FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended January 1, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File Number 0-6187
BANTA CORPORATION
(Exact name of registrant as specified in its charter)
Wisconsin 39-0148550
(State or other jurisdiction (IRS Employer
of incorporation or organization) I.D. Number)
225 Main Street, Menasha, Wisconsin 54952
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (414) 751-7777
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.10 par value
Rights to Purchase Common Stock
(Title of Class)
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. (X)
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)
Aggregate market value of voting stock held by non-affiliates of the
registrant as of March 11, 1994: $735,923,158.
Number of shares of common stock outstanding March 11, 1994: 20,037,388.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Annual Report to Shareholders for year ended January 1, 1994,
(incorporated into part II).
(2) Definitive Proxy Statement for annual meeting of shareholders on
April 26, 1994 (incorporated into Part III).
Page Number of Exhibit Index 19
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PART I
Item 1. Business.
General.
Banta Corporation (the "Corporation"), together with its subsidiaries, is
one of the larger printing organizations in the United States, providing a
broad range of printing and graphic arts services. The Corporation was
incorporated in Wisconsin in 1901. Its principal executive offices are
located at 225 Main Street, Box 8003, Menasha, Wisconsin, 54952-8003. The
Corporation had a total of 4,304 employees at the end of fiscal 1993.
The Corporation operates in one business segment-Printing Services.
Market classifications of the Corporation's sales are commercial (catalogs,
direct mail and single-use products); books (educational, general, trade,
data manuals and software services); magazines; and other (prepress services
and production of point-of-purchase displays and postage stamps). The
Corporation's operations were conducted at 23 production facilities located in
Wisconsin, Minnesota, California, Illinois, Massachusetts, Missouri, North
Carolina, Utah, and Virginia at the end of fiscal 1993.
The following table sets forth the approximate percentage of consolidated
net sales contributed by each class of similar products and services which
accounted for ten percent or more of consolidated net sales for any of the
last three fiscal years.
1993 1992 1991
Commercial 44% 46% 47%
Books 34 30 31
Magazines 12 13 12
Other 10 11 10
------ ------ ------
TOTAL 100% 100% 100%
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During 1990, the Corporation announced its intention to sell its Banta
Ventures, Inc. ("BVI") subsidiary and its net assets were written down to
estimated realizable value. Accordingly, the financial statements
incorporated by reference herein reflect BVI as a Discontinued Operation for
all periods presented. An estimated loss of $8,500,000 from the disposition,
net of applicable income tax credits of $1,200,000, was recorded in the third
quarter of 1990. During the third quarter of 1991, the Corporation revised
its estimate of the realizable value of BVI and recorded an additional
$7,600,000 loss provision, net of applicable income tax credits of $3,000,000.
During the second quarter of 1992, the Corporation completed the sale of
the majority of the BVI operations for $12,000,000 cash, 100,000 convertible
preferred shares of the buyer, a $2,500,000 note and the assumption of
selected liabilities by the buyer. During the second quarter of 1993, the
preferred shares were converted into common shares of the buyer which were
then sold in a secondary public offering resulting in net proceeds to the
Corporation of approximately $3,500,000.
In March of 1994 the Corporation purchased substantially all of the
assets and assumed selected liabilities of Danbury Printing & Litho, Inc.
("Danbury"). The purchase price for this transaction, including liabilities
assumed, aggregated approximately $22 million. This acquisition will be
accounted for as a purchase. Danbury, which will primarily serve direct
marketing customers within the commercial printing market classification,
reported 1993 sales of approximately $35 million.
Customers.
The Corporation sells its products and services to a large number of
customers and ordinarily does not have long-term contracts with its customers.
Production agreements covering one to three years are becoming more frequent
for magazine and catalog production. Production of postage stamps is
performed exclusively pursuant to long-term
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contracts between the Corporation, or its joint venture partners, and the
United States Postal Service ("USPS"). Substantially all sales are made to
customers through employees of the Corporation and it's subsidiaries based on
customer specifications. The fifteen largest customers accounted for
approximately 25%, 22% and 21% of net sales during 1993, 1992 and 1991,
respectively. No customer accounted for more than 10% of the Corporation's
net sales in 1993, 1992 or 1991. In the opinion of management, the loss of
any single customer would not have a material long-term adverse effect on the
Corporation.
Backlogs.
The Corporation is primarily a manufacturing services company and
provides its customers with printing and converting services. Lead time for
services varies, depending upon the type of customer, the industry being
serviced and seasonal factors. Backlogs would be expressed in terms of time
scheduled on equipment and not dollar value. Consequently, the dollar value
of backlogs is not readily available.
Markets Served.
Below is a description of the primary markets the Corporation serves:
* Commercial
The Corporation provides catalogs primarily for the consumer, industrial
and retail catalog markets. Bindery services provide ink-jet labeling and
demographic binding (which allows several different versions of the same
catalog to be bound simultaneously). Distribution services provided by
various Banta operating units, including computerized mail distribution
planning systems which assist our customers in minimizing postage costs, are
an integral part of catalog printing services.
Printed materials for direct marketing customers are provided by three
Banta units (including Danbury). These products vary in format and size and
include magazine and catalog inserts, bill stuffers, brochures, booklets,
cards and target market products designed to sell a product or solicit a
response.
Catalog and direct marketing materials are primarily distributed through
the USPS as third class or bulk rate postage. Substantial escalation in
postage rates, as experienced in 1991, significantly impacts the cost of doing
business for the Corporation's customers and may affect future growth
opportunities for these markets.
One of the Corporation's subsidiaries, Ling Products, Inc., provides
printed products to the fast-food industry and converts poly film and paper
into single-use products for the food service industry and health care
industry. In addition, Ling Products extrudes films, using both cast and
blown extruders, for use in its manufacturing processes and for sale to
external customers. Its health care products include plastic garment covers,
examination gowns, stretcher sheets, examination table paper, pillow covers
and gloves for personnel who come into contact with patients having highly
communicable diseases.
* Books
The Corporation is one of the largest printers of consumable elementary
and high school workbooks in the United States. The Corporation prints other
products for publishers of educational and general book markets including
textbooks (primarily soft cover), testing materials and paperbound books.
