effect on the consolidated financial statements.
8
<PAGE> 9
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(continued)
e. 1995 Performance Bonus Plan
In July 1995, the Board of Directors approved the 1995 Performance Bonus Plan
(the "Plan"), applicable to its Vice Chairman of the Board and President only.
Under the Plan, for each of the five fiscal years of the Company commencing
with fiscal year 1996, the Executive will be entitled to a graduated bonus (the
"Performance Bonus") based upon a comparison of the Company's earnings from
operations plus depreciation and amortization (the "Performance Measure") in
that award year with the immediately preceding fiscal year. Bonuses are
payable only if pre- established thresholds are met. The size of the
Performance Bonus is tied to the level of the Company's performance, as
measured by the Performance Measure, with the larger bonuses available only in
the case of truly superior results. The maximum Performance Bonus payable in
respect of any award year under the Plan is $2.0 million.
A shareholder of the Company has brought a suit in the United States District
court, Southern District of New York, seeking to enjoin payment of Performance
Bonuses under the 1995 Performance Bonus Plan described below. The Company
believes that the suit is without merit and expects to pay Performance Bonuses
under the Plan when and if earned.
f. Common Stock Purchase Warrants
During the second quarter, the Company issued warrants to purchase 400,000
shares of its common stock to a customer who concurrently entered into a
long-term supply agreement with the Company. The warrant is exerciseable
immediately at $17.13 per share and expires September 1, 2000. At such time as
the customer may exercise the warrant, any cash volume discount previously paid
to the customer based upon minimum levels of purchases will be refunded to the
Company and included in paid-in-capital.
g. Acquisition Contingent Consideration
The Company recorded approximately $5.0 million of contingent consideration in
the second quarter, as it is probable that such amount will be paid to the
former owners of the Premium Group, based upon the anticipated attainment of
previously established thresholds.
6. SUBSEQUENT EVENTS
In December the Company will enter into a new senior credit facility. The
Company has received commitments from lending banks for the entire facility and
expects to execute the agreement shortly. The new facility increases the
amount available under the Company's previous credit facility by $41.0 million
to $185.0 million. The new facility consists of $120.0 million of senior term
notes and $65.0 million of a long-term revolver which bear interest, at the
discretion of the Company, at either the Bank's prime rate or at LIBOR plus 100
basis points. The senior term notes will be repaid in various quarterly
installments through May 7, 2000 at which time the revolver will mature. The
increased credit facility was made available to facilitate the Company's
programs to purchase up to 2,500,000 shares of its common stock as more fully
described in Note 5.
In connection with establishment of the new credit facility, the Company will
record, in the third quarter, an extraordinary charge representing the
write-off of previously deferred finance costs incurred in connection with the
prior facility of approximately $1.4 million (net of tax benefit of $.9
million).
9
<PAGE> 10
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
In January 1994, the Company acquired certain operating assets of the Premium
Packaging Group of Cascades Paperboard International, Inc. (the "Premium
Group") and the Heminway Business. The Premium Group's and Heminway's
operations are reflected in the results of operations for the entire periods
presented.
RESULTS OF OPERATIONS
Net Sales
Net sales for the quarter ended October 28, 1995 were $105.1 million compared
to net sales of $97.0 million for the corresponding prior period, an increase
of 8.3%. The Company believes that future sales growth will be generated
through continued penetration of its existing markets, and the expanding market
of CD ROM products. The Company's new facility in Oregon began production in
September 1995, although it is not expected to have a significant impact on
consolidated sales until late in fiscal 1996. The Company's Pittsford facility
ceased production in September 1995. The closure of Pittsford did not have a
significant effect on sales as customer orders were satisfied by other Company
facilities.
Cost of Sales
Cost of sales as a percentage of sales for the quarter and six months ended
October 28, 1995 were 78.3% and 77.9% as compared to 76.9% for the
corresponding prior periods. The increase in cost of sales as a percentage of
sales is attributable to manufacturing inefficiencies experienced at one of the
Company's major facilities. The Company has taken action to correct the
problems at that facility and expects to see improvement throughout the balance
of the year. The month of October was adversely impacted by Hurricane Opal
which caused downtime at two of the Company's facilities due to power
interruptions and other consequences of local weather conditions.
