SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 0-20450
Swing-N-Slide Corp.
(Exact name of registrant as specified in its charter.)
Delaware 36-3808989
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1212 Barberry Drive, Janesville, Wisconsin 53545
(Address of principal executive office)
Registrant's telephone number, including area code (608) 755-4777.
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 twelve 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 ninety days. YES X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: as of July 29, 1996
there were 6,004,000 shares of common stock, par value, $.01 per share,
outstanding.
<PAGE>
SWING-N-SLIDE CORP.
FORM 10-Q
FOR THE THREE MONTHS ENDED JUNE 30, 1996
INDEX
Part I. Financial Information: Page
Unaudited Consolidated Balance Sheets -
December 31, 1995 and June 30, 1996 3
Unaudited Consolidated Interim Statements of Operations
and Retained Earnings -
Three Months Ended June 30, 1995,
Six Months Ended June 30, 1995,
Three Months Ended June 30, 1996 and
Six Months Ended June 30, 1996 4
Unaudited Consolidated Interim Statements of Cash Flows-
Six Months Ended June 30, 1995 and
Six Months Ended June 30, 1996 5
Notes to Unaudited Interim Consolidated Financial Statements 6
Management's Discussion and Analysis of Financial Condition
and Results of Operations 7-10
Part II. Other Information
Item 1 - Legal Proceedings 11
Item 4 - Submission of Matters to Vote of
Security Holders 11
Item 6 - Exhibits and Reports on Form 8-K
Signature 12
<PAGE>
SWING-N-SLIDE CORP.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except share data)
December 31, June 30,
ASSETS 1995 1996
Current assets:
Cash $7 $7
Accounts receivable, less allowance
for doubtful accounts of $91 and $144 4,569 11,208
Other receivables 165 214
Inventories 6,405 6,415
Prepaid expenses 967 1,487
Deferred income taxes 50 50
------- -------
Total current assets 12,163 19,381
Property, plant and equipment, net 6,302 5,837
Deferred financing and other costs, net of
accumulated amortization of $425 and $685 1,504 2,485
Patent cost, net of accumulated amortization
of $136 and $195 1,264 1,206
Goodwill, net of accumulated amortization
of $2,429 and $2,738 22,322 22,013
Deferred income taxes 1,030 710
------ ------
$44,585 $51,632
====== ======
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Revolving loan $1,700 $4,500
Accounts payable 2,252 2,796
Accrued income taxes 49 1,529
Accrued expenses 1,342 2,701
Current portion of long-term debt 6,901 6,538
------ ------
Total current liabilities 12,244 18,064
Long-term debt, net of current portion 33,137 32,121
Contingent liability
Stockholders' equity(deficit):
Preferred stock, $.01 par value, 5,000,000
shares authorized, no shares issued or
outstanding - -
Common stock, $.01 par value, 25,000,000
shares authorized, 9,604,000 shares
issued 96 96
Class B common stock, $.01 par value,
1,750,000 shares authorized, no shares
issued or outstanding - -
Additional paid-in capital 27,631 27,646
Excess purchase price over predecessor
basis (5,627) (5,627)
Retained earnings 17,452 19,680
Less 3,600,000 common shares held in
treasury, at cost (40,348) (40,348)
------- -------
Total stockholders' equity(deficit) (796) 1,447
------- -------
$44,585 $51,632
======= =======
Note: The consolidated balance sheet at December 31, 1995 has been
derived from the audited consolidated balance sheet at that date.
See notes to interim consolidated financial statements
<PAGE>
<TABLE>
SWING-N-SLIDE CORP.
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(unaudited)
(in thousands, except per share amounts)
<CAPTION>
Three months Six months Three months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
1995 1995 1996 1996
<S> <C> <C> <C> <C>
Net sales $19,643 $33,506 $19,213 $28,815
Cost of goods sold 9,342 16,601 8,846 13,429
------- ------- ------- -------
Gross profit 10,301 16,905 10,367 15,386
Operating expenses:
Selling 2,132 4,019 1,990 3,299
General and administrative 1,436 2,685 1,423 2,658
Amortization of intangible
assets 263 524 362 628
------ ------ ------ ------
3,831 7,228 3,775 6,585
------ ------ ------ ------
Operating income 6,470 9,677 6,592 8,801
Other expense:
Interest expense 1,208 2,369 1,061 2,075
Other, net 28 66 9 2,618
------ ------ ------ ------
Total other expense 1,236 2,435 1,070 4,693
------ ------ ------ ------
Income before income taxes 5,234 7,242 5,522 4,108
Income tax expense 2,016 2,791 2,143 1,880
------ ------ ------ ------
Net income 3,218 4,451 3,379 2,228
Retained earnings at
beginning of period 14,558 13,325 16,301 17,452
------ ------ ------ ------
Retained earnings at
end of period $17,776 $17,776 $19,680 $19,680
====== ====== ====== ======
Net income per share:
Primary $0.54 $0.70 $0.56 $0.37
===== ===== ===== =====
Fully Diluted $0.54 $0.70 $0.49 $0.35
===== ===== ===== =====
</TABLE>
See notes to consolidated financial statements
<PAGE>
SWING-N-SLIDE CORP.