Print opportunities in the consumable educational workbook market decreased
during the last several years. Publisher consolidations have resulted in
fewer companies offering educational products which has reduced the number of
projects printed. These newly combined companies have tightened cost and
inventory controls. Additionally, the much publicized effort to improve the
nation's educational system has prompted schools to try alternate teaching
methods. Some of these efforts have replaced consumable workbooks with other
materials.
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To reduce its concentration in the elementary and high school markets,
the Corporation has increased its marketing efforts for other softcover books
including college texts, general books, data manuals and software
documentation for the computer industry. The Corporation's operating units
serving the computer and software industries print manuals, using both offset
printing and high speed photocopying, and offer complete "turnkey services"
including computer disk replication, product packaging and distribution. In
1993, the Corporation expanded the array of services it offers customers in
this market. New services include 1-800 telephone order fulfillment services,
which allows orders to be received directly by our fulfillment facility. The
Corporation's CYCLESpeed (SM) service is a new manufacturing system that
emphasizes shorter, more frequent production of print orders to minimize our
customers' inventory and provides constant monitoring of inventory levels.
The Corporation's book units also produce multimedia products for
educational publishers, industry and professional and trade associations.
Other customers include publishers of trade books, religious books,
cookbooks and manuals.
* Magazines
The Corporation's two plants serving the magazine market print, sort and
mail magazines representing more than 500 different titles. These magazines
include primarily short-to-medium run publications (usually less than 350,000
copies) which are generally distributed to subscribers by mail. The
Corporation's magazine customers are publishers of specialty magazines,
including religious, business and professional journals and hobby, craft and
sporting publications. During 1993, the Corporation began providing its
customers with computerized mailing list and distribution services.
* Other
Prepress services are provided by four of the Corporation's operating
units to publishers, printers and advertising agencies. Such services include
the conversion of full-color photographs, art and text into color separated
film for use in the production of printing plates utilizing computer
technology, electronic scanners and cameras.
KCS Industries Inc., a subsidiary of the Corporation, produces point-of-
purchase products such as custom designed signs, displays, labels and decals
for a variety of customers including those in the brewing, cosmetic, food,
appliance, automotive and home entertainment industries. KCS Industries also
produces postage stamps in booklet, coil and sheet format for the USPS.
Competition.
The Corporation is subject to competition from a large number of
companies, some of which have greater resources and capacity than the
Corporation. The major competitive factors in the Corporation's business are
price, quality of finished products, distribution capabilities, ongoing
customer service and availability of printing time on equipment which is
appropriate in size and function for a given project. The consolidation of
customers within certain of the Corporation's markets provides both greater
competitive pricing pressures and opportunities for increased volume
solicitation. In recent years, excess capacity in the printing industry has
resulted in downward pricing pressures. The Corporation believes it compares
favorably with its competitors.
There are seasonal fluctuations in the usage of printing equipment which
in times of low demand and excess capacity can give rise to increased pricing
pressure. In the educational market, for instance, activity is greater in the
first half of the year, and in the catalog and direct marketing markets,
activity is greater in the second half of the year.
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Raw Materials.
The principal raw material used by the Corporation is paper. Most of the
Corporation's production facilities are located in heavily concentrated
papermaking areas, and the Corporation can generally obtain quality paper at
competitive prices. The Corporation is not dependent upon any one source for
its paper or other raw materials.
Overcapacity in paper markets during 1993, 1992 and 1991 caused paper to
be readily available and resulted at certain times in significant price
reductions. The Corporation's average cost of paper fluctuated in 1993 with
lower costs during the first six months. A midyear price increase averaged
about 10% on most coated paper and much of that increase eroded in the fourth
quarter. Overall, the average cost of paper to our customers was about 2%
higher in 1993 than in 1992. During 1992 and 1991, the paper prices were on
average, 9.1% and 6.5% less, respectively, than in the prior year. However,
during the last six months of 1992, paper prices increased modestly.
The Corporation uses a number of other raw materials, including ink,
polyethylene resin (used in film extrusion), solvents, adhesives, wire,
packaging materials and subcontracted components. Costs for these materials,
other than polyethylene resins, were stable during recent years. Resin prices
decreased about 20% during 1991 following the Persian Gulf war, increased
about 24% in 1992 and decreased about 10% in 1993.
Development.
In the graphic arts industry, most research and development is done by
equipment and material suppliers. The Corporation generally does not engage
in long-range research and development relating to equipment and has not spent
significant amounts of money for such purposes. One of the purposes of the
Corporation's technical research and development effort is to establish a
competitive advantage in existing markets by focusing on improving operating
procedures, increasing machine speeds and improving monitoring of paper usage.
The Corporation's research and development effort also includes investigations
of new markets both for products currently produced by the Corporation, as
well as applications of newer technology including the development of certain
proprietary inks, coatings, adhesives and machine modifications. During the
last several years, eleven professional and technical employees have worked
exclusively on research and development activities. Additionally,
approximately forty persons from quality control and engineering devoted a
portion of their time to research and development.
The Corporation has environmental compliance programs primarily for
control of internal and external air quality, ground water quality, disposal
of waste material and all aspects of the work environment concerning employee
health. Capital expenditures for air quality equipment have approximated 2%
to 4% of total capital expenditures in each of the last three years. Planned
capital expenditures for environmental control equipment are expected to be in
the same range for 1994. The Corporation also incurs ongoing costs in
monitoring compliance with environmental laws, in connection with disposal of
waste materials and in connection with laws governing the remediation of sites
at which the Corporation has previously disposed of waste materials.
Requirements by EPA and state officials nationwide, relating to disposal of
wastes in landfill sites, are increasing and result in higher costs for the
Corporation and its competitors. Costs for environmental compliance and waste
disposal have not been material to the Corporation in the past, but the
Corporation presently believes that expenditures for these purposes will have
a negative impact on its earnings and those of its competition in the future.
These increased costs should not have a material impact on the Corporation's
competitive position, assuming similar expenditures are required to be made by
competitors. The Corporation does not believe at the present time that any
costs, claims or penalties that may be incurred or assessed under
environmental laws, in connection with known environmental assessment and
remediation matters, beyond any reserves already provided will have a material
adverse effect upon the operations or consolidated financial position of the
Corporation.
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EXECUTIVE OFFICERS OF THE CORPORATION
Name, Age, Position Business Experience During Last Five Years
Calvin W. Aurand, Jr.; 63;. . . . . Chairman of the Board and Chief Executive
President, Chairman of the Officer of the Corporation since July
Board and Chief Executive 1989; President of the Corporation since
Officer March 1989; President and Chief Operating
Officer of American Bank Note Company
(printer of currency, stamps and stock and
bond certificates), 1985-February, 1989.