The Company's margins continue to be affected by increases in certain raw
material costs this year as compared to the prior year, some of which could not
be reflected in the selling price to the customer. The Company remains
sensitive to price competitiveness in the markets that it serves, and in the
areas that are targeted for growth. It believes that the installation of
state-of-the-art printing and manufacturing equipment (and related labor and
production efficiencies) will enable it to compete effectively.
Selling, General and Administrative Expenses
Selling, general and administrative expenses as a percentage of sales for the
quarter and six months ended October 28, 1995 were 10.2% and 10.1% as compared
to 9.3% and 9.7%, respectively, for the corresponding prior periods. The
increase in selling, general and administrative expenses as a percentage of
sales is largely due to additional costs associated with the integration of the
Premium Group's operations, including additional professional fees, and
increased occupancy and operating costs associated with the Company's corporate
offices.
10
<PAGE> 11
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
Interest Expense
Interest expense for the quarter and six months ended October 28, 1995 was $2.1
million and $4.2 million as compared to $2.4 million and $4.8 million,
respectively, for the corresponding prior periods. The reduction in interest
expense resulted primarily from the conversion into common stock of $17.5
million of convertible subordinated debentures, partially offset by an increase
in interest rates. Interest costs capitalized for the quarter and six months
ended October 28, 1995 related to the construction of plant and equipment
(including the Company's Oregon facility) amounted to $292 thousand and $554
thousand, respectively. Interest costs capitalized during the prior periods
were not significant. The Company anticipates that the amount of interest to
be capitalized in the quarter to end January 1996 will be significantly less
than the amounts previously capitalized.
In October 1994, the Company assigned to a bank an interest rate swap agreement
relating to $42.0 million of its Senior Term Notes for cash proceeds of
approximately $1.3 million. The proceeds have been recorded as a deferred
credit which is being amortized as a reduction of interest expense (amounting
to $146 thousand and $280 thousand for the quarter and six months ended
October 28, 1995, respectively, and $56 thousand for the corresponding prior
periods). At October 28, 1995, $633 thousand of deferred gain remains which
will be amortized: $230 thousand in the remaining portion of fiscal 1996, $289
thousand in fiscal 1997; and $114 thousand in fiscal 1998.
The Company has used, and may continue to use, interest rate swaps and caps to
manage its exposure to fluctuating interest rates under its debt agreements.
Income Taxes
The effective income tax rate for the quarter and six months ended October 28,
1995 was 38.2% compared to 38.0% for the corresponding prior periods,
respectively. These rates reflect a blend of domestic and foreign taxes and
are adjusted periodically based upon the estimated annual effective tax rate,
which for the entire fiscal year ended April 29, 1995 was 37.8%.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents at October 28, 1995 were $6.2 million as compared to
$4.1 million at April 29, 1995, and working capital was $35.8 million as
compared to $31.9 million as of the same dates respectively. The current ratio
at October 28, 1995 and April 29, 1995 was approximately 1.5 to one. The
increase in cash is primarily due to the timing of payments under the Company's
revolving credit facility.
Cash flow from operating activities for the six months ended October 28, 1995
was $20.7 million before changes in operating assets and liabilities, of which
$8.9 million was invested in non-cash working capital, primarily accounts
receivable. Cash flows from operations as well as borrowings under the
Company's credit facilities were used to support $28.7 million in capital
expenditures. In connection with
11
<PAGE> 12
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
(continued)
a planned expansion of the Company's facilities, the Company anticipates
investing approximately $22.0 million in a new plant and new equipment in
Oregon, of which $15.9 million has been disbursed as of October 28, 1995.
Funds for the expansion are to be provided from the Company's credit facility.