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Six months Six months
ended ended
June 30, June 30,
1995 1996
Operating activities:
Net income $4,451 $2,228
Adjustments to reconcile net income to
net cash provided by operating activities:
Deferred income taxes 360 320
Depreciation 627 594
Amortization 524 628
Interest converted to convertible
subordinated debentures - 71
Changes in operating assets and
liabilities (2,133) (3,835)
------ ------
Net cash provided by operating activities 3,829 6
Investing activity:
Purchase of property, plant and equipment (443) (129)
Financing activities:
Increase(decrease) in revolving loan (3,860) 2,800
Issuances of long-term debt 45,000 5,000
Debt costs incurred (1,637) (1,242)
Purchase of treasury stock (40,348) -
Proceeds from issuance of
common stock - 15
Payments of long-term debt (2,541) (6,450)
------ ------
Net cash provided(used) by financing
activities (3,386) 123
------ ------
Increase in cash - -
Cash at beginning of period 7 7
------ ------
Cash at end of period $7 $7
====== ======
Supplemental disclosure of cash flows
information-cash paid during period for:
Interest $2,356 $1,790
Income taxes, net of refunds received 373 70
See notes to interim consolidated financial statements
<PAGE>
Notes to Interim Consolidated Financial Statements
(Unaudited)
(in thousands)
June 30, 1996
1. Basis of presentation of unaudited consolidated financial statements
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
priniciples for year end financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information refer to the
consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
2. Inventories
Inventories consist of
the following: December 31, June 30,
1995 1996
Finished goods and work in process $2,137 $2,103
Raw materials 4,268 4,312
------ ------
$6,405 $6,415
====== ======
<PAGE>
Management's Discussion and Analysis
of
Financial Condition and Results of Operations
Results of Operations:
The following table shows, for the periods indicated, information derived
from the consolidated statements of operations of the Company expressed as
a percentage of net sales for such periods.
<TABLE>
<CAPTION>
As a Percentage of Net Sales
Three Six Three Six
Months ended Months ended Months ended Months ended
June 30, June 30, June 30, June 30,
1995 1995 1996 1996
<S> <C> <C> <C> <C>
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 47.6 49.5 46.0 46.6
----- ----- ----- -----
Gross profit 52.4 50.5 54.0 53.4
Operating expenses:
Selling 10.9 12.0 10.4 11.5
General and administrative 7.3 8.0 7.4 9.2
Amort. of intangible assets 1.3 1.6 1.9 2.2
----- ----- ----- -----
Total operating expenses 19.5 21.6 19.7 22.9
----- ----- ----- -----
Operating income 32.9 28.9 34.3 30.5
Income before income taxes 26.6 21.6 28.7 14.3
</TABLE>
Three months ended June 30, 1996, compared to the three months ended June
30, 1995.
Net Sales. Net sales decreased by $0.4 million, or 2.2 percent, for the
three months ended June 30, 1996, as compared to the same period a year
ago. Sales for the core product lines (kits, slides and accessories) were
down 5.7 percent in the second quarter of 1996 versus the same period a
year ago. This decline was primarily due to competition in the market.
Sales of products in the new Shape Plastics line along with pre-cut kits
and international sales favorably impacted sales in the second quarter of
1996. The Company plans to expand its marketing efforts for its pre-cut
and international product lines going forward.
Gross Profit. Gross profit increased $0.1 million, or 0.6 percent, and
increased as a percentage of net sales to 54.0 percent for the three
months ended June 30, 1996, as compared to 52.4 percent for the same
period a year ago. The primary reasons for the increase in gross profit
margin were lower high density polyethylene costs and the effects of
changes implemented in the second quarter of 1995 which reduced indirect
labor costs and improved manufacturing efficiencies.
Selling Expense. Selling and marketing expenses decreased $0.1 million,
or 6.7 percent, and decreased as a percentage of net sales to 10.4 percent
for the three months ended June 30, 1996, as compared to 10.9 percent for
the same period a year ago. The dollar decrease was mainly attributable to
a decrease in display building costs ($60,000) and a decrease in product
liability costs ($50,000).
General and Administrative Expenses. General and administrative expenses
decreased $13,000, or 0.9 percent, but increased as a percentage of net
sales to 7.4 percent for the three months ended June 30, 1996, as compared
to 7.3 percent for the same period a year ago. The dollar decrease is
primarily due to a decrease in compensation costs and related benefits.
Amortization of Intangible Assets. Amortization of financing fees,
goodwill and other intangibles was $0.4 million for the quarter ended June
30, 1996. This is $0.1 million more than for the same period a year ago.
Amortization of intangible assets increased due to the amortization of
financing fees related to the issuance of 10% Convertible Subordinated
Debentures in the first quarter of 1996.
Other Expense. Interest expense decreased $0.1 million to $1.1 million
for the three months ended June 30, 1996, as compared to the same period
in 1995. This decrease is primarily due to the pay down of $5.0 million on
the Company's term note in 1995 and the pay down of $2.8 million on the
Company's term note in the first quarter of 1996 ($0.2 million). However,
this decrease was partially offset by the interest related to the issuance
of $5.0 million of 10% Convertible Subordinated Debentures in 1996 ($0.1
million).
Six months ended June 30, 1996, compared to six months ended June 30,
1995.
Net Sales. Net sales for the six months ended June 30, 1996, decreased
$4.7 million, or 14.0 percent, as compared to the same period in 1995.
Sales of the core product lines were down 17.2 percent for the six months
ended June 30, 1996, as compared to the same period a year ago. The sales
decline is primarily attributable to the continued trend of retailers
carrying less inventory, competition in the market and poor spring
weather.
Gross Profit. Gross profit decreased $1.5 million, or 9.0 percent, but
increased as a percentage of net sales to 53.4 percent for the six months
ended June 30, 1996, as compared to 50.5 percent for the same period a
year ago. The primary reasons for the increase in gross profit margin were
lower high density polyethylene costs and improved manufacturing
efficiencies.
Selling Expense. Selling and marketing expenses decreased $0.7 million,
or 17.9 percent, and decreased as a percentage of net sales to 11.5
percent for the six months ended June 30, 1996, as compared to 12.0
percent for the same period a year ago. The decrease is primarily due to a
decrease in commission expense ($0.3 million), a decrease in advertising
and promotion costs ($0.1 million) and a decrease in display building
costs ($0.2 million).