Gerald A. Henseler; 53; . . . . . . Executive Vice President and Chief
Executive Vice President and Financial Officer of the Corporation since
Chief Financial Officer 1992; Senior Vice President, Chief
Financial Officer and Treasurer of the
Corporation prior thereto.
Ronald D. Kneezel; 37;. . . . . . . Secretary of the Corporation since
Secretary, Vice President and December 1, 1991; Vice President and
General Counsel General Counsel of the Corporation since
July, 1988.
Robert A. Kreider; 39;. . . . . . . Treasurer of the Corporation since
Treasurer and Corporate November 1992, Corporate Controller since
Controller July 1989; Assistant Treasurer April 1991
- October 1992; Controller of a subsidiary
of the Corporation prior thereto.
James E. Milslagle; 54; . . . . . . Vice President of the Corporation since
Vice President Human Resources May 1988.
Dennis J. Meyer; 38;. . . . . . . . Vice President of the Corporation since
Vice President Marketing January, 1994; Vice President, Quebecor
Printing (manufacturer of printed
materials) 1990-1993; Director of
Marketing, Maxwell Communications
Corporation (manufacturer of printed
materials) 1986-1990.
John E. Tiffany; 55;. . . . . . . . Vice President of the Corporation since
Vice President Manufacturing October, 1988.
Allan J. Williamson; 62;. . . . . . President of Banta Company, a division of
President of Banta Company, the Corporation, since January, 1991;
a division of the Corporation Executive Vice President of Banta Company
prior thereto.
There are no family relationships between the executive officers of the
Corporation.
All of the executive officers are elected or appointed annually. Each officer
holds office until his successor has been elected or appointed or until his
death, resignation or removal.
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Item 2. Properties.
The Corporation and its subsidiaries own operating plants located in
Wisconsin, Minnesota, Missouri, North Carolina, Utah and Virginia, as well as
several warehouse facilities for storage of materials. As of the end of
fiscal 1993, these owned facilities include approximately 2,592,000 square
feet of space utilized as follows: office space 268,000, manufacturing
1,406,000 and warehouse 918,000. The Corporation leases its headquarters
office located in Menasha, Wisconsin. The Corporation leases four production
facilities in Wisconsin; two in Massachusetts; and one each in California,
Illinois, Minnesota and Utah, as well as warehouse space in numerous
locations. These leased facilities contain approximately 995,000 square feet
of space. The buildings owned and leased by the Corporation are primarily of
steel and brick construction.
One plant owned by the Corporation and certain equipment are pledged to
secure issues of industrial revenue bonds in the principal amount of
$3,240,000 as of January 1, 1994.
Item 3. Legal Proceedings.
The Corporation is not involved in any material pending legal
proceedings, as defined by this item.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder
Matters.
As of March 11, 1994, there were approximately 1,778 holders of record of
the Corporation's Common Stock.
Under long-term debt agreements to which the Corporation is a party,
payment of cash dividends is restricted. As of January 1, 1994, approximately
$56,032,000 was not restricted under these agreements.
The information set forth under the caption "Dividend Record and Market
Prices" in the Corporation's Annual Report to Shareholders for the fiscal year
ended January 1, 1994, (a copy of which is filed as an exhibit to this report)
is hereby incorporated herein by reference in answer to the remainder of this
Item.
Item 6. Selected Financial Data.
The information set forth under the caption "Five-Year Summary of
Selected Financial Data" in the Corporation's Annual Report to Shareholders
for the fiscal year ended January 1, 1994, (a copy of which is filed as an
exhibit to this report) is hereby incorporated herein by reference in answer
to this Item.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The information set forth under the caption "Management's Discussion and
Analysis of Financial Position and Operations" in the Corporation's Annual
Report to Shareholders for the fiscal year ended January 1, 1994, (a copy of
which is filed as an exhibit to this report) is hereby incorporated herein by
reference in answer to this Item.
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Item 8. Financial Statements and Supplementary Data.
The Consolidated Balance Sheets of the Corporation and subsidiaries as of
January 1, 1994 and January 2, 1993, and the related Consolidated Statements
of Earnings, Cash Flows and Shareholders' Investment for the fiscal years
ended January 1, 1994, January 2, 1993 and December 28, 1991, together with
the related notes thereto, set forth in the Corporation's Annual Report to
Shareholders for the fiscal year ended January 1, 1994, (a copy of which is
filed as an exhibit to this report) are hereby incorporated herein by
reference in answer to a portion of this Item.
The information set forth under the caption "Unaudited Quarterly
Financial Information" in the Corporation's Annual Report to Shareholders for
the fiscal year ended January 1, 1994 (a copy of which is filed as an exhibit
to this report) is hereby incorporated herein by reference in answer to a
portion of this item.
The information set forth under the caption "Report of Independent Public
Accountants" in the Corporation's Annual Report to Shareholders for the fiscal
year ended January 1, 1994 (a copy of which is filed as an exhibit to this
report) is hereby incorporated herein by reference in answer to the remainder
of this Item.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information under the caption "Election of Directors" contained in
the Corporation's definitive proxy statement for the annual meeting of
shareholders on April 26, 1994, as filed with the Securities Exchange
Commission, is hereby incorporated herein by reference. Reference is also
made to the information under the heading "Executive Officers of the
Corporation" included under Item 1 of Part I of this report.
Item 11. Executive Compensation.
The information under the captions "Board of Directors" and "Executive
Compensation" (other than the information under the subheading "Board
Compensation Committee Report on Executive Compensation") contained in the
Corporation's definitive proxy statement for the annual meeting of
shareholders on April 26, 1994, as filed with the Securities and Exchange
Commission, is hereby incorporated herein by reference in answer to this Item.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information under the caption "Stock Ownership of Management"
contained in the Corporation's definitive proxy statement for the annual
meeting of shareholders on April 26, 1994, as filed with the Securities and
Exchange Commission, is hereby incorporated herein by reference in answer to
this Item.
Item 13. Certain Relationships and Related Transactions.