Subsequent to October 28, 1995 and pursuant to a program adopted in 1993, the
Company purchased an additional 300,000 shares of its common stock for
approximately $4.7 million. Subject to the execution of a new credit agreement
as more fully described below, the Board of Directors authorized the purchase
of up to an additional 2.0 million shares of the Company's common stock from
time to time in the open market, subject to the terms of the Company's new
credit agreement. As of December 11, 1995, approximately 2,500,000 shares are
authorized for purchase under existing Board of Director resolutions.
To effectuate its Board authorization, the Company will enter into a new credit
facility agreement with its banks increasing its existing line of credit by
approximately $41.0 million to $185 million. The new facility consists of
$120.0 million of senior term notes and $65.0 million of a long-term revolver
which bear interest, at the discretion of the Company, at either the Bank's
prime rate or at LIBOR plus 100 basis points. The senior term notes will be
repaid in various quarterly installments through May 7, 2000 at which time the
revolver will mature. The increased credit facility was made available to
facilitate the Company's programs to purchase up to 2,500,000 shares of its
common stock. The Company has received commitments from lending banks for the
entire facility and expects to execute the agreement shortly.
The Board and management of the Company believe the long-term outlook for the
Company to be promising and that the Company's common stock represents an
attractive investment opportunity. The purchases will be made from time to
time as market conditions permit.
In connection with establishment of the new credit facility, the Company will
record, in the third quarter, an extraordinary charge representing the
write-off of previously deferred finance costs incurred in connection with the
prior facility of approximately $1.4 million (net of tax benefit of $.9
million).
The Loan Agreement provides for covenants related to levels of debt to cash
flow, current assets to current liabilities, fixed charge coverage, net worth
and investments (including investments in the Company's own common stock), and
restricts the amount of retained earnings available for payment of dividends.
The Loan Agreement requires the Company to prepay the term notes to the extent
of 50% of excess cash flow as defined. To date, no prepayments are required.
The Company expects that cash flow from operations together with the borrowing
capacity under the revolving credit facility will be sufficient to meet the
needs of the business in the foreseeable future. The Company will have, as
described above, a $65.0 million long-term revolving credit facility for its
working capital requirements. Borrowings under this facility are limited to
the sum of 80% of accounts receivable and 50% of inventories (the "Borrowing
Base"). At October 28, 1995, the Company had borrowings under this facility of
$40.1 million.
The Company recorded approximately $5.0 million of contingent consideration in
the second quarter, as it is probable that such amount will be paid to the
former owners of the Premium Group, based upon the anticipated attainment of
previously established thresholds.
12
<PAGE> 13
SHOREWOOD PACKAGING CORPORATION AND SUBSIDIARIES
Part II
Item 1 LEGAL PROCEEDINGS
Information concerning legal and environmental matters is
incorporated by reference from Part I, Footnotes 5(c) and (d) of
Notes to Consolidated Condensed Financial Statements
Item 2 CHANGES IN SECURITIES
None
Item 3 DEFAULTS UPON SENIOR SECURITIES
None
Item 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company's annual meeting of Stockholders was held on
October 19, 1995 (the "Meeting"). At the Meeting, the Company's
stockholders voted upon the following matters: (I) The election of
three directors comprising the Class III Directors; (ii) the
ratification of Deloitte & Touche LLP as the independent auditors of
the Company for the fiscal year ending April 27, 1996; and (iii) the
adoption of the Company's 1995 Performance Bonus Plan.
The Holders of the Company's common stock voted as a single class on
all matters submitted for a vote at the Meeting. The number of votes
cast for, against or withheld, as well as the number of abstentions,
as to each such matter is set forth below:
ELECTION OF DIRECTORS
<TABLE>
<CAPTION>
NAME FOR WITHHELD
<S> <C> <C>
Paul B. Shore 17,099,748 240,289
Marc P. Shore 17,104,185 235,852
Seymour Leslie 17,210,100 129,937
</TABLE>
RATIFICATION OF APPOINTMENT OF DELOITTE & TOUCHE LLP
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
17,234,013 5,185 26,391
</TABLE>
APPROVAL OF THE 1995 PERFORMANCE BONUS PLAN
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
<S> <C> <C>
15,688,291 1,379,483 53,910
</TABLE>
The Inspectors of Election for the Meeting did not record any broker
non-votes as to any matter submitted for a vote at the Meeting.