General and Administrative Expenses. General and administrative expenses
decreased $27,000, or 1.0 percent, but increased as a percentage of net
sales to 9.2 percent for the six months ended June 30, 1996, as compared
to 8.0 percent for the same period in 1995. The dollar decrease is
primarily due to a decrease in compensation costs and related benefits.
The increase as a percentage of net sales is due to the allocation of
fixed general and administrative expenses to lower sales volume.
Amortization of Intangible Assets. Amortization of financing fees,
goodwill and other intangibles was $0.6 million for the six months ended
June 30, 1996, as compared to $0.5 million for the same period a year ago.
Additional amortization resulted from the financing fees associated with
the issuance of 10% Convertible Subordinated Debentures in 1996.
Other Expense. Interest expense decreased $0.3 million to $2.1 million
for the six months ended June 30, 1996, as compared to the same period a
year ago. The decrease is primarily due to the pay down of $5.0 million on
the Company's term note in 1995 and a reduction in revolver borrowings in
1996 versus 1995 ($0.4 million). However, this decrease was partially
offset by the interest on the 10% Convertible Subordinated Debentures that
were issued in 1996 ($0.2 million).
Other expenses increased from $66,000 for the six months ended June 30,
1995, to $2.6 million for the six months ended June 30, 1996. Included in
other expenses are the fees and expenses paid by the Company related to
the tender offer by GreenGrass Holdings on February 16, 1996.
Income Taxes. Income tax expense for the six months ended June 30, 1996,
was at an effective rate of 45.8 percent. This differs from the effective
rate of 38.5 percent used in 1995 because certain costs related to the
tender offer completed on February 16, 1996, are not deductible for tax
purposes.
Seasonality
The Company experiences significant quarterly fluctuations in its
operations. Sales of the Swing-N-Slide core product lines are concentrated
in the period from January 1 through June 30 (approximately 70-75
percent). The timing of initial stocking orders and fluctuations in
customer demand through the spring and summer months contribute to this
pattern.
Liquidity and Capital Resources
On January 4, 1996, the Company entered into an agreement with an
unrelated general partnership of which one of the partners is a group of
the Company's senior management, pursuant to which the general partnership
commenced a tender offer for up to 3,510,000 shares of common stock of the
Company at a purchase price of $6.50 per share. This tender offer was
completed on February 16, 1996. The agreement also provided that the
general partnership would invest additional funds through the purchase of
the Company's newly authorized convertible debentures. On February 16,
1996, the general partnership invested $4.3 million through the purchase
of 10% Convertible Subordinated Debentures. The debentures are convertible
at the rate of one share of common stock for each $4.80 principal amount
of debentures. On April 25, 1996, the partnership invested an additional
$0.7 million through the purchase of additional debentures. The proceeds
from issuance of debentures on February 16, 1996, were used to pay down
approximately $1.7 million of the Company's term loan and to pay fees
associated with the tender offer and issuance of the debentures. The
proceeds from the issuance of debentures on April 25, 1996, was used to
pay down $0.7 million of the Company's term loan.
The Company's primary sources of working capital are cash flows from
operations and borrowings under the credit agreement entered into on
January 19, 1995. This credit agreement includes a revolving loan facility
of $10.0 million and a term loan facility of $45.0 million. At June 30,
1996, the outstanding amounts of the revolving loan facility and the term
facility were approximately $4.5 million and $33.6 million, respectively.
Borrowings under the revolving loan facility are limited to specified
percentages of inventories, and accounts receivable, not to exceed $10.0
million. Under the credit agreement, interest on borrowings is payable
quarterly, at either (i) the greater of 1.5 percent over the bank's prime
rate or 2.0 percent over the federal funds rate, or (ii) 2.75 percent over
the LIBOR rate, at the Company's option. The Company is subject to an
annual commitment fee of 0.5 percent of the daily unused portion of the
commitment. The borrowings under the credit agreement are secured by
substantially all of the assets of the Company. The Company is subject to
certain restrictive covenants which include, among other things,
restrictions on the payments of dividends or issuance of capital stock and
a limitation on additional indebtedness.
Swing-N-Slide made capital expenditures totalling approximately $0.1
million in the six months ended June 30, 1996. The Company expects that
its level of total capital expenditures for existing lines of business for
1996 will be similar to 1995. The Company continues to evaluate
opportunities for both internal and external growth and believes that
funds generated from operations and its current and future capacity for
borrowing will be sufficient to fund current business operations as well
as future capital expenditures and growth opportunities.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On May 24, 1996, the Rock County Wisconsin Circuit Court denied
the defendants' motion to dismiss the case in Irving Sirota, on behalf of
himself and derivatively on behalf of Swing-N-Slide Corp. v. Thomas R.
Baer, Richard G. Mueller, Andrew W. Code, James D. Dodson, Peter M.
Gotsch, Terence M. Malone, Henry B. Pearsall, Brian P. Simmons, Newco,
Inc., CHS, and Swing-N-Slide Corp. (as nominal defendant) (Case No. 95-CV-
726 J), previously filed on November 17, 1995 (the "Sirota Case"). The
Sirota Case is a shareholder derivative action filed on behalf of Sirota
and the Company. The complaint seeks monetary damages and alleges that
the defendants breached their fiduciary duties to the Company and its
shareholders in connection with the Company's purchase of 3.6 million
outstanding shares of common stock, which was completed in January 1995.
The defendants include current and former directors and officers of the
Company, and such defendants may have certain indemnification claims
against the Company or certain claims against the Company's provider of
D&O insurance. The defendants have indicated that they intend to
vigorously defend the claims. The Company believes that resolution of the
claims should not have any material adverse effect on the financial
condition or results of operations of the Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's annual meeting of shareholders held on April 25,
1996, Richard G. Mueller, Thomas R. Baer, David S. Evans, George N.