The information under the captions "Board of Directors" and "Executive
Compensation" (other than the information under the subheading "Board
Compensation Committee Report on Executive Compensation") contained in the
Corporation's definitive proxy statement for the annual meeting of
shareholders on April 26, 1994, as filed with the Securities and Exchange
Commission, is hereby incorporated herein by reference in answer to this Item.
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Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are filed as part of this report:
PAGE REFERENCE
ANNUAL REPORT
FORM 10-K TO SHAREHOLDERS
1. Financial Statements:
Consolidated Balance Sheets
January 1, 1994 and January 2, 1993 20
For the fiscal years ended January 1, 1994,
January 2, 1993 and December 28, 1991:
Consolidated Statements of Earnings 21
Consolidated Statements of Cash Flows 22
Consolidated Statements of
Shareholders' Investment 23
Notes to Consolidated Financial Statements 24-30
Report of Independent Public Accountants 31
Consent of Independent Public Accountants 12
2. Financial Statement Schedules:
Report of Independent Public Accountants 12
Schedule V - Plant and Equipment 13
Schedule VI - Accumulated Depreciation and
Amortization of Plant and Equipment 14
Schedule VIII - Valuation and Qualifying
Accounts 15
Schedule IX - Short Term Borrowings 16
Schedule X - Supplementary Income Statement
Information 17
All other schedules have been omitted since the required information is
included in the consolidated financial statements or notes thereto, or
because the information is not required or applicable.
3. Exhibits:
3. (a) Articles of Incorporation, as amended (1)
(b) Amendments to Bylaws
(c) Bylaws, as amended
4. (a) Note Purchase Agreements dated December 9, 1986 (2)
(b) Amendment to Note Purchase Agreements dated December 9, 1986 (3)
(c) Note Purchase Agreement dated June 24, 1988 (4)
(d) Amendment to Note Purchase Agreements dated December 9, 1986 (5)
(e) Promissory Note Agreement dated July 17, 1990 (6)
(f) Rights Agreement dated October 29, 1991 (7)
[Note: The registrant has outstanding certain issues of industrial
revenue bonds, none of which authorize the issuance of securities in
an amount exceeding 10% of the registrant's consolidated assets.
The registrant hereby agrees to furnish to the Commission upon
request a copy of any instrument with respect to long-term debt not
being registered under which the total amount of securities
authorized does not exceed 10% of the registrant's consolidated
assets.]
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*10.(a) Supplemental Retirement Plan for Key Employees (8)
(b) Amendment to Supplemental Retirement Plan for Key Employees (9)
(c) Prior Amendments to Supplemental Retirement Plan (10)
(d) Management Incentive Award Plan (11)
(e) Amendment to Management Incentive Award Plan (12)
(f) Form of Agreements with Gerald A. Henseler and Allan J.
Williamson (13)
(g) Form of Agreements with Calvin W. Aurand, Jr. and Ronald D.
Kneezel (14)
(h) Form of Agreements with Robert A. Kreider, Dennis J. Meyer, James
E. Milslagle and John E. Tiffany (15)
(i) Letter of Agreement with Calvin W. Aurand, Jr. (16)
(j) 1985 Deferred Compensation Plan for Key Employees, as amended and
restated (17)
(k) 1988 Deferred Compensation Plan for Key Employees, as amended and
restated (18)
(l) Basic Form of Deferred Compensation Agreements under 1985 and
1988 Deferred Compensation Plans for Key Employees (19)
(m) Deferred Compensation Plan for Directors (20)
(n) Form of Deferred Compensation Agreements for Directors (21)
(o) Revised Form of Indemnity Agreements with Directors and Certain
Officers (22)
(p) 1987 Incentive Stock Option Plan; 1987 Nonstatutory Stock Option
Plan (23)
(q) Amendment to 1987 Nonstatutory Stock Option Plan (24)
(r) Executive Trust Agreement (25)
(s) Amendment to Executive Trust Agreement
(t) Long-term Incentive Plan (26)
(u) Amendment to Long-term Incentive Plan (27)
(v) 1991 Stock Option Plan (28)
(w) Agreement with Allan J. Williamson (29)
(x) Description of Supplemental Long-term Disability Plan (30)
13. Annual Report to Shareholders for fiscal year ended January 1, 1994.
With the exception of those portions specifically incorporated herein
by reference (See Part I, Item 1 and Part II, Items 5, 6, 7 and 8)
said report is furnished solely for the information of the Commission
and is not to be deemed "filed" as part of this report.
21. List of Subsidiaries.
(1) Exhibit No. 19(b) to Form 10-Q for the quarter ended April 3, 1993 is
hereby incorporated herein by reference.
(2) Exhibit No. 4(c) to Form 10-K for the year ended January 3, 1987 is
hereby incorporated herein by reference.
(3) Exhibit No. 4(b) to Form 10-Q for the quarter ended July 2, 1988 is
hereby incorporated herein by reference.
(4) Exhibit No. 4(a) to Form 10-Q for the quarter ended July 2, 1988 is
hereby incorporated herein by reference.
(5) Exhibit No. 4(d) to Form 10-K for the year ended December 30, 1989 is
hereby incorporated herein by reference.
(6) Exhibit No. 4 to Form 10-Q for the quarter ended September 29, 1990 is
hereby incorporated herein by reference.
(7) Exhibit No. 4.1 to the Form 8-K dated October 29, 1991 is hereby
incorporated herein by reference.
(8) Exhibit No. 14 to Form 10-K for the year ended December 29, 1979 is
hereby incorporated herein by reference.
(9) Exhibit No. 10(c) to Form 10-K for the year ended December 31, 1988 is
hereby incorporated herein by reference.
* Exhibits 10(a) through 10(x) are management contracts or compensatory plans
or arrangements.
All documents incorporated herein by reference are filed with the Commission
under File No. 0-6187.
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(10) Exhibit No. 19(a) to Form 10-K for the year ended December 31, 1983,
Exhibit No. 19(a) to Form 10-Q for the quarter ended June 30, 1984
and Exhibit No. 10(f) to Form 10-K for the year ended December 28,
1985 are hereby incorporated herein by reference.
(11) Exhibit No. 10(e) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(12) Exhibit No. 19(e) to Form 10-Q for the quarter ended April 3, 1993 is
hereby incorporated herein by reference.
(13) Exhibit No. 10 to Form 10-K for the year ended January 1, 1983 is
hereby incorporated herein by reference.
