Securities and Exchange Commission
Washington, D.C. 20549
Form 10-K
X Annual Report Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the fiscal year ended June 30, 1995
Commission file number 1-2944
Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the transition period from to
Stokely-Van Camp, Inc.
(Exact name of registrant as specified in its charter)
Indiana 35-0690290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Quaker Tower P.O. Box 049001 Chicago, Illinois 60604-9001
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: 312-222-7111
Securities registered pursuant to Section 12(b) of the Act:
Name of Each
Exchange on
Title of Each Class Which Registered
5% Cumulative Prior Preference New York Stock Exchange
Stock, $20 Par Value
Common Stock, $1 Par Value None
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.[X]
Registrant had 2,989,371 shares of common stock outstanding on June 30, 1995,
all of which were owned by The Quaker Oats Company. There is no trading
market for the registrant's voting stock held by non-affiliates.
TABLE OF CONTENTS
PART I PAGE
ITEM 1. Business 1
ITEM 2. Properties 1
ITEM 3. Legal Proceedings 1
ITEM 4. Submission of Matters to a Vote of
Security-Holders N/A
PART II
ITEM 5. Market for Registrant's Common
Equity and Related Stockholder Matters 2
ITEM 6. Selected Financial Data 2
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 3-5
ITEM 8. Financial Statements and Supplementary Data 6-16
ITEM 9. Changes in and Disagreements With Accountants
on Accounting and Financial Disclosure N/A
PART III
ITEM 10. Directors and Executive Officers of
the Registrant 18
ITEM 11. Executive Compensation 18-22
ITEM 12. Security Ownership of Certain
Beneficial Owners and Management 22-23
ITEM 13. Certain Relationships and Related
Transactions 23
PART IV
ITEM 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K
(a)(1) Financial Statements
Consolidated Financial Statements of Stokley-Van
Camp, Inc. and subsidiaries are incorporated under
Item 8 of this Form 10-K
(a)(2)&(d) Financial Statement Schedules
X Supplementary Income Statement Information 24
(a)(3)&(c) Exhibits
3(a) Restated Articles of Incorporation of Stokley-Van Camp, Inc.
(As of February 14, 1994)
3(b) By-Laws of Stokley-Van Camp, Inc. (incorporated
by reference to the Company's Form 10-K for the year
ended June 30, 1985, file number 1-2944)
10(a) GATORADE Trust Agreement dated January 1,
1984 (incorporated by reference to the Company's Form
10-K for the fiscal year ended June 30, 1984, file number
1-2944)
21 Subsidiaries of the Registrant
(b) Reports on Form 8-K
(b)(1) On June 23, 1995, the Company filed an 8-K (Items 2 & 7) dated
June 8, 1995 disclosing unaudited pro forma combined financial
information and related Sale Agreement for the sale of the
canned bean business.
(b)(2) On June 27, 1995, the Company filed an 8-K (Item 8) dated June
13, 1995 indicating approval of a change in fiscal year end from
June 30 to December 31, effective the calendar year beginning
January 1, 1996.
SIGNATURES 26
PART I
ITEM 1. BUSINESS
Stokely-Van Camp, Inc. and Subsidiaries (the "Company" or "Stokely"), a
subsidiary of The Quaker Oats Company ("Quaker") since fiscal 1984, has
historically been a processor, marketer and distributor of high-quality
canned food and beverage products to retail stores, institutional
distributors and industrial and athletic users. On June 8, 1995, the Company
sold its VAN CAMP'S pork and beans business. Consequently, Stokely's
products will consist only of GATORADE thirst quencher, a beverage
specifically developed to quench thirst during periods of physical activity.
GATORADE thirst quencher is marketed through retail grocery stores,
convenience stores, food service distributors, warehouse clubs and
wholesalers, and is also sold directly to athletic, institutional and
industrial users. This product is distributed nationally and internationally
and is primarily sold through Quaker sales organizations and food brokers.
The supply of raw materials for GATORADE thirst quencher has been adequate
and continuous. The Company's sales are somewhat seasonal, with particularly
strong first and fourth fiscal quarter sales.
Export sales in fiscal 1995 and 1994 were $43.7 million and $50.6 million,
respectively. Export sales in fiscal 1993 were not material.
Fee Agreement
In 1984, the Company entered a novation of a series of agreements with the
trustee of the Gatorade Trust, the contracting agent of the innovators of
GATORADE thirst quencher and their successors in interest, and renewed rights
to manufacture and sell certain beverage products in return for payment of
fees based on varying levels of sales. In the event of failure by Stokely to
make payments to the Gatorade Trust, the Trustee may cancel the Agreements
and purchase back from Stokely, for a reasonable value, all trademarks and
foreign patents connected with the GATORADE thirst quencher business.
Competition
Stokely's beverage business is highly competitive. Following the sale of the
VAN CAMP'S business, the Company's two key competitors are the two major soft
drink companies, Coca-Cola Co. and PepsiCo Inc. The principal competitive
factors affecting sales include quality, price, brand image created by
advertising, distribution effectiveness and product availability.
Employees
The total number of Stokely employees as of June 30, 1995, was approximately
1,000.
ITEM 2. PROPERTIES
The Company owns and operates 5 plants, including manufacturing, filling and
distribution facilities. The plants are located in 5 states. The Company
also leases a facility in Puerto Rico. The Newport, Tennessee facility was
sold with the VAN CAMP'S business. The Company continues to co-pack from the
sold facility and is currently studying new sourcing options. The majority
of GATORADE thirst quencher sales is shipped direct from the production
sites. In addition, the Company owns or leases 6 distribution centers, all
of which are shared with Quaker. Other distribution centers are leased as
needed throughout the year. Sales and administrative office space is shared
with Quaker. Management believes manufacturing, distribution center and
office space owned and leased are suitable and adequate for the business and
productive capacity is appropriately utilized.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings or environmental
clean-up actions that it believes will have a material adverse effect on its
financial position or results of operations.
Page 1
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Since October 31, 1983, all outstanding shares of the Company's common stock
have been held by Quaker. The stock is not listed on any stock exchange or
traded on any market. The Company did not pay any dividends on its common
stock in fiscal years 1995, 1994 or 1993.
ITEM 6.
<TABLE>
SELECTED FINANCIAL DATA
<CAPTION>
(Dollars in Millions)
Fiscal Year
Ended
June 30
1995(a) 1994(b) 1993 1992(c) 1991
<S> <C> <C> <C> <C> <C>
Net Sales $1,113.2 $1,077.0 $885.3 $ 876.2 $876.5
Cost of Goods Sold 586.4 553.4 443.7 422.7 435.1
Income Before Income Taxes
and Cumulative Effect of
Accounting Changes $ 167.9 $ 120.6 $ 99.7 $ 105.4 $131.7
Provision for Income Taxes 62.0 50.2 39.7 41.9 51.0
Income Before Cumulative
Effect of Accounting Changes 105.9 70.4 60.0 63.5 80.7
Cumulative Effect of
Accounting Changes-
Net of Tax 1.5 -- 14.0 -- --
Net Income $ 104.4 $ 70.4 $ 46.0 $ 63.5 $ 80.7
As of June 30
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Property-Net $132.0 $132.9 $133.4 $124.7 $121.2
Total Assets $948.6 $804.8 $707.4 $628.5 $618.0
Long-term Debt $ 0.6 $ 0.7 $ 0.8 $ 1.1 $ 10.6
Redeemable Preference and
Preferred Stock $ 15.3 $ 15.3 $ 15.3 $ 15.3 $ 15.3
<FN>
(a) Fiscal 1995 results include a $44.9 million pretax gain for the sale of
VAN CAMP'S pork and beans business.
(b) Fiscal 1994 results include a $9.4 million pretax restructuring charge
for a manufacturing consolidation for VAN CAMP'S products and for
workforce reductions.
(c) Fiscal 1992 results include a $3.4 million pretax charge for a recall of
certain VAN CAMP'S products.
</TABLE>
Page 2
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Fiscal 1995 Compared with Fiscal 1994
Operating Results
Consolidated net sales for fiscal 1995 were $1.11 billion, up three percent
from fiscal 1994. Volume increased three percent versus the prior year due
to volume increases of approximately five percent for GATORADE thirst
quencher in the United States, slightly offset by volume decreases in the VAN
CAMP'S business, which was sold on June 8, 1995. The GATORADE thirst
quencher volume increase was a result of increased consumer demand primarily
resulting from the introduction of the new sport bottle in addition to new
flavor introductions and effective advertising and merchandising. GATORADE
thirst quencher performance is particularly notable, in that two major soft
drink competitors have broadened the distribution of competitive beverage
products throughout the United States. The Company expects this heightened
level of competition to continue in the coming year. Price increases did not
significantly affect fiscal 1995 sales.
Gross profit margin decreased to 47.3 percent of sales from 48.6 percent in
the prior year as a result of increased packaging material and distribution
costs and product mix changes. Selling, general and administrative (SG&A)
expenses increased to $427.0 million, or an increase of five percent,
primarily due to higher advertising and merchandising (A&M) expenditures for
GATORADE thirst quencher in a period of competitive expansion in its
category. A&M expenses were 26.5 percent of sales in fiscal 1995, versus
25.5 percent in fiscal 1994. SG&A and A&M expenses were both higher as a
percentage of sales as a result of the significant spending for Gatorade.
Gain on Divestiture
In fiscal 1995, the Company realized a gain of $44.9 million on the sale of
VAN CAMP'S pork and beans business.
Interest and Income Taxes
Interest income of $29.4 million increased $10.9 million from the prior year
stemming from higher average amounts due from The Quaker Oats Company, as
well as higher interest rates. See Note 5 to the consolidated financial
statements for further discussion of the Company's investing and borrowing
arrangement with Quaker.
The effective tax rate for fiscal 1995 was 36.9 percent versus 41.6 percent
in fiscal 1994. Favorable tax treatment for operations in Puerto Rico caused
the overall rate to decrease.
Page 3
Fiscal 1994 Compared with Fiscal 1993
Operating Results
Consolidated net sales for fiscal 1994 were $1.08 billion, up 22 percent from
fiscal 1993. Volume increased 17 percent versus the prior year due to strong
volume increases for GATORADE thirst quencher, slightly offset by volume
decreases for VAN CAMP'S products. The GATORADE thirst quencher volume
increase was a result of the warmer summer weather in fiscal 1994 compared to
fiscal 1993 and the increased consumer demand resulting from the conversion
of the 32 ounce glass container to plastic. GATORADE thirst quencher
performance is particularly notable, in that two major soft drink competitors
have broadened the distribution of their sports beverages throughout the
United States. Price increases did not significantly affect fiscal 1994
sales.
Gross profit margin decreased to 48.6 percent of sales from 49.9 percent in
the prior year as a result of increased distribution and packaging material
costs, partially offset by improved product mix and cost-containment
initiatives. SG&A expenses increased to $406.6 million, or an increase of
17 percent, primarily due to higher A&M expenditures for GATORADE thirst
quencher, as well as higher other operating expenses. A&M expenses were 25.5
percent of sales in fiscal 1994, versus 26.6 percent in fiscal 1993. SG&A
and A&M expenses were both lower as a percentage of sales as a result of the
significant increase in sales.
Restructuring Charge
In fiscal 1994, the Company recorded a restructuring charge of $9.4 million
for a manufacturing consolidation for VAN CAMP'S products and for workforce
reductions. Net non-cash asset write-offs amounted to $5.4 million of the
charge. Severance and termination benefits for the elimination of
approximately 200 positions were $3.0 million in cash expenses and the
remaining amount of $1.0 million in cash expenses was for other related
costs. Cash outlays occurred predominately in fiscal 1995 and were funded
through operating cash flows. Charges to the established reserve were
consistent with management's original estimate. Savings realized during
fiscal 1995 from fiscal 1994 restructuring activities have been in line
with expectations.
The Company will continue to focus on efficiency initiatives that improve its
manufacturing, marketing, logistics and customer service processes while
lowering costs and more effectively utilizing human and financial resources.
Interest and Income Taxes
Interest income of $18.5 million increased $7.3 million from the prior year
stemming from higher average amounts due from The Quaker Oats Company, as
well as higher interest rates. See Note 5 to the consolidated financial
statements for further discussion of the Company's investing and borrowing
arrangement with Quaker.
The effective tax rate for fiscal 1994 was 41.6 percent versus 39.8 percent
in fiscal 1993. The higher U.S. statutory tax rate, including the legislated
retroactive adjustment to January 1, 1993, caused the overall rate to
increase.
Liquidity and Capital Resources
Net cash provided by operating activities of $95.0 million, $66.6 million and
$145.0 million during fiscal 1995, 1994 and 1993, respectively, was well in
excess of the Company's dividends and capital expenditures. The increase in
cash flows in fiscal 1995 was mainly due to changes in working capital,
primarily a decrease in Gatorade inventory resulting from efficient inventory
management during a period of high sales. Capital expenditures for fiscal
1995, 1994 and 1993 were $38.2 million, $21.1 million and $24.6 million
respectively, with no material individual commitments outstanding.
