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 September 27, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-3295
--
MINERALS TECHNOLOGIES INC.
(Exact name of registrant as specified in its charter)
DELAWARE 25-1190717
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
405 Lexington Avenue, New York, New York 10174-1901
(Address of principal executive offices, including zip code)
(212) 878-1800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that registrant was required
to file such reports) and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
---------- ----------
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT October 23, 1998
Common Stock, $.10 par value 22,018,965
<PAGE>
MINERALS TECHNOLOGIES INC.
INDEX TO FORM 10-Q
Page No.
------
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements:
Condensed Consolidated Statement of Income
for the three month and nine month periods
ended September 27, 1998 and September 28,
1997 3
Condensed Consolidated Balance Sheet as of
September 27, 1998 and December 31, 1997 4
Condensed Consolidated Statement of Cash
Flows for the nine month periods ended
September 27, 1998 and September 28, 1997 5
Notes to Condensed Consolidated Financial
Statements 6
Independent Auditors' Report 9
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings 15
Item 6.
Exhibits and Reports on Form 8-K 16
Signature 17
PAGE 2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Ended
(thousands, except ------------------
per share data) Sept.27, Sept.28,
1998 1997
-------- --------
Net sales . . . . . . . . . . . . . $154,119 $155,012
Operating costs and expenses:
Cost of goods sold. . . . . . . . . 104,670 108,588
Marketing, distribution and
administrative expenses. . . . . . 19,513 19,488
Research and development expenses . 5,143 4,974
-------- --------
Income from operations . . . . . . . 24,793 21,962
Non-operating deductions, net. . . . 1,289 2,560
Income before provision for taxes on
income and minority interests. . . 23,504 19,402
Provision for taxes on income. . . . 7,270 6,207
Minority interests . . . . . . . . . 783 (518)
------- -------
Net income . . . . . . . . . . . . . $15,451 $13,713
======= =======
Earnings per common share:
Basic . . . . . . . . . . . . . . $0.70 $0.61
Diluted. . . . . . . . . . . . . . $0.68 $0.59
Cash dividends declared per common share $0.025 $0.025
Shares used in the computation of earnings per share
Basic . . . . . . . . . . . . . . 22,211 22,545
Diluted. . . . . . . . . . . . . . 22,814 23,134
Nine Months Ended
-----------------
(thousands of dollars, Sept.27, Sept.28,
except per share data) 1998 1997
-------- --------
Net sales . . . . . . . . . . . . . . $453,973 $444,403
Operating costs and expenses:
Cost of goods sold . . . . . . . . . 311,199 313,089
Marketing, distribution and
administrative expenses . . . . . . 58,196 56,823
Research and development expenses. . 15,302 15,199
------- -------
Income from operations. . . . . . . . 69,276 59,292
Non-operating deductions, net . . . . 5,115 5,648
Income before provision for taxes
on income and minority interests. . 64,161 53,644
Provision for taxes on income . . . . 20,518 17,164
Minority interests. . . . . . . . . . 734 (162)
------- -------
Net income. . . . . . . . . . . . . . $42,909 $36,642
======= =======
Earnings per common share:
Basic . . . . . . . . . . . . . . $1.92 $1.62
Diluted . . . . . . . . . . . . . . $1.86 $1.59
Cash dividends declared per common share $0.075 $0.075
Shares used in the computation of earnings per share
Basic . . . . . . . . . . . . . . 22,406 22,565
Diluted . . . . . . . . . . . . . . 23,076 23,093
See accompanying Notes to Condensed Consolidated Financial Statements.
Page 3
<PAGE>
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEET
ASSETS
Sept.27, Dec.31,
1998* 1997**
(thousands of dollars) ------- ------
Current assets:
Cash and cash equivalents. . . . . . . $ 31,303 $ 41,525
Accounts receivable, net . . . . . . . 115,189 108,146
Inventories . . . . . . . . . . . . . 61,788 61,166
Other current assets . . . . . . . . . 11,227 15,745
------- -------
Total current assets. . . . . . . . 219,507 226,582
Property, plant and equipment, less
accumulated depreciation and
depletion: Sept. 27, 1998: $367,038
Dec. 31, 1997: $349,538 . . . . . . . 509,731 500,731
Other assets and deferred charges. . . . 22,453 14,094
-------- --------
Total assets . . . . . . . . . . . . . $751,691 $741,407
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt. . . . . . . . . . . . $ 13,508 $ 13,989
Accounts payable . . . . . . . . . . . 35,911 33,163
Other current liabilities. . . . . . . 48,111 47,066
------- -------
Total current liabilities . . . . . 97,530 94,218
Long-term debt . . . . . . . . . . . . . 88,454 101,571
Other non-current liabilities. . . . . . 83,749 78,621
------- -------
Total liabilities . . . . . . . . . 269,733 274,410
------- -------
Shareholders' equity:
Common stock . . . . . . . . . . . . . 2,551 2,537
Additional paid-in capital . . . . . . 142,711 139,113
Retained earnings. . . . . . . . . . . 453,493 412,264
Accumulated other comprehensive loss . (15,055) (14,344)
------- -------
583,700 539,570
Less common stock held in treasury,
at cost . . . . . . . . . . . . . . 101,742 72,573
------- -------
Total shareholders' equity. . . . . 481,958 466,997
------- -------
Total liabilities and shareholders'
equity . . . . . . . . . . . . . . . $751,691 $741,407
======== ========
* Unaudited
** Condensed from audited financial statements.
See accompanying Notes to Condensed Consolidated Financial Statements.
Page 4
<PAGE>
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended
------------------
(thousands of dollars) Sept.27, Sept.28,
1998 1997
---- ----
OPERATING ACTIVITIES
Net income. . . . . . . . . . . . . . . $42,909 $36,642
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation, depletion and amortization 40,132 39,522
Other non-cash items . . . . . . . 6,884 3,261
Net changes in operating assets and
liabilities . . . . . . . . . . . . . 3,177 (2,969)
------ ------
Net cash provided by operating activities 93,102 76,456
------ ------
INVESTING ACTIVITIES
Purchases of property, plant and equipment (58,366) (46,984)
Acquisition of business . . . . . . . . (34,130) --
Proceeds from disposition of business. 32,357 --
Other investing activities, net . . . . (336) 3,762
------- ------
Net cash used in investing activities (60,475) (43,222)
======= ======
FINANCING ACTIVITIES
Proceeds from issuance of short-term and
long-term debt . . . . . . . . . . . 599 19,597
Repayment of debt . . . . . . . . . . . (14,125) (34,537)
Purchase of common shares for treasury . (29,169) (5,015)
Other financing activities, net . . . . 1,923 3,755
------- -------
Net cash used in financing activities . (40,772) (16,200)
------- -------
Effect of exchange rate changes on cash
and cash equivalents . . . . . . . 2,077) (950)
------- -------
Net (decrease)/increase in cash and
cash equivalents. . . . . . . . . (10,222) 16,084
Cash and cash equivalents at beginning of
period. . . . . . . . . . . . . . 41,525 15,446
------ ------
Cash and cash equivalents at end of
period. . . . . . . . . . . . . . $ 31,303 $31,530
======= =======
Interest paid . . . . . . . . . . . . . $ 5,834 $ 6,662
======= =======
Income taxes paid . . . . . . . . . . . $ 9,887 $ 9,907
======= =======
See accompanying Notes to Condensed Consolidated Financial Statements.
Page 5
<PAGE>
MINERALS TECHNOLOGIES INC. AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements
have been prepared by management in accordance with the rules and regulations of
the United States Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. Therefore, these financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 1997. In the opinion of management, all adjustments, consisting
solely of normal recurring adjustments necessary for a fair presentation of the
financial information for the periods indicated, have been included. The
results for the three-month and nine-month periods ended September 27, 1998 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1998.
NOTE 2: INVENTORIES
The following is a summary of inventories by major category:
(thousands of dollars) September 27, December 31,
1998 1997
---- ----
Raw materials. . . . . . . . $21,621 $19,605
Work in process. . . . . . . 4,211 5,858
Finished goods . . . . . . . 19,298 19,812
Packaging and supplies . . . 16,658 15,891
------- -------
Total inventories. . . . . . $61,788 $61,166
======= =======
NOTE 3: LONG TERM DEBT
The following is a summary of long term debt:
September 27, December 31,
(thousands of dollars) 1998 1997
---- ----
7.75% Economic Development
Revenue Bonds Series 1990
Due 2010 (secured). . . . . $4,600 $4,600
Variable/Fixed Rate Industrial
Development Revenue Bonds
Due 2009 . . . . . . . . . 4,000 4,000
Variable/Fixed Rate Industrial
Development Revenue Bonds
Due April 1, 2012 . . . . . 7,545 7,545
Variable/Fixed Rate Industrial
Development Revenue Bonds
Due August 1, 2012. . . . . 8,000 8,000
6.04% Guarantied Senior Notes
Due June 11, 2000 . . . . . 26,000 39,000
7.49% Guaranteed Senior Notes
Due July 24, 2006 . . . . . 50,000 50,000
Other borrowings . . . . . . . . 1,817 1,914
------- -------
101,962 115,059
Less: Current maturities . . . . 13,508 13,488
------- --------
Long-term debt . . . . . . . . . $88,454 $101,571
======= ========
Page 6
<PAGE>
NOTE 4 : EARNINGS PER SHARE (EPS)
Basic earnings per share are based upon the weighted average number of
common shares outstanding during the period. Diluted earnings per share are
based upon the weighted average number of common shares outstanding during the
period assuming the issuance of common shares for all dilutive potential common
shares outstanding. The following table sets forth the computation of basic and
diluted earnings per share:
THREE MONTHS ENDED
------------------
BASIC EPS
(IN THOUSANDS, EXCEPT PER Sept.27, Sept.28,
SHARE DATA) 1998 1997
---- ----
Net income . . . . . . . . . . . . . $15,451 $13,713
Weighted average shares outstanding. 22,211 22,545
------- -------
Basic earnings per share . . . . . . $ 0.70 $ 0.61
======= =======
DILUTED EPS
Net income . . . . . . . . . . . . . $15,451 $13,713
Weighted average shares outstanding. 22,211 22,545
------- -------
Dilutive effect of stock options . . 603 589
Weighted average shares outstanding,
adjusted . . . . . . . . . . . . . 22,814 23,134
------- -------
Diluted earnings per share . . . . . $ 0.68 $ 0.59
======= =======
BASIC EPS NINE MONTHS ENDED
(IN THOUSANDS, EXCEPT PER Sept.27, Sept.28,
SHARE DATA) 1998 1997
---- ----
Net income . . . . . . . . . . . . . $42,909 $36,642
Weighted average shares outstanding. 22,406 22,565
------- -------
Basic earnings per share . . . . . . $ 1.92 $ 1.62
======= =======
DILUTED EPS
Net income . . . . . . . . . . . . . $42,909 $36,642
------- -------
Weighted average shares outstanding. 22,406 22,565
Dilutive effect of stock options . . 670 528
------- -------
Weighted average shares outstanding.
adjusted . . . . . . . . . . . . . 23,076 23,093
======= =======
Diluted earnings per share $ 1.86 $ 1.59
======= =======
NOTE 5 : COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income," which establishes standards
for the reporting and display of comprehensive income and its components in
general purpose financial statements. The following are the components
of comprehensive income:
THREE MONTHS ENDED
(thousands of dollars) Sept. 27, Sept. 28,
1998 1997
---- ----
Net income . . . . . . . . . . . . $15,451 $13,713
Other comprehensive income,
net of tax:
Foreign currency translation
adjustments. . . . . . . . 5,899 (6,183)
Unrealized holding gains
(losses) . . . . . . . . . (47) (2)
------- -------
Comprehensive income. . . $21,303 $ 7,528
======= =======
NINE MONTHS ENDED
(thousands of dollars) Sept. 27, Sept. 28,
1998 1997
---- ----
Net income . . . . . . . . . . . . $42,909 $36,642
Other comprehensive income,
net of tax:
Foreign currency translation
adjustments. . . . . . . . (666) (13,200)
Unrealized holding gains
(losses) . . . . . . . . . (45) 16
------- -------
Comprehensive income $42,198 $23,458
======= =======
The components of accumulated other comprehensive loss, net of related tax, are
as follows:
Sept.27, Dec. 31,
1998 1997
---- ----
Foreign currency translation
adjustments . . . . . . . . . $(14,122) (13,456)
Minimum pension liability
adjustments . . . . . . . . . (1,001) (1,001)
Unrealized holding gains . . . . . 68 113
------- -------
Accumulated other
comprehensive loss . . . . . $(15,055) $(14,344)
======= =======
page 7
<PAGE>
NOTE 6: ACQUISITION AND DIVESTITURE
On April 30, 1998 the Company acquired for approximately $34 million
in cash a precipitated calcium carbonate (PCC) manufacturing facility in
United Kingdom from Rhodia Limited. This acquisition allows the Company
to establish a base for its specialty PCC business in Europe. The
transaction was accounted for as a purchase. The purchase price exceeded
the fair value of net assets acquired by approximately $8 million, which
is being amortized on a straight-line basis over 25 years.