(14) Exhibit No. 10(k) to Form 10-K for the year ended December 31, 1988
is hereby incorporated herein by reference.
(15) Exhibit No. 10(g) to Form 10-K for the year ended December 28, 1991
is hereby incorporated herein by reference.
(16) Exhibit No. 10(l) to Form 10-K for the year ended December 31, 1988
is hereby incorporated herein by reference.
(17) Exhibit No. 10(j) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(18) Exhibit No. 10(k) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(19) Exhibit No. 10(l) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(20) Exhibit No. 10(q) to Form 10-K for the year ended January 3, 1987 is
hereby incorporated herein by reference.
(21) Exhibit No. 10(p) to Form 10-K for the year ended January 3, 1987 is
hereby incorporated herein by reference.
(22) Exhibit No. 10(a) to Form 10-Q for the quarter ended March 28, 1992
is hereby incorporated herein by reference.
(23) Exhibit No. 6(a) to Form 10-Q for the quarter ended July 4, 1987 is
hereby incorporated herein by reference.
(24) Exhibit No. 19(a) to Form 10-Q for the quarter ended October 3, 1987
is hereby incorporated herein by reference.
(25) Exhibit No. 10(r) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(26) Exhibit No. 10(t) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(27) Exhibit No. 19(f) to Form 10-Q for the quarter ended April 3, 1993 is
hereby incorporated herein by reference.
(28) Exhibit No. 10(u) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(29) Exhibit No. 10(v) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(30) Exhibit No. 10(a) to Form 10-Q for the quarter ended October 2, 1993
is hereby incorporated herein by reference.
All documents incorporated herein by reference are filed with the Commission
under File No. 0-6187.
11<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
We have audited, in accordance with generally accepted standards, the
consolidated financial statements included in the Banta Corporation annual
report to shareholders and incorporated by reference in this Form 10-K, and
have issued our report thereon dated January 31, 1994. Our audit was made for
the purpose of forming an opinion on those statements taken as a whole. The
schedules listed in the index in item 14(a) are the responsibility of the
Corporation's management and are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of the basic
financial statements. The schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly state in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN & CO.
Milwaukee, Wisconsin,
January 31, 1994.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our reports, included and incorporated by reference in this Form 10-K, into
Banta Corporation's previously filed Form S-8 Registration Statements Nos. 33-
13584, 33-40036 and 33-54576.
ARTHUR ANDERSEN & CO.
Milwaukee, Wisconsin,
March 21, 1994.
12<PAGE>
<PAGE>
BANTA CORPORATION
SCHEDULE V - PLANT AND EQUIPMENT
YEARS ENDED JANUARY 1, 1994 (1993), JANUARY 2, 1993 (1992),
AND DECEMBER 28, 1991 (1991)
<TABLE>
DOLLARS IN THOUSANDS
<CAPTION>
BALANCE, ADDITIONS RETIREMENTS OTHER(1) BALANCE, END
BEGINNING OF (TRANSFERS) OR SALES OF YEAR
YEAR AT COST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Year ended January 1, 1994:
Land $ 6,551 $ 46 $ - $ - $ 6,597
Buildings 68,223 6,268 279 (1,102) 73,110
Machinery 275,378 44,094 3,001 927 317,398
Furniture & Fixtures 12,041 3,024 393 175 14,847
Construction in Progress 8,877 9,528 - - 18,405
------------ ------------ ------------ ------------ ------------
$ 371,070 $ 62,960 $ 3,673 $ 0 $ 430,357
============ ============ ============ ============ ============
Year ended January 2, 1993:
Land $ 5,680 $ - $ - $ 871 $ 6,551
Buildings 58,022 7,599 42 2,644 68,223
Machinery and Equipment 251,861 28,028 4,529 18 275,378
Furniture and Fixtures 10,518 2,487 659 (305) 12,041
Construction in Progress 13,985 (5,108) - - 8,877
------------ ------------ ------------ ------------ ------------
$ 340,066 $ 33,006 $ 5,230 $ 3,228 $ 371,070
============ ============ ============ ============ ============
Year ended December 28, 1991:
Land $ 5,511 $ 523 $ 41 $ (313) $ 5,680
Buildings 55,372 2,575 30 105 58,022
Machinery and Equipment 236,079 16,990 4,607 3,399 251,861
Furniture and Fixtures 9,003 1,576 460 399 10,518
Construction in Progress 4,033 9,955 - (3) 13,985
------------ ------------ ------------ ------------ ------------
$ 309,998 $ 31,619 $ 5,138 $ 3,587 $ 340,066
============ ============ ============ ============ ============
</TABLE>
(1) Represents primarily the transfer of the remaining video operations
assets that were previously recorded as assets held for sale in 1992
and the purchase of plant and equipment of Bushman Press in 1991.
This column also includes certain reclassification in all three years.
13<PAGE>
<PAGE>
BANTA CORPORATION
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION OF PLANT AND EQUIPMENT
YEARS ENDED JANUARY 1, 1994 (1993), JANUARY 2, 1993 (1992),
AND DECEMBER 28, 1991 (1991)
<TABLE>
DOLLARS IN THOUSANDS
<CAPTION>
BALANCE, ADDITIONS RETIREMENTS OTHER(1) BALANCE, END
BEGINNING OF (TRANSFERS) OR SALES OF YEAR
YEAR AT COST
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Year ended January 1, 1994:
Buildings $ 18,586 $ 2,920 $ 304 $ 68 $ 21,270
Machinery and Equipment 140,512 28,269 2,619 1,557 167,719
Furniture and Fixtures 6,726 1,983 336 107 8,480
------------ ------------ ------------ ------------ ------------
$ 165,824 $ 33,172 $ 3,259 $ 1,732 $ 197,469
============ ============ ============ ============ ============
Year ended January 2, 1993:
Buildings $ 15,165 $ 2,663 $ 42 $ 800 $ 18,586
Machinery and Equipment 118,217 26,104 3,733 (76) 140,512
Furniture and Fixtures 5,746 1,548 596 28 6,726
------------ ------------ ------------ ------------ ------------
$ 139,128 $ 30,315 $ 4,371 $ 752 $ 165,824
============ ============ ============ ============ ============
Year ended December 28, 1991:
Buildings $ 12,703 $ 2,488 $ 26 $ - $ 15,165
Machinery and Equipment 97,462 24,284 3,529 - 118,217
Furniture and Fixtures 4,856 1,262 372 - 5,746
------------ ------------ ------------ ------------ ------------
$ 115,021 $ 28,034 $ 3,927 $ 0 $ 139,128
============ ============ ============ ============ ============
</TABLE>
(1) In 1993, represents a reclassification of previously provided reserves
related to certain equipment. In 1992, represents the transfer of
Video Operation that were previously recorded as Assets Held for Sale.
