SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________.
Commission File Number 0-1349
Stanhome Inc.
___________________________________________________________________________
(Exact name of registrant as specified in its charter)
Massachusetts 04-1864170
____________________________________ _______________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
333 Western Avenue, Westfield, Massachusetts 01085
___________________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 413-562-3631
___________________________________________________________________________
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days Yes [X] No [_]
March 31,
1995 1994
____ ____
Shares Outstanding:
Common Stock with
Associated Rights 18,808,715 19,470,555
Total number of pages
contained herein 24
Index to Exhibits is
on page 20
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
------------------------------
STANHOME INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 1995 and DECEMBER 31, 1994
(Unaudited)
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and certificates of deposit $ 20,983,249 $ 19,349,839
Marketable securities, at cost (which
approximates market value) 10,483,644 2,000
Notes and accounts receivable, net 146,237,945 140,696,603
Inventories 112,602,291 116,015,060
Prepaid advertising 45,561,709 40,099,913
Other prepaid expenses 9,939,130 6,513,723
------------ ------------
Total current assets 345,807,968 322,677,138
------------ ------------
PROPERTY, PLANT AND EQUIPMENT, at cost 128,740,431 125,995,626
Less - Accumulated depreciation and
amortization 70,345,961 68,036,607
------------ ------------
58,394,470 57,959,019
------------ ------------
OTHER ASSETS:
Goodwill and other intangibles, net 124,166,945 121,586,984
Other 9,435,604 9,899,491
------------ ------------
133,602,549 131,486,475
------------ ------------
$537,804,987 $512,122,632
============ ============
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
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<PAGE>
<TABLE>
STANHOME INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 1995 and DECEMBER 31, 1994
(Unaudited)
<CAPTION>
March 31, December 31,
1995 1994
---- ----
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes and loans payable $ 88,579,082 $ 39,022,890
Accounts payable 59,070,473 63,072,000
Federal, state and foreign taxes
on income 29,988,637 37,062,510
Accrued expenses--
Payroll and commissions 14,644,926 17,423,516
Vacation, sick and postretirement
benefits 10,160,227 9,435,495
Royalties 7,668,208 7,974,606
Pensions and profit sharing 6,528,816 9,055,259
Other 37,999,140 37,171,244
------------ ------------
Total current liabilities 254,639,509 220,217,520
------------ ------------
LONG-TERM LIABILITIES:
Foreign employee severance obligations 12,236,081 13,207,097
Pensions 9,472,474 9,302,239
------------ ------------
Total long-term liabilities 21,708,555 22,509,336
------------ ------------
SHAREHOLDERS' EQUITY
Common stock 3,153,530 3,153,530
Capital in excess of par value 37,788,508 37,376,690
Retained earnings 364,368,486 362,946,840
Cumulative translation adjustments ( 27,224,351) ( 27,660,727)
------------ ------------
378,086,173 375,816,333
Less - Shares held in treasury, at cost 116,629,250 106,420,557
------------ ------------
Total shareholders' equity 261,456,923 269,395,776
------------ ------------
$537,804,987 $512,122,632
============ ============
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
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<PAGE>
<TABLE>
STANHOME INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 and 1994 (Unaudited)
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
NET SALES $184,869,162 $171,769,005
COST OF SALES 77,425,988 69,806,121
------------ ------------
GROSS PROFIT 107,443,174 101,962,884
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSE 93,673,069 86,982,547
------------ ------------
OPERATING PROFIT 13,770,105 14,980,337
Interest expense ( 1,342,297) ( 156,920)
Other income, net ( 157,467) 664,328
------------ ------------
INCOME BEFORE INCOME TAXES 12,270,341 15,487,745
Income taxes 5,820,000 7,354,813
------------ ------------
NET INCOME 6,450,341 8,132,932
RETAINED EARNINGS, beginning of
period 362,946,840 338,753,939
Cash dividends, $.265 per share in
1995 and $.25 per share in 1994 ( 5,028,695) ( 4,863,437)
------------ ------------
RETAINED EARNINGS, end of period $364,368,486 $342,023,434
============ ============
EARNINGS PER COMMON SHARE:
Primary and fully diluted $ .34 $ .41
===== =====
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
-4-
<PAGE>
<TABLE>
STANHOME INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1995 and 1994 (Unaudited)
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net cash provided/(used) by