On April 28, 1998 the Company sold its limestone operation in Port
Inland, Michigan to Oglebay Norton Company for cash and receivables
approximating $34 million. The sales price approximated the net book
value of the assets.
page 8
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Minerals Technologies Inc.:
We have reviewed the condensed consolidated balance sheet of Minerals
Technologies Inc. and subsidiary companies as of September 27, 1998 and the
related condensed consolidated statements of income for each of the three-month
and nine-month periods ended September 27, 1998 and September 28, 1997 and cash
flows for the nine-month periods then ended. These financial statements are the
responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the condensed consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Minerals Technologies Inc.
and subsidiary companies as of December 31, 1997 and the related consolidated
statements of income, shareholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated January 22, 1998, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1997 is fairly presented, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
KPMG Peat Marwick LLP
New York, New York
November 3, 1998
Page 9
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
INCOME AND EXPENSE ITEMS
AS A PERCENTAGE OF NET SALES
THREE MONTHS NINE MONTHS
ENDED ENDED
----------------- -----------------
Sept.27, Sept.28, Sept.27, Sept.28,
1998 1997 1998 1997
-------- -------- ------- -------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of goods sold 67.9 70.0 68.5 70.5
Marketing, distribution
and administrative
expenses 12.7 12.6 12.8 12.8
Research and development
expenses 3.3 3.2 3.4 3.4
----- ----- ----- -----
Income from operations 16.1 14.2 15.3 13.3
Net income 10.0% 8.8% 9.5% 8.2%
===== ===== ===== =====
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 27, 1998 AS COMPARED WITH THREE MONTHS ENDED
SEPTEMBER 28, 1997
Net sales in the third quarter of 1998 decreased approximately 1% to $154.1
million from $155.0 million in the third quarter of 1997. In the second
quarter of 1998, the Company divested its Midwest limestone operation and
acquired a precipitated calcium carbonate (PCC) business in the United Kingdom.
Excluding both transactions, the reported sales growth in the third quarter
would have been 3%. In addition, the stronger U.S. dollar had an unfavorable
impact of approximately $3.2 million or 2 percentage points of sales growth.
Worldwide PCC sales grew 17.7% to $89.2 million from $75.8 million in the
third quarter of 1997. This increase was primarily attributable to the startup
of five new satellite plants since the third quarter of 1997, the significant
ramp-up of several satellite plants that began operations during the first nine
months of 1997, and initial sales from the aforementioned acquisition of a
specialty PCC business in the United Kingdom.
The Company recently announced the formation of a joint venture in China
with Asia Pulp & Paper Company Pte. Ltd. for the construction of a four-unit
satellite PCC plant in Dagang, China. (A "satellite unit" produces between
25,000 and 35,000 tons of PCC annually.)
Currently, two PCC satellite facilities are under construction, in
Courtland, Alabama and Dagang, China. Together, these plants will be equivalent
to approximately nine satellite units and are scheduled to begin operations
during the first half of 1999. The Company now operates 53 satellite plants in
14 countries worldwide.
Beginning in the first quarter of 1998, sales of pyrolytic graphite
products, previously reported in the processed minerals product line, are
reported in the refractory product line. Prior year's sales have been
reclassified to reflect this change. Net sales for the four quarters of 1997
were $1.1 million, $1.0 million, $0.5 million and $0.7 million respectively.
In April 1998, the Company divested its Midwest limestone business in Port
Inland, Michigan. References to ongoing operations exclude the results from
this facility. Net sales from the Midwest limestone business in the third and
fourth quarters of 1997 were $8.3 million and $5.9 million, respectively.
Net sales from the ongoing operations of processed mineral products
decreased 6.2% in the third quarter of 1998 to $19.7 million from $21.0 million
in the comparable quarter of 1997. The sales decline was primarily
attributable to the rationalization of the product line in the talc business.
Page 10
<PAGE>
Net sales of refractory products decreased 9.4% to $45.2 million from
$49.9 million in the third quarter of 1997. Foreign exchange had an unfavorable
impact of approximately $2.0 million on refractory product sales.
Income from operations increased 12.9% in the third quarter of 1998 to
$24.8 million. This increase was due primarily to growth in the PCC product
line; improved profitability in refractory products, largely due to the
successful implementation of the Company's strategy of introducing high-value,
innovative products; and increased profitability in the processed minerals
product line.
Non-operating deductions decreased primarily as a result of foreign
exchange gains in the current year as compared to foreign exchange losses in the
prior year. In addition, interest expense decreased from the prior year.
Net income grew 12.7% to $15.5 million from $13.7 million in the prior
year. Earnings per common share, on a diluted basis, rose 15.3% to $0.68 in the
third quarter of 1998 compared to $0.59 in the prior year.
NINE MONTHS ENDED SEPTEMBER 27, 1998 AS COMPARED WITH NINE MONTHS ENDED
SEPTEMBER 28, 1997
Net sales for the first nine months of 1998 increased 2.2% to $454.0
million from $444.4 million in 1997. Excluding the effects of overall
unfavorable foreign exchange rates, the sale of the Midwest limestone business
and the acquisition of the PCC business in the United Kingdom, sales would have
increased 6.3%. This increase was due to the expansion of the PCC product line.
PCC sales increased 15.7% to $254.3 million from $219.8 million in the prior
year. Net sales from the ongoing operations of processed minerals products
decreased 5.0% to $59.2 million for the first nine months of 1998. Refractory
product sales for the first nine months of 1998 were $138.9 million, a 5.8%
decrease from the prior year's $147.5 million. Foreign currency had an
unfavorable effect on refractory sales of approximately $6.0 million as a result
of the stronger U.S. dollar. The currency effect on consolidated net sales was
approximately $10.3 million or 3 percentage points of growth.
Net sales from ongoing operations in the United States increased 5.1%
to $306.8 million in the first nine months of 1998, due primarily to growth in
the PCC product line. Net foreign sales increased approximately 5.8% in the
first nine months of 1998, primarily as a result of the continued international
expansion of the PCC product line.
Income from operations rose 16.8% to $69.3 million in the first nine
months of 1998 from $59.3 million in the previous year.
Net income increased 17.1% to $42.9 million from $36.6 million in
1997. Diluted earnings per share increased 17.0% to $1.86 compared to $1.59 in
the prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position remained strong in the first nine
months of 1998. Cash flows were provided from operations and the sale of the
Midwest limestone business. The cash was applied principally to fund
approximately $58.4 million of capital expenditures, acquire a specialty PCC
business, repurchase of common shares for treasury and remit the required
principal repayment of $13 million under the Company's Guarantied Senior Notes
due June 11, 2000. Cash provided from operating activities amounted to $93.1
million in the first nine months of 1998 as compared to $76.5 million in the
prior year.
On February 26, 1998, the Company's Board of Directors authorized a $150
million stock repurchase program pursuant to which stock will be purchased on
the open market from time to time. As of October 22, the Company had
repurchased approximately 640,000 shares under this program, at an average price
of approximately $48 per share.
Page 11
<PAGE>
On April 28, 1998, the Company sold its limestone operation in Port Inland,
Michigan to Oglebay Norton Company for approximately $34 million, which
approximated its net book value. This high volume commodity operation no longer
complemented the Company's long term strategic vision. Sales for the facility
were approximately $21 million in 1997.
On April 30, 1998, the Company acquired for approximately $34 million a PCC
manufacturing facility located near Birmingham, England from Rhodia Limited, a
specialty chemicals company. This acquisition will allow the Company to
establish a base for its specialty PCC business in Europe. This facility
produces specialty PCC products for food and pharmaceutical applications, as
well as for use in plastics, sealants and coatings, and paper. Sales from this
facility in 1997 were approximately $18 million.
The Company has available approximately $110 million in uncommitted, short-
term bank credit lines, none of which were in use at September 27, 1998. The
Company anticipates that capital expenditures for all of 1998 will approximate
$90 million, principally for the construction of satellite PCC plants, expansion
projects at existing satellite PCC plants, and for other opportunities which
meet the strategic growth objectives of the Company. The Company expects to
meet such requirements from internally generated funds, the aforementioned
uncommitted bank credit lines and, where appropriate, project financing of
certain satellite plants.
PROSPECTIVE INFORMATION AND FACTORS THAT MAY AFFECT FUTURE RESULTS
The Securities and Exchange Commission encourages companies to disclose
forward looking information so that investors can better understand their future
prospects and make informed investment decisions. This report may contain
forward looking statements that set out anticipated results based on
management's plans and assumptions. Words such as "anticipate," "estimate,"
"expects," "projects," and words and terms of similar substance used in
connection with any discussion of future operating or financial performance
identify these forward looking statements.
The Company cannot guarantee that the expectations set forth in any forward
looking statement will be realized, although it believes it has been prudent in
its plans and assumptions. Achievement of future results is subject to risks,
uncertainties and inaccurate assumptions. Should known or unknown risks or
uncertainties materialize, or should underlying assumptions prove inaccurate,
actual results could vary materially from those anticipated, estimated or
projected. Investors should bear this in mind as they consider forward looking
statements and should refer to the discussion of certain risks, uncertainties
and assumptions under the heading "Cautionary Factors That May Affect Future
Results" in Exhibit 99 to this Quarterly Report on Form 10-Q.
CYCLICAL NATURE OF CUSTOMERS' BUSINESS
The bulk of the Company's sales are to customers in the paper and
steel industries, which have historically been cyclical. Both industries have
encountered difficulties in 1998, which in most markets have been more price-
driven than volume-driven. The pricing structure of some of our long term PCC
contracts makes our PCC business less sensitive to declines in the quantity of
product purchased. For this reason, and because of the geographical
diversification of our business, the Company's operating results to date have
not been materially affected by the difficult economic environment. However,
we cannot predict the economic outlook in the countries in which we do business,
nor in the key industries we serve. There can be no assurance that a recession,
in some markets or worldwide, would not have a significant negative impact on
the Company's financial position or results of operations.
RECENTLY ISSUED ACCOUNTING STANDARDS
In February 1998, the Financial Accounting Standards Board issued SFAS No.