Herrera, Timothy R. Kelleher, Terence S. Malone and Caroline L. Williams
were elected as directors of the Company for terms expiring in 1997.
Directors Mueller, Kelleher, Malone and Williams were elected by all
3,765,492 shares voting, while directors Baer, Evans and Herrera were
elected by 3,765,411 shares, with 81 shares withholding authority.
Shareholders at the annual meeting also approved the 1996 Incentive
Stock Plan and the appointment of Ernst & Young LLP as the Company's
independent auditors for 1996. With respect to the 1996 Incentive Stock
Plan, 3,656,670 shares were voted for, 107,812 voted against and 1,010
shares abstained. With respect to the approval of Ernst & Young LLP, all
3,765,492 shares were voted for approval. There were no broker-nonvotes
in connection with the actions taken at the annual meeting.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10 - 1996 Incentive Stock Plan
Exhibit 11 - Statement Re: Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE>
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.
Swing-N-Slide Corp.
Date: August 2, 1996 /s/ Richard E. Ruegger
Richard E. Ruegger,
Vice President-Finance
and Chief Financial Officer
(Duly authorized officer and Principal
Financial and Accounting Officer)
<PAGE>
Exhibit Index
Exhibit Description
10 1996 Incentive Stock Plan
11 Statement Re: Computation of Earnings Per Share
27 Financial Data Schedule
Exhibit 10
SWING-N-SLIDE CORP.
1996 INCENTIVE STOCK PLAN
Section 1. Purpose
The purpose of the Swing-N-Slide Corp. 1996 Incentive Stock Plan
(the "Plan") is to promote the interests of Swing-N-Slide Corp. (together
with its wholly owned subsidiary, Newco, Inc. and any successors to said
entities, the "Company") and its stockholders, by encouraging and
providing for the acquisition of an equity interest in the success of the
Company by key employees and by enabling the Company and its Affiliates
(as defined below) to attract and retain the services of key employees
upon whose judgment, interest, skills, and special effort the successful
conduct of their operations is largely dependent. In addition, the Plan
is designed to promote the best interests of the Company and its
stockholders by providing a means to attract and retain competent
directors who are not employees of the Company, any Affiliate or of any
GreenGrass Affiliate (as defined below) and to provide opportunities for
stock ownership by such directors which will increase their proprietary
interest in the Company and, consequently, their identification with the
interests of the stockholders of the Company.
Section 2. Effective Date.
The Plan shall become effective on April 1, 1996, subject,
however, to the approval of the Plan by the stockholders of the Company at
the next annual meeting of stockholders within twelve months following the
date of adoption of the Plan by the Board.
Section 3. Definitions
As used in the Plan, the following terms shall have the
respective meanings set forth below:
(a) "Affiliate" means any entity that, directly or through
one or more intermediaries, is controlled by, controls, or is
under common control with, the Company.
(b) "Award" means any Option, Stock Appreciation Right,
Bonus Share or Director Option granted under the Plan.
(c) "Award Agreement" means any written agreement,
contract, or other instrument or document evidencing any Award
granted under the Plan.
(d) "Board" means the Board of Directors of the Company.
(e) "Bonus Shares" means any shares of Stock delivered
pursuant to Section 10 of the Plan.
(f) A "Change of Control" shall be deemed to have occurred
on the date on which (i) any Person or group of Persons acting
in concert become the beneficial owner, directly or indirectly,
or otherwise possess the voting rights of securities
representing in excess of fifty percent (50%) of the voting
securities of the Company, except for GreenGrass Holdings, a
Delaware general partnership ("GreenGrass Holdings"), GreenGrass
Capital LLC, a Delaware limited liability company ("Capital"),
or any member of Capital on the date hereof, or their respective
affiliates (the "Permitted Holders"); (ii) the Company sells or
otherwise disposes of all or substantially all of its assets
other than to an entity which is a Permitted Holder; (iii)
persons who, at the beginning of any twelve (12) consecutive
month period, constitute the Board cease, at the end of such
period, to constitute a majority of the Board, and any Person or
group of Persons acting in concert become the beneficial owner,
directly or indirectly, or otherwise possess the voting rights
of securities representing in excess of fifty percent (50%) of
the voting securities of the Company within such twelve-month
period; or (iv) the Company merges with or into any other entity
unless the surviving corporation in the merger is a Permitted
Holder.
(g) "Code" means the Internal Revenue Code of 1986 and the
regulations thereunder, as amended from time to time.
(h) "Commission" means the United States Securities and
Exchange Commission or any successor agency.
(i) "Committee" means the compensation committee of the
Board designated by such Board to administer the Plan and
composed of not less than two directors, each of whom is a
"disinterested person" within the meaning of Rule 16b-3.
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(k) "Fair Market Value" means the fair market value of the
Stock determined by such methods or procedures as shall be
established from time to time by the Committee; provided,
however, that the Fair Market Value shall not be less than the
par value of the Stock; and provided further, that so long as
the Stock is traded on a public market, Fair Market Value means
the closing price of a share of Stock on the relevant date as
reported on the composite list used by the Wall Street Journal
for reporting stock prices, or if no such sale shall have been
made on that day, on the last preceding day on which there was
such a sale.
(l) "GreenGrass Affiliate" means any entity that, directly
or through one or more intermediaries, is controlled by,
controls, or is under common control with Capital.
(m) "Key Employee" means any officer or other key employee
of the Company or of any Affiliate who is responsible for or
contributes to the management, growth or profitability of the
business of the Company or any Affiliate as determined by the
Committee.
(n) "Non-Employee Director" means any member of the Board
who is not an employee of the Company, any Affiliate or of any
GreenGrass Affiliate.
(o) "Option" means the right to purchase Stock at a stated
price for a specified period of time. For purposes of the Plan,
an Option may be either (i) an "incentive stock option" within
the meaning of Section 422 of the Code; or (ii) a "nonqualified
stock option."