This column also includes certain reclassifications.
14<PAGE>
<PAGE>
BANTA CORPORATION
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED JANUARY 1, 1994 (1993), JANUARY 2, 1993 (1992),
AND DECEMBER 28, 1991 (1991)
<TABLE>
DOLLARS IN THOUSANDS
<CAPTION>
BALANCE ADDITIONS CHARGES BALANCE, END
BEGINNING OF CHARGED TO TO OF YEAR
YEAR EARNINGS RESERVE, NET
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Reserve for
Doubtful
Receivables:
1993 $ 2,933 $ 938 $ 928 $ 2,943
============ ============ ============ ============
1992 $ 2,195 $ 1,825 $ 1,087 $ 2,933
============ ============ ============ ============
1991 $ 2,354 $ 1,309 $ 1,468 $ 2,195
============ ============ ============ ============
</TABLE>
15<PAGE>
<PAGE>
BANTA CORPORATION
SCHEDULE IX - SHORT-TERM BORROWINGS
YEARS ENDED JANUARY 1, 1994 (1993), JANUARY 2, 1993 (1992),
AND DECEMBER 28, 1991 (1991)
<TABLE>
DOLLARS IN THOUSANDS
<CAPTION>
WEIGHTED
AVERAGE
MAXIMUM AVERAGE MONTHLY
WEIGHTED AMOUNT AMOUNT INTEREST
BALANCE, AVERAGE OUTSTANDING OUTSTANDING RATE
END OF INTEREST DURING DURING DURING
CATEGORY YEAR RATE THE YEAR THE YEAR THE YEAR
- ------------------------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
1993: Commercial Paper $ 20,800 3.43% $ 22,810 $ 7,364 3.32%
Bank Borrowings - - - - -
1992: Commercial Paper - - $ 10,933 $ 2,873 4.33%
Bank Borrowings - - - - -
1991: Commercial Paper $ 9,985 5.05% $ 21,431 $ 10,006 6.24%
Bank Borrowings - - 2,000 167 8.25%
</TABLE>
Commercial paper borrowings are supported by lines of credit aggregating
$40,000,000 at January 1, 1994.
Commercial paper maturities generally do not exceed 90 days.
Bank borrowings are arranged on an as-needed basis at various terms.
16<PAGE>
<PAGE>
BANTA CORPORATION
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
YEARS ENDED JANUARY 1, 1994 (1993), JANUARY 2, 1993 (1992),
AND DECEMBER 28, 1991 (1991)
<TABLE>
DOLLARS IN THOUSANDS
<CAPTION>
1993 1992 1991
------------ ------------ ------------
<S> <C> <C> <C>
Maintenance and Repairs $ 13,366 $ 12,110 $ 10,417
</TABLE>
Depreciation and amortization of intangible assets and deferred charges, taxes
other than payroll and income taxes, royalties, and advertising costs did not
exceed one percent of consolidated sales.
17<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BANTA CORPORATION
DATE: March 23, 1994 BY: /s/ CALVIN W. AURAND, JR.
Calvin W. Aurand, Jr.,
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ CALVIN W. AURAND, JR. March 23, 1994
Calvin W. Aurand, Jr. President,
Chairman of the Board, Chief
Executive Officer and Director
/s/ GERALD A. HENSELER March 23, 1994
Gerald A. Henseler, Executive Vice
President, Chief Financial Officer,
and Director
/s/ ROBERT A. KREIDER March 23, 1994
Robert A. Kreider, Treasurer
/s/ GEORGE T. BROPHY March 23, 1994
George T. Brophy, Director
/s/ BERNARD S. KUBALE March 23, 1994
Bernard S. Kubale, Director
/s/ DONALD TAYLOR March 23, 1994
Donald Taylor, Director
/s/ ALLAN J. WILLIAMSON March 23, 1994
Allan J. Williamson, Director
18<PAGE>
<PAGE>
BANTA CORPORATION - File No. 0-6187
Form 10-K, Year Ended January 1, 1994
EXHIBIT INDEX
Exhibit Number
3. (a) Articles of Incorporation, as amended (1)
(b) Amendments to Bylaws
(c) Bylaws, as amended
4. (a) Note Purchase Agreements dated December 9, 1986 (2)
(b) Amendment to Note Purchase Agreements dated
December 9, 1986 (3)
(c) Note Purchase Agreement dated June 24, 1988 (4)
(d) Amendment to Note Purchase Agreements dated
December 9, 1986 (5)
(e) Promissory Note Agreement dated July 17, 1990 (6)
(f) Rights Agreement dated October 29, 1991 (7)
10. (a) Supplemental Retirement Plan for Key Employees (8)
(b) Amendment to Supplemental Retirement Plan for
Key Employees (9)
(c) Prior Amendments to Supplemental Retirement Plan (10)
(d) Management Incentive Award Plan (11)
(e) Amendment to Management Incentive Award Plan (12)
(f) Form of Agreements with Gerald A. Henseler and
Allan J. Williamson (13)
(g) Form of Agreements with Calvin W. Aurand, Jr. and
Ronald D. Kneezel (14)
(h) Form of Agreements with Robert A. Kreider, Dennis J.