Page 4
The Company has an investing and borrowing arrangement under which it loans
available cash to Quaker or borrows its short-term cash requirements from
Quaker. Certain subsidiaries of the Company currently maintain cash
balances. See Note 5 to the consolidated financial statements for further
discussion of this arrangement.
Accounting and Fiscal-Year Changes
Effective July 1, 1994, the Company adopted Financial Accounting Standards
Board (FASB) Statement #112, "Employers' Accounting for Postemployment
Benefits." The cumulative effect of adoption was a $1.5 million after-tax
charge in the first quarter of fiscal 1995. The adoption of this statement
did not have a material effect on operating results or cash flows in fiscal
1995, nor is it expected to have a material effect in future years.
Effective the calendar year beginning January 1, 1996, the Company will
change from a fiscal year end of June 30 to December 31 to capture the
results of a full beverage season in a single fiscal-year period. A six-
month fiscal transition period from July 1, 1995 through December 31, 1995
will precede the start of the new calendar-year cycle.
Page 5
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
AND REINVESTED EARNINGS
Fiscal Year
Ended June 30
(Dollars in Millions)
1995 1994 1993
Net Sales $1,113.2 $1,077.0 $885.3
Cost of goods sold 586.4 553.4 443.7
Gross profit 526.8 523.6 441.6
Selling, general and
administrative expenses 427.0 406.6 348.7
Interest (income) (29.4) (18.5) (11.2)
Interest expense 6.2 5.5 4.4
Gain on divestiture (44.9) -- --
Restructuring charge -- 9.4 --
Income Before Income Taxes and
Cumulative Effect of
Accounting Changes 167.9 120.6 99.7
Provision for income taxes 62.0 50.2 39.7
Income Before Cumulative Effect of
Accounting Changes 105.9 70.4 60.0
Cumulative effect of accounting
changes-net of tax 1.5 -- 14.0
Net Income 104.4 70.4 46.0
Dividends on preference and preferred
stock (0.8) (0.8) (0.8)
Reinvested Earnings-
Beginning Balance 544.7 475.1 429.9
Reinvested Earnings-Ending Balance $ 648.3 $ 544.7 $475.1
See accompanying notes to consolidated financial statements.
Page 6
<TABLE>
STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal Year
<CAPTION> Ended June 30
(Dollars in Millions) 1995 1994 1993
<S> <C> <C> <C>
Cash Flows from Operating Activities:
Net income $104.4 $70.4 $46.0
Adjustments to reconcile net income to net cash
provided by operating activities:
Cumulative effect of accounting changes 1.5 -- 14.0
Depreciation and amortization 18.7 16.0 14.6
Deferred income taxes (1.3) (0.4) 1.4
Gain on divestiture (44.9) -- --
Restructuring charge -- 9.4 --
Loss on disposition of property
and equipment 0.6 1.2 3.2
(Increase) decrease in trade accounts
receivable (20.7) (16.4) 28.9
Decrease (increase) in inventories 21.4 (31.4) 22.6
(Increase) in other current assets (10.0) (7.6) (1.4)
Increase in trade accounts payable 8.9 6.1 0.6
Increase (decrease) in income taxes payable 15.0 (1.5) 6.6
Increase in other current liabilities 4.2 17.3 10.4
Other items (2.8) 3.5 (1.9)
Net Cash Provided by Operating Activities 95.0 66.6 145.0
Cash Flows from Investing Activities:
Additions to property, plant and equipment (38.2) (21.1) (24.6)
Business divestiture 90.6 -- --
Net Cash Provided by (Used) in
Investing Activities 52.4 (21.1) (24.6)
Cash Flows from Financing Activities:
Change in amount due from The Quaker Oats
Company (157.6) (3.5) (119.3)
Cash dividends (0.8) (0.8) (0.8)
Reduction of long-term debt (0.1) (0.1) (0.3)
Net Cash Used in Financing Activities (158.5) (4.4) (120.4)
Net Change in Cash and Cash Equivalents $ (11.1) $41.1 $ --
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
Page 7
STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30
(Dollars in Millions) 1995 1994
ASSETS
Current Assets:
Cash and cash equivalents $ 30.0 $ 41.1
Due from The Quaker Oats Company 560.3 402.7
Trade accounts receivable-net of
allowance of $4.8 and $4.6 as of
June 30, 1995 and 1994, respectively 134.2 113.5
Inventories:
Finished goods 42.2 70.9
Materials and supplies 15.2 16.8
Total inventories 57.4 87.7
Other current assets 30.0 20.3
Total Current Assets 811.9 665.3
Other Assets 4.7 6.6
Property, plant and equipment 194.6 203.4
Less accumulated depreciation 62.6 70.5
Property - Net 132.0 132.9
Total Assets $948.6 $804.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Trade accounts payable $ 53.4 $ 44.5
Accrued payroll, pension and bonus 26.1 23.5
Accrued advertising and merchandising 37.1 35.8
Income taxes payable 54.6 39.6
Other current liabilities 28.3 13.6
Total Current Liabilities 199.5 157.0
Long-term Debt 0.6 0.7
Other Liabilities 33.5 33.4
Deferred Income Taxes -- 2.3
Redeemable Preference and
Preferred Stock 15.3 15.3
Common Shareholders' Equity:
Common stock, $1 par value, authorized
10,000,000 shares;
issued 3,591,381 shares 3.6 3.6
Additional paid-in capital 68.7 68.7
Reinvested earnings 648.3 544.7
Treasury common stock, at cost,
602,010 shares (20.9) (20.9)
Total Common Shareholders' Equity 699.7 596.1
Total Liabilities and
Shareholders' Equity $948.6 $804.8
See accompanying notes to consolidated financial statements.
Page 8
STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Consolidation
The consolidated financial statements include Stokely-Van Camp, Inc. and
Subsidiaries (the "Company" or "Stokely"). All significant intercompany
transactions have been eliminated. The Company is a subsidiary of The Quaker
Oats Company ("Quaker").
Inventories
Inventories are valued at the lower of cost or market, using the last-in,
first-out (LIFO) cost method, and include the cost of raw materials, labor
and overhead. If the LIFO method of valuing these inventories was not used,
total inventories would have been $1.2 million and $8.8 million higher than
reported as of June 30, 1995 and 1994, respectively.
Property and Depreciation
Property, plant and equipment are carried at cost and depreciated on a
straight-line basis over their estimated useful lives. Useful lives range
from 10 to 40 years for buildings and improvements and from 3 to 12 years for
machinery and equipment.
Software Costs
The Company defers significant software development project costs. Software
costs of $0.2 million, $1.3 million and $1.3 million were deferred during
fiscal 1995, 1994 and 1993, respectively. Amounts deferred are amortized
over a three-year period beginning with a project's completion. Net deferred
software costs as of June 30, 1995 were $2.8 million.
Income Taxes
The Company uses an asset and liability approach to financial accounting and
reporting for income taxes. Deferred income taxes are provided when tax laws
and financial accounting standards differ with respect to the amount of
income for a year and the bases of assets and liabilities.
Fiscal Year Change
In May 1995, the Board of Directors approved a change in the Company's fiscal
year end from June 30 to December 31, effective the calendar year beginning
January 1, 1996. A six-month fiscal transition period from July 1, 1995
through December 31, 1995 will precede the start of the new calendar-year
cycle. Fiscal years presented and referred to in these consolidated
financial statements and notes thereto are on a June 30 fiscal-year basis
unless otherwise indicated.
Page 9
NOTE 2
DIVESTITURE
On June 8, 1995, the Company completed the sale of VAN CAMP'S pork and beans
business to Hunt-Wesson, Inc., a subsidiary of ConAgra, Inc. for $90.6
million and realized a gain of $44.9 million. Sales from the VAN CAMP'S
business were $125.9 million, $143.8 million and $149.5 million in fiscal
1995, 1994 and 1993, respectively. Operating income from the VAN CAMP'S
business was $6.4 million, $8.2 million and $10.9 million in fiscal 1995,
1994 and 1993, respectively. Operating income includes certain allocations
of overhead expenses and excludes the gain on the sale in fiscal 1995 and the
restructuring charge in fiscal 1994.
NOTE 3
RESTRUCTURING CHARGE
In fiscal 1994, the Company recorded a restructuring charge of $9.4 million
for a manufacturing consolidation for VAN CAMP'S products and for workforce
reductions. Net non-cash asset write-offs amounted to $5.4 million of the
charge. Severance and termination benefits for the elimination of
approximately 200 positions were $3.0 million in cash expenses and the
remaining amount of $1.0 million in cash expenses was for other related
costs. Cash outlays occurred predominately in fiscal 1995 and were funded
through operating cash flows. All restructuring activities were completed by
VAN CAMP'S sale date. Charges to the established reserve were consistent
with management's original estimate. Savings realized during fiscal 1995
from fiscal 1994 restructuring activities have been in line with
expectations.
NOTE 4
INCOME TAXES
The Company uses an asset and liability approach to financial accounting and
reporting for income taxes in accordance with FASB Statement #109,
"Accounting for Income Taxes." FASB Statement #109 was adopted effective
July 1, 1992 and the cumulative effect of adoption was to increase fiscal
1993 net income by $2.8 million.
Provisions for income taxes on income before the cumulative effect of
accounting changes were as follows:
<TABLE>
<CAPTION>
(Dollars in Millions) 1995 1994 1993
Currently payable:
<S> <C> <C> <C>
Federal $58.1 $41.9 $32.9
State 11.9 8.5 6.9
Non-U.S. 0.2 -- --
Total currently payable 70.2 50.4 39.8
Deferred - net:
Federal (7.6) (0.7) (0.5)
State (0.3) 0.5 0.4
Non-U.S. (0.3) -- --
Total deferred - net (8.2) (0.2) (0.1)
Provision for income taxes $62.0 $50.2 $39.7
<CAPTION>
The components of the deferred income tax (benefit) were as follows:
(Dollars in Millions) 1995 1994 1993
<S> <C> <C> <C>
Accelerated tax depreciation $ (1.8) $ 0.8 $ 1.1
Postretirement benefits 0.8 (0.7) (0.9)
Accrued expenses (5.7) (0.4) --
Other (1.5) 0.1 (0.3)
Deferred income tax (benefit) $ (8.2) $(0.2) $(0.1)
</TABLE>
Page 10
Reconciliations of the statutory Federal income tax rates to the effective
income tax rates were as follows:
(Dollars in Millions) 1995 1994 1993
% of % of % of
Pretax Pretax Pretax
Amount Income Amount Income Amount Income
Tax provision based on the
Federal statutory rate $58.8 35.0% $42.2 35.0% $33.9 34.0%
State and local income
taxes-net of Federal
income tax benefit 7.5 4.5 5.9 4.9 4.8 4.8
Other (4.3) (2.6) 2.1 1.7 1.0 1.0
Provision for income taxes $62.0 36.9% $50.2 41.6% $39.7 39.8%
The sources of pretax income before the cumulative effect of accounting
changes were as follows:
(Dollars in Millions) 1995 1994 1993
U.S. sources $177.7 $122.2 $95.5
Non-U.S. sources (9.8) (1.6) 4.2
Income before income taxes and
cumulative effect of
accounting changes $167.9 $120.6 $99.7
The consolidated balance sheets included the following deferred tax assets
and deferred tax liabilities:
1995 1994
Deferred Deferred Deferred Deferred
(Dollars in Millions) Tax Tax Tax Tax
Assets Liabilities Assets Liabilities
Depreciation and
amortization $ 2.0 $14.0 $ 2.5 $16.7
Postretirement benefits 11.6 -- 12.4 --
Other benefit plans 3.5 3.0 1.5 2.7
Accrued expenses 9.1 0.2 3.0 0.2
Other 1.1 0.7 0.2 --
Total $ 27.3 $17.9 $ 19.6 $19.6
Total income tax provisions (benefits) were allocated as $62.0 million for
continuing operations and $(1.0) million for the cumulative effect of
accounting change in fiscal 1995 and as $50.2 million for continuing
operations in fiscal 1994.
NOTE 5
RELATED PARTY TRANSACTIONS
Stokely, through its parent Quaker, conducts its operations as an integrated
component of Quaker's U.S. and Canadian Grocery Products Division. Certain
liabilities and expenses are commingled and are charged or allocated to
Stokely from Quaker. With the exception of cost of sales and advertising and
merchandising expenses, the majority of remaining operating, general and
administrative expenses are allocated from Quaker to Stokely. Stokely
reimburses Quaker and its affiliates for services provided for its benefit.
Quaker's International Grocery Products Division is licensed to sell GATORADE
thirst quencher in international markets. In exchange for these licensing
rights, Quaker pays the Company a royalty. The following summarizes the
significant related party transactions other than those described elsewhere
in the financial statements:
Income Taxes
Stokely is included in the consolidated Federal income tax return of Quaker.