13
<PAGE> 14
Item 5 OTHER INFORMATION
None
Item 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.95 - Stock warrant agreement dated as of August 11, 1995*
(b) Reports on Form 8-K
None.
*Portions of this document have been omitted from the filed text
pursuant to an Application for Confidential Treatment which was filed
with the Securities and Exchange Commission
14
<PAGE> 15
SIGNATURES
Pursuant to the regulations 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.
SHOREWOOD PACKAGING CORPORATION
(Registrant)
by: s/ Howard M. Liebman
----------------------------
Howard M. Liebman
Executive Vice President and
Chief Financial Officer
Dated: December 12, 1995
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
Item Description Page
- -----------------------------------------------------------------------------
<S> <C>
10.95 Stock warrant agreement dated as of August 1, 1995.*
27 Financial Data Schedule
</TABLE>
*Portions of this document have been omitted from the filed text
pursuant to an Application for Confidential Treatment which was filed
with the Securities and Exchange Commission
16
<PAGE> 1
EXHIBIT 10.95
CONFIDENTIAL TREATMENT
EXHIBIT A
THIS WARRANT (AND THE SHARES OF STOCK ISSUABLE UPON EXERCISE HEREOF) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THIS WARRANT (AND
SUCH SHARES) HAS BECOME EFFECTIVE UNDER SUCH ACT OR IN THE OPINION OF COUNSEL
TO THE COMPANY SUCH REGISTRATION IS NOT REQUIRED.
STOCK WARRANT AGREEMENT dated as of August 1, 1995 between
Shorewood Packaging Corporation, a Delaware corporation, with its principal
office at 277 Park Avenue, New York, New York 10172 (the "Company") and * .
WHEREAS, the Board of Directors of the Company has determined
that it is in the best interests of the Company and its stockholders to grant
to * an option to purchase four hundred thousand (400,000) shares of the
common stock, par value $.01 per share (the "Common Stock") of the Company in
connection with the execution and delivery by * of a Supply Agreement
dated even date herewith (the "Supply Agreement") with the Company; and
WHEREAS, pursuant to Paragraph 4(a) of the Supply Agreement, *
has agreed to purchase not less than $ * of Packaging Materials (as
defined in the Supply Agreement) from Shorewood during the Term thereof; and
NOW, THEREFORE, the parties agree as follows:
1. Grant of Option
1.1 The Company grants to * , on the
terms and conditions hereinafter set forth, the right to purchase four hundred
thousand (400,000) (subject to adjustment as hereinafter provided) shares of
Common Stock of the Company (the "Warrant Shares").
1.2 This Warrant and the Warrant Shares
when issued, are not, will not, and are not required to be, registered under
the Securities Act of 1933, as amended,
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 2
- 2 -
(the "Securities Act") but, the Warrant Shares, may, subject to applicable rules
and regulations, be listed upon any securities exchange upon which the Company's
Common Stock is listed at the time of such issuance and sale.
2. Price for Shares
2.1 The Purchase Price for the Warrant
Shares shall be $17.125 per share (subject to adjustment as hereinafter
provided) which is the mean between the high bid-low asked prices of the Common
Stock as of 4 p.m. on the date hereof.
3. Period of Warrant
3.1 This Warrant will be exercisable, in
whole and not in part, beginning on the date hereof and expiring thirty one
(31) days after the fifth anniversary hereof (the "Expiration Date").
4. Exercise of Warrant
4.1 This warrant shall be exercisable at
any time on or before 4:00 p.m. Eastern Standard time on the Expiration Date by
notice in writing from * to the Company which notice shall be signed by a
duly authorized officer of * . Except as provided in Section 8 below, such
notice shall be accompanied by payment in full made in cash or bank check
payable to the Company for the full amount of (i) the purchase price, and (ii)
the Cash Rebates to be refunded to the Company pursuant to subparagraph 5(b) of
the Supply Agreement.