(p) "Participant" means any Key Employee designated by the
Committee to be granted an Award under the Plan.
(q) "Rule 16b-3" means Rule 16b-3 as promulgated by the
Commission under the Exchange Act or any successor rule or
regulations thereto.
(r) "Stock" means the Common Stock of the Company, par
value of $.01 per share.
(s) "Stock Appreciation Right" means any right granted
pursuant to Section 9 of the Plan.
Section 4. Administration
The Plan shall be administered by the Committee; provided,
however, that if at any time the Committee shall not be in existence, the
functions of the Committee as specified in the Plan shall be exercised by
a committee comprised solely of those members of the Board who qualify as
"disinterested persons" under Rule 16b-3.
Subject to the terms of the Plan and applicable law, the
Committee shall have full power and authority to: (i) designate
Participants; (ii) determine the type or types of Awards to be granted to
Participants under the Plan; (iii) determine the number of shares to be
covered by (or with respect to which payments, rights, or other matters
are to be calculated in connection with) Awards granted to Participants;
(iv) determine the terms and conditions of any Award granted to a
Participant; (v) determine whether, to what extent, and under what
circumstances Awards granted to Participants may be settled or exercised
in cash, shares of Stock, other securities, other Awards, or other
property, or canceled, forfeited, or suspended to the extent permitted in
Section 15 of the Plan, and the method or methods by which Awards may be
settled, exercised, canceled, forfeited, or suspended; (vi) determine
whether, to what extent, and under what circumstances cash, shares of
Stock, other securities, other Awards, other property, and other amounts
payable with respect to an Award granted to Participants under the Plan
shall be deferred either automatically or at the election of the holder
thereof or of the Committee; (vii) modify or amend any Award or waive any
restrictions or conditions applicable to any Award, (viii) interpret and
administer the Plan and any instrument or agreement relating to, or Award
made under, the Plan (including, without limitation, any Award Agreement);
(ix) establish, amend, suspend, or waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (x) make any other determination and take
any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations, and other
decisions under or with respect to the Plan or any Award shall be within
the sole discretion of the Committee, may be made at any time, and shall
be final, conclusive, and binding upon all persons, including the Company,
any Affiliate, any Participant, any Non-Employee Director, any holder or
beneficiary of any Award, any stockholder, and any employee of the Company
or of any Affiliate. Notwithstanding the foregoing, Awards to Non-
Employee Directors under the Plan shall be automatic and the amount, terms
and conditions of such Awards shall be determined as provided in
Section 11 of the Plan.
Section 5. Eligibility and Participation
Participants in the Plan shall be selected by the Committee from
among those Key Employees, including any executive officer or employee-
director of the Company or of any Affiliate, who, in the opinion of the
Committee, are in a position to contribute materially to the Company's
continued growth and development and to its long-term financial success.
All Non-Employee Directors shall receive Awards as provided in Section 11.
Section 6. Stock Subject to Plan
6.1 Number. Subject to adjustment as provided in Section 6.3,
the total number of shares of Stock with respect to which Awards may be
granted pursuant to the Plan shall be 1,200,000. The total number of
shares of Stock subject to issuance pursuant to Options granted under the
Plan and Stock Appreciation Rights granted under the Plan to any one
person may not exceed 350,000. A Stock Appreciation Right that is granted
in connection with an Option pursuant to Section 8.1 shall not be counted
for purposes of applying the limitation of this Section 6.1. The shares
to be delivered under the Plan may consist, in whole or in part, of
authorized but unissued Stock or treasury Stock, not reserved for any
other purpose.
6.2 Unused Stock; Unexercised Rights. If, after the effective
date of the Plan, any shares of Stock covered by an Award granted under
the Plan, or to which any Award relates, are forfeited or if an Award
otherwise terminates, expires or is canceled prior to the delivery of all
of the shares of Stock or of other consideration issuable or payable
pursuant to such Award then the number of shares of Stock counted against
the number of shares available under the Plan in connection with the grant
of such Award, shall again be available for granting of additional Awards
under the Plan to the extent permitted by Section 15 and to the extent
determined to be appropriate by the Committee.
6.3 Adjustment in Capitalization. In the event that the
Committee shall determine that any dividend or other distribution (whether
in the form of cash, Stock, other securities or other property),
recapitalization, stock split, reverse stock split, reorganization,
merger, consolidation, split-up, spin-off, combination, repurchase or
exchange of Stock or other securities of the Company, issuance of warrants
or other rights to purchase Stock or other securities of the Company, or
other similar corporate transaction or event affects the Stock, other than
where such transaction or event is in consideration for additional fair
value, such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee may, in such manner as it may deem equitable, adjust any or all
of (i) the number and type of shares of Stock subject to the Plan and
which thereafter may be made the subject of Awards under the Plan; (ii)
the number and type of shares of Stock subject to outstanding Awards; and
(iii) the grant, purchase or exercise price with respect to any Award, or,
if deemed appropriate, make provision for a cash payment to the holder of
an outstanding Award; provided, however, in each case, that with respect
to Awards of incentive stock options no such adjustment shall be
authorized to the extent that such authority would cause such options to
cease to be treated as incentive stock options; and provided further,
however, that the number of shares of Stock subject to any Award payable
or denominated in Stock shall always be a whole number. Notwithstanding
the foregoing, Director Options subject to grant or previously granted to
Non-Employee Directors under the Plan at the time of any event described
in the preceding sentence shall be subject to only such adjustments as
shall be necessary to maintain the proportionate interest of the Non-
Employee Directors and preserve, without exceeding, the value of such
Director Options.
Section 7. Term of the Plan
No Award shall be granted under the Plan after March 31, 2001.