Stokely provides for current and deferred taxes as if it filed a separate
consolidated tax return except that if any items are subject to limitations
in Stokely's tax calculations, such limitations are determined on the basis
of the Quaker consolidated group.
Page 11
Employees
Current salaried and hourly employees whose services benefit the Stokely
business are employees of Quaker. Their compensation is paid by Quaker and
charged to Stokely based on actual salary and fringe benefit costs of the
assigned employees. These employees also participate in a number of Quaker
insurance and employee benefit programs. Stokely participates in these
programs through annual charges of each program's cost.
Corporate Insurance Programs
Stokely participates in Quaker's consolidated risk management programs for
property and casualty insurance.
Stokely is charged for annual premiums and reported losses. Incurred but not
reported losses are not charged to Stokely income currently. Stokely will
recognize these costs in the future when specific identification has been
made by Quaker.
Corporate Overhead Allocations
Quaker provides certain corporate general and administrative services to
Stokely including personnel, legal, finance, facility management and
utilities. These expenses are allocated to Stokely on a basis which
approximates actual services provided.
Shared Operating Expenses
Quaker's U.S. and Canadian Grocery Products Division allocates a ratable
portion of shared operating expenses including sales force and brokers,
certain other marketing expenses, product research and general and
administrative services. These expenses are allocated to Stokely on a basis
which approximates actual services provided as determined by various
measures.
International Grocery Products Fee Agreements
Stokely has entered into a number of licensing agreements allowing the
international affiliates of Quaker to manufacture and sell certain beverage
products in return for payment of licensing fees. Fees received under these
agreements amounted to $5.5 million, $3.6 million and $3.1 million in fiscal
1995, 1994 and 1993, respectively.
Investing and Borrowing Arrangement
The Company has an investing and borrowing arrangement under which it loans
its available cash to Quaker or borrows its short-term cash requirements from
Quaker. Funds collected from operations which are remitted to Quaker
increase the amount due from Quaker; conversely, operating expenses paid by
Quaker reduce the receivable from Quaker or may result in a payable to
Quaker. This arrangement provides for an interest rate based on the yield of
U.S. Treasury Bills, as determined by the weekly U.S. Government auction. In
addition, the Company had 100 percent participation in certain loans owed to
Quaker by Quaker subsidiaries. These loans were repaid to Quaker in the
fourth quarter of fiscal 1995. However, the funds received were not remitted
to the Company and are included in the amount due from Quaker. The Company
may, at any time, demand repayment of all or any part of the amount due from
Quaker. There were no bank lines of credit as of June 30, 1995 or 1994.
NOTE 6
LONG-TERM DEBT
(Dollars in Millions) 1995 1994
Industrial Revenue Bonds, 4.5%
due through October 1, 1999 $0.7 $0.8
Less Current Maturities 0.1 0.1
Long-term Debt $0.6 $0.7
Page 12
Aggregate required payments of maturities on long-term debt for the next five
fiscal years are $0.1 million in 1996 and 1997, $0.2 million in 1998 and
1999, and $0.1 million in 2000.
NOTE 7
CAPITAL STOCK
Since October 31, 1983, all outstanding shares of the Company's common stock
have been held by Quaker and the balances of common stock ($3.6 million;
3,591,381 shares issued), additional paid-in capital ($68.7 million) and
treasury common stock ($20.9 million; 602,010 shares) have remained
unchanged.
The Company has three series of preferred stock: Voting 5% Cumulative
Convertible Second Preferred Stock; non-voting 5% Cumulative Prior Preference
Stock; and Serial Preferred Stock. The Voting 5% Cumulative Convertible
Second Preferred Stock is convertible at the holder's option, on a share for
share basis, into the non-voting 5% Cumulative Prior Preference Stock. As of
June 30, 1995, authorized shares were 500,000 and issued and outstanding
shares were 10,860 for the 5% Cumulative Convertible Second Preferred Stock.
As of June 30, 1995, 1,500,000 shares were authorized, 753,496 shares were
issued, 753,163 shares were outstanding and 10,860 shares were reserved for
conversion for the 5% Cumulative Prior Preference Stock. Both issues are
redeemable at the Company's option for $21 per share. No Serial Preferred
Stock has been issued, although 500,000 shares are authorized. The following
chart summarizes the changes in the outstanding preference and preferred
stock balances.
5% Cumulative 5% Cumulative
Prior Preference Convertible Second
Stock Preferred Stock
$20 Par Value $20 Par Value
Balance as of June 30, 1992 752,340 11,683
Shares Converted 360 (360)
Balance as of June 30, 1993 752,700 11,323
Shares Converted 250 (250)
Balance as of June 30, 1994 752,950 11,073
Shares Converted 213 (213)
Balance as of June 30, 1995 753,163 10,860
NOTE 8
PENSION PLANS
Salaried employees assigned to the Stokely business are employees of Quaker
and are covered by a Quaker plan (see Note 5). The Company has maintained a
pension plan for all hourly employees which, effective December 31, 1994, was
merged with the Quaker Retirement Plan. Plan benefits are based on years of
service. Company policy is to make contributions to the Plan within the
maximum amount deductible for Federal income tax purposes. Consistent with
arrangements described in Note 5, effective January 1, 1995, pension costs
related to hourly employees are charged to Stokely based on actual pension
costs incurred by Quaker.
The components of net pension (income) under the Stokely Plan for hourly
employees are detailed below:
(Dollars in Millions) 1995 1994 1993
Service cost (benefits earned
during the year) $ 0.2 $ 0.4 $ 0.3
Interest cost on projected
benefit obligation 0.7 1.4 1.4
Actual return on plan assets (1.4) (2.0) (2.5)
Net amortization and deferral (0.2) (0.9) (0.4)
Net pension (income) $(0.7) $(1.1) $(1.2)
Page 13
Reconciliations of the funded status of the Company's defined benefit plans
to the prepaid pension costs were as follows (with the merger of the
Company's plan into the Quaker Retirement Plan, effective December 31, 1995,
no reconciliation of the funded status as of June 30, 1995 is available):
(Dollars in Millions) 1994
Vested benefits $18.3
Non-vested benefits 0.5
Accumulated and projected
benefit obligation(a) 18.8
Plan assets at market value 33.6
Projected benefit obligation less
than plan assets 14.8
Unrecognized net (gain) (3.9)
Unrecognized prior service cost 1.2
Unrecognized net (asset) at
transition (5.1)
Prepaid pension costs $ 7.0
Assumptions:
Discount rate: 8.00%
Rate of future compensation increases:(a) --
Long-term rate of return on plan assets: 8.50%
(a) Effect of future compensation increases is not applicable as the Plan
benefits are based on years of service.
NOTE 9
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
AND OTHER POSTEMPLOYMENT BENEFITS
The Company provides certain health care and life insurance benefits to its
retired employees who meet service-related eligibility requirements. The
Company funds only the annual cash requirements of these benefits.
Effective July 1, 1992, the Company adopted FASB Statement #106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." This statement
requires that the expected cost of these benefits be charged to expense
during the years that the employees render service. The statement was
adopted through a cumulative pretax charge of $27.5 million, or $16.8 million
after-tax, which represents the accumulated postretirement benefit obligation
for years prior to fiscal 1993.
The components of postretirement benefit costs were as follows:
(Dollars in Millions) 1995 1994 1993
Service cost (benefits earned during the year) $1.4 $1.5 $1.0
Interest cost on projected benefit obligation 3.8 4.0 3.0
Total postretirement benefit costs $5.2 $5.5 $4.0
Page 14
The Company's unfunded accumulated postretirement benefit obligations were as
follows:
(Dollars in Millions) 1995 1994
Current retirees $11.3 $11.2
Current active employees - fully eligible 2.5 2.7
Current active employees - not fully eligible 18.1 24.7
Accumulated postretirement benefit obligation 31.9 38.6
Unrecognized net gain (loss) 1.6 (2.8)
Unrecognized prior service cost (0.4) (0.5)
Accrued postretirement benefit costs $33.1 $35.3
Assumptions:
Weighted average discount rate: 8.25%
Health care trend rates: 1996 2006 and Beyond
Pre-age 65: 9.6% 4.0%
Age 65 and over: 9.8% 5.0%
If the health care trend rates were increased one percentage point, the
current-year postretirement benefit costs would have been $0.5 million higher
and the accumulated benefit obligation as of June 30, 1995 would have been
$4.0 million higher.
Effective July 1, 1994, the Company adopted FASB Statement #112, "Employers'
Accounting for Postemployment Benefits." The cumulative effect of adoption
is a $1.5 million after-tax charge in the first quarter of fiscal 1995. The
adoption of this statement will not have a material effect on operating
results or cash flows in future years.
NOTE 10
SUPPLEMENTAL CASH FLOW INFORMATION
(Dollars in Millions)
1995 1994 1993
Interest Paid $ 0.1 $ 0.1 $ 0.1
Income Taxes Paid $37.9 $38.5 $31.2
NOTE 11
LEASES AND OTHER COMMITMENTS
Certain operating properties are rented under non-cancelable operating
leases. Total rental expense under operating leases was $5.3 million, $5.0
million and $5.4 million in fiscal 1995, 1994 and 1993, respectively. Future
minimum annual rentals on non-cancelable operating leases, primarily for
sales and administrative offices and distribution centers, is as follows:
(Dollars in 1996 1997 1998 1999 2000 Later Total
Millions)
Total Payments $4.4 $4.1 $3.8 $3.6 $3.4 $13.5 $32.8
The Company enters into executory contracts to promote various products. As
of June 30, 1995, future commitments under these contracts amounted to
approximately $53.6 million.
Page 15
NOTE 12
<TABLE>
SELECTED QUARTERLY FINANCIAL DATA
<CAPTION>
(Dollars in Millions)
Quarterly Financial Data (Unaudited)
First Quarter Second Quarter Third Quarter Fourth Quarter
1995 1994 1995 1994 1995 1994 1995(a) 1994(b)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $350.8 $347.4 $119.9 $118.9 $218.5 $191.3 $424.0 $419.4
Cost of Goods Sold 178.0 173.8 75.7 68.7 118.9 105.3 213.8 205.6
Gross Profit $172.8 $173.6 $ 44.2 $ 50.2 $ 99.6 $ 86.0 $210.2 $213.8
Income (Loss) Before
Cumulative Effect
of Accounting
Changes $ 23.2 $ 37.5 $(13.9) $ (6.7) $ 13.4 $ 8.2 $ 83.2 $ 31.4
Net Income (Loss) $ 21.7 $ 37.5 $(13.9) $ (6.7) $ 13.4 $ 8.2 $ 83.2 $ 31.4
<FN>
(a) Includes a $44.9 million pretax gain for the sale of VAN CAMP'S pork
and beans business. Also includes a $1.9 million after-tax credit
for favorable LIFO price variances.
(b) Includes a $9.4 million pretax restructuring charge ($5.6 million after-
tax) for a manufacturing consolidation and for workforce reductions.
</TABLE>
NOTE 13
FINANCIAL INSTRUMENTS
Financial instruments are primarily used to fund working capital and to
reduce the impact of commodity price fluctuations. The Company uses
commodity options and futures contracts to reduce the risk that raw material
purchases will be adversely affected as commodity prices change. While the
hedge instruments are subject to the risk of loss from changing commodity
prices, the losses would generally be offset by lower costs of the purchases
being hedged. The Company does not trade these instruments with the
objective of earning financial gains on the commodity price fluctuations
alone, nor does it trade in commodities for which there are no underlying
exposures. Management believes that its use of financial instruments to
reduce risk is in the Company's best interest.
The Company primarily hedges purchases of corn sweetener. Approximately one
percent of cost of goods sold is in commodities that may be hedged. The
Company's strategy is to typically hedge some of the production requirements
for the following twelve-month period. As of June 30, 1995, approximately 38
percent of fiscal 1996 production requirements were hedged. The carrying
values of these commodity instruments approximates the fair values. Realized
gains and losses charged to cost of goods sold in fiscal 1995 and 1994 were
not material.
The carrying value of cash and long-term debt approximates fair value. The
counterparties to the Company's financial instruments are major financial
institutions. The Company continually evaluates the creditworthiness of the
counterparties and has never experienced, nor does it anticipate
nonperformance by any of its counterparties.
Page 16
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
Stokely-Van Camp, Inc.:
We have audited the accompanying consolidated balance sheets of Stokely-Van
Camp, Inc. (an Indiana corporation and subsidiary of The Quaker Oats Company)
and subsidiaries as of June 30, 1995 and 1994, and the related consolidated
statements of income and reinvested earnings and cash flows for each of the
three fiscal years in the period ended June 30, 1995. These financial
statements and the schedules referred to below are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Stokely-Van Camp, Inc. and
subsidiaries as of June 30, 1995 and 1994, and the results of their
operations and their cash flows for each of the three fiscal years in the
period ended June 30, 1995, in conformity with generally accepted accounting
principles.