4.2 Upon the exercise of this Warrant,
the Company shall promptly issue stock certificates for the shares of Common
Stock purchased. * will not be nor deemed to be, a holder of any Warrant
Shares unless and until certificates for such shares are issued to it under the
terms of this Agreement.
4.3 If and when this Warrant is
exercised, the certificates to be issued evidencing shares of the Company's
Common Stock shall bear a legend substantially as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 3
- 3 -
AS AMENDED. NO TRANSFER, SALE OR OTHER DISPOSITION OF
THESE SHARES MAY BE MADE EXCEPT PURSUANT TO RULE 144
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNLESS A REGISTRATION STATEMENT WITH RESPECT TO THESE
SHARES HAS BECOME EFFECTIVE UNDER SAID ACT, OR THE
COMPANY IS FURNISHED WITH AN OPINION OF COUNSEL TO THE
COMPANY THAT SUCH REGISTRATION IN NOT REQUIRED."
4.4 The Company hereby agrees that at
all times there shall be reserved for issuance and delivery upon exercise of
this Warrant, free from preemptive rights, such number of authorized but
unissued or treasury shares of its common stock as shall be required for
issuance or delivery upon exercise of this Warrant.
4.5 The Company further agrees that: (i)
it will not, by amendment of its Certificate of incorporation or through
reorganization, consolidation, merger, dissolution or sale of its assets, or by
any other voluntary act, avoid or seek to avoid the observance or performance of
any of the covenants, stipulations or conditions to be observed or performed
hereunder by the Company; (ii) it will fully cooperate with * in preparing
any filings or applications and provide such information to * or any
regulatory authority as may be necessary to obtain any approvals or fulfill any
filing requirements in connection with * exercise of this option or in
connection with this Agreement; and (iii) promptly take all action provided for
herein to protect * against any dilution of the Common Stock.
5. Transferability of Warrant
This Warrant shall not be assignable or
transferable except in its entirety to an Affiliate of * (as defined in the
Securities Exchange Act of 1934, as amended and in the rules and regulations
issued thereunder).
6. Demand Registration
At any time prior to the fifth anniversary hereof, *
shall have the right exercisable by written notice to the Company (the
"Demand Request"), to have the Company prepare and file with the Securities and
Exchange Commission (the "SEC"), on no more than one (subject to Section 8
below) occasion, a registration statement and such other documents,
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 4
- 4 -
including a prospectus, as may be necessary in the opinion of the Company
counsel, to comply with the provisions of the Securities Act, so as to permit a
public offering and sale of the Warrant Shares for nine (9) consecutive months
by * . Notwithstanding anything else herein contained, the Company will
have no obligation to prepare and file a registration statement under the
Securities Act pursuant to this Section 6 other than on Form S-3 if available
to the Company (or the equivalent thereto if such form is no longer generally
available). The Company shall be entitled to postpone for up to six (6) months
the filing of any registration statement otherwise required to be prepared and
filed by the Company pursuant to this Section 6 if at the time the Company
receives a request for registration the Board of Directors of the Company
determines, in its reasonable business judgment, that the filing of such
registration statement and the offering of the Warrant Shares pursuant thereto
would interfere with any financing, acquisition, corporate reorganization or
other material transaction by the Company, and the Company promptly gives *
notice of such determination and postponement. If the Company shall so
postpone the filing of a registration statement, * shall have the right to
withdraw the request for registration by giving written notice to the Company
within fifteen (15) days after receipt of the Company's notice of postponement
(and, in the event of such withdrawal, such request shall not be deemed a
request for registration which may be made pursuant to this Section 6.