Meyer, James E. Milslagle and John E. Tiffany (15)
(i) Letter Agreement with Calvin W. Aurand, Jr. (16)
(j) 1985 Deferred Compensation Plan for Key Employees,
as amended and restated (17)
(k) 1988 Deferred Compensation Plan for Key Employees,
as amended and restated (18)
(l) Basic Form of Deferred Compensation Agreements under
1985 and 1988 Deferred Compensation Plans for
Key Employees (19)
(m) Deferred Compensation Plan for Directors (20)
(n) Form of Deferred Compensation Agreements for Directors (21)
(o) Revised Form of Indemnity Agreements with Directors
and Certain Officers (22)
(p) 1987 Incentive Stock Option Plan; 1987 Nonstatutory
Stock Option Plan (23)
(q) Amendment to 1987 Nonstatutory Stock Option Plan (24)
(r) Executive Trust Agreement (25)
(s) Amendment to Executive Trust Agreement
(t) Long-term Incentive Plan (26)
(u) Amendment to Long-term Incentive Plan (27)
(v) 1991 Stock Option Plan (28)
(w) Agreement with Allan J. Williamson (29)
(x) Description of Supplemental Long-term Disability Plan (30)
19<PAGE>
<PAGE>
BANTA CORPORATION - File No. 0-6187
Form 10-K, Year Ended January 1, 1994
EXHIBIT INDEX CONTINUED
Exhibit Number
13. Annual Report to Shareholders for fiscal year ended
January 1, 1994
With the exception of those portions specifically incorporated herein by
reference (See Part I, Item 1 and Part II, Items 5, 6, 7 and 8) said
report is furnished solely for the information of the Commission and is
not to be deemed "filed" as part of this report.
21. List of Subsidiaries
(1) Exhibit No. 19(b) to Form 10-Q for the quarter ended April 3, 1993
is hereby incorporated herein by reference.
(2) Exhibit No. 4(c) to Form 10-K for the year ended January 3, 1987 is
hereby incorporated herein by reference.
(3) Exhibit No. 4(b) to Form 10-Q for the quarter ended July 2, 1988 is
hereby incorporated herein by reference.
(4) Exhibit No. 4(a) to Form 10-Q for the quarter ended July 2, 1988 is
hereby incorporated herein by reference.
(5) Exhibit No. 4(d) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(6) Exhibit No. 4 to Form 10-Q for the quarter ended September 29, 1990
is hereby incorporated herein by reference.
(7) Exhibit No. 4.1 to the Form 8-K dated October 29, 1991 is hereby
incorporated herein by reference.
(8) Exhibit No. 14 to Form 10-K for the year ended December 29, 1979 is
hereby incorporated herein by reference.
(9) Exhibit No. 10(c) to Form 10-K for the year ended December 31, 1988
is hereby incorporated herein by reference.
(10) Exhibit No. 19(a) to Form 10-K for the year ended December 31,
1983, Exhibit No. 19(a) to Form 10-Q for the quarter ended June 30,
1984 and Exhibit No. 10(f) to Form 10-K for the year ended December
28, 1985 are hereby incorporated herein by reference.
(11) Exhibit No. 10(e) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(12) Exhibit No. 19(e) to Form 10-Q for the quarter ended April 3, 1993
is hereby incorporated herein by reference.
(13) Exhibit No. 10 to Form 10-K for the year ended January 1, 1983 is
hereby incorporated herein by reference.
All documents incorporated herein by reference are filed with the Commission
under File No. 0-6187.
20<PAGE>
<PAGE>
(14) Exhibit No. 10(k) to Form 10-K for the year ended December 31, 1988
is hereby incorporated herein by reference.
(15) Exhibit No. 10(g) to Form 10-K for the year ended December 28, 1991
is hereby incorporated herein by reference.
(16) Exhibit No. 10(l) to Form 10-K for the year ended December 31, 1988
is hereby incorporated herein by reference.
(17) Exhibit No. 10(j) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(18) Exhibit No. 10(k) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(19) Exhibit No. 10(l) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(20) Exhibit No. 10(q) to Form 10-K for the year ended January 3, 1987
is hereby incorporated herein by reference.
(21) Exhibit No. 10(p) to Form 10-K for the year ended January 3, 1987
is hereby incorporated herein by reference.
(22) Exhibit No. 10(a) to Form 10-Q for the quarter ended March 28, 1992
is hereby incorporated herein by reference.
(23) Exhibit No. 6(a) to Form 10-Q for the quarter ended July 4, 1987 is
hereby incorporated herein by reference.
(24) Exhibit No. 19(a) to Form 10-Q for the quarter ended October 3,
1987 is hereby incorporated herein by reference.
(25) Exhibit No. 10(r) to Form 10-K for the year ended December 30, 1989
is hereby incorporated herein by reference.
(26) Exhibit No. 10(t) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(27) Exhibit No. 19(f) to Form 10-Q for the quarter ended April 3, 1993
is hereby incorporated herein by reference.
(28) Exhibit No. 10(u) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(29) Exhibit No. 10(v) to Form 10-K for the year ended December 29, 1990
is hereby incorporated herein by reference.
(30) Exhibit No. 10(a) to Form 10-Q for the quarter ended October 2,
1993 is hereby incorporated herein by reference.
All documents incorporated herein by reference are filed with the Commission
under File Number 0-6187.
21
EXHIBIT 3(b)
BY-LAW AMENDMENTS
The second sentence of Section 3.01 of the By-Laws of the Corporation was
amended to reduce the number of authorized directors to eight (8) effective
April 13, 1993, to increase the number of authorized directors to nine (9)
effective September 1, 1993, and to increase the number of authorized
directors to ten (10) effective December 7, 1993.
EXHIBIT 3(c)
12/7/93
BY-LAWS
OF
BANTA CORPORATION
(a Wisconsin corporation)
ARTICLE I. OFFICES
1.01. Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Wisconsin, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
1.02. Registered Office. The registered office of the corporation
required by the Wisconsin Business Corporation Law to be maintained in the
State of Wisconsin may be, but need not be, identical with the principal
office in the State of Wisconsin, and the address of the registered office may
be changed from time to time by the Board of Directors. The business office
of the registered agent of the corporation shall be identical to such
registered office.
ARTICLE II. SHAREHOLDERS
2.01. Annual Meeting. The annual meeting of the shareholders of the
corporation (the "Annual Meeting") shall be held on the second Tuesday in the
month of April of each year, at the hour of two (2) o'clock p.m. (local time),
or at such other time and date as may be fixed by or under the authority of
the Board of Directors, for the purpose of electing directors and for the
transaction of such other business as may properly come before the Annual
Meeting in accordance with Section 2.13 of these by-laws. If the day fixed
for the Annual Meeting shall be a legal holiday in the State of Wisconsin,
such meeting shall be held on the next succeeding business day. If the
election of directors shall not be held on the day designated herein, or fixed
as herein provided, for any Annual Meeting, or at any adjournment thereof, the
Board of Directors shall cause the election to be held at a special meeting of
the shareholders (a "Special Meeting") as soon thereafter as conveniently may
be. In fixing a meeting date for any Annual Meeting, the Board of Directors
may consider such factors as it deems relevant within the good faith exercise
of its business judgment.