As indicated in Note 4 and Note 9, effective July 1, 1992, the Company
changed their accounting for income taxes and for postretirement benefits
other than pensions. As indicated in Note 9, effective July 1, 1994, the
Company changed their accounting for postemployment benefits.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. Schedule X is presented for purposes
of complying with the Securities and Exchange Commission's rules and is not a
required part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in our audit of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
Arthur Andersen LLP
Chicago, Illinois,
August 1, 1995
Page 17
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information concerning the directors and
executive officers of Stokely-Van Camp, Inc. as of September 1, 1995.
Name Principal Occupation Age
James F. Doyle Executive Vice President - Worldwide 43
Beverages;
Chief Executive Officer and
President of Stokely.
R. Thomas Howell, Jr. Vice President - General 53
Corporate Counsel and Corporate
Secretary of Quaker; Director, Vice
President and Secretary of Stokely.
Janet K. Cooper Vice President and Treasurer of 42
Quaker and Stokely and Director
of Stokely.
Thomas L. Gettings Vice President and Corporate 38
Controller of Quaker and Stokely.
Mr. Doyle and Mr. Howell have served in their capacities since November,
1994. Ms. Cooper and Mr. Gettings have served in their capacities since
July, 1992. All of the above-named directors and officers have been employed
by Quaker in an executive capacity for more than five years.
ITEM 11. EXECUTIVE COMPENSATION
The following table details annual and long-term compensation paid during the
Company's three most recent fiscal years to the Company's Chief Executive
Officer and President. No other executive officer of the Company was paid in
excess of $100,000 in salary and bonus relative to their services for the
Company.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-term
Annual Compensation Compensation
Other Restricted All
Annual Stock Other
Fiscal Salary Bonus Compensation Awards Options Compensat
Name Year ($) ($)(1) ($) ($)(2) (#)(3) ($)(4)
<S> <C> <C> <C> <C> <C> <C> <C>
James F. Doyle - 1995 $332,760 $217,600 -- $42,449 48,000 $70,759
Chief Executive 1994 $299,208 $254,800 -- $25,247 48,000 $55,753
Officer and 1993 $270,790 $221,100 -- $19,416 60,000 $54,938
President of
Stokely
<FN>
(1)Amounts for fiscal 1995, 1994 and 1993 include the cash awards that have
been paid under the Management Incentive Bonus Plan ("MIB") based on the
Company's financial performance for fiscal 1995, 1994 and 1993,
respectively. Amounts for fiscal 1993 also include the portion of the
MIB award for fiscal 1992 which was
Page 18
withheld from the fiscal 1992 MIB award pool and put at risk, subject to
achievement of certain financial objectives during the first half of
fiscal 1993. The financial objectives were achieved in fiscal 1993, and
paid in fiscal 1993 along with the 1993 MIB award as follows for Mr.
Doyle: $31,900 and $189,200.
(2)Restricted stock award values reflect the fair market value of Quaker's
common stock on the date of each grant. The values reflect Quaker
matching awards of restricted stock under a broad-based long-term
incentive program, the Incentive Investment Program. Dividends on
restricted shares were and continue to be paid on an on-going basis at
the same rate as paid to all shareholders. The aggregate number and
value of restricted shares for Mr. Doyle, valued as of the last day of
the Company's fiscal year (June 30, 1995) are as follows:
Number of
Shares Value
2,625 $85,969
Upon a change in control of Quaker (see definition under Pension Plans),
restricted shares outstanding on the date of the change in control will
be canceled and an immediate lump-sum cash payment will be paid which is
equal to the product of (1) the higher of (i) the closing price of
common stock as reported on the New York Stock Exchange Composite Index
on or nearest to the date of payment (or, if not listed on such
exchange, on a nationally recognized exchange or quotation system on
which trading volume in the common stock is highest) or (ii) the highest
per share price for common stock actually paid in connection with the
change in control and (2) the number of shares of such restricted stock.
(3) All stock option awards in fiscal 1995 and 1994 were granted with an
exercise price that is equal to the fair market value of the Quaker
common stock on the date of the grant. Fifty percent of the stock
option awards in fiscal 1993 were granted with an exercise price that is
equal to the fair market value of Quaker's common stock on the date of
the grant. The remaining 50% were granted with an exercise price that
is 125% of the fair market value of Quaker's common stock on the date of
the grant.
(4) Amounts shown are the total value of the stock allocations under The
Quaker Employee Stock Ownership Plan ("ESOP"), and cash awards based on
earnings in excess of the Internal Revenue Code limits on the amount of
earnings deemed eligible for purposes of the annual stock allocation
made directly under the ESOP.
</TABLE>
Page 19
The following table contains information covering the grant of stock options to
the Company's Chief Executive Officer and President during fiscal 1995 under
The Quaker Long Term Incentive Plan of 1990. The exercise price for options
granted is equal to the fair market value of Quaker's common stock on the date
of the grant.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants (1)
Number of % of Total Potential Realizable Value
Securities Options Granted Assumed Annual Rates of
Underlying to Employees Stock Price Appreciation
Options in Fiscal Exercise Expiration for Option Term (2)
Name Granted (#) Year Price ($/Sh) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
James F. Doyle 48,000 1.6% $40.35 9/13/04 $1,217,892 $3,086,378
<FN>
(1) All options were granted on September 14, 1994. One-third of the options
granted will vest on each of the three anniversaries following the date of
grant. The options would be cancelled and a lump-sum cash payment would
be paid for realizable value upon the occurrence of a change in control.
(See definition under "Pension Plans".)
(2) Based on fair market value on the date of grant and an annual appreciation
at the rate stated (compounded annually) of such fair market value through
the expiration date of such options. The dollar amounts under
these columns are the result of calculations at the 5% and 10% stock price
appreciation rates set by the Securities and Exchange Commission and
therefore do not forecast possible future appreciation, if any, of Quaker's
stock price.
The following table contains information covering the exercise of options by the
Chief Executive Officer and President during fiscal 1995 and unexercised
options held as of the end of fiscal 1995.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number of Securities
Underlying Value of Unexercised,
Unexercised Options In-the-Money Options
at Fiscal Year at Fiscal Year End
Shares Value End(#) ($)(2)
Acquired On Realized
Name Exercise (#) ($)(1) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
James F. Doyle 0 $0 159,332 100,560 $671,397 $9,894
<FN>
(1) Represents the difference between the option exercise price and the fair
market value of Quaker's common stock on the date of exercise.
(2) Represents the difference between the option exercise price and the fair
market value of Quaker's common stock on the last day of fiscal 1995
(June 30, 1995).
</TABLE>
Page 20
Pension Plans
Quaker and its subsidiaries maintain several pension plans. The Quaker
Retirement Plan (the "Retirement Plan"), which is the principal plan, is a
noncontributory, defined benefit plan covering eligible salaried and hourly
employees of the Company who have completed one year of service as defined by
the Retirement Plan.
Under the Retirement Plan, the participant accrues a benefit based upon the
greater of a Years-of-Service Formula and an Earnings/Service Formula. Under
the Years-of-Service Formula, participants accrue annual benefits equivalent
to credited years of service times $216. Under the Earnings/Service Formula
a participant's benefit is the sum of two parts:
1. Past Service Accrual -- Benefits accrued through December 31, 1994 are
set at the greater of (a) those earned or (b) 1% of Five-Year Average
earnings to $22,700 plus 1.65% of earnings above $22,700, times credited
years of service; and
2. Future Service Accrual -- For each year beginning January 1, 1994 and
after, participants accrue benefits of 1.75% of annual earnings to 80%
of the Social Security wage base plus 2.5% of annual earnings above 80%
of the Social Security wage base.
Eligible earnings used to calculate retirement benefits include wages,
salaries, bonuses, contributions to The Quaker Investment Plan and
allocations under The Quaker Employee Stock Ownership Plan. Normal
retirement age under the Retirement Plan is age 65. The Retirement Plan
contains provision for early retirement benefits.
Benefit amounts payable under the Retirement Plan are limited to the extent
required by the Employee Retirement Income Security Act of 1974 ("ERISA"), as
amended, and the Internal Revenue Code of 1986, as amended. If the benefit
formula produces an amount in excess of those limitations, the excess will be
paid out of general corporate funds in accordance with the terms of The
Quaker 415 Excess Benefit Plan and The Quaker Eligible Earnings Adjustment
Plan. The Quaker Eligible Earnings Adjustment Plan also provides for payment
out of general corporate funds, based upon benefit amounts which would
otherwise have been payable under the Retirement Plan and The Quaker 415
Excess Benefit Plan, if the executive had not previously elected to defer
compensation under the Executive Deferred Compensation Plan.
The estimated annual retirement benefits that Mr. Doyle would receive under
the Retirement Plan, The Quaker 415 Excess Benefit Plan, and The Quaker
Eligible Earnings Adjustment Plan, if he retired at age 65, is $240,591. The
amount assumes that he will continue to work for Quaker until his normal
retirement date and that his earnings will remain the same as in calendar
year 1994 and that he will elect a straight-lifetime benefit without survivor
benefits. (Payment options such as a 50% joint and survivor annuity or other
annuities are available.)
The Retirement Plan assures active and retired employees that, to the extent
of sufficient plan assets, it will continue in effect for a reasonable period
following a change in control of Quaker without a reduction of anticipated
benefits, and under certain circumstances may provide increased benefits.
Generally, under the Retirement Plan a change in control shall be deemed to
have occurred in any of the following circumstances:
(i) An acquisition of 30% or more of Quaker's stock unless such acquisition
is pursuant to an agreement with Quaker approved by the Board before the
acquisitor becomes the beneficial owner of 5% of Quaker's outstanding voting
power;
(ii) A majority of the Board of Directors is comprised of persons who were
not nominated by the Board of Directors for election as directors;
(iii) A plan of complete liquidation of Quaker; or
(iv) A merger, consolidation or sale of all or substantially all of Quaker's
assets unless thereafter (a) directors of Quaker immediately prior thereto
continue to constitute at least 50% of the directors of the surviving entity
or purchaser; or (b) Quaker's securities continue to represent, or are
converted to securities which represent, more than 70% of the combined voting
power of the surviving entity or purchaser.
Page 21
For a five-year period following a change in control of Quaker, the accrual
of benefits for service during such period cannot be decreased while there
are excess assets (as defined in the Retirement Plan). For a two-year period
following such a change in control, the accrued benefits of members who meet
specified age and service requirements and who are terminated will be
increased. For so long as there are excess assets during that five-year
period, if the Retirement Plan is merged with any other plan, the accrued
benefit of each member and the amount payable to retired or deceased members
shall be increased until there are no excess assets. If during that five-
year period the Retirement Plan is terminated, to the extent that assets
remain after satisfaction of liabilities, the accrued benefits shall be
increased such that no assets of the Retirement Plan will directly or
indirectly revert to Quaker.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
All of the outstanding common stock of Stokely is owned by Quaker whose
corporate offices are located at 321 North Clark, Chicago, IL 60610.
The following table presents information with respect to all persons known to
Stokely to own more than 5% of any other class of Stokely's voting securities
as of September 20, 1995. Each beneficial owner has, to the knowledge of
Stokely, sole voting power and sole investment power with respect to the
shares listed opposite such owner's name.
Amount and Percent
Name and Address Nature of of
Title of Class of Beneficial Owner Ownership Class
Second Preferred The William B. Stokely, Jr. 2,012 18.5
Stock (1) Foundation
620 Campbell Station Road
Station West, Suite 4
Knoxville, TN 37922
Marjorie M. Cochran 1,125 10.3
Wesley Woods Towers #808
1825 Clifton Rd NE
Atlanta, GA 30329-4047
Esther M. Minter 1,125 10.3
230 East College Street
Griffin, GA 30223-4348
Cooper N. Mills 926 8.5
666 Brook Circle
Griffin, GA 30223-4413
(1)Holders of common stock and Second Preferred Stock vote collectively and
not as a separate class. As of June 30, 1995, the outstanding shares of
Second Preferred Stock comprise less than 1% of the aggregate number of
outstanding shares of common stock and Second Preferred Stock.
Page 22
The table below sets forth information with respect to beneficial ownership
of common stock of Quaker by the directors and named executive officers of
Stokely as of September 1, 1995, and by the directors and by the named
executive officers, and executive officers as a group. Shares subject to
acquisition within 60 days through the exercise of stock options are included
in the first column and are shown separately in the second column. No
director or officer and named executive officers owns any equity securities
of Stokely.
Amount Shares Subject
of Beneficial to Acquisition
Ownership(a) Within 60
Days(a)
James F. Doyle 234,517(c)(d) 211,412
R. Thomas Howell, Jr. 216,306(b)(c)(d)(e) 149,628
Janet K. Cooper 51,988(c)(d)(f) 44,892
All Directors and Officers
as a group 542,056(b)(c)(d) 438,234
(a) Unless otherwise indicated, each named individual and each person in the
group has sole voting power and sole investment power with respect to shares
shown. These shares represent less than 1 percent for every person, and less
than 1 percent for all directors and officers as a group, of the total shares
outstanding, including shares subject to acquisition within 60 days following
September 1, 1995.