Notwithstanding the foregoing, the Company will have no obligation to prepare
and file a registration statement under the Securities Act, if to do so would
require a special audit of the Company's balance sheet and related financial
statements in connection with the preparation of the registration statement,
even if, as a result, the filing of the registration statement would be delayed
until after the completion of the Company's next regular audit.
7. Piggy-Back Registration
If at any time the Company proposes to file a
registration statement to register Common Stock of the Company (other than
Common Stock issued with respect to any acquisition or any employee stock
option, stock purchase or similar plan) under the Securities Act for sale to
the public in an underwritten offering, it will at each such time give written
notice to * of its intention to do so ("Notice of Intent") and, upon the
written request of * (the "Piggy-Back Request") made within 30 calendar
days after the receipt of any such notice (which request must specify that *
intends to dispose of all of the Warrant Shares held by * on the date the
Notice of Intent is received by * and state the intended method of
disposition thereof), the Company will use its best efforts to effect the
registration under the Securities Act of the Warrant Shares which the Company
has been so requested to register, to the extent requisite to permit the
intended disposition; provided, however, that if the managing
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 5
- 5 -
underwriter shall certify in writing that inclusion of all of the Warrant Shares
would, in such managing underwriter's opinion, materially interfere with the
proposed distribution of the securities in respect of which registration was
originally to be effected (x) at a price reasonably related to fair value, and
(y) under circumstances which will not materially and adversely affect the
market of the Company's securities (such writing to state the basis of such
opinion and the maximum number of shares which may be distributed without such
interference), then the Company may, upon written notice to * , have the
right to exclude from such registration such number of Warrant Shares which it
would otherwise be required to register hereunder as is necessary to reduce the
total amount of securities to be so registered to the maximum amount which can
be so marketed.
8. Combined Exercise and Registration Request
If at or before the date of a Demand Request or a
Piggy-Back Request, * shall not have exercised this Warrant in accordance
with the terms of Section 4.1 hereof, such Demand Request or Piggy-Back Request,
as the case may be, shall be deemed to be a notice of exercise by * pursuant
to the first sentence of Section 4.1 and an agreement to pay to the Company the
full amount required by the second sentence of Section 4.1 (in the form provided
therein) on or before the earlier of the Expiration Date or the date when a
registration statement filed by the Company pursuant to Section 6 or Section 7
becomes effective under the Securities Act (the "Effective Date").
Notwithstanding the foregoing, at any time before the Company requests the SEC
to accelerate the Effective Date of a registration statement filed pursuant to
Section 6 or Section 7 hereof, but not after the sixth anniversary hereof, *
may, by delivery of a written notice to the Company, withdraw its Demand Request
or Piggy-Back Request, as the case may be, and upon delivery of such withdrawal
notice such Demand Request or Piggy-Back Request, as the case may be, shall be
deemed to be null and void and * shall continue to have the rights granted
in Sections 4, 6, and 7 hereof, within the time limits provided therein, to the
same extent as if no Demand Request or Piggy-Back Request had been made and no
notice of exercise of this warrant had been delivered; provided, however, that
if the Demand Request or Piggy-Back Request, as the case may be is delivered to
the Company before the Expiration Date and * has not before then otherwise
exercised the Warrant pursuant to Section 4.1 hereof. * may, at its election
include with such withdrawal notice the payment required by the second sentence
of Section 4.1 and the Company shall deliver to * a stock certificate or
stock certificates in accordance with the provisions of Sections 4.2 and 4.3
hereof.
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 6
- 6 -
9. Registration Expenses
The costs and expenses (other than
underwriting discounts and commissions) of all registrations and qualifications
under the Securities Act and of all other actions the Company is required to
take or effect pursuant to this Agreement shall be paid by the Company
(including, without limitation, all registration and filing fees, printing
expenses, fees and expenses of complying with Blue Sky laws, and fees and
disbursements of counsel for the Company and of the Company's independent
public accountants); provided, however, that fees and expenses of complying
with Blue Sky laws in those states where Warrant Shares and no other securities
of the Company covered by the registration statement will be offered for sale,
shall be paid by * .