132, "Employers' Disclosures about Pensions and Other Postretirement Benefits,"
which revises employers' disclosures about pension and other postretirement
benefit plans. It does not change the measurement or recognition of those plans.
The statement is effective for fiscal years beginning after December 15, 1997.
The adoption of this statement has no impact on the consolidated financial
statements.
Page 12
<PAGE>
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." The statement is
effective for fiscal years beginning after December 15, 1998. Earlier
application is encouraged in fiscal years for which annual financial statements
have not been issued. The statement defines which costs of computer software
developed or obtained for internal use are capitalized and which costs are
expensed. The Company adopted SOP 98-1 in 1998. The adoption of SOP 98-1 does
not materially affect the consolidated financial statements.
In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of
Start-Up Activities." The statement is effective for fiscal years beginning
after December 15, 1998. The statement requires costs of start-up activities
and organization costs to be expensed as incurred. The Company will adopt
SOP 98-5 for calendar year 1999. The adoption of SOP 98-5 will not
materially affect the consolidated financial statements.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." The statement
establishes accounting and reporting standards for derivative instruments and
for hedging activities. It requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and measure
those instruments at fair value. The statement is effective for all fiscal
quarters of fiscal years beginning after June 15, 1999. The Company will adopt
SFAS 133 by January 1, 2000. Adoption of SFAS 133 is not expected to have a
material effect on the consolidated financial statements.
YEAR 2000
The 'year 2000 issue' arises because many computer programs and
electronically controlled devices denote years using only the last two digits.
Because these programs and devices may fail to recognize the year 2000
correctly, calculations or other tasks that involve the year 2000 may cause them
to produce erroneous results or to fail altogether. Like other companies, the
Company uses operating systems, applications and electronically controlled
devices that were produced by many different vendors at different times, and
many of which were not originally designed to be year 2000 compatible.
- --- Steps to Address the Year 2000 Issue
In 1996, the Company began the installation of new computer hardware and
software to improve the capability of the Company's information systems, to
harmonize the various information technology platforms in use, and to centralize
certain financial functions. The project encompasses corporate financial and
accounting functions as well as manufacturing and costing, procurement, planning
and scheduling of production and maintenance, and customer order management.
The benefits anticipated from this project include, but are not limited to, the
achievement of year 2000 readiness.
The Company has acquired much of the hardware and software required to
implement this project, and is currently bringing its domestic business
locations on to the new systems sequentially. This is proceeding according to
schedule, and the Company expects the new systems to be operational in all
affected U.S. locations no later than the third quarter of 1999. Other U.S.
manufacturing locations are currently year 2000 ready, with the exception of
three locations which are serviced by an information technology system which is
in the process of being upgraded. This upgrade is scheduled to be completed no
later than the second quarter of 1999.
Other preparations for the year 2000 are being carried out by the relevant
business units on a decentralized basis. Information technology systems outside
the United States are in the process of being evaluated and repaired or replaced
as required. The Company expects this process to be completed by all non-U.S.
locations no later than the third quarter of 1999.
The Company's exposures to the year 2000 issue other than in the area of
information technology arise mostly with respect to process control systems and
instrumentation at the Company's manufacturing locations, and in equipment used
at customer locations. Telephone and e-mail systems, operating systems and
applications in free-standing personal computers, local area networks and site
services such as electronic security systems, elevators and HVAC may also be
affected. A failure of these systems which interrupted our ability to supply
products to our customers could have a
Page 13
<PAGE>
material adverse impact on our results of operations. These issues are being
addressed by the individual business units, by obtaining from vendors and
service providers either necessary modifications to the software or assurance
that the system will not be disrupted by the year 2000 issue. This process is
expected to be completed no later than the third quarter of 1999.
- --- Costs
The Company expects to spend approximately $15-17 million before January 1,
2000, for new computer hardware and software, other information technology
upgrades and replacements, and upgrades and replacements to non-IT systems
worldwide. Of this amount approximately $10 million has been expended as of the
end of the third quarter of 1998. These expenditures will be capitalized or
expensed in accordance with Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use," which the
Company has adopted.
The Company expects to finance these expenditures solely from working
capital, and does not expect the total cost associated with its plans to address
the year 2000 issue to have a material adverse impact on its financial position
or results of operations.
None of the Company's other information technology projects have been
delayed due to the implementation of year 2000 solutions.
- --- Third Parties
Like other companies, the Company relies on its customers for revenues, on
its suppliers for raw materials and on its other vendors for products and
services of all kinds; these third parties all face the year 2000 issue. An
interruption in the ability of any of them to provide goods or services, or to
pay for goods or services provided to them, or an interruption in the business
operations of our customers causing a decline in demand for our products, could
have a material adverse effect on the Company in turn. In particular, each of
the Company's satellite PCC plants relies on one customer for most or all of its
business, and in many cases for raw materials as well, so that a shutdown of the
host paper mill's operations would also cause the satellite PCC plant to shut
down.
In addition, there is a risk, the probability of which the Company is not
in a position to estimate, that the transition to the year 2000 will cause
wholesale, perhaps prolonged, failures of electrical generation, banking,
telecommunications or transportation systems in the United States or abroad,
disrupting the general infrastructure of business and the economy at large. The
effect of such disruptions on the Company could be material.
The Company's divisions are communicating with their principal customers
and vendors about their year 2000 readiness, and expect this process to be
completed no later than the third quarter of 1999. None of the responses
received to date suggests that any significant customer or vendor expects the
year 2000 issue to cause an interruption in its operations which would have a
material adverse impact on the Company. However, because so many firms are
exposed to the risk of failure not only of their own systems, but of the systems
of other firms, the ultimate effect of the year 2000 issue is subject to a very
high degree of uncertainty.
The Company believes that its preparations currently under way are adequate
to assess and manage the risks presented by the year 2000 issue, and does not
have a formal contingency plan at this time.
The statements in this section regarding the effect of the year 2000 and
the Company's responses to it are forward looking statements. They are based on
assumptions that the Company believes to be reasonable in light of its current
knowledge and experience. A number of contingencies could cause actual results
to differ materially from those described in forward looking statements made by
or on behalf of the Company. Please see "Cautionary Factors That May Affect
Future Results" in the attached Exhibit 99.
Page 14
<PAGE>
ADOPTION OF A COMMON EUROPEAN CURRENCY
On January 1, 1999, eleven European countries will adopt the Euro as their
common currency. From that date until January 1, 2002, debtors and creditors
may choose to pay or to be paid in Euros or in the former national currencies.
On and after January 1, 2002, the former national currencies will cease to be
legal tender.
The Company is currently reviewing its information technology systems and
upgrading them as necessary to ensure that they will be able to convert among
the former national currencies and the Euro, and process transactions and
balances in Euros, as required. The Company has sought and received assurances
from the financial institutions with which it does business that beginning in
1999 they will be capable of receiving deposits and making payments both in
Euros and in the former national currencies. The Company does not expect that
adapting its information technology systems to the Euro will have a material
impact on its financial condition or results of operations. The Company is also
reviewing contracts with customers and vendors calling for payments in
currencies that are to be replaced by the Euro, and intends to complete in a
timely way any required changes to those contracts.
Adoption of the Euro is likely to have competitive effects in Europe, as
prices that had been stated in different national currencies become directly
comparable to one another. In addition, the adoption of a common monetary
policy throughout the countries adopting the Euro can be expected to have an
effect on the economy of the region. These competitive and economic effects
cannot be predicted with certainty, and there can be no assurance that they will
not have a material effect on the Company's business in Europe.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiary Specialty Minerals Inc. are defendants in a
lawsuit captioned Eaton Corporation v. Pfizer Inc, Minerals Technologies Inc.
and Specialty Minerals Inc., which was filed July 31, 1996 and is pending in the
U.S. District Court for the Western District of Michigan. The suit alleges that
certain materials sold to Eaton for use in truck transmissions were defective,
necessitating repairs for which Eaton now seeks reimbursement. The amount of
damages claimed by Eaton is approximately $20 million plus interest. The
Company believes it has insurance coverage for a substantial portion of the
alleged damages, if it should be held liable. While all litigation contains an
element of uncertainty, the Company and Specialty Minerals believe that they
have valid defenses to the claims asserted by Eaton in this lawsuit, are
continuing to defend all such claims vigorously, and believe that the outcome of
this matter will not have a material adverse effect on the Company's
consolidated financial position or results of operations.
The Company and its subsidiaries are not party to any other material
pending legal proceedings, other than ordinary routine litigation that is
incidental to their businesses.
Page 15
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits:
3.1 --- Restated By-Laws of the Company, as amended
and restated October 22, 1998
4.1 --- First Amendment of Rights Agreement dated as of
November 2, 1998, by and between the Company and
ChaseMellon Shareholder Services L.L.C., amending
Rights Agreement dated as of October 26, 1992 and
previously filed as Exhibit 10.14 to the Company's
Annual Report on Form 10-K for the year ended
December 31, 1997
10.1--- Form of Employment Agreement (1), together
with schedule relating to executed Employment
Agreements
10.2--- Form of Severance Agreement (2), together
with schedule relating to executed Severance
Agreements
15 --- Accountants' Acknowledgment (Part I Data)
27.1--- Financial Data Schedule for the nine months
ended September 27, 1998
27.2--- Financial Data Schedule for the nine months
ended September 28, 1997
99 --- Statement of Cautionary Factors That May
Affect Future Results
(1) Incorporated by reference to the exhibit so designated
filed with the Company's Annual Report on Form 10-K for
the year ended December 31, 1997.
(2) Incorporated by reference to the exhibit so designated
filed with the Company's Annual Report on Form 10-K for
the year ended December 31, 1996.
(b) No reports on Form 8-K were filed during the third
quarter of 1998.
Page 16
<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.
Minerals Technologies Inc.
By: /s/Neil M. Bardach
Neil M. Bardach
Vice President-Finance and
Chief Financial Officer
November 3, 1998
Page 17
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
ARTICLE I
STOCKHOLDERS' MEETING
1. PLACE OF MEETING. Meetings of the stockholders shall be held at the
registered office of the Corporation in Delaware, or at such other place within
or without the State of Delaware as may be designated by the Board of Directors
or the stockholders.
2. ANNUAL MEETING. The annual meeting of the stockholders shall be held
on such date and at such time and place as the Board of Directors may designate.
The date, place and time of the annual meeting shall be stated in the notice of
such meeting delivered to or mailed to stockholders. At such annual meeting the
stockholders shall elect directors, in accordance with the requirements of the
Certificate of Incorporation, by a plurality vote, and transact such other
business as may properly be brought before the meeting.
3. QUORUM. The holders of a majority of the stock issued and outstanding
and entitled to vote, present in person or by proxy, shall be requisite for and
shall constitute a quorum of all meetings of the stockholders, except as
otherwise provided by law, by the Certificate of Incorporation or by these By-
laws. If a quorum shall not be present at any meeting of the stockholders, the
stockholders present in person or by proxy and entitled to vote shall have the
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present; provided, however,
if the adjournment is for more than thirty days, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote at the
meeting. At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the meeting as
originally notified. Except as provided in paragraph 2 of Article I of these
By-laws and the Certificate of Incorporation and except as otherwise provided by
law, at all meetings of the stockholders all questions shall be determined by a
majority of the votes cast on such questions.