(b) The figures shown for these directors and executive officers include an
aggregate of 2,433 shares representing their proportionate interests in the
Quaker Stock Fund of The Quaker Investment Plan. The directors each hold the
following number of shares under this plan: Mr. Doyle, 0; Mr. Howell, 1,444;
and Ms. Cooper, 0.
(c) The figures shown for these directors and executive officers include an
aggregate of 20,759 shares (which includes 3,604 shares on the basis of the
conversion of 1,669 shares of Series B ESOP Convertible Preferred at the
conversion rate of 2.16) allocated to them in The Quaker Employee Stock
Ownership Plan. The directors each hold the following number of shares under
this plan: Mr. Doyle, 6,181; Mr. Howell, 6,698; and Ms. Cooper, 4,605.
(d) The figures shown for these directors and executive officers include an
aggregate of 5,430 shares granted to them under The Quaker Long Term
Incentive Plan of 1990 for which the restricted period has not lapsed. The
directors each hold the following number of shares under this plan: Mr.
Doyle, 2,625; Mr. Howell, 1,422; and Ms. Cooper, 464.
(e) Of these shares, 1,541 are held by Mr. Howell's children.
(f) Of these shares, 100 are held by Ms. Cooper's husband and 2 are held by
Ms. Cooper's daughter.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For a description of related transactions with Quaker, reference should be
made to Part II, Items 7 and 8 (Notes 1, 5 and 8).
Page 23
STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE FISCAL YEARS ENDED JUNE 30, 1995, 1994 AND 1993
(Dollars in Millions)
ITEM 1995 1994 1993
Depreciation $ 15.7 $ 12.9 $ 12.4
Advertising & Merchandising $294.8 $274.6 $235.2
Page 24
SIGNATURES
Pursuant to the requirements of Sections 13 and 15 (d) of the Securities
Exchange Act of 1934, the Registrant has caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
STOKELY-VAN CAMP, INC.
(Registrant)
By: /s/ James F. Doyle
James F. Doyle
Chief Executive Officer
and President
Date: September 28, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on the 28th day of September, 1995, by the
following persons on behalf of the Registrant and in the capacities
indicated.
Signature Title
/s/ James F. Doyle Chief Executive Officer and
James F. Doyle President
/s/ Janet K. Cooper Vice President and
Treasurer
Janet K. Cooper (Principal Financial
Officer)
/s/ R. Thomas Howell, Jr. Vice President,
R. Thomas Howell, Jr. Secretary and Director
/s/ Thomas L. Gettings Vice President and
Corporate
Thomas L. Gettings Controller
Page 25
EXHIBIT INDEX
Paper (P),
Electronic (E)
or Incorporated by
EXHIBIT NO. DESCRIPTION Reference (IBRF)
3 (a) Restated Articles of Incorporation of Stokely-Van E
Camp, Inc. (as of February 14, 1994)
3 (b) By-Laws of Stokely-Van Camp, Inc. IBRF
(incorporated by reference to
the Company's Form 10-K for the fiscal year
ended June 30, 1985, file number 1-2944).
10 (a) GATORADE Trust Agreement dated January 1, 1984 IBRF
(incorporated by reference to the Company's Form
10-K for the fiscal year ended June 30, 1984, file
number 1-2944).
21 Subsidiaries of the Registrant. E
23 (b) Reports on Form 8-K
(b)(1) 8-K filed June 23, 1995 IBRF
(b)(2) 8-K filed June 27, 1995 IBRF
Page 26
exhibit 3(a)
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
STOKELY-VAN CAMP, INC.
The undersigned officers of Stokely-Van Camp,
Inc., (hereinafter referred to as the
"Corporation"), existing pursuant to the
provisions of The Indiana General Corporation Act,
as amended (hereinafter referred to as the "Act"),
desiring to give notice of corporate action
effectuating certain amendments of its Articles of
Incorporation by the adoption of new Amended and
Restated Articles of Incorporation to supersede
and take the place of its heretofore existing
Articles of Incorporation, certify the following
facts:
SUBDIVISION A -- AMENDED AND RESTATED ARTICLES
l. Text of the Amended and Restated Articles
The exact text of the entire Articles of
Incorporation of the Corporation, as amended and
restated (hereinafter referred to as the "Amended
and Restated Articles"), now is as follows:
Be it remembered that the following Amended
and Restated Articles of Incorporation and all
matters heretofore done or hereafter to be done
are in accordance with "An Act concerning domestic
and foreign corporations for profit, providing
penalties for the violation hereof, and repealing
all laws or parts of laws in conflict herewith",
approved March 16, 1929, and all acts amendatory
thereof and supplemental thereto, and that the
following Amended and Restated Articles of
Incorporation supersede and take the place of the
heretofore existing Articles of Incorporation, as
amended.
1. The name of the Corporation shall be Stokely-Van Camp, Inc.
2. The purpose or purposes for which it is formed are as follows:
To purchase, lease or otherwise acquire, own,
hold and operate, sell or otherwise dispose of
farms for the production of vegetables, fruits,
berries, grains, live stock and farm, dairy and
food products of all kinds whatsoever, and to buy,
sell and deal generally in all such farm, dairy
and food products either directly or through
subsidiaries or other agencies.
To construct, purchase, lease or otherwise
acquire, own, hold, operate, sell or otherwise
dispose of factories and plants for processisng,
canning, preserving, packing or otherwise
preparing for market consumption, vegetables,
fruits, berries, meats, grains, milk and other
food products of any and all kinds whatsoever
whether grown or produced by itself or others, and
to buy, store, sell and deliver at wholesale or
retail all such products either directly or
through subsidiaries or other agencies.
To construct, purchase, lease or otherwise
acquire, own, hold, operate, sell or otherwise
dispose of factories and plants for the
manufacture of cans, cases and other containers
for all such products and the labels therefor, and
to buy, sell, deal in and deal with such
containers and labels either directly or through
subsidiaries or other agencies.
To construct, purchase, lease or otherwise
acquire, own, hold, operate, sell or otherwise
dispose of coal mines, and to produce, buy, store,
sell and deliver and generally deal in and with
coal and coal products of all kinds at wholesale
and retail, either directly or through
subsidiaries or other agencies.
To construct, purchase, lease or otherwise
acquire, own, hold, operate, sell or otherwise
dispose of ice and refrigeration plants, and to
manufacture, buy, store, sell and deliver ice at
wholesale or retail and to conduct generally the
business of cold storage and refrigeration in all
its branches either directly or through
subsidiaries or other agencies.
To construct, purchase, lease or otherwise
acquire, hold, own, operate, sell or otherwise
dispose of bottling works and soft drink plants,
and to manufacture, store, buy, sell and deliver
and generally deal in and deal with soft drinks
and any of the constituents thereof at wholesale
or retail either directly or through subsidiaries
or other agencies.
To construct, purchase, lease or otherwise
acquire, hold, own, operate, sell or otherwise
dispose of plants for the production and
manufacture of fertilizers, minerals, rocks, clays
and mineral and vegetable and animal products of
all kinds, including the products of fields, farms
and forests and the compounds and combinations
therof, and to buy, sell, and generally deal in
and deal with such products in their raw or
finished state either directly or through
subsidiaries or other agencies.
To manufacture, purchase, or otherwise
acquire, hold, own, mortgage, pledge, sell, lease,
assign and transfer, or otherwise dispose of, to
invest, trade, deal in and deal with, goods, wares
and merchandise and real and personal property of
every class and description.
To erect, or cause to be erected, on any
lands owned, held, or in any way occupied by the
corporation, building or other structures with
their appurtenances, and to rebuild, enlarge,
alter, or improve any buildings or other
structures now, or hereafter erected, on any
lands, so owned, held or occupied.
To enter into, make and perform contracts of
every kind for any lawful purpose with any person,
firm, partnership, association, trustee, syndicate
or corporation, municipality, body politic,
country, territory, state, government or colony or
dependency or subdivision thereof, or entity
whatsoever.
To acquire the goodwill, rights and property,
and the whole or any part of the assets, tangible
or intangible, and to undertake or in any way
assume the liabilities of any person, firm,
association, partnership, trustee, syndicate or
corporation; to pay for the said goodwill, rights,
property, and assets in cash, the stock, bonds or
other securities of this or any other corporation,
or by undertaking the whole or any part of the
liabilities of the transferor; to hold or in any
manner to dispose of the whole or any part of the
property so purchased; to conduct in any lawful
manner the whole or any part of any business so
acquired, and to exercise all the powers necessary
or convenient in and about the conduct and
management of such business.
To secure, purchase, obtain, apply for,
register, take on lease, or otherwise acquire,
own, hold, use, exercise, develop, mortgage,
pledge, sell, assign, lease, transfer, take or
grant licenses in respect of, or otherwise dispose
of and turn to account, and any and all
copyrights, trademarks, trade names and other
trade rights, letters patent, licenses, patent
rights, patented processes and all similar rights
and property, however created, issued or granted,
or any interest therein or rights thereunder or
any inventions, improvements, processes, designs,
formula or devices which may seem capable of being
used for or in connection with any of the objects
or purposes of this corporation.
To guarantee, purchase, receive, hold, own,
sell, assign, transfer, mortgage, pledge or
otherwise dispose of shares of capital stock,
bonds, mortgages, debentures, notes or other
securites, obligatons, conracts or evidences of
indebtedness of any partnerhip, syndicate,
trustee, association or corporation (organized
under the laws of this State or any other State,
county, nation or government), or of any state,
country, nation, municipality, government or a
body politic or subdivision thereof; to receive,
collect and dispose of interest, dividends and
income upon, of and from any of the bonds,
mortgages, debentures, notes, shares of capital
stock, securities, obligations, conracts,
evidences of indebtedness and other property, any
and all rights, powers and privileges of indvidual
ownership thereof, including the right to vote
thereon.
Without limit as to amount to draw, make,
accept, endorse, discount, execute and issue
promissory notes, drafts, bills of exchange,
warrants, bonds, debentures and other negotiable
or transferable instruments and evidences of
indebtedness, whether secured by mortgage or
otherwise, as well as to secure the same by
mortgage or otherwise, so far as may be permitted
by the laws of the State of Indiana.
To purchase, in so far as the same may be
done without impairing the capital of the
corporation, and subject to the other provisions
hereof, and to hold, pledge and reissue shares of
its own capital stock; but such stock, so acquired
and held, shall not be entitled to vote nor to
receive dividends.
To have one or more offices, conduct its
business and promote its objects within and
without the State of Indiana, in other States, the
District of Columbia, the territories, colonies
and dependencies of the United Staes, and in
foreign countries, without restriction as to place
or amount, but subject to the laws of such State,
District, territory, colony, dependency or
country.
To do any or all of the things herein set
forth to the same extent as natural persons might
or could do and in any part of the world, as
principals, agents, contractors, or otherwise and
either alone or in company with others.
In general, to carry on any other business in
connection with the foregoing, whether
manufacturing or otherwise, not forbidden by the
laws of the State of Indiana, and with all the
powers conferred upon corporations by the laws of
the State of Indiana.
But if this corporation shall undertake to do
any of the things hereinabove set forth in any
state other than Indiana, in the District of
Columbia, in any territory, colony, or dependency
of the United States, or in any foreign country,
or in any colony or dependency thereof, then as to
such jurisdictions and each of them, this
corporation shall be deemed to have such powers in
so far only as such jurisdictions respectively
permit corporations within their several
respective jurisdictions to be organized for or to
exercise such powers.
It is the intention that each of the objects
or purposes specified in each of the paragraphs of
this article shall, except where otherwise
specified, be nowise limited or restricted by
reference to or inference from the terms of any
other paragraph or of any other article hereof,
but that the objects or purposes specified herein
shall be regarded as independent objects or
purposes, and the enumeration of specific objects
or purposes shall not be construed to restrict in
any manner the powers of this corporation, nor
shall the expression of one thing be deemed to
exclude another, although it be of like nature.
3. The period during which it is to
continue as a corporation is unlimited.
4. The post office address of its principal
office is One N. Capitol Avenue, Indianapolis,
Indiana 46204.
The name of its resident agent is CT
Corporation System.
The post office address of its resident
agent is One N. Capitol Avenue, City of
Indianapolis, Marion County, Indiana.