10. Registration Procedures
If and whenever the Company is required to
effect the registration of any Warrant Shares under the Securities Act as
provided in this Agreement, the Company will promptly:
(i) prepare and file with the Securities and
Exchange Commission ("Commission") a registration statement with respect to
such Warrant Shares and use its beat efforts to cause such registration
statement to become effective;
(ii) prepare and file with the Commission
such amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all such Warrant Shares until
such time as all of such Warrant Shares have been disposed of in accordance
with the intended methods of disposition by * set forth in such
registration statement, but in no event for a period of more than nine months
after such registration statement becomes effective;
(iii) furnish to * such number of copies
of such registration statement and of each such amendment and supplement
thereto and such number of copies of the prospectus included in such
registration statement as shall reasonably be requested by * ;
(iv) use its best efforts to register or
qualify the Warrant Shares covered by such registration statement under such
other securities or Blue Sky laws of such
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 7
- 7 -
jurisdictions within the United States of America (including territories and
commonwealths thereof) as the seller shall reasonably request, except that the
Company shall not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it is not so
qualified, to subject itself to taxation in any such jurisdiction or to consent
to general service of process in any jurisdiction;
(v) notify * when a prospectus relating
to the Warrant Shares is required to be delivered under the Securities Act
within the period mentioned in subdivision (ii) of this paragraph, of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances then existing (and upon receipt of such notice and until a
supplemented or amended prospectus as set forth below is available, * shall
not offer or sell any securities covered by such registration statement and
shall return all copies of such prospectus to the Company if requested to do so
by it); and
(vi) furnish to * , at the time of the
disposition of any Warrant Shares by them, a signed copy of an opinion of
counsel to the effect that: (a) a registration statement covering such Warrant
Shares has been filed with the Commission under the Securities Act and has been
made effective by order of the Commission, (b) said registration statement and
the prospectus contained therein comply as to form in all material respects
with the requirements of the Securities Act, (c) no stop order has been issued
by the Commission suspending the effectiveness of such registration statement
and (d) the applicable provisions of the securities or Blue Sky laws of each
state in which the Company shall be required, pursuant to clause (iv) of this
paragraph, to register or qualify such Warrant Shares, have been complied with,
assuming the accuracy and completeness of the information furnished to such
counsel with respect to each filing relating to such laws; it being understood
that such opinion may contain such qualifications and assumptions as are
customary in the rendering of similar opinions, and that such counsel may rely,
as to all factual matters treated therein, on certificates of the Company.
The Company may require * to furnish the
Company such information regarding * identity and its intended distribution
of such Warrant Shares as the Company may from time to time reasonably require
in writing and as shall be required by law to effect such registration.
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 8
- 8 -
11. Termination of Obligations
The obligations of the Company imposed by
Section 6 through 9 above shall cease and terminate, as to any particular
Warrant Shares, upon the earlier of (a) when such shares shall have been
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering such securities, or (b) when the
Company shall have furnished to * an opinion of the Company's outside
counsel concluding that the Warrant Shares may be sold without registration
under the Securities Act or (c) seven years and thirty one days after the date
hereof. Whenever such restrictions shall terminate as to any Warrant Shares,
* shall be entitled to receive from the Company without expense a new
certificate or certificates representing such securities not bearing the legend
set forth in Section 4.3 hereto.
12. Availability of Information
The Company will use its best efforts to
comply with the reporting requirements of Sections 13 and 15(d) of the
Securities Exchange Act of 1934 to the extent it shall be required to do so
pursuant to such Sections, and at all times while so required shall use its
best efforts to comply with all other public information reporting requirements
of the Commission (including reporting requirements which serve as a condition
to utilization of Rule 144 promulgated in effect and relating to the
availability of an exemption from the Securities Act for the sale of any
Warrant Shares). The Company will also cooperate with * in supplying such
information and documentation as may be necessary for it to complete and file
any information reporting forms presently or hereafter required by the
Commission as a condition to the availability of an exemption from the
Securities Act for the sale of any Warrant Shares.