operating activities ($16,375,129) $17,164,172
----------- -----------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment ( 3,142,870) ( 1,321,591)
Proceeds from sale of property, plant and
equipment 500,339 605,699
Acquisition of businesses, net of cash
acquired, including additional
contingent cash payments ( 208,042) -
Other, principally marketable securities ( 416,052) ( 630)
----------- -----------
Net cash used by investing activities ( 3,266,625) ( 716,522)
----------- -----------
FINANCING ACTIVITIES:
Cash dividends ( 5,028,695) ( 4,863,437)
Exchanges and purchases of common stock ( 10,301,359) ( 108,891)
Notes and loans payable 46,537,740 ( 56,515)
Exercise of stock options 265,299 1,954,489
Other common stock issuance 239,185 230,674
----------- -----------
Net cash provided/(used) by
financing activities 31,712,170 ( 2,843,680)
----------- -----------
Effect of exchange rate changes on cash
and cash equivalents 44,638 187,903
----------- -----------
Increase/(decrease) in cash and
cash equivalents 12,115,054 13,791,873
Cash and cash equivalents,
beginning of year 19,349,839 53,333,754
----------- -----------
Cash and cash equivalents, end of quarter $31,464,893 $67,125,627
=========== ===========
SUPPLEMENTAL CASH FLOW DATA
Cash paid for:
Interest $ 763,854 $ 190,717
Income taxes $12,558,705 $ 1,709,357
<FN>
The accompanying notes are an integral part of these condensed financial
statements.
</TABLE>
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<PAGE>
STANHOME INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The consolidated condensed financial statements and related notes
included herein have been prepared by the Company, without audit except for
the December 31, 1994 condensed balance sheet, which was derived from the
Annual Report on Form 10-K, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. The information furnished reflects all normal
recurring adjustments which are, in the opinion of management, necessary to
a fair statement of the results for the interim periods. It is suggested
that these condensed financial statements be read in conjunction with the
financial statements and related notes to consolidated financial statements
included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994.
1. ACCOUNTING POLICIES:
The Company's financial statements for the three months ended March
31, 1995 have been prepared in accordance with the accounting policies
described in Note 1 to the December 31, 1994 consolidated financial
statements included in the Company's 1994 Annual Report on Form 10-K.
Marketable securities with maturities of three months or less are
considered to be cash equivalents and amounted to $10,482,000 at March 31,
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<PAGE>
1995 versus none at December 31, 1994. Except for $2,000 of other
investments with terms in excess of 90 days, the cash flows' cash and cash
equivalents at March 31, 1995 are equal to the cash and certificates of
deposit and the marketable securities on the March 31, 1995 balance sheet.
Notes and accounts receivable were net of allowance for doubtful accounts
of $15,322,000 at March 31, 1995 and $15,249,000 at December 31, 1994.
The impact of adopting the AICPA's SOP 93-7 (Reporting on Advertising
Costs) in 1994 was immaterial to the Company as the Company was already in
compliance with all the Statement's accounting provisions.
The Company recognizes revenue as merchandise is turned over to the
shipper.
2. INVENTORY CLASSES:
The major classes of inventories at March and December 3l were as
follows (in thousands):
March 31, December 31,
1995 1994
---- ----
Raw materials and supplies $ 7,988 $ 7,071
Work in process 1,144 818
Finished goods in transit 10,470 9,949
Finished goods 93,000 98,177
-------- --------
$112,602 $116,015
======== ========
3. OTHER INCOME, NET:
Other income, net for the three months ended March 31, 1995 and 1994
consists of the following (in thousands):
1995 1994
---- ----
Interest income $ 745 $ 846
Amortization of other assets ( 1,009) ( 598)
Other, net 106 417
------ ------
($ 158) $ 665
====== ======
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<PAGE>
4. EARNINGS PER COMMON SHARE (BASIS OF CALCULATION):
Earnings per common share are based on the average number of common
shares outstanding and common share equivalents for the period covered.
For both years, there was no difference in earnings per share between
primary and fully diluted earnings per share computations. For the first
quarter fully diluted computation, the average number of shares utilized
was 19,033,574 and 19,754,901 shares for 1995 and 1994, respectively,
including common share equivalents of 19,174 in 1995 and 332,288 in 1994.