5. The total number of shares into which
its authorized capital stock is to be divided is
12,500,000, consisting of shares as follows:
2,500,000 shares having a par value of $20.00 per share
10,000,000 shares having a par value of $1.00 per share
6. The shares are to be divided into classes as follows:
Cumulative Prior Preference Stock
of the par value of $20.00 each 1,500,000
Cumulative Convertible Second Preferred Stock
of the par value of $20.00 each 500,000
Serial Preferred Stock
of the par value of $20.00 each 500,000
Common Stock of the par value of $ 1.00 each 10,000,000
The relative rights, preferences, limitations and
restrictions of each class shall be as follows:
(A) The holders of record of the Cumulative
Prior Preference Stock hereinafter referred to as
the "Prior Preference Stock" shall be entitled to
receive, when and as declared by the Board of
Directors, dividends at the rate of Five Percent
(5%) of the par value thereof per annum and no
more, payable in equal quarterly installments on
the first days of January, April, July and October
in each year, accruing from January 1, 1942, in
respect of shares of the Prior Preference Stock
issued before January 1, 1942, and in respect of
shares of Prior Preference Stock issued on or
after said date, from the quarterly dividend
payment date on which issued, or, if not issued on
a quarterly dividend payment date, from the
quarterly dividend payment date next preceding the
date of issue of such shares, before any
distribution, whether by way of dividends or
otherwise shall be declared or paid upon or set
apart for the Cumulative Convertible Second
Preferred Stock (hereinafter referred to as the
"Second Preferred Stock") or the Serial Preferred
Stock or the Common Stock of the corporation, or
any other stock of the corporation except stock
having a preference over, or being on a parity
with, the Prior Preference Stock. Such dividends
upon the Prior Preference Stock shall be cumulative
so that if, in any quarterly dividend period or
periods, Prior Preference Stock at the rate of
Five Percent (5%) of the par value thereof per
annum shall not have been paid or set apart for
payment, but without interest, before any
distribution, whether by way of dividends or
otherwise, shall be declared or paid upon, or set
apart for the Second Preferred Stock or the Serial
Preferred Stock or the Common Stock, or any other
stock of the corporation, except stock having
preference over, or being on a parity with, the
Prior Preference Stock.
(B) After full cumulative dividends upon all
Prior Preference Stock then outstanding shall have
been paid for all past quarterly dividend periods,
and after, or concurrently with, making payment
of, or provision for, full dividends upon all
Prior Preference Stock then outstanding to the end
of the current quarterly dividend period, then,
and not otherwise, the holders of the Second
Preferred Stock shall be entitled to receive, when
and as declared by the Board of Directors,
dividends thereon at the rate of Five Percent
(5%) of the par value thereof per annum and no
more, payable in equal quarterly installments on
the first days of January, April, July and October
in each year, accruing from the quarterly dividend
payment date on which issued, or, if not issued on
a quarterly dividend payment date, from the
quarterly dividend payment date next preceding the
date of issue of such shares, before any
distribution, whether by way of dividends or
otherwise, shall be declared or paid upon or set
apart for the Serial Preferred Stock or the Common
Stock of the Corporation, or any other stock of
the Corporation, except stock having a preference
over, or being on a parity with, the Second
Preferred Stock. Such dividends upon the Second
Preferred Stock shall be cumulative so that if, in
any quarterly dividend period or periods,
dividends upon the outstanding Second Preferred
Stock at the rate of Five Percent (5%) of the par
value thereof per annum, shall not have been paid
or set apart for payment, the deficiency shall be
paid or set apart for payment, but without
interest, before any distribution, whether by way
of dividends or otherwise, shall be declared or
paid upon, or set apart for the Serial Preferred
Stock or the Common Stock, or any other stock of
the Corporation, except stock having preference
over, or being on a parity with, the Second
Preferred Stock.
(C) After full cumulative dividends upon any
Prior Preference Stock then outstanding shall have
been paid for all past quarterly dividend periods,
and after, or concurrently with, making payment
of, or provision for, full dividends upon all
Prior Preference Stock then outstanding to the end
of the current quarterly dividend period, and
after full cumulative dividends upon all Second
Preferred Stock then outstanding shall have been
paid for all past quarterly dividend periods, and
after, or concurrently with, making payment of, or
provision for, full dividends upon all Second
Preferred Stock then outstanding to the end of the
current quarterly dividend period, then, and not
otherwise, the holders of the Serial Preferred
Stock shall be entitled to receive, when and as
declared by the Board of Directors, dividends
thereon at the rate and time and in the manner and
on the terms and conditions prescribed by the
Board of Directors pursuant to paragraph N of this
Article 6, before any distribution, whether by way
of dividends or otherwise shall be declared or
paid upon or set apart for the Common Stock of the
Corporation, or any other stock of the
Corporation, except stock having a preference
over, or being on a parity with, the Serial
Preferred Stock.
(D) After full cumulative dividends upon all
Prior Preference Stock then outstanding shall have
been paid for all past quarterly dividend periods,
and after, or concurrently with, making payment
of, or provision for, full dividends upon all
Prior Preference Stock then outstanding to the end
of the current quarterly dividend period, and
after full cumulative dividends upon all Second
Preferred Stock then outstanding shall have been
paid for all past quarterly dividend periods, and
after, or concurrently with, making payment of, or
provision for, full dividends upon all Second
Preferred Stock then outstanding to the end of the
current quarterly dividend period, and after full
cumulative dividends upon all series of Serial
Preferred Stock shall have been paid for all past
quarterly dividend periods, to the extent required
by the resolution or resolutions of the Board of
Directors establishing such series, and after, or
concurrently with, making payment of, or provision
for, full dividends upon all series of Serial
Preferred Stock then outstanding to the end of the
current quarterly dividend period, then, and not
otherwise, dividends may be declared upon, and
paid to the holders of the Common Stock, to the
exclusion of the holders of the Prior Preference
Stock, the Second Preferred Stock, and the Serial
Preferred Stock.
(E) Upon at least thirty (30) days' notice,
given by mail to the record holders of the Prior
Preference Stock to be redeemed, and by
publication of such notice in at least one
newspaper printed in the English language and of
general circulation, in the Borough of Manhattan,
City, County and State of New York, the
Corporation may redeem all the shares of the Prior
Preference Stock then outstanding, or any part
thereof, at any time or from time to time, at the
price per share of $21, together with an amount
equal to the amount of all the dividends
accumulated and unpaid thereon at the redemption
date, but without interest, whether or not earned
or declared (hereinafter called the "redemption
price"), all by such method as shall be provided
from time to time by resolution of the Board of
Directors or by the bylaws of the Corporation.
From and after the date fixed in such notice as
the date of redemption, unless default shall be
made by the Corporation in providing moneys at the
time and place specified for the payment of the
redemption price of the Prior Preference Stock so
called for redemption, or, if the Corporation
shall so elect, from and after a date (which shall
be prior to the redemption date and which,
together with the fact of such election, shall be
set forth in the notice of redemption) on which
the Corporation shall provide moneys for the
payment of the redemption price by depositing the
amount thereof for account of the holders of the
Prior Preference Stock entitled thereto with a
bank or trust company doing business in the
Borough of Manhattan, City, County and State of
New York and having capital and surplus of at
least Five Million Dollars ($5,000,000), all
dividends on the prior Preference Stock thereby
called for redemption shall cease to accrue, and
all rights of the holders thereof as stockholders
of the Corporation, except the right to receive
the redemption price, shall cease and determine.
Any moneys provided by the Corporation for the
payment of the redemption price of Prior
Preference Stock which shall remain unclaimed by
the holders of the Prior Preference Stock entitled
thereto at the end of six (6) years after such
date of redemption, together with any interest
thereon which shall be allowed by such bank or
trust company, if any, with which such moneys
shall have been deposited, shall be paid by such
bank or trust company to the Corporation and shall
revert to the treasury of the Corporation and be
available for general corporate purposes as if
never provided by the Corporation for the payment
of the redemption price for Prior Preference
Stock, provided, however, that thereafter such
holders, if and when they shall make claim
therefor, shall be paid the redemption price of
Prior Preference Stock (but without interest
thereon) from any funds of the Corporation then
available for that purpose. Nothing herein
contained shall limit any legal right of the
Corporation to purchase any of the Prior
Preference Stock at a price not exceeding the
redemption price.
(F) Upon at least thirty (30) days' notice,
given by mail to the record holders of the Second
Preferred Stock to be redeemed, and by publication
of such notice in at least one newspaper printed
in the English language and of general
circulation, in the Borough of Manhattan, City,
County and State of New York, the Corporation may
redeem all the shares of the Second Preferred
Stock then outstanding, or any part thereof, at
any time subsequent to the close of the first
fiscal year following the fiscal year in which the
shares to be redeemed were issued and from time to
time, at the price per share of $21, together with
an amount equal to the amount of all the dividends
accumulated and unpaid thereon at the redemption
date, but without interest, whether or not earned
or declared (hereinafter called the "redemption
price"), all by such method as shall be provided
from time to time by resolution of the Board of
Directors or by the bylaws of the Corporation.
From and after the date fixed in such notice as
the date of redemption, unless default shall be
made by the Corporation in providing moneys at the
time and place specified for the payment of the
redemption price of the Second Preferred Stock so
called for redemption, or,if the Corporation shall
so elect, from and after a date (which shall be
prior to the redemption date and which, together
with the fact of such election, shall be set forth
in the notice of redemption) on which the
Corporation shall provide moneys for the payment
of the redemption price by depositing the amount
thereof for account of the holders of the Second
Preferred Stock entitled thereto with a bank or
trust company doing business in the Borough of
Manhattan, City, County and State of New York and
having capital and surplus of at least Five
Million Dollars ($5,000,000), all dividends on the
Second Preferred Stock thereby called for
redemption shall cease to accure, and all rights
of the holders thereof as stockholders of the
Corporation, except the right to receive the
redemption price, shall cease and determine. Any
moneys provided by the Corporation for the payment
of the redemption price of Second Preferred Stock
which shall remain unclaimed by the holders of the
Second Preferred Stock entitled thereto at the end
of six (6) years after such date of redemption,
together with any interest thereon which shall be
allowed by such bank or trust company, if any,
with which such moneys shall have been deposited,
shall be paid by such bank or trust company to the
Corporation and shall revert to the treasury of
the Corporation and be available for general
corporate purposes as if never provided by the
Corporation for the payment of the redemption
price for Second Preferred Stock, provided,
however, that thereafter such holders, if and when
they shall make claim therefor, shall be paid the
redemption price of Second Preferred Stock (but
without interest thereon) from any funds of the
Corporation then available for that purpose.
Nothing herein contained shall limit any legal
right of the Corporation to purchase any of the
Second Preferred Stock at a price not exceeding
the redemption price.
(G) In the event of liquidation, dissolution
or winding up of the Corporation, voluntary or
involuntary, the holders of the Prior Preference
Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation, whether
from capital, surplus or earnings, before any
payment or distribution out of said assets shall
be made to the holders of the Second Preferred
Stock or the holders of the Serial Preferred Stock
or the holders of the Common Stock, or any other
stock of the Corporation, except stock having
preference over, or being on a parity with, the
Prior Preference Stock, the sum of $20 per share
and an amount which shall be equal to the
dividends accumulated and unpaid thereon, whether
or not earned or declared, but without interest,
and thereafter the holders of the Prior Preference
Stock shall be entitled to no further payment or
distribution. A reorganization, consolidation or
merger of this Corporation (in whatever manner
effected, including a sale or transfer of its
assets) shall not be regarded as a voluntary
liquidation, dissolution or winding up of this
Corporation.
(H) In the event of the liquidation,
dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the
holders of all Prior Preference Stock then
outstanding, the holders of the Second Preferred
Stock then outstanding shall be entitled to be
paid out of the assets of the Corporation, whether
from capital, surplus, or earnings, before any
payment or distribution out of said assets shall
be made to the holders of the Serial Preferred
Stock or the holders of the Common Stock, or any
other stock of the Corporation, except stock
having a preference over, or being on a parity
with, the Second Preferred Stock, the sum of $20
per share, and an amount which shall be equal to
the dividends accumulated and unpaid thereon,
whether or not earned or declared, but without
interest, and thereafter, the holders of the
Second Preferred Stock shall be entitled to no
further payment or distribution. A
reorganization, consolidation or merger of this
Corporation (in whatever manner effected,
including the sale or transfer of its assets)
shall not be regarded as a voluntary liquidation,
dissolution or winding up of this Corporation.
(I) In the event of the liquidation,
dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the
holders of all Prior Preference Stock then
outstanding, and after payment in full of the
amounts required to be paid to the holders of all
the Second Preferred Stock then outstanding, the
holders of all series of Serial Preferred Stock
then outstanding shall be entitled to be paid out
of the assets of the Corporation, whether from
capital, surplus or earnings, before any payment
or distribution out of said assets shall be made
to the holders of the Common Stock, or any other
stock of the Corporation, except stock having a
preference over, or being on a parity with, the
Serial Preferred Stock, the sum of $20 per share,
and, if required by the resolution or resolutions
of the Board of Directors establishing such
series, an amount which shall be equal to the
dividends accumulated and unapid thereon, whether
or not earned or declared, but without interest,
and thereafter the holders of the Serial Preferred
Stock shall be entitled to no further payment or
distribution. A reorganization, consolidation or
merger of this Corporation (in whatever manner
effected,including the sale or transfer of its
assets) shall not be regarded as a voluntary
liquidation, dissolution or winding up of this
Corporation.