13. Dilution or Other Adjustments
In any event of any change in the Common
Stock prior to the exercise of this warrant or the Expiration Date, which ever
is first, through merger, consolidation, reorganization, recapitalization, stock
split, stock dividend, or the issuance to stockholders of rights to subscribe to
stock of the same class, or in the event of any change in the capital structure,
the Board of Directors of the Company shall on an equitable basis make such
adjustments with respect to the number and price of shares of Common Stock of
the Company subject to the Warrant as are consistent with the provisions of
Schedule 13 hereto.
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 9
- 9 -
14. Representation
The Company represents and warrants that all
Warrant Shares deliverable upon exercise hereof will be duly authorized and upon
issuance in accordance with the terms hereof will be validly issued, fully paid
and non-assessable and duly listed, or listed upon official notice of issuance
on any stock exchange where other securities of the Company of the same class
are listed.
15. Indemnity
The Company shall indemnify and hold harmless
the holder of the Warrant Shares from and against any and all losses, claims,
damages and liabilities caused by any untrue statement or alleged untrue
statement of a material fact contained in a registration statement or any
post-effective amendment thereto or any registration statement under the
securities laws, or any prospectus included therein required to be filed or
furnished by reason of this Agreement or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or alleged untrue statement or omission or alleged omission based upon
information furnished or required to be furnished in writing to the Company by
such holder expressly for use therein, which indemnification shall include such
person, if any, who controls any such holder within the meaning of such
securities laws; provided, however, that the Company shall not be obliged to so
indemnify any such holder or controlling person unless such holder shall at the
same time indemnify the Company, its directors, each officer signing the related
registration statement and each person, if any, who controls the Company within
the meaning of such law, from and against any and all losses, claims, damages
and liabilities caused by any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or any prospectus required
to be filed or furnished by reason of this Section or caused by any omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, insofar as such losses, claims, damages
or liabilities are caused by any untrue statement or alleged untrue statement or
omission based upon information furnished in writing to the Company by any such
holder expressly for use therein.
16. Miscellaneous
14.1 This Agreement shall be governed by and
construed in
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<PAGE> 10
- 10 -
accordance with the internal laws of the State of New York.
14.2 Any and all notices referred to herein
shall be sufficient if furnished in writing and delivered in person or mailed by
certified mail (return receipt requested) to the respective parties at their
addresses set forth above or to such other address as either party may from time
to time designate in writing.
14.3 As used herein, the masculine gender
shall include the feminine gender.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above mentioned.
SHOREWOOD PACKAGING CORPORATION
By:/s/ Marc Shore
------------------------------------
Authorized Signatory
*
By: *
------------------------------------
Authorized Signatory
_____________________
* Portions of this document have been omitted by whiting out the relevant text
pursuant to an Application for Confidential Treatment. Such whited omissions
will be filed separately with the Securities and Exchange Commission together
with such Application for Confidential Treatment.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-27-1996
<PERIOD-START> APR-30-1995
<PERIOD-END> OCT-28-1995
<CASH> 6,204
<SECURITIES> 0
<RECEIVABLES> 47,246
<ALLOWANCES> 556
<INVENTORY> 46,460
<CURRENT-ASSETS> 104,935
<PP&E> 214,649
<DEPRECIATION> (64,337)
<TOTAL-ASSETS> 280,698
<CURRENT-LIABILITIES> 69,184
<BONDS> 115,550
<COMMON> 217
0
0
<OTHER-SE> 79,785
<TOTAL-LIABILITY-AND-EQUITY> 280,698
<SALES> 105,120
<TOTAL-REVENUES> 105,120
<CGS> 82,322
<TOTAL-COSTS> 93,054
<OTHER-EXPENSES> (206)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,102
<INCOME-PRETAX> 10,170
<INCOME-TAX> 3,888
<INCOME-CONTINUING> 6,282
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,282
<EPS-PRIMARY> .32
<EPS-DILUTED> .32
</TABLE>