4. VOTING; PROXIES. At each meeting of the stockholders of the
Corporation, every stockholder having the right to vote shall be entitled to
vote in person or by proxy. Any stockholder may authorize another person to act
for him by proxy. A proxy must be in writing and executed by the stockholder or
his or her duly authorized attorney. In lieu thereof, to the extent permitted
by law, a proxy may be transmitted in a telegram, cablegram or other means of
electronic transmission provided that the telegram, cablegram or electronic
transmission either sets forth or is submitted with information from which it
can be determined that the telegram, cablegram or other electronic transmission
was authorized by the stockholder. A copy, facsimile transmission or other
reliable reproduction of a written or electronically-transmitted proxy
authorized by this Section 4 may be substituted for or used in lieu of the
original writing or electronic transmission. No proxy authorized by this
Section 4 shall be voted or acted upon more than three years from
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
its date, unless the proxy provides for a longer period. No ballot, proxies or
votes, nor any revocations thereof or changes thereto shall be accepted after
the time set for the closing of the polls pursuant to Section 10 of Article I of
these By-laws. Each proxy shall be delivered to the inspectors of election
prior to or at the meeting. The vote for directors shall be by ballot.
5. NOTICE. Written notice of an annual or special meeting shall be given
to each stockholder entitled to vote thereat, not less than ten nor more than
sixty days prior to the meeting. If mailed, such notice shall be deemed to be
given when deposited in the mail, postage pre-paid, directed to the stockholder
at his or her address as it appears on the records of the Corporation.
6. INSPECTORS OF ELECTION. The Corporation shall, in advance of any
meeting of stockholders, appoint one or more inspectors of election to act at
the meeting and make a written report thereof. The Corporation may designate
one or more persons as alternate inspectors to replace any inspector who fails
to act. In the event that no inspector so appointed or designated is able to
act at a meeting of stockholders, the person presiding at the meeting shall
appoint one or more inspectors to act at the meeting. Each inspector, before
entering upon the discharge of his or her duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspector or inspectors so
appointed or designated shall (i) ascertain the number of shares of capital
stock of the Corporation outstanding and the voting power of each such share,
(ii) determine the shares of capital stock of the Corporation represented at the
meeting and the validity of proxies and ballots, (iii) count all votes and
ballots, (iv) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors, and
(v) certify their determination of the number of shares of capital stock of the
Corporation represented at the meeting and such inspectors' count of all votes
and ballots. Such certification shall specify such other information as may be
required by law. In determining the validity and counting of proxies and
ballots cast at any meeting of stockholders of the Corporation, the inspectors
may consider such information as is permitted by applicable law. No person who
is a candidate for an office at an election may serve as an inspector at such
election.
7. STOCK LIST. At least ten days before every meeting of the
stockholders a complete list of the stockholders entitled to vote at said
meeting, arranged in alphabetical order, with the post office address of each,
and the number of shares held by each, shall be prepared by the Secretary. Such
list shall be open to the examination of any stockholder for any purpose germane
to the meeting, during ordinary business hours at a place within the city where
the meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held
for said ten days, and shall be produced and kept at the time and place of
meeting
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
during the whole time thereof and subject to the inspection of any stockholder
who may be present. The original or duplicate stock ledger shall be provided at
the time and place of each meeting and shall be the only evidence as to who are
the stockholders entitled to examine the list of stockholders or to vote in
person or by proxy at such meeting.
8. SPECIAL MEETINGS. Special meetings of the stockholders for any
purpose or purposes may be called by the Chair of the Board, and shall be called
by the Chair of the Board or the Secretary at the request in writing of a
majority of the Board of Directors. Such request shall state the purpose or
purposes of the proposed meeting. Business transacted at all special meetings
shall be confined to the objects stated in the notice of special meeting and
matters germane thereto.
9. ORGANIZATION. Meetings of stockholders shall be presided over by the
Chair of the Board, if any, or in his or her absence by the Vice Chair of the
Board, if any, or in his or her absence by the President, or in their absences
by a Vice President, or in the absence of the foregoing persons by a Chair
designated by the Board of Directors, or in the absence of such designation by a
Chair chosen at the meeting. The Secretary shall act as secretary of the
meeting, but in his or her absence the Chair of the meeting may appoint any
person to act as secretary of the meeting.
10. CONDUCT OF MEETINGS. The date and time of the opening and the closing
of the polls for each matter upon which the stockholders will vote at a meeting
shall be announced at such meeting by the person presiding over the meeting.
The Board of Directors of the Corporation may adopt by resolution such rules or
regulations for the conduct of meetings of stockholders as it shall deem
appropriate. Except to the extent inconsistent with such rules and regulations
as adopted by the Board of Directors, the chair of any meeting of stockholders
shall have the right and authority to prescribe such rules, regulations and
procedures and to do all such acts as, in the judgment of such chair, are
appropriate for the proper conduct of the meeting. Such rules, regulations or
procedures, whether adopted by the Board of Directors or prescribed by the chair
of the meeting, may include, without limitation, the following: (1) the
establishment of an agenda or order of business for the meeting; (2) rules and
procedures for maintaining order at the meeting and the safety of those present;
(3) limitations on attendance at or participation in the meeting to stockholders
of record of the Corporation, their duly authorized and constituted proxies or
such other persons as the chair shall permit; (4) restrictions on entry to the
meeting after the time fixed for the commencement thereof; and (5) limitations
on the time allotted to questions or comments by participants. Unless, and to
the extent determined by the Board of Directors or the chair of the meeting,
meetings of stockholders shall not be required to be held in accordance with
rules of parliamentary procedure.
11. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In order
that the Corporation may determine the stockholders entitled to notice of or to
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
vote at any meeting of the stockholders or any adjournment thereof, or entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date: (1) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty nor
less than ten days before the date of such meeting; and (2) in the case of any
other action, shall not be more than sixty days prior to such other action. If
no record date is fixed the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the date next preceding the day on
which the meeting is held. A determination of stockholders of record entitled
to notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
12. NOTICE OF STOCKHOLDER PROPOSAL. At a meeting of the stockholders, only
such business shall be conducted as shall have been properly brought before the
meeting. Business, other than nominations of persons as directors of the
Corporation, may be properly brought before such meeting only (i) pursuant to
the Corporation's notice of meeting; (ii) by or at the direction of the chairman
of the meeting (but only in the case of an annual meeting); or (iii) by any
stockholder of record of the Corporation who has complied with the notice
procedures of this paragraph and who was a stockholder of record at the time
such notice was delivered. Any stockholder who intends to bring any matter
other than the election of directors before a meeting of stockholders and is
entitled to vote on such matter shall deliver a timely written notice of such
stockholder's intent to bring such matter before the meeting of stockholders,
either by personal delivery or by United States mail, postage pre-paid, to the
Secretary of the Corporation. To be timely such, notice must be received by the
Secretary: (1) with respect to an annual meeting of stockholders, not less than
70 days nor more than 90 days in advance of the first anniversary of the
previous year's annual meeting; and (2) with respect to any other meeting of
stockholders, not later than the close of business on the tenth day following
the date of public announcement by the Corporation of the date of such meeting.
In no event shall the public announcement of an adjournment of such meeting
commence a new time period for the giving of a stockholder's notice as described
above. Such written notice shall set forth (i) a brief description of the
business desired to be brought before the meeting; (ii) the reason for
conducting such business at the meeting; (iii) any material interest in such
business of the stockholder giving notice and of the beneficial owner, if not
the stockholder giving notice, on whose behalf the proposal is made; (iv) in the
event that such business includes a proposal to amend the By-laws of the
Corporation, the language of the proposed amendment; (v) the name and address of
the stockholder giving notice
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
and of any such beneficial owner; (vi) the class and number of shares of the
Corporation owned of record or beneficially by such stockholder giving notice
and by any such beneficial owner on whose behalf the proposal is made; (vii) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to propose such business; and (viii) a representation
whether the stockholder or the beneficial owner, if any, intends or is part of a
group which intends to (a) deliver a proxy statement and form of proxy to
holders of at least the percentage of the Corporation's outstanding Common Stock
required to approve or adopt the proposal and/or (b) otherwise solicit proxies
from stockholders in support of such proposal. For purposes of this Section 12,
"public announcement" shall mean disclosure in a press release reported by the
Dow Jones News Service, Associated Press, or comparable national news service,
or in a document filed by the Corporation with the Securities Exchange
Commission pursuant to Section 13, 14, or 15(d) of the Securities Exchange Act
of 1934.
13. COMPLIANCE WITH PROCEDURES. Only such business shall be conducted at a
meeting of stockholders as shall have been brought before the meeting in
accordance with the procedures set forth in this By-law. Except as otherwise
provided by law, the Certificate of Incorporation, or these By-Laws, the
chairman of the meeting shall have the power and duty to (i) determine whether
any business proposed to be brought before the meeting was proposed in
accordance with the procedures set forth in these By-laws and (ii) if any
proposed business is not in compliance with this By-law, or if the stockholder
solicits or is part of a group which solicits proxies in support of such
stockholder's proposal without such stockholder having made the representation
required by clause (vii) of paragraph 12 of this By-law to declare that such
defective nomination shall be disregarded. Notwithstanding the foregoing
provisions of this By-law, a stockholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934 and the rules and
regulations thereunder with respect to the matters set forth in this By-law.
Nothing in this By-law shall be deemed (i) to affect any rights of stockholders
to request inclusion of proposals in the Corporation's proxy statement pursuant
to Rule 14a-8 of the Securities Exchange Act of 1934 or (ii) to limit any class
voting rights provided to holders of Preferred Stock upon the occurrence of
dividend arrearages.
ARTICLE II - DIRECTORS
1. NUMBER; ELECTION; TERM. The number of directors which shall
constitute the whole Board shall not be less than three, nor more than twelve,
the exact number within said limits to be fixed from time to time solely by
resolution of the Board, acting by the vote of not less than a majority of the
directors then in office. A majority of the directors shall consist of persons
who are not employees of the Corporation or of any subsidiary of the
Corporation. Should the death, resignation or other removal of any
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
non-employee director result in the failure of the requirement set forth in the
preceding sentence to be met, such requirement shall not apply during the time
of the vacancy caused by the death, resignation or removal of any such non-
employee director. The remaining directors of the Corporation shall cause any
such vacancy to be filled in accordance with these By-laws within a reasonable
period of time. At the annual meeting directors shall be elected in accordance
with the requirements of these By-laws and the Certificate of Incorporation.
2. PLACE OF MEETINGS. The directors may hold their meetings and keep the
books of the Corporation outside of the State of Delaware at such places as they
may from time to time determine.
3. VACANCIES. If the office of any director becomes vacant for any
reason or any new directorship is created by any increase in the authorized
number of directors, a majority of the directors then in office, although less
than a quorum, may choose a successor or successors or fill the newly created
directorship and the directors so chosen shall hold office until the next annual
election of the class for which such directors shall have been chosen.
4. ORGANIZATIONAL MEETING. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of other
business, after each annual election of directors on the day and at the place of
the next regular meeting of the board. Notice of such meeting need not be
given. Such meeting may be held at any other time or place which shall be
specified in a notice given as hereinafter provided for special meetings of the
Board of Directors or in a consent and waiver of notice thereof signed by all of
the directors.
5. REGULAR MEETINGS. Regular meetings of the Board may be held without
notice at such time and place either within or without the State of Delaware as
shall from time to time be determined by the Board.
6. SPECIAL MEETINGS. Special meetings of the Board may be called by the
Chair of the Board, a Vice Chair of the Board or the President by the mailing of
notice to each director at least 48 hours before the meeting or by notifying
each director of the meeting at least 24 hours prior thereto either personally,
by telephone or by electronic transmission; special meetings shall be called on
like notice by the Chair of the Board, a Vice Chair of the Board, the President
or, on the written request of any two directors, by the Secretary.