(J) In the event of the liquidation,
dissolution or winding up of the Corporation,
whether voluntary or involuntary, after payment in
full of the amounts required to be paid to the
holders of all Prior Preference Stock then
outstanding, and after payment in full of the
amounts required to be paid to the holders of all
the Second Preferred Stock then outstanding, and
after payment in full of the amounts required to
be paid to the holders of all the Serial Preferred
Stock then outstanding, the holders of the Common
Stock then outstanding shall be entitled to the
exclusion of the holders of the Prior Preference
Stock, the holders of the Second Preferred Stock
and the holders of the Serial Preferred Stock to
share ratably in all remaining assets of the
Corporation.
(K) (a) The shares of the Second Preferred
Stock shall be convertible, at the option of the
holder thereof, at any time, subject to the right
of redemption of the Corporation, upon surrender
by the holder to the Corporation of the
certificates for the shares so to be converted,
into full paid and non-assessable shares of Prior
Preference Stock of the Corporation at the rate of
one share of Prior Preference Stock for each share
of Second Preferred Stock so surrendered for
conversion. The rate of conversion mentioned
above is hereinafter referred to as the
"conversion ratio" of the Second Preferred Stock.
The conversion ratio shall be subject to
adjustment from time to time in certain instances
as hereinafter provided. Upon conversion the
Corporation shall make no payment or adjustment on
account of dividends accrued or in arrears on the
share or shares surrendered for conversion. In
the event of the call for redemption of any shares
of the Second Preferred Stock, such right of
conversion, as to the shares designated for
redemption, shall continue up to the close of
business on the third full business day prior to
the date fixed for redemption, and such right
shall thereupon terminate unless the Corporation
shall not have proceeded in accordance with the
provisions of paragraph (F) of Article 6 hereof
and shall default in the payment of the redemption
price. A "full business day" shall not include a
Saturday, a Sunday, or a day which is a legal
holiday in the State of New York.
(b) Before any holder of shares of the
Second Preferred Stock shall be entitled to
convert such shares into Prior Preference Stock,
he shall surrender the certificate or certificates
for such shares of the Second Preferred Stock at
the office of any Transfer Agent of the
Corporation for the Prior Preference Stock, duly
endorsed to the Corporation or in blank or
accompanied by proper instruments of transfer to
the Corporation or in blank, and shall give
written notice to the Corporation at such office
that he elects so to convert such shares of the
Second Preferred Stock, and shall state in writing
therein the name or names in which he wishes the
certificate or certificates for Prior Preference
Stock to be issued.
(c) The Corporation will, as soon as
practicable after such surrender, as above
provided, of certificates for shares of the Second
Preferred Stock, deliver to or upon the written
order of the holder of the certificates so
surrendered, certificates for the number of full
shares of Prior Preference Stock to which he shall
be entitled as herein provided. Subject to the
following provisions of this sub-paragraph (c),
such conversion shall be deemed to have been made
as of the date of such surrender of shares of the
Second Preferred Stock to be converted, and the
person or persons entitled to receive the Prior
Preference Stock issuable on conversion of such
shares of the Second Preferred Stock shall be
treated for all purposes as having become the
record holder or holders of such Prior Preference
Stock on said date. The Corporation shall not be
required to make such conversion, and no surrender
of shares of the Second Preferred Stock shall be
effective for that purpose, while the stock
transfer books of the Corporation are closed for
any purpose, but the surrender of such shares of
the Second Preferred Stock for conversion during
any period while such books are so closed shall
become effective for the purpose of such
conversion immediately upon the reopening of such
books, as if the conversion had been made on the
date such shares of the Second Preferred Stock
were surrendered.
(d) In case the Corporation shall at
any time subdivide or combine its outstanding
shares of Prior Preference Stock, the conversion
ratio shall be proportionately decreased or
increased, as the case may be.
(e) Whenever the conversion ratio is
adjusted, as herein provided, the Corporation
shall forthwith file with each Transfer Agent of
the Corporation for the Prior Preference Stock a
statement signed by the President or a Vice
President and by the Secretary or the Treasurer or
one of the Assistant Secretaries or Assistant
Treasurers of the Corporation, stating the
adjusted conversion ratio determined as provided
herein. Such statement shall set forth in
reasonable detail such facts as shall be necessary
to show the reason for and the manner of computing
such adjustment. Notice of any adjustment of the
conversion ratio shall be given promptly by one
publication in a daily newspaper printed in the
English language and of general circulation in the
Borough of Manhattan, City, County and State of
New York, or by mail to the holders of record of
the shares of the Second Preferred Stock.
(f) In case of any capital
reorganization or any reclassification of the
capital stock of the Corporation or in case of the
consolidation or merger of the Corporation with
another corporation, each share of the Second
Preferred Stock shall thereafter be convertible
into the number of shares of stock or other
securities of property of the Corporation, or of
the successor corporation resulting from such
consolidation or merger, as the case may be, to
which the Prior Preference Stock of the
Corporation, deliverable upon conversion of such
share of the Second Preferred Stock, would have
been entitled upon such capital reorganization,
reclassification of capital stock consolidation or
merger; and, in any such case, the Corporation
shall make an appropriate adjustment in the
application of the provisions herein set forth
with respect to rights and interests thereafter of
the holders of shares of the Second Preferred
Stock, to the end that the provisions set forth
herein (including the specified changes in and
other adjustments of the conversion ratio) shall
thereafter be applicable as near as reasonable may
be, in relation to any shares or other property
thereafter deliverable upon the conversion of
shares of the Second Preferred Stock.
(g) In case at any time:
(i) the Corporation shall declare
any dividend payable in stock upon its Prior
Preference Stock or make any distribution (other
than cash dividends) to the holders of its Prior
Preference Stock; or
(ii) the Corporation shall offer
for subscription to the holders of its Prior
Preference Stock any additional shares of stock of
any class or any other rights; or
(iii) any capital reorganization, or
reclassification of the capital stock of the
Corporation or the consolidation or merger of the
Corporation with another corporation shall be
proposed by the Corporation;
then, and in any one or more of said cases, the
Corporation shall cause at least ten days' prior
notice to be mailed to each Transfer Agent for the
Second Preferred Stock, and to the holders of
record of the outstanding shares of the Second
Preferred stock, of the date on which (x) the
books of the Corporation shall close, or a record
shall be taken for such stock dividend,
distribution or subscription rights, or (y) such
reclassification, reorganization, consolidation or
merger shall take place, as the case may be. Such
notice shall also specify the date, if any is to
be fixed, as of which holders of Prior Preference
Stock of record shall participate in said
dividend, distribution or subscription rights or
shall be entitled to exchange their Prior
Preference Stock for securities or other property
deliverable upon such reclassification,
reorganization,consolidation or merger, as the
case may be.
(h) The Corporation shall at all times
reserve and keep available, out of its authorized
and unissued stock, solely for the purpose of
effecting the conversion of shares of the Second
Preferred Stock, such number of shares of Prior
Preference Stock as shall from time to time be
sufficient to effect the conversion of all shares
of the Second Preferred Stock from time to time
outstanding.
(L) So long as any of the Prior Preference
Stock shall be outstanding, and except as
otherwise provided by the laws of the State of
Indiana, the Corporation shall not, without the
consent given in writing, or by the affirmative
vote of the holders of at least a majority of the
number of shares of Prior Preference Stock at the
time outstanding, or if holders of in excess of
twenty-five percent (25%) of such shares shall
vote against the proposal:
l. create any prior lien on the property of
the Corporation (except purchase money mortgages
on property acquired for use in the business of
the Corporation);
2. issue any shares of stock in addition to
the shares hereby authorized to be issued, having
rights of priority equal to or superior to the
rights of the Prior Preference Stock; or
3. sell, lease or exchange all or
substantially all of its property or assets.
(M) If at any time dividends in arrears upon
the Prior Preference Stock shall aggregate in
amount $1.00 or more per share, then, until the
Corporation shall have paid all dividends in
arrears on all Prior Preference Stock then
outstanding, the holders of record of the shares
of Prior Preference Stock,voting together as a
separate class, shall, at the annual meeting of
the stockholders of the Corporation next held and
at all subsequent annual meetings until all
accrued and unpaid dividends on the Prior
Preference Stock shall have been paid in full,
have the right to elect a majority of the members
of the Board of Directors. Upon the payment in
full of all such dividends in arrears, the right
of the holders of the Prior Preference Stock to
elect a majority of the members of the Board of
Directors shall cease, subject, however, to
revival whenever such dividends on the Preferred
Stock shall again be in arrears in an aggregate
amount of $l.00 per share or more.
(N) (a) Subject to applicable provisions of
law and to the provisions of these Articles of
Incorporation (including without limitation those
provisions set forth in paragraphs (C) and (I) of
this Article 6) authority is hereby expressly
granted to and vested in the Board of Directors,
to the extent permitted by and upon compliance
with the provisions set forth in the law of the
State of Indiana, to issue the Serial Preferred
Stock from time to time in one or more series,
each series to have such relative rights,
preferences, limitations or restrictions, and bear
such designations, as shall be determined and
stated prior to the issuance of any shares of any
such series in and by a resolution or resolutions
of the Board of Directors authorizing the issuance
of such series, including without limitation:
(l) The number of shares to constitute
such series and the distinctive designation
thereof;
(2) The dividend rate or rates to which
the shares of such series shall be entitled and
whether dividends shall be cumulative and, if so,
the date or dates from which dividends shall
accumulate, and the quarterly dates on which
dividends, if declared, shall be payable.
(3) Whether the shares of such series
shall be redeemable, the limitations and
restrictions in respect of such redemptions, the
manner of selecting shares of such series for
redemption if less than all shares are to be
redeemed, and the amount per share, including the
premium, if any, which the holders of shares of
such series shall be entitled to receive upon the
redemption thereof, which amount may vary at
different redemption dates and may be different in
respect of shares redeemed through the operation
of any retirement or sinking fund and in respect
of shares otherwise redeemed;
(4) Whether the holders of shares of
such series shall be entitled to receive, in the
event of the liquidation, dissolution or winding
up of the Corporation, whether voluntary or
involuntary, an amount equal to the dividends
accumulated and unpaid thereon, whether or not
earned or declared, but without interest;
(5) Whether the shares of such series
shall be subject to the operation of a purchase,
retirement or sinking fund and, if so, whether
such fund shall be cumulative or non-cumulative,
the extent to and the manner in which such fund
shall be applied to the purchase of redemption of
the shares of such series for retirement or to
other corporate purposes, and the terms and
provisions in respect of the operation thereof;
(6) Whether the shares of such series
shall be convertible into, or exchangeable for,
shares of stock of any other class or series
thereof or of any other series of the same class,
and if so convertible or exchangeable, the price
or prices or the rate or rates of conversion or
exchange and the method, if any, of adjusting the
same;
(7) The voting powers, if any, of the
shares of such series in addition to the voting
powers provided by law;
(8) Any other rights, preferences,
limitations or restrictions not inconsistent with
law or the provisions of these Articles of
Incorporation.
(b) All shares of any one series of Serial
Preferred Stock shall be identical with each other
in all respects, except that in respect of any
series entitled to cumulative dividends, shares of
such series issued at different times may differ
as to the dates from which such dividends shall be
cumulative.
(O) No holder of shares of any stock of the
Corporation shall be entitled to such holder to
subscribe for any shares of any class which the
Corporation may issue or sell (whether now or
hereafter authorized).
(P) Shares of stock without distinction as
to class having a par value may be issued for an
amount of consideration not less than the par
value thereof.
(Q) In the event that any holders of any
class of stock of the Corporation shall become
entitled to a fractional share of stock of any
class pursuant to a plan of recapitalization,
consolidation or merge, or otherwise, the Board of
Directors of the Corporation shall have the right,
at its option, to issue scrip representing such
fractional share or to make payment to the holder
in cash equivalent to the market value as
determined by it, of such fractional share. Such
scrip shall not entitle the holder thereof to
receive dividends or to any other rights of a
stockholder, but upon surrender thereof to the
Corporation in amounts calling in the aggregate
for one (l) or more shares of such stock, such
scrip shall be exchangeable for a certificate or
certificates representing the share or shares of
such stock called for thereby. Such scrip shall
become void upon such date or dates as the Board
of Directors of the Corporation in the exercise of
its absolute discretion shall determine.