The lower average number of shares for 1995 primarily resulted from the
repurchase of shares as part of the Company's repurchase program.
5. FINANCIAL INSTRUMENTS:
The Company enters into various short-term foreign exchange
agreements during the year, all of which are held for purposes other than
trading. The purpose of the Company's foreign currency hedging activities
is to reduce the risk that the eventual settlement of foreign currency
transactions will be adversely affected by changes in exchange rates. The
Company's various subsidiaries import products in foreign currencies and
from time to time will enter into agreements or build foreign currency
deposits as a partial hedge against currency fluctuations on inventory
purchases. Gains and losses on these agreements are deferred and recorded
as a component of cost of sales when the related inventory is sold. At
March 31, 1995, there were no open inventory purchase agreements and
deferred amounts were not material. The Company makes short-term foreign
currency intercompany loans to various international subsidiaries and
utilizes agreements to fully hedge these transactions against currency
fluctuations. The cost of these agreements is included in the interest
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<PAGE>
charged to the subsidiaries and expensed monthly as the interest is
accrued. The intercompany interest eliminates upon consolidation and any
gains and losses on the agreements are recorded as a component of other
income. The Company receives dividends, technical service fees, royalties
and other payments from its subsidiaries. From time to time, the Company
will enter into foreign currency forward agreements as a partial hedge
against currency fluctuations on these current receivables. Gains and
losses are recognized or the credit or debit offsets the foreign currency
payables. As of March 31, 1995, net deferred amounts on outstanding
agreements were not material and all current agreements have expiration
dates in 1995. The outstanding agreement amounts (notional value) at March
31, 1995, are as follows (in thousands):
Canada $ 6,076
Germany 5,381
Italy 3,816
United Kingdom 2,594
France 2,186
U.S. 2,000
-------
Total $22,053
=======
6. LICENSE AGREEMENT:
In January 1995, the Company entered into an agreement with a third
party to license the domestic operations of its Worldwide Direct Selling
Group. The business licensed, known as Stanley Home Products ("SHP"),
marketed home care, personal care and cosmetic items to consumers through
direct selling programs. SHP recorded net sales of approximately $9
million in the first quarter of 1994 and produced operating losses for the
past several years. These sales represented approximately 15% of the
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<PAGE>
Worldwide Direct Selling Group's first quarter 1994 net sales and 5% of the
Company's consolidated net sales. For the first quarter of 1994, SHP's
operating loss in the U.S. and Puerto Rico was approximately $800 thousand.
The agreement calls for the third party to license the trademarks and
formulas of SHP for use in the U.S., Puerto Rico and Canada, and remit to
the Company royalties based on sales of the related products.
The transfer of the SHP business is on schedule to be completed by
the second quarter of 1995. In connection with this agreement, the Company
closed administrative and distribution facilities in the U.S. and Puerto
Rico during the first quarter of 1995. Management believes that the total
costs to exit the SHP operations, including employee severance benefits,
will be offset in 1995 by a comparable amount of gains, approximately $6
million, primarily from the sale of SHP's distribution facilities. The
costs to exit the SHP operations therefore have not had and are not
expected to have a material adverse impact on the Company's future
operating results or financial condition. As of March 31, 1995 the net
book value of assets of the business to be disposed of or transferred were
net inventories of $6.4 million and net property, plant and equipment of
$1.8 million.
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<PAGE>
STANHOME INC.
THREE MONTHS ENDED MARCH 31, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BUSINESS SEGMENTS of the Company's operations are summarized on Page
17. A discussion and analysis of the segments follows:
GIFTWARE
Giftware Group sales increased 22% in the first quarter of 1995 due
principally to 12% volume growth from existing lines and 10% from new
businesses acquired in 1994. International results increased and including
the new businesses, international sales represented 17% of total 1995 first
quarter sales compared to 12% in 1994. The Precious Moments line
represented 48% of total 1995 sales compared to 52% in 1994 and the
Cherished Teddies line represented 13% of total sales in 1995 compared to
14% in 1994. Operating profit in the first quarter increased 12% and was
less than the sales increase due principally to lower operating profits
from the new businesses and higher cost of sales due in part to sales mix.