7. QUORUM. At all meetings of the Board the presence of one-third of the
total number of directors determined by resolution pursuant to Section 1 of this
Article II to constitute the Board of Directors shall be necessary and
sufficient to constitute a quorum
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
for the transaction of business, and the act of a majority of the directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by law, by the
Certificate of Incorporation or by these By-laws.
8. EXECUTIVE COMMITTEE. There shall be an Executive Committee of three
or more directors elected by a majority of the Board. The Committee shall be
composed of the Chief Executive Officer, the President, and such other directors
as the Board shall elect. The Board, by resolution, may designate one or more
directors as alternate members of the Committee, who may replace any absent or
disqualified member at any meeting of the Committee. In the absence or
disqualification of a member of the Committee, the member or members present at
any meeting of the Committee and not disqualified from voting, whether or not
he, she or they constitute a quorum, may unanimously appoint another member of
the Board to act at the meeting in the place of any such absent or disqualified
member. A quorum shall be a majority of the members of the Committee. Regular
meetings of the Committee shall be held without notice at such time and place as
shall from time to time be determined by the Committee; special meetings of the
Committee may be called pursuant to the rules determined by the Committee. The
Committee shall generally perform such duties and exercise such powers as may be
directed or delegated by the Board of Directors from time to time. Except as
otherwise provided by law, the Committee shall have authority to exercise all
the powers of the Board while the Board is not in session. The act of a
majority of the Committee members present at any meeting at which there is a
quorum shall be the act of the Committee except as may be otherwise specifically
provided by law, by the Certificate of Incorporation or by these By-laws. The
Committee shall keep regular minutes of its proceedings and report the same to
the Board at its next regular meeting.
9. ADDITIONAL COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate one or more additional
committees, each committee to consist of one or more of the directors of the
Corporation. In the event that the Board shall designate a committee that shall
have the power to recommend changes in the compensation of senior management of
the Corporation and/or a committee that shall have the power to recommend
nominees for election as directors of the Corporation, the membership of such
committees shall consist solely of directors who are not employees of the
Corporation or of any subsidiary of the Corporation. The Board may designate
one or more directors as alternate members of any such additional committee, who
may replace any absent or disqualified member at any meeting of the committee.
Any such committee shall have such powers as are granted to it by the resolution
of the Board or by subsequent resolutions passed by a majority of the whole
Board. Nothing herein shall limit the authority of the Board of Directors to
appoint other committees consisting in whole or in part of persons who are not
directors of the Corporation to carry out such functions as the Board may
designate.
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BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
10. PRESENCE AT MEETING. Members of the Board of Directors or any
committee designated by such Board may participate in the meeting of said Board
or committee by means of conference telephone or similar communications
equipment by means of which all persons in the meeting can hear each other and
participate. The ability to participate in a meeting in the above manner shall
constitute presence at said meeting for purposes of a quorum and any action
thereat.
11. ACTION WITHOUT MEETINGS. Any action required or permitted to be taken
at any meeting of the Board of Directors or any committee designated by such
Board may be taken without a meeting, if all members of the Board or committee
consent thereto in writing and the writing or writings are filed with the
minutes of the proceedings of the Board or committee.
12. ELIGIBILITY TO MAKE NOMINATIONS. Nominations of candidates for
election as directors at any meeting of stockholders called for election of
directors (an "Election Meeting") may be made by the Board of Directors or by
any stockholder entitled to vote at such Election Meeting.
13. PROCEDURE FOR NOMINATIONS BY STOCKHOLDERS. Any stockholder entitled
to vote for the election of a director at a meeting may nominate one or more
persons for such election only if (i) written notice of such stockholder's
intent to make such nomination is timely given, either by personal delivery or
by United States mail postage pre-paid, to the Secretary of the Corporation and
(ii) such stockholder was a stockholder of record at the time such notice was
delivered. To be timely, such notice must be received by the Secretary: (1)
with respect to an annual meeting of stockholders, not less than 70 days nor
more than 90 days in advance of the first anniversary of the previous year's
annual meeting; and (2) with respect to any other meeting of stockholders, not
later than the close of business on the tenth day following the date of public
disclosure by the Corporation of the date of such meeting. In no event shall
the public announcement of an adjournment of such meeting commence a new time
period for the giving of a stockholder's notice as described above. The written
notice shall set forth (i) the name, age, business address and residence address
of each nominee proposed in such notice; (ii) the principal occupation or
employment of each such nominee; (iii) the number of shares of capital stock of
the Corporation which are beneficially owned by each such nominee; and (iv) such
other information concerning each such nominee as would be required, pursuant to
Regulation 14A under the Securities and Exchange Act of 1934, as amended, in a
proxy statement soliciting proxies for the election of such nominee as a
director. Such notice shall include a signed consent of each such nominee to
serve as a director of the Corporation, if elected. The notice shall also
contain (i) the name and address of the stockholder giving notice, as they
appear in the Corporation's books (and of the beneficial owner, if other than
the stockholder, on whose behalf the proposal is made); (ii) the class and
number of shares of the Corporation owned of record or beneficially by such
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
stockholder giving notice (and by the beneficial owner, if other than the
stockholder, on whose behalf the proposal is made); (iii) a representation that
the stockholder is a holder of record of stock of the Corporation entitled to
vote at such meeting and intends to appear in person or by proxy at the meeting
to propose the nomination; and (iv) a representation whether the stockholder or
the beneficial owner, if any, intends or is part of a group which intends to (a)
deliver a proxy statement and form of proxy to holders of at least the
percentage of the Corporation's outstanding Common Stock required to elect the
nominee and/or (b) otherwise solicit proxies from stockholders in support of
such nomination.
14. COMPLIANCE WITH PROCEDURES. Only such persons who are nominated in
accordance with the procedures set forth in this By-law shall be eligible to be
elected at an annual or special meeting of stockholders of the Corporation to
serve as directors. Except as otherwise provided by law, the Certificate of
Incorporation, or these By-Laws, the chairman of the meeting shall have the
power and duty to (i) determine whether a nomination proposed to be brought
before the meeting was made in accordance with the procedure set forth in this
By-law and (ii) if any proposed nomination is not in compliance with this By-
law, to declare that such defective nomination shall be disregarded.
Notwithstanding the foregoing provisions of this By-law, a stockholder shall
also comply with all applicable requirements of the Securities Exchange Act of
1934 and the rules and regulations thereunder with respect to the matters set
forth in this By-law. Nothing in this By-law shall be deemed to limit any class
voting rights provided to holders of Preferred Stock upon the occurrence of
dividend arrearages.
ARTICLE III - OFFICERS
1. ELECTION; TERM OF OFFICE; APPOINTMENTS. The Board of Directors, at
its first meeting after each annual meeting of stockholders, shall elect at
least the following officers: a Chair of the Board and/or a President, one or
more Vice Presidents, a Controller, a Treasurer and a Secretary. The Board may
also elect, appoint, or provide for the appointment of such other officers and
agents as may from time to time appear necessary or advisable in the conduct of
the affairs of the Corporation. Officers of the Corporation shall hold office
until their successors are chosen and qualify in their stead or until their
earlier death, resignation or removal, and shall perform such duties as from
time to time shall be prescribed by these by-laws and by the Board and, to the
extent not so provided, as generally pertain to their respective offices. The
Board of Directors may fill any vacancy occurring in any office of the
Corporation at any regular or special meeting. Two or more offices may be held
by the same person.
2. REMOVAL AND RESIGNATION. Any officer elected or appointed by the
Board of Directors or the Executive Committee may be removed at any time by the
affirmative vote of a majority of the whole Board of Directors. If the office
of any officer
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BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
elected or appointed by the Board becomes vacant for any reason, the vacancy may
be filled by the Board. Any officer may resign at any time upon written notice
to the Corporation.
3. CHAIR OF THE BOARD. The Chair of the Board shall be the chief
executive officer of the Corporation, unless otherwise prescribed by the Board
of Directors, and shall preside at all meetings of the stockholders and of the
directors. He or she shall perform such other duties, and exercise such powers,
as from time to time shall be prescribed by these By-laws or by the Board of
Directors.
4. PRESIDENT. The President, in the absence of the Chair of the Board or
the Vice Chair, if any, shall preside at meetings of the Directors. He or she
shall have such authority and perform such duties in the management of the
Corporation as from time to time shall be prescribed by the Board of Directors
and, to the extent not so prescribed, he or she shall have such authority and
perform such duties in the management of the Corporation, subject to the control
of the Board, as generally pertain to the office of President.
5. VICE PRESIDENTS. Vice Presidents shall perform such duties as from
time to time shall be prescribed by these By-laws, by the Chair of the Board, by
the President or by the Board of Directors, and except as otherwise prescribed
by the Board of Directors, they shall have such powers and duties as generally
pertain to the office of Vice President.
6. SECRETARY. The Secretary or person appointed as secretary at all
meetings of the Board and of the stockholders shall record all votes and the
minutes of all proceedings in a book to be kept for that purpose, and he or she
shall perform like duties for the Executive Committee when required. He or she
shall give, or cause to be given, notice of all meetings of the stockholders,
and of the Board of Directors if required. He or she shall perform such other
duties as may be prescribed by these By-laws or as may be assigned to him by the
Chair of the Board, the President or the Board of Directors, and, except as
otherwise prescribed by the Board of Directors, he or she shall have such powers
and duties as generally pertain to the office of Secretary.
7. TREASURER. The Treasurer shall have custody of the Corporation's
funds and securities. He or she shall perform such other duties as may be
prescribed by these By-laws or as may be assigned to him or her by the Chair of
the Board, the President or the Board of Directors, and, except as otherwise
prescribed by the Board of Directors, he or she shall have such powers and
duties as generally pertain to the office of Treasurer.
8. CONTROLLER. The Controller shall have charge of the Corporation's
books of account, and shall be responsible for the maintenance of adequate
records of all assets, liabilities and financial transactions of the
Corporation. The Controller shall prepare and
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
render such balance sheets, profit and loss statements and other financial
reports as the Board of Directors, the Chair of the Board or the President may
require. He or she shall perform such other duties as may be prescribed by
these By-laws or as may be assigned to him or her by the Chair of the Board, the
President or the Board of Directors, and, except as otherwise prescribed by the
Board of Directors, he or she shall have such powers and duties as generally
pertain to the office of Controller.
ARTICLE IV - STOCK
1. CERTIFICATES OF STOCK. The certificates of stock of the Corporation
shall be in the form or forms from time to time approved by the Board of
Directors. Such certificates shall be numbered and registered, shall exhibit
the holder's name and the number of shares, and shall be signed by the following
officers of the Corporation: the Chair of the Board of Directors, or the
President or a Vice President; and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary. If any certificate is manually
signed (1) by a transfer agent other than the Corporation or its employee, or
(2) by a registrar other than the Corporation or its employee, any other
signature on the certificate, including those of the aforesaid officers of the
Corporation, may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he or she were such officer, transfer agent or registrar at
the date of issue.
2. LOST CERTIFICATES. The Board of Directors or any officer of the
Corporation to whom the Board of Directors has delegated authority may authorize
any transfer agent of the Corporation to issue, and any registrar of the
Corporation to register, at any time and from time to time unless otherwise
directed, a new certificate or certificates of stock in the place of a
certificate or certificates theretofore issued by the Corporation, alleged to
have been lost or destroyed, upon receipt by the transfer agent of evidence of
such loss or destruction, which may be the affidavit of the applicant; a bond
indemnifying the Corporation and any transfer agent and registrar of the class
of stock involved against claims that may be made against it or them on account
of the lost or destroyed certificate or the issuance of a new certificate, of
such kind and in such amount as the Board of Directors shall have authorized the
transfer agent to accept generally or as the Board of Directors or an authorized
officer shall approve in particular cases; and any other documents or
instruments that the Board of Directors or an authorized officer may require
from time to time to protect adequately the interest of the Corporation. A new
certificate may be issued without requiring any bond when, in the judgment of
the directors, it is proper to do so.