However, unless otherwise expressly provided in the Plan or in an
applicable Award Agreement, any Award theretofore granted may extend
beyond such date, and, to the extent set forth in the Plan, the authority
of the Committee to amend, alter, adjust, suspend, discontinue or
terminate any such Award, or to waive any conditions or restrictions with
respect to any such Award, and the authority of the Board to amend the
Plan, shall extend beyond such date.
Section 8. Key Employee Stock Options
8.1 Grant of Options. Subject to the provision of Sections 6
and 7, Options may be granted to Participants at any time and from time to
time as shall be determined by the Committee. The Committee shall have
complete discretion in determining the number of Options granted to each
Participant. The Committee also shall determine whether an Option is to
be an incentive stock option within the meaning of Section 422 of the Code
or a nonqualified stock option. However, in no event shall the aggregate
Fair Market Value (determined at the date of grant) of Stock with respect
to which incentive stock options are exercisable for the first time by a
Participant during any calendar year exceed $100,000. Nor shall any
incentive stock option be granted to any person who owns, directly or
indirectly, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company. Nothing in this Section 8
of the Plan shall be deemed to prevent the grant of nonqualified stock
options in excess of the maximum established by Section 422 of the Code.
8.2 Award Agreement. Each Option shall be evidenced by an
Award Agreement that shall specify the type of Option granted, the Option
price, the duration of the Option, the number of shares of Stock to which
the Option pertains and such other provisions as the Committee shall
determine.
8.3 Option Price. The Option price shall be determined by the
Committee, but shall not for any incentive stock option be less than 100%
of the Fair Market Value of the Stock on the date the Option is granted.
8.4 Duration of Options. Each Option shall expire at such time
as the Committee shall determine at the time it is granted, provided,
however, that no incentive stock option shall be exercisable later than
the tenth (10th) anniversary date of its grant.
8.5 Exercise of Options. Subject to the provisions of
Section 14, Options granted under the Plan shall be exercisable at such
times and be subject to such restrictions and conditions as the Committee
shall in each instance approve, which need not be the same for all
Participants.
8.6 Payment. The Committee shall determine the method or
methods by which, and the form or forms, including, without limitation,
cash, shares of Stock, other securities, other Awards, or other property,
or any combination thereof, having a Fair Market Value on the exercise
date equal to the relevant exercise price, in which payment of the
exercise price with respect to an Option may be made or deemed to have
been made.
8.7 Incentive Stock Options. The terms of any incentive stock
option granted under the Plan shall comply in all respects with the
provisions of Section 422 of the Code, or any successor provision thereto,
and any regulations promulgated thereunder. Notwithstanding any provision
in the Plan to the contrary, no incentive stock option may be granted
hereunder after the tenth anniversary of the adoption of the Plan by the
Board.
8.8 Restrictions on Stock Transferability. The Committee may
impose such restrictions on any shares of Stock acquired pursuant to the
exercise of an Option under the Plan as it may deem advisable, including,
without limitation, restrictions under applicable Federal securities law,
under the requirements of any stock exchange upon which such shares of
Stock are then listed, under any blue sky or state securities laws
applicable to such shares and under any agreements with Capital,
GreenGrass Management LLC or any of their Affiliates to which the
Participants are bound.
Section 9. Stock Appreciation Rights
9.1 Grant of Stock Appreciation Rights. Subject to the
provisions of Sections 6 and 7, Stock Appreciation Rights may be granted
to Participants. Non-Employee Directors are not eligible to be granted
Stock Appreciation Rights under the Plan. Each grant of Stock
Appreciation Rights shall be in writing. A Stock Appreciation Right may
relate to a specific Option granted under the Plan and may, in such case,
relate to all or part of the Option shares covered by the related Option,
or may be granted independently of any Option granted under the Plan.
9.2 Exercise or Maturity of Stock Appreciation Rights. Stock
Appreciation Rights shall be exercisable or shall mature at such time or
times, on the conditions and to the extent and in the proportion, that any
related Option is exercisable and may be exercised or mature for all or
part of the shares of Stock subject to the related Option. In the case of
a Stock Appreciation Right that is granted independently of any Option
granted under the Plan, such Rights shall be exercisable or shall mature
at such time or times, on the conditions and to the extent and in the
proportion set forth in the grant. Notwithstanding the preceding
sentence, a Stock Appreciation Right granted under the Plan to a
Participant who is an officer of the Company or an Affiliate subject to
Section 16 of the Exchange Act shall not be exercisable until at least six
months have elapsed from the date of grant of such Stock Appreciation
Right.
9.3 Effect of Exercise. Upon exercise of any number of Stock
Appreciation Rights, the number of Option shares subject to any related
Option shall be reduced accordingly and such Option shares may not again
be subject to an Option under this Plan. The exercise of any number of
Options shall result in an equivalent reduction in the number of Option
shares covered by the related Stock Appreciation Right and such shares may
not again be subject to a Stock Appreciation Right under this Plan;
provided, however, that if a Stock Appreciation Right was granted for less
than all of the Option shares covered by any related Option, any such
reduction shall be made at such time as, and only to the extent that, the
number of shares exercised under the related Option exceeds the number of
Option shares not covered by the Stock Appreciation Right.
9.4 Payment of Stock Appreciation Right Amount. On exercise or
maturity of the Stock Appreciation Right, the holder shall be entitled to
receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a
share of Stock at the date of exercise over the price fixed by
the Committee at the date of grant, by
(b) The number of shares with respect to which the Stock
Appreciation Right is exercised.
In the case of a Stock Appreciation Right which is granted in
conjunction with an Option, the amount determined under (a) above shall be
determined by using a price fixed by the Committee at the date of grant
which does not exceed the option price of any related incentive stock
option. The holder of a Stock Appreciation Right shall receive payment in
cash or a combination of cash and Stock, the Fair Market Value of which is
to be determined as of the date of exercise or maturity of the Stock
Appreciation Right, all in accordance with the terms and conditions of the
written grant of the Stock Appreciation Right.