DIRECT RESPONSE
Direct Response Group sales increased 22% in the first quarter of 1995
due to unit volume growth in dolls and figurines in the United States.
Doll sales amounted to 31% of 1995 sales compared to 27% in 1994, while
plate sales accounted for 48% of sales in 1995 compared to 62% in 1994.
All other categories of sales, which are mostly figurines, increased to 21%
of sales compared to 11% in 1994. Market conditions in the direct response
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<PAGE>
business continue to be very competitive. International sales decreased
and operating losses increased. The Group recorded a small operating loss
in the first quarter of 1995 compared to an operating profit in 1994 of 6%
of sales. The decrease in operating profit was due primarily to increased
advertising expense in 1995 compared to 1994. Advertising expenses
increased to 51% of sales in 1995 versus 45% in 1994 due to lower sales
response rates to programs reflecting the very competitive market
condition. Operating expense also increased due to postal rate and paper
cost increases.
DIRECT SELLING
Comparable Direct Selling results for the first quarter excluding the
United States and Puerto Rico operations, which in 1995 have been licensed
to a third party, are as follows:
1995 1994 % Change
Sales $47,759 $49,861 ( 4)
Operating profit 4,749 6,138 ( 23)
European sales increased 2% on lower unit volume and represented 90% of
1995 first quarter sales while operating profit decreased 22% and
accounted for 91% of first quarter operating profit. Lower sales in Italy
combined with higher selling, general and administrative expenses in Italy
and Spain reduced operating margins. European local currency 1995 sales
and operating profit translated at 1994 average first quarter exchange
rates would have resulted in a 4% sales decrease and a 27% operating
profit decrease. Sales for the Mexican and Venezuelan Group in the first
quarter decreased 37% due to a 45% decrease in Mexico, resulting from the
devaluation of the Mexican peso, while Group operating profit decreased
-12-
<PAGE>
due to the peso devaluation and higher selling, general and administrative
expenses. The United States and Puerto Rico direct selling operations in
1995 have been assumed by a third party. The assets of these businesses,
not assumed by the third party, have been and are being disposed during
1995. The severance and other exit costs are expected to approximate $6
million, and to be offset by gains on the sale of assets of the business.
GENERAL CORPORATE EXPENSE increased in the first quarter due to
higher compensation and benefits consistent with the Company programs.
INTERNATIONAL ECONOMIES AND CURRENCY
The Latin American operations in Mexico and Venezuela have experienced
highly inflationary economies with rapidly changing prices in local
currencies. These conditions, with the resulting adverse impact on local
economies, have made it difficult for operations in these locations to
achieve adequate operating margins. In addition, the strengthening of the
dollar versus Latin American currencies has resulted in lower U.S. dollar
results for these operations. European operations were favorably impacted
by higher currency translation rates in 1995 compared to 1994. The value
of the U.S. dollar versus international currencies where the Company
conducts business will continue to impact the future results of these
businesses. In addition to the currency risks, the Company's international
operations, including sources of imported products, are subject to other
risks of doing business abroad, including import or export restrictions and
changes in economic and political climates.
The fluctuations in net sales and operating profit margins from
quarter to quarter are partially due to the seasonal characteristics of the
Company's business segments.
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<PAGE>
INTEREST EXPENSE AND OTHER INCOME, NET
Interest expense increased due to higher borrowing levels principally
for the 1994 acquisitions. Other assets amortization of goodwill
increased due to the impact from the 1994 acquisitions. The amortization
for Giftware in 1995 was $.8 million compared to $.4 million in 1994 and
the amortization for Direct Response was $.2 million in 1995 and $.2
million in 1994. Other income, net last year includes a $.4 million gain
on the sale of a U.S. distribution center.
THE EFFECTIVE TAX RATE of 47% was the same as 1994 despite
international rate increases, and higher non deductible goodwill in 1995.
This was due principally to earnings mix with a lower ratio of foreign
income to United States income, which has a lower rate.
FINANCIAL CONDITION
The Company has historically satisfied its capital requirements with
internally generated funds and short-term loans. Working capital
requirements have seasonal variations during the year and are generally
greatest during the third quarter.