3. TRANSFERS OF STOCK. Transfers of stock shall be made upon the books
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
of the Corporation upon presentation of the certificates by the registered
holder in person or by duly authorized attorney, or upon presentation of proper
evidence of succession, assignment or authority to transfer and upon surrender
of the certificate therefor.
4. HOLDER OF RECORD. The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and accordingly shall not be bound to recognize any equitable or other claim to
or interest in such share on the part of any other person whether or not it
shall have express or other notice thereof, save as expressly provided by the
laws of the State of Delaware.
ARTICLE V - INDEMNIFICATION AND SEVERANCE
1. RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and hold
harmless, to the fullest extent permitted by applicable law as it presently
exists or may hereafter be amended, any person who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding") by reason of the fact that he or she, or a person for whom he or
she is the legal representative, is or was a director, officer, employee or
agent of the Corporation or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust, enterprise or nonprofit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses (including attorneys' fees) reasonably incurred by such
person. The Corporation shall be required to indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
2. PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees) incurred in defending any proceeding in advance of
its final disposition, provided, however, that the payment of expenses incurred
by a director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the director or officer to
repay all amounts advanced if it shall ultimately be determined that the
director or officer is not entitled to be indemnified. Payment of such expenses
incurred by other employees and agents of the Corporation may be made by the
Board of Directors in its discretion upon such terms and conditions, if any, as
it deems appropriate.
3. CLAIMS. If a claim for indemnification or payment of expenses
(including attorneys' fees) under this Article is not paid in full within sixty
days after a written claim therefor has been received by the Corporation the
claimant may file suit to recover the unpaid amount of such claim and, if
successful in whole or in part, shall be entitled to be paid the expense of
prosecuting such claim. In any such action the Corporation shall have the burden
of proving that the claimant was not entitled to the requested indemnification
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
or payment of expenses under applicable law.
4. NONEXCLUSIVITY OF RIGHTS. The right conferred on any person by this
Article V shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Certificate of
Incorporation, these By-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
5. OTHER INDEMNIFICATION. The Corporation's obligation, if any, to
indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or non-profit entity shall be reduced by any amount such
person may collect as indemnification from such other corporation, partnership,
joint venture, trust, enterprise or non-profit entity.
6. AMENDMENT OR REPEAL. Any repeal or modification of the foregoing
provisions of this Article V shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
7. SEVERANCE. Any written agreement or any amendment of an existing
written agreement that provides for payments to a director, officer or other
employee of the Corporation or any subsidiary of the Corporation upon (i) a
"change in control" of the Corporation or (ii) the termination or constructive
termination of the employment of such director, officer, or other employee
following a "change in control" of the Corporation, must be approved by (a) the
unanimous vote of the members of the committee of the Board of Directors which
has the power to recommend changes in the compensation of the senior management
of the Corporation, if any, and (b) a majority of the Directors who are not
employees of the Corporation or any subsidiary of the Corporation. For the
purposes hereof, a "change in control" of the Corporation shall mean through (i)
the accumulation by a person or group of related persons of 20% or more of the
Company's outstanding capital stock and/or (ii) a change in the composition of a
majority of the Corporation's Board of Directors without the approval of the
incumbent Board.
ARTICLE VI - MISCELLANEOUS
1. DELAWARE OFFICE. The address of the registered office of the
Corporation in the State of Delaware shall be at Corporation Trust Center, 1209
Orange Street, Wilmington, County of New Castle, Delaware 19801 and the name of
its registered agent at such address is Corporation Trust Company.
2. OTHER OFFICES. The Corporation may also have an office in the City
and State of New York, and such other offices at such places as the Board of
Directors from time to time may appoint or the business of the Corporation may
require.
<PAGE>
BY-LAWS OF MINERALS TECHNOLOGIES INC. (DELAWARE)
AS AMENDED OCTOBER 22, 1998
3. SEAL. The corporate seal shall be in the form adopted by the Board of
Directors. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise. The seal may be affixed by any
officer of the Corporation to any instrument executed by authority of the
Corporation, and the seal when so affixed may be attested by the signature of
any officer of the Corporation.
4. NOTICE. Whenever notice is required to be given by law, the
Certificate of Incorporation or these By-laws, a written waiver signed by the
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened.
5. AMENDMENTS. The Board of Directors shall have the power to adopt,
amend or repeal the By-laws of the Corporation by the affirmative action of a
majority of its members. The By-laws may be adopted, amended or repealed by the
affirmative vote of a majority of the stock issued and outstanding and entitled
to vote at any regular meeting of the stockholders or at any special meeting of
the stockholders if notice of such proposed adoption, amendment or repeal be
contained in the notice of such special meeting.
6. FORM OF RECORDS. Any records maintained by the Corporation in the
regular course of its business, including its stock ledger, books of account,
and minutes books, may be kept on, or be in the form of, punch cards, magnetic
tape, photographs, microphotographs, or any other information storage device,
provided that the records so kept can be converted into clearly legible form
within a reasonable time. The Corporation shall so convert any records so kept
upon the request of any person entitled to inspect the same.
7. CHECKS. All checks, drafts, notes and other orders for the payment of
money shall be signed by such officer or officers or agents as from time to time
may be designated by the Board of Directors or by such officers of the
Corporation as may be designated by the Board to make such designation.
8. FISCAL YEAR. The fiscal year shall begin the first day of January in
each year.
FIRST AMENDMENT OF
RIGHTS AGREEMENT
THIS AMENDMENT (this "Amendment") of the Rights Agreement (as defined below) is
made and entered into as of this 2nd day of November, 1998, by and between
MINERALS TECHNOLOGIES INC., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services L.L.C., successor to Chemical Bank as "Rights
Agent" under the Rights Agreement.
RECITALS:
WHEREAS, on October 26, 1992, the Board of Directors of the Company
declared a dividend of one stock purchase right (a "Right") for each outstanding
share of common stock, $.10 par value (the "Common Stock") of the Company to the
stockholders of record at the close of business on November 6, 1992, with each
Right entitling the registered holder to purchase from the Company one one
hundredth of a share of the Series A Junior Preferred Stock of the Company (the
"Preferred Stock"), or a combination of securities and assets of equivalent
value, at a purchase price of $65.00 per Right, subject to adjustment (the
description and terms of the Rights are set forth in a Rights Agreement, dated
as of October 26, 1992 (the "Rights Agreement") between the Company and
Chemical Bank as Rights Agent; and
WHEREAS, pursuant to Section 21 of the Rights Agreement and as confirmed in
a letter agreement between the Company and ChaseMellon Shareholder Services
L.L.C. dated October 28, 1998, ChaseMellon Shareholder Services L.L.C. succeeded
Chemical Bank as Rights Agent; and
WHEREAS, in light of subsequent developments in connection with rights
agreements generally, the Board of Directors deems it advisable and in the best
interests of the Company and its stockholders to amend certain provisions of the
Rights Agreement; and
WHEREAS, each of the Company and the Rights Agent desire to amend the
Rights Agreement as set forth below;
NOW, THEREFORE, the undersigned, in consideration of the premises,
covenants and agreements contained herein and in the Rights Agreement, and other
good, sufficient and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, do hereby agree as follows:
1. Amendments.
(a) Each of the following sections of the Rights Agreement is hereby
amended and restated in its entirety to read as follows:
(i) Section 1(a).
1
<PAGE>
"(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Voting Stock (as such
term is hereinafter defined) of the Company then outstanding; provided
that, an Acquiring Person shall not include an (i) Exempt Person (as such
term is hereinafter defined), or (ii) any Person, together with all
Affiliates and Associates of such Person, who or which would be an
Acquiring Person solely by reason of (A) being the Beneficial Owner of
shares of Voting Stock of the Company, the Beneficial Ownership of which
was acquired by such Person pursuant to any action or transaction or series
of related actions or transactions approved by the Board of Directors
before such Person otherwise became an Acquiring Person or (B) a reduction
in the number of issued and outstanding shares of Voting Stock of the
Company pursuant to a transaction or a series of related transactions
approved by the Board of Directors of the Company; provided further, that
in the event such Person described in this clause (ii) does not become an
Acquiring Person by reason of subclause (A) or (B) of this clause (ii),
such Person nonetheless shall become an Acquiring Person in the event such
Person thereafter acquires Beneficial Ownership of an additional 1% of the
Voting Stock of the Company, unless the acquisition of such additional
Voting Stock would not result in such Person becoming an Acquiring Person
by reason of subclause (A) or (B) of this clause (ii). Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good
faith that a Person who would otherwise be an "Acquiring Person" as defined
pursuant to the foregoing provisions of this paragraph (a) has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed an
"Acquiring Person" for any purposes of this Rights Agreement."
(ii) Section 1(h).
"[text intentionally omitted]"
(iii) Section 1(r).
"(r) "Qualifying Tender Offer" shall mean a tender or exchange offer
for all outstanding shares of Common Stock of the Company approved by the
Board of Directors after taking into account the potential long-term value
of the Company and all other factors that they consider relevant."
(iv) Section 1(u).
2
<PAGE>
"(u) "Stock Acquisition Date" shall mean the first date on which there
shall be a public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) or such earlier date as the Board of
Directors shall become aware of the existence of an Acquiring Person."
(v) Section 3(b).
"(b) Until the close of business on the day which is the earlier of
(i) the tenth day after the Stock Acquisition Date or (ii) the tenth
business day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an
Exempt Person) of, or the first public announcement of the intent of any
Person (other than an Exempt Person) to commence, a tender or exchange
offer upon the successful consummation of which such Person, together with
its Affiliates and Associates, would be the Beneficial Owner of 30% or more
of the then outstanding shares of Voting Stock of the Company (irrespective
of whether any shares are actually purchased pursuant to any such offer)
(the earlier of such dates being herein referred to as the "Distribution
Date"), (x) the Rights shall be evidenced by the certificates for Common
Stock registered in the name of the holders of Common Stock (together with,
in the case of certificates for Common Stock outstanding as of the Record
Date, the Summary of Rights) and not by separate Right certificates and the
record holders of such certificates for Common Stock shall be the record
holders of the Rights represented thereby and (y) each Right shall be
transferable only simultaneously and together with the transfer of a share
of Common Stock (subject to adjustment as hereinafter provided). Until the
Distribution Date (or, if earlier, the Expiration Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Stock shall
constitute the surrender for transfer of the Right or Rights associated
with the Common Stock evidenced thereby, whether or not accompanied by a
copy of the Summary of Rights."
(vi) Section 11(a)(iii).
"(iii) In the event that the Company does not have available
sufficient authorized but unissued Preferred Stock to permit the
adjustments required pursuant to the foregoing subparagraph (i) or the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize and reserve for issuance such number of additional
shares of Preferred Stock as may from time to time be required to be issued
upon the exercise in full of all Rights from time to time outstanding and,
if necessary, shall use
3
<PAGE>
its best efforts to obtain stockholder approval thereof. In lieu of issuing
shares of Preferred Stock in accordance with the foregoing subparagraphs
(i) and (ii), the Company may, if the Board of Directors determines that
such action is necessary or appropriate and not contrary to the interests
of holders of Rights, elect to issue or pay, upon the exercise of the
Rights, cash, property, shares of Preferred or Common Stock, or any
combination thereof, having an aggregate Fair Market Value equal to the
Fair Market Value of the shares of Preferred Stock which otherwise
would have been issuable pursuant to Section 11(a) (ii), which Fair
Market Value shall be determined by an investment banking firm
selected by the Board of Directors. For purposes of the preceding
sentence, the Fair Market Value of the Preferred Stock shall be as
determined pursuant to Section 11(b). Subject to Section 23 hereof, any
such election by the Board of Directors of the Company must be made and
publicly announced within thirty (30) days after the date on which the
event described in Section 11(a) (ii) occurs."