9.5 Rule 16b-3 Requirements. Notwithstanding any other
provision of the Plan, the Committee may impose such conditions on
exercise of a Stock Appreciation Right (including, without limitation, the
right of the Committee to limit the time of exercise to specified periods)
as may be required to satisfy the requirements of Rule 16b-3 under the
Exchange Act.
Section 10. Bonus Shares
The Committee is authorized to provide Participants the
opportunity to elect to receive such portion, as determined by the
Committee, of cash bonuses under the Company's management incentive
compensation program in the form of shares of Stock ("Bonus Shares"). If
a Participant is subject to Section 16 of the Exchange Act, the election
to receive Bonus Shares must be made at least six months prior to the date
cash bonuses are determined. All elections made under this Section 10 by
persons subject to Section 16 of the Exchange Act are irrevocable and will
remain in effect until another irrevocable election becomes effective.
Bonus Shares shall be issued in an amount equal to (a) the equivalent
dollar amount of bonus a Participant has elected to receive in Stock
(subject to such limits as may be prescribed by the Committee) divided by
(b) the price per share of Stock as determined by the Committee and shall
be subject to such terms and conditions as the Committee deems
appropriate, including, without limitation, restrictions on sale or other
disposition.
Section 11. Non-Employee Director Stock Options
Each Non-Employee Director (including members of the Committee)
who is a director of the Company on the first day after the annual meeting
of stockholders of the Company during the term of the Plan shall
automatically be granted on each such date a fully vested non-qualified
stock option for the purchase of 5,000 shares of Stock ("Director
Options") at a purchase price equal to one hundred percent (100%) of the
Fair Market Value of the shares on the date each Director Option is
granted. Director Options shall be exercisable for ten (10) years from
the date of grant and shall terminate ninety (90) days after the Non-
Employee Director ceases to serve as a director of the Company for any
reason, except that, in the event of a Change of Control, Director Options
will remain exercisable during the remaining term of the Director Option
if the Non-Employee Director ceases to serve as a director of the Company
(or its successor) at any time during the one-year period immediately
following any such Change of Control.
Section 12. Beneficiary Designation
Each Participant and Non-Employee Director under the Plan may,
from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be
paid in case of the Participant's or the Non-Employee Director's, as the
case may be, death before he or she receives any or all of such benefit.
Each designation will revoke all prior designations, shall be in a form
prescribed by the Committee and will be effective only when filed by the
Participant or the Non-Employee Director in writing with the Committee
during his or her lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to the
estate of the Participant or the Non-Employee Director.
Section 13. Rights of Employees
Nothing in the Plan shall interfere with or limit in any way the
right of the Company or any Affiliate to terminate any Participant's
employment at any time nor confer upon any Participant any right to
continue in the employ of the Company or any Affiliate.
Section 14. Change of Control
In the event of a "Change of Control" (a) each Participant shall
be entitled to receive full vesting of the Option (i) for the fiscal year
in which the Change of Control occurred, if the Options for said year
would have vested by applying the EBITDA (as defined in the Award
Agreement), or other measure of performance as required by the Award
Agreement for the 12-month period immediately preceding the date of the
Change of Control; and (ii) covering future years beyond the year in which
the Change of Control occurred, at the percentage of fully diluted Stock
for each such fiscal year determined by multiplying the maximum percentage
of fully diluted Stock available for Options to be granted in such fiscal
years times the rate by which the percentage of fully diluted Stock
relating to Options actually granted under subsection (i) above for the
year of the Change of Control bears to the maximum percentage of fully
diluted Stock available under the Plan for such year (for example, if the
Participant received 80% of the maximum percentage of fully diluted Stock
available under the Plan for year of the Change of Control, the
Participant would be entitled to receive full vesting of Options
representing 80% of the maximum percentage of fully diluted Stock
available under the Plan for all future years covered by the Plan);
(b) each holder of an Option and Director Option shall
have the right to a redemption, in the sole and absolute discretion of the
Participant and Non-Employee Director, of any or all Options and Director
Options that are vested in the Participant or Non-Employee Director in
exchange for a payment of cash in the amount of the value of such options,
determined by multiplying the applicable number of shares of Stock covered
by such options by the difference between the then Fair Market Value of
such shares of Stock and the exercise price for the Stock under the
options; and
(c) each Option and Director Option shall remain
exercisable during its full term (i) if at any time the holder ceases to
be an employee or director during the one-year period immediately
following any Change of Control or (ii) if the employee holder gives
notice of his termination within thirty (30) days after expiration of such
one-year period.
The Committee may, in its sole and absolute discretion, amend,
modify or rescind the provisions of this Section 14 if it determines that
the operation of this Section 14 may prevent a transaction in which the
Company or any Affiliate is a party from being accounted for on a pooling-
of-interests basis.
Section 15. Amendment, Modifications and Termination of Plan
The Board may at any time amend, alter, suspend, discontinue or
terminate the Plan; provided, however, that the provisions of Section 11
of the Plan shall not be amended more than once every six (6) months,
other than to comport with changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules promulgated
thereunder; and provided further that stockholder approval of any
amendment of the Plan shall also be obtained if otherwise required by (i)
the rules and/or regulations promulgated under Section 16 of the Exchange
Act (in order for the Plan to remain qualified under Rule 16b-3), (ii) the
Code or any rules promulgated thereunder (in order to allow for incentive
stock options to be granted under the Plan, or (iii) the listing
requirements of the American Stock Exchange or any principal securities
exchange or market on which the Stock is then traded (in order to maintain
the listing or quotation of the Stock thereon). Termination of the Plan
shall not affect the rights of Participants or Non-Employee Directors with
respect to Awards previously granted to them, and all unexpired Awards
shall continue in force and effect after termination of the Plan except as
they may lapse or be terminated by their own terms and conditions.