The major sources of funds from operating activities in the first
quarter of 1995 were from net income, depreciation, amortization and lower
inventory levels. The major uses were increased accounts receivable which
increased due to the higher sales volume and marketing programs; increased
prepaid expenses from higher advertising in direct response; lower
accounts payable and accrued expenses due principally to timing and the
payment of year end payrolls and benefits; and lower accrued taxes due to
timing of payments. The first quarter 1995 working capital increases
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<PAGE>
in receivables, inventories and prepaids compared to the first quarter of
1994 reflect increases to support higher levels of sales.
The major use of cash in investing activities in the first quarter of
1995 was for capital expenditures. Capital expenditure commitments for
$20 million are forecasted for 1995. Due to the Company's exit from the
United States direct selling business, the Company has for sale four
United States distribution facilities with a total appraised value of
approximately $7 million. The Company has an acquisition program, and may
utilize funds for this purpose in the future. The Italian subsidiary
invests excess cash in short-term investments which change from time to
time based on availability and rates. The level of changes of marketable
securities from period to period principally represents investment
alternatives versus certificates of deposit, time deposits, and
intercompany loans.
The major uses of cash in financing activities were for dividends to
shareholders and purchases of common stock. Purchases of common stock
principally included shares repurchased by the Company. During the first
quarter of this year, the Company repurchased 360,600 shares for
$10,302,000. The Company has an authorized program to purchase shares of
stock for the Company treasury from time to time in the open market,
depending on market conditions, and may utilize funds for this purpose in
the future. As of March 31, 1995, 655,000 shares remained available for
purchase under the program. The Company's earnings, cash flow, and
available debt capacity have made and make stock repurchases, in the
Company's view, one of its best investment alternatives. The major source
of funds from financing activities was from higher seasonal borrowings,
which also increased due to reduced intercompany loans which fluctuate
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<PAGE>
depending on market condition rates. Total stock options outstanding at
the exercise price amounted to $88 million at March 31, 1995 and the
Company could receive these funds in the future if the options are
exercised.
Fluctuations in the value of the U.S. dollar versus international
currencies affect the U.S. dollar translation value of international
currency denominated balance sheet items. The changes in the balance sheet
dollar values due to international currency translation fluctuations are
recorded as a component of shareholders' equity. International currency
fluctuations of $436,000 reduced the cumulative translation component which
reduced the shareholders' equity decrease in the first three months of
1995. The translation adjustments to the March 31, 1995 balance sheet that
produced the 1995 change in the cumulative translation component of
shareholders' equity were decreases in working capital by $2,508,000;
increases in net property, plant and equipment and other assets by
$2,353,000; and decreases in long-term liabilities by $591,000. The
Company depends upon its international operations to pay dividends and to
make other payments to the Company. The Company's international operations
are subject to the risks of doing business abroad including currency,
economic and political.
With the level of funds generated from operations, the level of
working capital and the unused lines of credit, no liquidity problems are
anticipated.
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<PAGE>
<TABLE>
STANHOME INC.
SALES AND OPERATING PROFIT BY BUSINESS SEGMENT
FOR THE FIRST THREE MONTHS ENDED MARCH 31, 1995 AND 1994 (Unaudited)
(In Thousands)
<CAPTION>
1995 1994 Percent
Actual Actual Change
------ ------ -------
<S> <C> <C> <C>
Net Sales:
Giftware $105,955 $ 86,745 22%
Direct Response 31,806 26,074 22
Direct Selling 47,759 59,439 (20)
Eliminations ( 651) ( 489)
-------- --------
Total Net Sales $184,869 $171,769 8%
======== ========
Operating Profit:
Giftware $ 11,499 $ 10,288 12%
Direct Response ( 16) 1,549
Direct Selling 4,749 5,315 (11)
Corporate ( 2,462) ( 2,172) (13)
-------- --------
Total Operating Profit $ 13,770 $ 14,980 ( 8%)
======== ========
</TABLE>
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<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Stockholders was held on April 27, 1995.
(c) The first matter voted upon at the meeting was the election of
Directors. The members of Class III were standing for election
to a three-year term expiring at the Annual Meeting in 1998.