(vii) Section 13(a).
"(a) Except for any transaction approved by the Board of Directors, in the
event that, at any time on or after the Distribution Date, (x) the Company
shall, directly or indirectly, consolidate with, or merge with and into,
any other Person or Persons (other than an Exempt Person) and the Company
shall not be the surviving or continuing corporation of such consolidation
or merger, or (y) any Person or Persons (other than an Exempt Person)
shall, directly or indirectly, consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (other than an Exempt Person) or
of the Company or cash or any other property, or (z) the Company or one
or more of its Subsidiaries shall, directly or indirectly, sell or
otherwise transfer to any other Person or any Affiliate or Associate
of such Person, in one or more transactions, or the Company or one or
more of its Subsidiaries shall sell or otherwise transfer to any Persons
in one or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the first
occurrence of any such event, proper provision shall be made so that
(i) each holder of record of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof and payment of the Exercise Price in accordance with the terms
of this Rights Agreement, such number of shares of validly issued,
fully paid, nonassessable and freely tradeable Common Stock of
the Principal Party (as defined herein), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall, based on the Fair Market Value of the Common Stock of the
Principal Party on the date of the consummation of such consolidation,
merger, sale or transfer, equal twice the Exercise Price; (ii)
such Principal Party shall
4
<PAGE>
thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Rights
Agreement; (iii) the term "Company" for all purposes of this Rights
Agreement shall thereafter be deemed to refer to such Principal Party;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its
Common Stock in accordance with the provisions of Section 9 hereof
applicable to the reservation of Preferred Stock) in connection
with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided,
however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or
other extraordinary transaction in respect of such Principal Party,
each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Exercise Price,
such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had it, at the time of
such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal
Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property and (v)
the provisions of Section 11(a) (ii) hereof shall be of no effect
following the occurrence of any event described in clause (x), (y)
or (z) above of this Section 13(a)."
(viii) Section 18(a).
"(a) The Company agrees to pay the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration
and execution of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and hold it harmless against, any
loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Rights
Agreement, including the cost and expenses of defending against
any claim of liability relating to the Rights or this Rights
Agreement. Anything to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect,
consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage."
5
<PAGE>
(ix) Section 23(a).
"(a) The Company may, at its option, but only by the vote of the Board
of Directors, redeem all but not less than all of the then outstanding
Rights, at anytime prior to the Close of Business on the earlier of (i)
the tenth day following the Stock Acquisition Date (subject to
extension by the Company as provided in Section 26 hereof) or (ii) the
Final Expiration Date, at a redemption price of $.01 per Right, subject to
adjustments as provided in subsection (C) below (the "Redemption Price").
Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable pursuant to Section 11(a) (ii) prior to the
expiration of the Company's right of redemption hereunder."
(x) Section 26.
"For as long as the Rights are then redeemable and except as provided in
the last sentence of this Section 26, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of this Agreement without the approval of
any holders of the Rights. At any time when the Rights are not then
redeemable and except as provided in the last sentence of this Section 26,
the Company may, and the Rights Agent shall if the Company so directs,
supplement or amend this Rights Agreement without the approval of any
holders of Right Certificates (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein or (iii) to change or
supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable, provided that no such supplement or amendment
pursuant to this clause (iii) shall materially adversely affect the
interest of the holders of Right Certificates. Upon the delivery of a
certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of
this Section 26, the Rights Agent shall execute such supplement or
amendment. This Agreement may be amended or supplemented at any time with
the approval of a majority of the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock).
Notwithstanding anything contained in this Rights Agreement to the
contrary, no supplement or amendment shall be made which changes the
Redemption Price or the Final Expiration Date and supplements or amendments
may be made after the time that any Person becomes an Acquiring Person
(other than pursuant to a Qualifying Tender Offer) only if such supplement
or amendment is approved by the Board of Directors."
6
<PAGE>
(b) Exhibits. Exhibits A, B, and C to the Rights Agreement are hereby
amended and restated in their entirety as set forth in Exhibits A, B, and C,
respectively, attached to this Amendment.
2. Binding Effect. This Amendment shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors
and assigns.
3. Execution in Counterparts. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
4. Rights Agreement in Effect. Except as hereby amended, the Rights
Agreement shall remain in full force and effect.
6. Governing Law. This Amendment shall be governed by, and interpreted
in accordance with, the laws of the State of Delaware, without regard to
principles of conflict of laws.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and year first-above written.
MINERALS TECHNOLOGIES INC.
By:/s/ S. Garrett Gray
---------------------------
Name: S. Garrett Gray
Title: Vice President
CHASEMELLON SHAREHOLDER SERVICES L.L.C.
By:/s/ Kimberly Crowell
---------------------------
Name: Kimberly Crowell
Title: Asst. Vice President
7
<PAGE>
EXHIBIT A
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS
REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE TRANSFERRED TO ANY
PERSON.
MINERALS TECHNOLOGIES INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On October 26, 1992, the Board of Directors of Minerals Technologies Inc. (the
"Company") declared a dividend distribution of one Preferred Stock Purchase
Right for each outstanding share of Common Stock, par value $0.10 per share (the
"Common Stock"), of the Company. The distribution is payable as of November 6,
1992 to stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth (1/100) of a share of
preferred stock of the Company, designated as Series A Junior Preferred Stock
(the "Preferred Stock") at a price of $65.00 per one one-hundredth (1/100) of a
share ("Exercise Price"). The description and terms of the Rights are set forth
in an agreement between the Company and Chemical Bank, as Rights Agent (the
"Rights Agent"), dated as of October 26, 1992, as amended by the First Amendment
of Rights Agreement between the Company and ChaseMellon Shareholder Services
L.L.C., as successor to the Rights Agent, dated as of November ___, 1998 (the
"Rights Agreement").
As discussed below, initially the Rights will not be exercisable, certificates
will not be sent to stockholders and the Rights will automatically trade with
the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Company (an "Acquiring Person") and (ii) the tenth business
day (or such later date as may be determined by the Board of Directors prior to
such time as any person or group of affiliated or associated persons becomes an
Acquiring Person) after the date of the commencement or announcement of a
person's or group's intention to commence a tender or exchange offer the
consummation of which would result in the ownership of 30% or more of the
Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of November 6, 1992, by such Common Stock certificate with a copy of this
Summary of Rights attached thereto. An Acquiring Person does not include(A) the
Company, (B) any subsidiary of the Company, (C) any employee benefit plan or
employee stock plan of the Company or of any subsidiary of the Company, or any
trust or other entity organized, appointed, established or holding Common Stock
for or pursuant to the terms of any such plan or (D) any person or group whose
ownership of 15% or more of the shares of voting stock of the Company then
outstanding results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii)).
Until the Distribution Date (or earlier redemption or expiration of the Rights),
new Common Stock certificates issued after November 6, 1992 will contain a
legend incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), the surrender for
transfer of any of the Common Stock certificates outstanding as of November 6,
1992, with or without a copy of this Summary of Rights attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the distribution Date.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on October 26, 2002, unless earlier redeemed by
the Company as described below.
The Preferred Stock is non-redeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. The Preferred
Stock may not be issued except upon exercise of Rights. Each share of Preferred
Stock will be entitled to receive when, as and if declared, a quarterly dividend
in an amount equal to the greater of $1.00 per share or 100 times the cash
dividends declared on the Company's Common Stock. In addition, Preferred Stock
is entitled to 100 times any non-cash dividends (other than dividends payable in
equity securities) declared on the Common Stock, in like kind. In the event of
the liquidation of the Company, the holders of Preferred Stock will be entitled
to receive a payment in an amount equal to the greater of $100.00 per share or
100 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 100 votes, voting together with the Common Stock. In the event
of any merger, consolidation or other transaction in which Common Stock is
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of Common Stock. The rights of Preferred Stock as
to dividends, liquidation and voting are protected by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise of the Rights is
subject to certain adjustments from time to time in the event of a stock
dividend on, or a subdivision or combination of, the Common Stock. The Exercise
Price for the Rights is subject to adjustment in the event of extraordinary
distributions of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed or the transaction is approved by a
majority of the Board of Directors, in the event that, after the time the Rights
become exercisable, the Company were to be acquired in a merger or other
business combination (in which any shares of Common Stock are changed into or
exchanged for other securities or assets) or more than 50% of the assets or
earning power of the Company and its subsidiaries (taken as a whole) were to be
sold or transferred in one or a series of related transactions, the Rights
Agreement provides that proper provision will be made so that each holder of
record of a Right will from and after such date have the right to receive, upon
payment of the Exercise Price, that number of shares of common stock of the
acquiring company having a market value at the time of such transaction equal to
two times the Exercise Price. In addition, unless the Rights are earlier
redeemed, in the event that a person or group becomes the beneficial owner of
15% or more of the Company's voting stock (other than pursuant to a tender or
exchange offer for all outstanding shares of Common Stock that is approved by
the Board of Directors, after taking into account the long-term value of the
Company and all other factors they consider relevant in the circumstances), the
Rights Agreement provides that proper provision will be made so that each holder
of record of a Right, other than the Acquiring Person (whose Rights will
thereupon become null and void), will thereafter have the right to receive, upon
payment of the Exercise Price, that number of shares of the Preferred Stock
having a market value at the time of the transaction equal to two times the
Exercise Price (such market value to be determined with reference to the market
value of the Company's Common Stock as provided in the Rights Agreement).
Fractions of shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share) may, at the election of the Company,
be evidenced by depositary receipts. The Company may also issue cash in lieu of
fractional shares which are not integral multiples of one one-hundredth of a
share.
At any time on or prior to the close of business on the earlier of (i) the tenth
day after the time that a person has become an Acquiring Person (or such later
date as a majority of the Board of Directors may determine) or (ii) October 26,
2002, the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (the "Redemption Price"). The Rights may be redeemed after the
time that any Person has become an Acquiring Person only if approved by a
majority of the Board of Directors. Immediately upon the effective time of the
action of the Board of Directors of the Company authorizing redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company may, except with
respect to the redemption price or date of expiration of the Rights, amend the
Rights in any manner, including an amendment to extend the time period in which
the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Company may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Amendments to the Rights Agreement from and after the time that any Person
becomes an Acquiring Person requires the approval of a majority of the Board of
Directors.
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or
to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A dated
November____, 1998. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
which is incorporated in this summary description herein by reference.
Exhibit 10.1
Employment Agreements have been executed by the Company and the indicated
employees, each substantially identical in all material respects to the form of
agreement filed as Exhibit 10.5 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1997, except as noted below. Each Employment
Agreement was executed for the Company by Dr. Valles, except the agreement with
Dr. Valles, which was executed for the Company by Mr. Gray.
TERMINATION
EMPLOYEE AND BASE DATE OF DATE OF
POSITION SALARY AGREEMENT AGREEMENT
Neil M. Bardach $225,000 August 1, 1998 October 22, 1999
Vice President -
Finance and Chief
Financial Officer
Howard R. Crabtree $204,347 October 22, 1998 October 21, 2001
Vice President,
Organization and
Human Resources
Anton Dulski $233,352 October 22, 1998 October 21, 2001
Vice President;
President and Chief
Executive Officer of
Minteq International Inc.