(R) The term "dividends accumulated and
unpaid", "dividends in arrears", "dividends
accrued or in arrears", "full cumulative
dividends", and "full accumulated dividends"
whenever used herein with reference to the Prior
Preference Stock or the Second Preferred Stock
shall be deemed to mean that amount which shall be
equal to Five Percent (5%) of the par value
thereof per annum to date from January 1, 1942, in
the case of Prior Preference Stock issued before
January 1, 1942, in the case of Prior Preference
Stock issued on or after that date and in the case
of Second Preferred Stock from the quarterly
dividend payment date on which issued, or, if not
issued on a quarterly dividend payment date, from
the quarterly dividend payment date next preceding
the date of issue thereof, in every case less the
amount of dividends already paid or set apart for
payment upon the shares of Prior Preference Stock
and Second Preferred Stock with reference to which
such terms are used and whenever used herein with
reference to any series of Serial Preferred Stock
shall be deemed to mean the amount which shall, to
the extent that dividends are made cumulative by
the resolution or resolutions of the Board of
Directors establishing such series, be equal to
the dividend rate to which the shares of such
series are entitled per annum to date from the
quarterly dividend payment date on which issued,
or, if not issued on a quarterly dividend payment
date, from the quarterly dividend payment date
next preceding the date of issue thereof, in every
case less the amount of dividends already paid or
set apart for payment upon the shares of Serial
Preferred Stock with reference to which such terms
are used.
7. Except as provided in paragraphs (L),
(M) and (N) of Article 6 hereof and as otherwise
required by the laws of the State of Indiana, the
holders of each one share of Second Preferred
Stock and the holders of each one share of Common
Stock, voting collectively and not as a class, to
the exclusion of all other classes of stock of the
Corporation at any time outstanding, shall be
entitled to one vote per each one share thereof
held in the election of directors and upon all
other matters requiring a vote of stockholders of
the Corporation.
8. The amount of capital of the Corporation
at the time of filing these Amended and Restated
Articles of Incorporation is $11,136,555.
9. The number of directors of the
Corporation shall be three.
No director of the Corporation shall be
removed from his office as a director by vote or
other action of stockholders without cause.
Notwithstanding anything contained in
this Article 9, if at any time dividends in
arrears upon the Prior Preference Stock shall
aggregate in amount $1.00 or more per share, then,
the term of all directors then in office shall
expire at the annual meeting of stockholders of
the Corporation next held; and, until the
Corporation shall have paid all dividends in
arrears on all Prior Preference Stock then
outstanding, directors shall be elected, at the
annual meeting of stockholders of the Corporation
next held and at all subsequent annual meetings,
until all accrued and unpaid dividends on the
Prior Preference Stock shall have been paid in
full for a term of one year and until their
successors are elected and qualified; and, as
provided in paragraph (M) of Article 6 hereof,
until the Corporation shall have paid all
dividends in arrears on all Prior Preference Stock
then outstanding, the holders of record of the
shares of Prior Preference Stock, voting together
as a separate class, shall, at the annual meeting
of the stockholders of the Corporation next held
and at all subsequent annual meetings, until all
accrued and unpaid dividends on the Prior
Preference Stock shall have been paid in full,
have the right to elect a majority of the members
of the Board of Directors. As provided in said
paragraph (M) of Article 6, upon the payment in
full of all such dividends in arrears, the right
of the holders of the Prior Preference Stock to
elect a majority of the members of the Board of
Directors shall cease, subject, however, to
revival whenever such dividends on the Preferred
Stock shall again be in arrears in an aggregate
amount of $1.00 per share or more, and at the
annual meeting of the stockholders of the
Corporation next held, directors shall be elected
by classes as in the manner hereinabove provided
with respect to the annual meeting of stockholders
to be held on October 4, 1967.
10. The names and addresses of the Directors
holding office at the time of the adoption of
these Amended and Restated Articles of
Incorporation are as follows:
James F. Doyle, 321 N. Clark Street, Chicago, IL 60610
R. Thomas Howell, Jr, 321 N. Clark Street, Chicago,IL 60610
Janet K. Cooper, 321 N. Clark Street, Chicago, IL 60610
11. The names and post office address of the
President and Secretary of the Corporation are as
follows:
James F. Doyle, President
321 N. Clark Street, Chicago, IL 60610
R. Thomas Howell, Jr., Secretary
321 N. Clark Street, Chicago, IL 60610
12. The private property of the stockholders
of said Corporation shall not be subject to the
payment of corporate debts to any extent
whatsoever.
13. In furtherance, and not in limitation of
the powers conferred by statute, the Board of
Directors is expressly authorized:
(a) To make, alter, amend and rescind the
bylaws of this Corporation, without any action on
the part of the stockholders.
(b) Subject to the limitations hereinbefore
set forth, to authorize and cause to be executed
mortgages and liens upon the real and personal
property of this Corporation.
(c) To fix, determine and vary the amount to
be maintained as surplus and, subject to the other
provisions and requirements of this Certificate,
the amount or amounts to be set apart or reserved
as working capital or for any other lawful
purposes. If so determined by the Board of
Directors, the Corporation may from time to time
receive money and/or other property and credit the
amount or value thereof to reserve or surplus, and
such money or other property may be an undivided
part of money or other property for another part
of which stock, bonds, debentures and/or other
obligations of the Corporation are issued.
Against any reserve or surplus so established
there may be charged losses at any time incurred by
the Corporation, also dividends or other
distributions upon stock. Such reserve or surplus
may be reduced from time to time by the Board of
Directors for the purposes above specified or by
transfer from such reserve or surplus to capital
account.
(d) From time to time to determine whether
and to what extent, and at what times and places,
and under what conditions and regulations, the
accounts and books of this Corporation (other than
the stock ledger), or any of them, shall be open
to inspection of stockholders; and no stockholder
shall have any right of inspecting any account,
book or document of this Corporation except as
conferred by statute, unless authorized by a
resolution of stockholders or directors.
(e) If the bylaws so provide, to designate,
by resolution adopted by a majority of the whole
board, two or more of its number to constitute an
executive committee, which committee shall for the
time being, as provided in said resolution or in
the bylaws of this Corporation, have and exercise
any or all of the powers of the Board of Directors
in the management of the business and affairs of
this Corporation, and have power to authorize the
seal of this Corporation to be affixed to all
papers which may require it.
(f) This Corporation may in its bylaws confer
powers upon its directors in addition to the
foregoing, and in addition to the powers and
authorities expressly conferred upon them by
statute.
(g) Both stockholders and directors shall
have power, if the bylaws so provide, to hold
their meetings, and to have one or more offices
within or without the State of Indiana, and to
keep the books of this Corporation (subject to the
provisions of the statutes), outside of the State
of Indiana at such places as may be from time to
time designated by the Board of Directors.
14. In the absence of fraud, no contract or
transaction between this Corporation and any other
association or corporation shall be affected by
the fact that any of the directors or officers of
this Corporation are interested in or are
directors or officers of such other association or
corporation, and any director or officer of this
Corporation individually may be a party to or may
be interested in any such contract or transaction
of this Corporation; and no such contract or
transaction of this Corporation with any person or
persons, firm, association or corporation shall be
affected by the fact that any director or officer
of this Corporation is a party to or interested in
such contract or transaction or in any way
connected with such person or persons, firm,
association or corporation; and each and every
person who may become a director or officer of
this Corporation is hereby relieved from any
liability that might otherwise exist from this
contracting with this Corporation for the benefit
of himself or any person, firm association or
corporation in which he may be in any wise
interested.
15. The Corporation reserves the right to
amend, alter, change or repeal any provision
contained in its Articles of Incorporation, in the
manner now or hereafter prescribed by statute, and
all rights conferred upon stockholders and
directors herein are granted subject to this
reservation. Notwithstanding the foregoing, the
provisions of the second paragraph of Article 9,
the provisions of Article 16, the provisions of
Article 17 and the provisions of this sentence may
not be amended, altered, changed or repealed
except by vote of stockholders holding at least
seventy-five percent (75%) of the voting power of
the outstanding stock of the Corporation.
16. In the event that it is proposed that
this Corporation enter into a merger or
consolidation with any other corporation and such
other corporation or its affiliates singly or in
the aggregate own or control directly or
indirectly five percent (5%) or more of the voting
power of the outstanding shares of stock of this
Corporation, or that this Corporation sell all or
substantially all of its assets or business to
such other corporation or its affiliates, the
affirmative vote of the holders of not less than
seventy-five percent (75%) of the total voting
power of all outstanding shares of stock of this
Corporation shall be required for the approval of
any such proposal; provided, however, that the
foregoing shall not apply to any such merger,
consolidation or sale of assets or business which
was approved by resolution of the Board of
Directors of this Corporation prior to the
acquisition of the ownership or control of five
percent (5%) of the voting power of the
outstanding shares of this Corporation by such
other Corporation or its affiliates, nor shall it
apply to any such merger, consolidation or sale of
assets or business between this Corporation and
another corporation fifty percent (50%) or more of
the voting power of the outstanding stock of which
is held by this Corporation. For the purpose
hereof an "affiliate" is any person (including a
corporation, partnership, trust, estate or
individual) who directly, or indirectly through
one or more intermediaries, controls, or is
controlled by, or is under common control with,
the person specified; and "control" means the
possession, directly or indirectly of the power to
direct or cause the direction of management and
policies of a person, whether through the
ownership of voting securities, by contract, or
otherwise.
17. In the event of a merger or
consolidation or in the event of a sale, lease,
exchange, mortgage, pledge or other disposal of
all or substantially all of the fixed assets of
the Corporation, for the purpose of terminating
and winding up, or changing the nature of its
business, then the stockholders of the Corporation
shall have and possess the same rights of
dissenting stockholders as are granted by the
Indiana General Corporation Act to stockholders of
corporations whose shares are not registered on a
national securities exchange.
2. Effect of Amended and Restated Articles
The Amended and Restated Articles shall
supersede and take the place of the heretofore
existing Amended Articles of Incorporation of the
Corporation.
SUBDIVISION B
MANNER OF ADOPTION AND VOTE
Action by Directors
The Board of Directors of the Corporation, by
unanimous written consent on February 15, 1994,
duly adopted a resolution in respect of the
Amended and Restated Articles that the provisions
and terms of its entire Articles of Incorporation
be amended and restated so as to read as set forth
in the Amended and Restated Articles, and that the
Amended and Restated Articles should supersede and
take the place of its heretofore existing Amended
Articles of Incorporation as amended at a meeting
of the Shareholders on October 5, 1955.
2. Compliance with Legal Requirements
The manner of the adoption of the Amended and
Restated Articles of Incorporation, constitute
full legal compliance with the provisions of the
Act, the Articles of Incorporation, and the Bylaws
of the Corporation.
SUBDIVISION C
STATEMENT OF CHANGES MADE WITH RESPECT TO THE
SHARES HERETOFORE AUTHORIZED
The amount or number of shares heretofore
authorized are 12,500,000 as follows:
2,500,000 shares consisting of 1,500,000 shares
of Cumulative Prior Preference Stock of the par
value of $20.00 each; 500,000 shares of Cumulative
Convertible Second Preferred Stock of the par value
of $20.00 each; and 500,000 shares of Serial
Preferred Stock of the par value of $20.00 each.
10,000,000 shares of Common Stock
of the par value of $1.00 each.
IN WITNESS WHEREOF, the undersigned officers
execute these Amended and Restated Articles of
Incorporation of the Corporation and certify to
the truth of the facts herein stated, this 15th
day of February, 1994.
/s/ James F. Doyle
James F. Doyle, President
STOKELY-VAN CAMP, INC.
/s/ R. Thomas Howell, Jr.
R. Thomas Howell, Jr., Secretary
STOKELY-VAN CAMP, INC.
ATTEST:
/s/ Marcia S. Laz
Marcia S. Laz
Assistant Secretary of
STOKELY-VAN CAMP, INC.
STATE OF ILLINOIS
COUNTY OF COOK
I, the undersigned, a Notary Public duly
commissioned to take acknowledgements and
administer oaths in the State of Illinois, certify
that JAMES F. DOYLE, President, R. THOMAS HOWELL,
JR., Secretary, and MARCIA S. LAZ, Assistant
Secretary of STOKELY-VAN CAMP, INC., the officers
executing the foregoing Amended and Restated Articles of
Incorporation, personally appeared before me;
acknowledged the execution thereof, and swore to
the truth of the facts therein stated.
WITNESS my hand and Notarial Seal this 15th
day of February, 1994.
/s/ Michaeleen L. Sage
Michaeleen Sage
Notary Public
My commission expires: [date is written, not typed] September 8, 1995
[offical seal appears to right] " 'OFFICIAL SEAL'
MICHAELEEN L. SAGE
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 9/8/95"
Exhibit 21
STOKELY-VAN CAMP, INC. AND SUBSIDIARIES
Subsidiaries of the Registrant
Subsidiary State or Country
of Incorporation
Beverages Gatorade (Chile) Limitada Chile
The Gatorade Company Delaware
Gatorade Puerto Rico Company Delaware
The Gatorade Company of Australia Pty. Ltd. Australia
Gatorade Portugal Servicos da Marketing S.A. Portugal
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<PERIOD-END> JUN-30-1995
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