Upon motion duly made and seconded, it was voted to elect John
F. Cauley, Jr., Homer G. Perkins, G. William Seawright, and
Anne-Lee Verville as Class III Directors for a three-year term
expiring at the Annual Meeting in 1998 and until their
successors are elected and qualified. The votes for each of
the candidates were reported as follows:
John F. Cauley, Jr. For: 16,059,457
Withheld: 239,629
Homer G. Perkins For: 16,011,924
Withheld: 287,162
G. William Seawright For: 16,044,449
Withheld: 254,637
Anne-Lee Verville For: 16,048,450
Withheld: 250,636
The second matter voted upon at the meeting was the
ratification of the Board's appointment of Arthur Andersen LLP
as independent accountants for 1995. Upon motion duly made and
seconded, it was voted that the appointment by the Board of
Directors at its March 1, 1995 meeting of Arthur Andersen LLP
independent certified public accountants, as independent
accountants for the Company for its fiscal year ending December
31, 1995 be ratified and approved. The votes for the
independent accountants were reported as follows:
Arthur Andersen LLP For: 16,228,390
Against: 35,175
Abstain: 35,521
The third matter voted upon at the meeting was the
approval of the Stanhome Inc. Non-Employee Director Stock Plan.
Upon motion duly made and seconded, it was voted that the Non-
Employee Director Stock Plan adopted by the Board of Directors
at its December 7, 1994 meeting be approved. The votes for the
approval of the Non-Employee Director Stock Plan were reported
as follows:
Non-Employee Director For: 14,814,182
Stock Plan
Against: 963,039
Abstain: 521,865
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<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
- Non-Employee Director Stock Plan.
- Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during
the Quarter for which this report is filed.
All other items hereunder are omitted because either such item is
inapplicable or the response to it is negative.
Signatures
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.
STANHOME INC.
(Registrant)
Date: May 15, 1995 /s/ G. William Seawright
_____________________________________
G. William Seawright
President and Chief Executive Officer
Date: May 15, 1995 /s/ Allan G. Keirstead
_____________________________________
Allan G. Keirstead
Chief Administrative and Financial
Officer
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Reg. S-K
Item 601 Exhibit 10-Q Page No.
_________ _______ _____________
<S> <C> <C>
10 Non-Employee Director Stock Plan 21
27 Financial Data Schedule 24
</TABLE>
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STANHOME INC.
NON-EMPLOYEE DIRECTOR STOCK PLAN
1. Purpose.
1.1 The Stanhome Inc. Non-Employee Director Stock Plan is intended
to increase the proprietary interest of non-employee members of the Board
of Directors of Stanhome Inc. by providing further opportunity for
ownership of the Company's common stock. By means of such increased
proprietary interest, the Plan is intended to enhance their incentive to
contribute to the success of the Company's business.
1.2 The Plan is intended to comply with Rule 16b-3 and shall be
interpreted in a manner consistent with the requirements thereof, as now or
hereafter construed, interpreted and applied by regulations, rulings and
cases. In particular, the provisions of Article 4 hereof are intended to
comply with the "formula plan" requirements of Rule 16b-3 and such Article
shall be construed so as to comply.
2. Definitions.
As used in this Plan, the following words and phrases shall
have the meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(c) "Committee" shall mean the Compensation and Stock Option
Committee of the Board.
(d) "Company" shall mean Stanhome Inc., a corporation organized
under the laws of the Commonwealth of Massachusetts, or any successor
corporation.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time, and as now or hereafter construed,
interpreted and applied by regulations, rulings and cases.
(f) "Participant" shall mean a non-employee member of the Board.
(g) "Plan" shall mean this Stanhome Inc. Non-Employee Director
Stock Plan, as amended from time to time.
(h) "Plan Year" shall mean the calendar year, except that the first
Plan Year shall begin on the day the stockholders of the Company approve
the Plan as adopted by the Board and shall end on the next December 31.
(i) "Rule 16b-3" shall mean Rule 16b-3, as in effect from time to
time, promulgated by the Securities and Exchange Commission under Section
16 of the Exchange Act, including any successor to such Rule.
(j) "Shares" shall mean the common stock of the Company, par value
$0.125 per share.
3. Number and Kind of Shares.
The maximum number of Shares which shall be reserved for the
grant of Shares under the Plan shall be fifteen thousand (15,000) Shares,
which number shall be subject to adjustment as provided in Article 5
hereof. Such Shares may be either authorized but unissued Shares or Shares
that shall have been or may be reacquired by the Company.