S. Garrett Gray $209,576 October 22, 1998 October 21, 2001
Vice President,
General Counsel
and Secretary
Paul R. Saueracker $241,146 October 22, 1998 October 21, 2001
Vice President;
President and Chief
Executive Officer of
Specialty Minerals Inc.
Jean-Paul Valles $738,972 October 22, 1997 October 17, 2001
Chairman and Chief
Executive Officer
Exhibit 10.2
Severance Agreements have been executed by the Company and the indicated
employees, each substantially identical in all material respects to the form of
agreement filed as Exhibit 10.11 to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996, except as noted below. Each Severance
Agreement was executed for the Company by Dr. Valles, except the agreement with
Dr. Valles, which was executed for the Company by Mr. Gray.
EMPLOYEE AND DATE OF
POSITION AGREEMENT
Neil M. Bardach August 1, 1998
Vice President -
Finance and Chief
Financial Officer
Howard R. Crabtree January 1, 1997
Vice President,
Organization and
Human Resources
Anton Dulski January 1, 1997
Vice President;
President and Chief
Executive Officer of
MINTEQ International Inc.
S. Garrett Gray January 1, 1997
Vice President,
General Counsel
and Secretary
Paul R. Saueracker January 1, 1997
Vice President;
President and Chief
Executive Officer of
Specialty Minerals Inc.
Jean-Paul Valles January 1, 1997
Chairman and Chief
Executive Officer
EXHIBIT 15
ACCOUNTANTS' ACKNOWLEDGMENT
The Board of Directors
Minerals Technologies Inc.:
Re: Registration Statement Nos. 33-59080, 33-65268, 33-
96558 and 333-62739
With respect to the subject registration
statements, we acknowledge our awareness of the use
therein of our report dated November 3, 1998, related
to our review of interim financial information.
Pursuant to Rule 436(c) under the Securities Act
of 1933, such report is not considered a part of a
registration statement prepared or certified by an
accountant or a report prepared or certified by an
accountant within the meaning of Sections 7 and 11 of
the Act.
Very truly yours,
KPMG Peat Marwick LLP
New York, New York
November 3, 1998
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the condensed consolidated financial statements of Minerals
Technologies Inc., and is qualified in its entirety by reference
to such condensed consolidated financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-27-1998
<CASH> 31,302
<SECURITIES> 0
<RECEIVABLES> 115,189
<ALLOWANCES> 0
<INVENTORY> 61,788
<CURRENT-ASSETS> 219,507
<PP&E> 876,769
<DEPRECIATION> 367,038
<TOTAL-ASSETS> 751,691
<CURRENT-LIABILITIES> 97,530
<BONDS> 88,454
0
0
<COMMON> 2,551
<OTHER-SE> 596,204
<TOTAL-LIABILITY-AND-EQUITY> 751,691
<SALES> 453,973
<TOTAL-REVENUES> 453,973
<CGS> 311,199
<TOTAL-COSTS> 311,199
<OTHER-EXPENSES> 15,302
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 64,161
<INCOME-TAX> 20,518
<INCOME-CONTINUING> 42,909
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 42,909
<EPS-PRIMARY> 1.92<F1>
<EPS-DILUTED> 1.86
<FN>
<F1> (EPS-PRIMARY) denotes basic EPS
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the condensed consolidated financial statements of Minerals
Technologies Inc., and is qualified in its entirety by reference
to such condensed consolidated financial statements.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-28-1997
<CASH> 31,530
<SECURITIES> 0
<RECEIVABLES> 115,961
<ALLOWANCES> 0
<INVENTORY> 63,710
<CURRENT-ASSETS> 226,630
<PP&E> 839,858
<DEPRECIATION> 343,720
<TOTAL-ASSETS> 733,835
<CURRENT-LIABILITIES> 86,856
<BONDS> 101,610
0
0
<COMMON> 2,534
<OTHER-SE> 536,908
<TOTAL-LIABILITY-AND-EQUITY> 733,835
<SALES> 444,403
<TOTAL-REVENUES> 444,403
<CGS> 313,089
<TOTAL-COSTS> 313,089
<OTHER-EXPENSES> 15,199
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 53,644
<INCOME-TAX> 17,164
<INCOME-CONTINUING> 36,642
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,642
<EPS-PRIMARY> 1.62<F1>
<EPS-DILUTED> 1.59
<FN>
<F1>(EPS-PRIMARY) denotes basic EPS
</FN>
</TABLE>
EXHIBIT 99
CAUTIONARY FACTORS THAT MAY AFFECT FUTURE RESULTS
The disclosure and analysis set forth in this report
contains certain forward looking statements, particularly
statements relating to future actions, performance or
results of current and anticipated products, sales efforts,
expenditures, and financial results. From time to time, the
Company also provides forward looking statements in other
publicly released materials, both written and oral. Forward
looking statements provide current expectations and
forecasts of future events such as new products, revenues
and financial performance, and are not limited to describing
historical or current facts. They can be identified by
their use of words such as plans, expects, anticipated, will
and other words and phrases of similar meaning.
Forward looking statements are necessarily based on
assumptions, estimates and limited information available at
the time they are made. A broad variety of risks and
uncertainties, both known and unknown, as well as the
inaccuracy of assumptions and estimates, can affect the
realization of the expectations or forecasts in these
statements. Consequently, no forward looking statement can
be guaranteed. Actual future results may vary materially.
The Company undertakes no obligation to update any forward
looking statements. You should refer to the Company's
subsequent filings under the Securities Exchange Act of 1934
for further disclosures.
As permitted by the Private Securities Litigation Reform Act
of 1995, the Company is providing the following cautionary
statements which identify factors that could cause the
Company's actual results to differ materially from
historical and expected results. It is not possible to
foresee or identify all such factors. You should not
consider this list an exhaustive statement of all potential
risks, uncertainties and inaccurate assumptions.
HISTORICAL GROWTH RATE
Continuance of the historical growth rate of the Company
depends upon a number of uncertain events, including the
outcome of the Company's strategies of increasing its
penetration into geographical markets such as Asia, Latin
America and Europe; increasing its penetration into product
markets such as the market for paper coating pigments and
the market for groundwood paper pigments; increasing sales
to existing PCC customers by increasing the amount of PCC
used per ton of paper produced; and developing, introducing
and selling new products. Difficulties, delays or failures
of any of these strategies could cause the future growth
rate of the Company to differ materially from its historical
growth rate.
CONTRACT RENEWALS
The Company's sales of PCC are predominantly pursuant to
long term agreements, generally ten years in length, with
paper mills at which the Company operates satellite PCC
plants. The terms of many of these agreements have been
extended, often in connection with an expansion of the
satellite PCC plant. To date, the Company's experience with
extensions and renewals of its satellite PCC agreements has
been favorable. There is no assurance, however, that this
will continue to be the case. Failure of a number of the
Company's customers to renew existing agreements could cause
the future growth rate of the Company to differ materially
from its historical growth rate, and could have a
substantial adverse effect on the Company's results of
operations.
LITIGATION; ENVIRONMENTAL EXPOSURES
The Company's operations are subject to international,
federal, state and local environmental, tax and other laws
and regulations, and potentially to claims for various
legal, environmental and tax matters. The Company is
currently a party to various litigation matters, including
the Eaton litigation which has previously been disclosed in
the Management's Discussion and Analysis sections of the
Company's most recent filings under the Securities Exchange
Act of 1934. While the Company carries liability insurance
which it believes to be appropriate to its businesses, and
has provided reserves for such matters which it believes to
be adequate, an unanticipated liability arising out of such
a litigation matter or a tax or environmental proceeding could
have a material adverse effect on the Company's financial condition
or results of operations.
NEW PRODUCTS
The Company is engaged in a continuous effort to develop new
products in all of its product lines. Difficulties, delays
or failures in the development, testing, production,
marketing or sale of such new products could cause its
actual results of operations to differ materially from
expected results.
COMPETITION; PROTECTION OF INTELLECTUAL PROPERTY
Particularly in its PCC and Refractory product lines, the
Company competes based in part upon proprietary knowledge,
both patented and unpatented. The Company's ability to
achieve anticipated results depends in part on its ability
to defend its intellectual property against inappropriate
disclosure as well as against infringement. In addition,
development by the Company's competitors of new products or
technologies that are more effective or less expensive than
those the Company offers could have a material adverse
effect on the Company's financial condition or results of
operations.
RISKS OF DOING BUSINESS ABROAD
As the Company expands its operations overseas, it faces the
increased risks of doing business abroad, including
inflation, fluctuations in interest rates and currency
exchange rates, changes in applicable laws and regulatory
requirements, export and import restrictions, tariffs and
other trade barriers, longer payment terms, adverse tax
treatment, nationalization, expropriation, limits on
repatriation of funds, unstable governments and legal
systems, and other factors. Adverse developments in any of
these areas could cause actual results to differ materially
from historical and expected results.
AVAILABILITY OF RAW MATERIALS
The Company's ability to achieve anticipated results depends
in part on having an adequate supply of raw materials for
its manufacturing operations, particularly lime and carbon
dioxide for PCC operations and magnesia for refractory
operations, and on having adequate access to the ore
reserves at its mining operations. Unanticipated changes in
the costs or availability of such raw materials, or in the
Company's ability to have access to its ore reserves, could
adversely affect the Company's results of operations.
YEAR 2000
The Company faces the risk that the transition to the year
2000 may cause its own systems and equipment, or the systems
and equipment of other firms, to fail unexpectedly. The
Company is taking steps to study and reduce this risk, as
outlined above in the Management's Discussion and Analysis
section of this quarterly report on Form 10-Q. However,
failure of the Company's efforts to repair or replace its
information technology systems and non-information
technology systems according to schedule; failure to
identify a mission-critical, non-year 2000-compatible item
of software or embedded control; failure of a significant
vendor or customer to provide MTI with goods or services or
to purchase or pay for goods or services, because of year
2000-related breakdowns; or widespread year 2000-related
disruption of the electrical, banking, telecommunications or
transportation systems or of the economy in general, could
adversely affect the Company's financial position or results
of operations.
CYCLICAL NATURE OF CUSTOMERS' BUSINESS
The bulk of the Company's sales are to customers in two
industries, paper and steel, which have historically been
cyclical. The Company's exposure to variations in its
customers' business has been reduced in recent years by the
growth in the number of plants we operate; by the
diversification of our portfolio of products and services;
and by our geographic expansion, since economic problems are
usually not equally felt in all parts of the world. In
addition, the structure of some of our long term contracts
gives us a degree of protection against declines in the
quantity of product purchased, since the price per ton rises
as the number of tons purchased declines. In addition, many
of our product lines lower our customers' cost of production
or increase their productivity, which should encourage them
to use our products. However, a sustained economic downturn
in one or more of the industries or geographic regions which
we serve, or in the worldwide economy, could cause actual
results of operations to differ materially from historical
and expected results.
ADOPTION OF A COMMON EUROPEAN CURRENCY
On January 1, 1999, eleven European countries will adopt the
Euro as their common currency. Adoption of the Euro will
require changes both to the Company's financial reporting
systems and to commercial arrangements with third parties,
including customers, suppliers and financial institutions.
In addition, adoption of a single currency and a common
monetary policy by the countries adopting the Euro can be
expected to have effects on competition in Europe and on the
overall economy of the region. A failure on our part to
identify or to correct systems or agreements which require
modification, or effects on competition or the general
economy of the region, could adversely affect the Company's
financial position or results of operations.