No amendment, modification or termination of the Plan shall in
any manner adversely affect any Award theretofore granted under the Plan,
without the consent of the Participant or the Non-Employee Director, as
the case may be.
Section 16. Tax Withholding
No later than the date as of which an amount first becomes
includible in the gross income of a Participant for federal income tax
purposes with respect to any Award under the Plan, the Participant shall
pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, state, local or foreign taxes of
any kind required by law to be withheld with respect to such amount.
Unless otherwise determined by the Committee, withholding obligations
arising with respect to Awards to Participants under the Plan may be
settled with shares of Stock, including shares that are part of, or are
received upon exercise of, the Award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditional on such payment or arrangements, and the Company and any
Affiliate shall, to the extent permitted by law, have the right to deduct
any such taxes from any payment otherwise due to the Participant. The
Committee may establish such procedures as it deems appropriate for the
settling of withholding obligations with shares of Stock, including,
without limitation, the establishment of such procedures as may be
necessary to satisfy the requirements of Rule 16b-3.
Section 17. General
17.1 Rule 16b-3 Six-Month Limitations. Notwithstanding any
other provision of the Plan, to the extent required in order to comply
with Rule 16b-3, any equity security offered pursuant to the Plan may not
be sold for at least six months after acquisition, except in the case of
death or disability, and any derivative security issued pursuant to the
Plan shall not be exercisable for at least six months, except in case of
death or disability of the holder thereof. Terms used in the preceding
sentence shall, for the purposes of such sentence only, have the meanings,
if any, assigned or attributed to them under Rule 16b-3.
17.2 No Consideration for Awards. Awards shall be granted to
Participants for no cash consideration unless otherwise determined by the
Committee.
17.3 Limits on Transfer of Awards. No Award and no right under
any such Award, shall be assignable, alienable, saleable or transferable
by a Participant or a Non-Employee Director otherwise than by will or by
the laws of descent and distribution; provided, however, that a
Participant and a Non-Employee Director may designate a beneficiary or
beneficiaries to exercise his or her rights, and to receive any property
distributable, with respect to any Award as provided in Section 12 hereof
or transfer an Award to the extent allowed under Rule 16b-3 of the
Exchange Act, subject to terms and conditions of the Award Agreement and
Committee rules. Each Award, and each right under any Award, shall be
exercisable, during the lifetime of the Participant only by such
individual or, if permissible under applicable law, by such individual's
guardian or legal representative. No Award, and no right under any such
Award, may be pledged, alienated, attached or otherwise encumbered, and
any purported pledge, alienation, attachment or encumbrance thereof shall
be void and unenforceable against the Company or any Affiliate.
Section 18. Legal Construction
18.1 Requirements of Law. The granting of Awards under the Plan
and the issuance of shares of Stock in connection with an Award, shall be
subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as
may be required.
18.2 Governing Law. The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the
State of Delaware.
18.3 Severability. If any provision of the Plan or any Award
Agreement or any Award is or becomes or is deemed to be invalid, illegal
or unenforceable in any jurisdiction, or as to any person or Award, or
would disqualify the Plan, any Award Agreement or any Award under any law
deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to applicable laws, or if it cannot be so
construed or deemed amended without, in the determination of the
Committee, materially altering the intent of the Plan, any Award Agreement
or the Award, such provision shall be stricken as to such jurisdiction,
person or Award, and the remainder of the Plan, any such Award Agreement
and any such Award shall remain in full force and effect.
Exhibit 11 - Statement Re: Computation of Earnings Per Share
<TABLE>
<CAPTION>
Three months Six months Three months Six months
ended ended ended ended
June 30, June 30, June 30, June 30,
1995 1995 1996 1996
(000's omitted, except per share data)
<S> <C> <C> <C> <C>
Primary:
Weighted average shares
outstanding 6,000 6,358 6,004 6,003
====== ====== ====== ======
Net Income $3,218 $4,451 $3,379 $2,228
====== ====== ====== ======
Per share amount $0.54 $0.70 $0.56 $0.37
====== ====== ====== ======
Fully diluted:
Weighted average shares
outstanding 6,000 6,358 6,004 6,003
Assumed conversion of 10%
convertible subordinated
debentures 0 0 1,012 728
----- ----- ----- -----
Totals 6,000 6,358 7,016 6,731
====== ====== ====== ======
Net income $3,218 $4,451 $3,379 $2,228
Add 10% convertible subordinated
debenture interest, net of
tax effect 0 0 74 108
----- ----- ----- -----
Totals $3,218 $4,451 $3,453 $2,336
====== ====== ====== ======
Per share amount $0.54 $0.70 $0.49 $0.35
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF SWING-N-SLIDE CORP. AS OF AND FOR THE
SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 7
<SECURITIES> 0
<RECEIVABLES> 11,208
<ALLOWANCES> 144
<INVENTORY> 6,415
<CURRENT-ASSETS> 19,381
<PP&E> 10,031
<DEPRECIATION> 4,194
<TOTAL-ASSETS> 51,632
<CURRENT-LIABILITIES> 18,064
<BONDS> 32,121
0
0
<COMMON> 96
<OTHER-SE> 1,351
<TOTAL-LIABILITY-AND-EQUITY> 51,632
<SALES> 28,815
<TOTAL-REVENUES> 28,815
<CGS> 13,429
<TOTAL-COSTS> 6,585
<OTHER-EXPENSES> 2,618
<LOSS-PROVISION> 54
<INTEREST-EXPENSE> 2,075
<INCOME-PRETAX> 4,108
<INCOME-TAX> 1,880
<INCOME-CONTINUING> 2,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,228
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.35
</TABLE>