<PAGE>
4. Grants of Shares.
4.1 Grants. In the case of an individual who is a Participant on
the day following the Annual Meeting of the stockholders of the Company
during a Plan Year, he or she shall receive a grant of two hundred (200)
Shares made on such day for that Plan Year. In the case of an individual
who becomes a Participant at any later time during a Plan Year, he or she
shall not receive a grant of Shares for that Plan Year in which he or she
becomes a Participant.
4.2 Sale Restriction. Notwithstanding any other provisions hereof,
no Shares granted hereunder may be sold or otherwise transferred until at
least six months after their date of grant.
5. Effect of Certain Changes.
In the event of any extraordinary dividend, stock dividend,
recapitalization, merger, consolidation, stock split, warrant or rights
issuance, or combination or exchange of such stock, or other similar
transactions, the number of Shares available for grant shall be equitably
adjusted by the Committee to reflect such event and preserve the value of
such grants; provided, however, that any fractional Shares resulting from
such adjustment shall be eliminated.
6. No Rights to Continuance as Director.
Nothing in the Plan or in any grant made pursuant hereto shall
confer upon any Participant the right to continue to serve as a member of
the Board or to be entitled to any remuneration or benefits not set forth
in the Plan.
7. Administration.
The Plan shall be administered by the Committee which shall be
composed of not less than three directors of the Company elected or to be
elected as members of the Committee by the Board. None of the Committee
members shall be, during service on the Committee, nor shall have been,
during the one year prior to service on the Committee, granted or awarded
Shares or options to acquire Shares under any other plan maintained by the
Company or any of its affiliates, other than any grant or award of options
or other equity securities of the Company pursuant to this Plan, Section 9
of the Stanhome Inc. 1991 Stock Option Plan, or any other plan of the
Company that would not result in such Committee member failing to qualify
as a 'disinterested person' under Rule 16b-3 of the Securities Exchange Act
of 1934, as amended, as in force from time to time. Members of the
Committee shall be subject to any additional restrictions necessary to
satisfy the requirements for disinterested administration under Rule 16b-3.
The Committee shall have the authority to make such interpretations and
constructions of the Plan as are necessary to administer the Plan in
accordance with, and subject to, the Plan's provisions. All determinations
of the Committee shall be made by a majority of its members either present
in person or participating by conference telephone at a meeting or by
unanimous written consent. All decisions, determinations and
interpretations of the Committee shall be final and binding on all persons,
including the Company, the Participant (or any person claiming any rights
under the Plan from or through any Participant) and any stockholder of the
Company.
<PAGE>
8. Amendment and Termination of the Plan.
The Board at any time and from time to time may suspend,
terminate, modify or amend the Plan; provided, however, that an amendment
which requires stockholder approval in order for the Plan to continue to
comply with Rule 16b-3 or any other law, regulation or stock exchange
requirement shall not be effective unless approved by the requisite vote of
stockholders of the Company; and provided, further, that the provisions of
Article 4 shall not be amended more than once every six months, other than
to comport with changes in the Code (or the rules thereunder) or the
Employee Retirement Income Security Act of 1974, as amended (or the rules
thereunder). Except as provided in Article 5 hereof, no suspension,
termination, modification or amendment of the Plan may adversely affect any
grant previously made, unless the written consent of the Participant is
obtained.
9. Governing Law.
The Plan and the rights of all persons claiming hereunder shall
be construed and determined in accordance with the laws of the Commonwealth
of Massachusetts without giving effect to the choice of law principles
thereof, except to the extent that such law is preempted by federal law.
10. Term.
10.1 The Plan shall take effect upon its adoption by the Board, but
the Plan shall be subject to the approval of the holders of a majority of
the Shares present, or represented, and entitled to vote at a meeting of
stockholders of the Company held in accordance with applicable law, which
approval must occur within twelve months of the date the Plan is adopted by
the Board. In no event shall any delivery of Shares be made to any
Participant or any other person under the Plan until such time as the
stockholder approval of the Plan is obtained.
10.2 The Plan shall remain in effect until December 31, 1999, unless
sooner terminated by the Board.
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<SECURITIES> 10,483,644
<RECEIVABLES> 161,559,823
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