2.02. Special Meetings.
(a) A Special Meeting may be called only by (i) the Chairman of the
Board, (ii) the President or (iii) the Board of Directors and shall be called
by the Chairman of the Board or the President upon the demand, in accordance
with this Section 2.02, of the holders of record of shares representing at
least 10% of all the votes entitled to be cast on any issue proposed to be
considered at the Special Meeting.
(b) In order that the corporation may determine the shareholders
entitled to demand a Special Meeting, the Board of Directors may fix a record
date to determine the <PAGE>
<PAGE>
shareholders entitled to make such a demand (the "Demand Record Date"). The
Demand Record Date shall not precede the date upon which the resolution fixing
the Demand Record Date is adopted by the Board of Directors and shall not be
more than 10 days after the date upon which the resolution fixing the Demand
Record Date is adopted by the Board of Directors. Any shareholder of record
seeking to have shareholders demand a Special Meeting shall, by sending
written notice to the Secretary of the corporation by hand or by certified or
registered mail, return receipt requested, request the Board of Directors to
fix a Demand Record Date. The Board of Directors shall promptly, but in all
events within 10 days after the date on which a valid request to fix a Demand
Record Date is received, adopt a resolution fixing the Demand Record Date and
shall make a public announcement of such Demand Record Date. If no Demand
Record Date has been fixed by the Board of Directors within 10 days after the
date on which such request is received by the Secretary, the Demand Record
Date shall be the 10th day after the first day on which a valid written
request to set a Demand Record Date is received by the Secretary. To be
valid, such written request shall set forth the purpose or purposes for which
the Special Meeting is to be held, shall be signed by one or more shareholders
of record (or their duly authorized proxies or other representatives), shall
bear the date of signature of each such shareholder (or proxy or other
representative) and shall set forth all information about each such
shareholder and about the beneficial owner or owners, if any, on whose behalf
the request is made that would be required to be set forth in a shareholder's
notice described in paragraph (a)(ii) of Section 2.13 of these by-laws.
(c) In order for a shareholder or shareholders to demand a Special
Meeting, a written demand or demands for a Special Meeting by the holders of
record as of the Demand Record Date of shares representing at least 10% of all
the votes entitled to be cast on any issue proposed to be considered at the
Special Meeting must be delivered to the corporation. To be valid, each
written demand by a shareholder for a Special Meeting shall set forth the
specific purpose or purposes for which the Special Meeting is to be held
(which purpose or purposes shall be limited to the purpose or purposes set
forth in the written request to set a Demand Record Date received by the
corporation pursuant to paragraph (b) of this Section 2.02, shall be signed by
one or more persons who as of the Demand Record Date are shareholders of
record (or their duly authorized proxies or other representatives), shall bear
the date of signature of each such shareholder (or proxy or other
representative), and shall set forth the name and address, as they appear in
the corporation's books, of each shareholder signing such demand and the class
or series and number of shares of the corporation which are owned of record
and beneficially by each such shareholder, shall be sent to the Secretary by
hand or by certified or registered mail, return receipt requested, and shall
be received by the Secretary within 70 days after the Demand Record Date.
(d) The corporation shall not be required to call a Special Meeting upon
shareholder demand unless, in addition to the documents required by paragraph
(c) of this Section 2.02, the Secretary receives a written agreement signed by
each Soliciting Shareholder (as defined herein), pursuant to which each
Soliciting Shareholder, jointly and severally, agrees to pay the corporation's
costs of holding the Special Meeting, including the costs of preparing and
mailing proxy materials for the corporation's own solicitation, provided that
if each of the resolutions introduced by any Soliciting Shareholder at such
meeting is adopted, and each of the individuals nominated by or on behalf of
any Soliciting Shareholder for election as director at
B-2<PAGE>
<PAGE>
such meeting is elected, then the Soliciting Shareholders shall not be
required to pay such costs. For purposes of this paragraph (d), the following
terms shall have the meanings set forth below:
(i) "Affiliate" of any Person shall mean any Person
controlling, controlled by or under common control with such first
Person.
(ii) "Participant" shall have the meaning assigned to such term
in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term in
Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to any
Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the demand or
demands for a meeting delivered to the corporation pursuant to
paragraph (c) of this Section 2.02 is 10 or fewer, each shareholder
signing any such demand;
(B) if the number of shareholders signing the demand or
demands for a meeting delivered to the corporation pursuant to
paragraph (c) of this Section 2.02 is more than 10, each Person who
either (I) was a Participant in any Solicitation of such demand or
demands or (II) at the time of the delivery to the corporation of
the documents described in paragraph (c) of this Section 2.02, had
engaged or intended to engage in any Solicitation of Proxies for use
at such Special Meeting (other than a Solicitation of Proxies on
behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a majority
of the directors then in office determine, reasonably and in good
faith, that such Affiliate should be required to sign the written
notice described in paragraph (c) of this Section 2.02 and/or the
written agreement described in this paragraph (d) in order to
prevent the purposes of this Section 2.02 from being evaded.
(e) Except as provided in the following sentence, any Special
Meeting shall be held at such hour and day as may be designated by whichever
of the Chairman of the Board, the President or the Board of Directors shall
have called such meeting. In the case of any Special Meeting called by the
Chairman of the Board or the President upon the demand of
B-3<PAGE>
<PAGE>
shareholders (a "Demand Special Meeting"), such meeting shall be held at such
hour and day as may be designated by the Board of Directors; provided,
however, that the date of any Demand Special Meeting shall be not more than 70
days after the Meeting Record Date (as defined in Section 2.05 of these
by-laws); and provided further that in the event that the directors then in
office fail to designate an hour and date for a Demand Special Meeting within
10 days after the date that valid written demands for such meeting by the
holders of record as of the Demand Record Date of shares representing at least
10% of all the votes entitled to be cast on any issue proposed to be
considered at the Special Meeting are delivered to the corporation (the
"Delivery Date"), then such meeting shall be held at 2:00 p.m. (local time) on
the 100th day after the Delivery Date or, if such 100th day is not a Business
Day (as defined below), on the first preceding Business Day. In fixing a
meeting date for any Special Meeting, the Chairman of the Board, the President
or the Board of Directors may consider such factors as he or it deems relevant
within the good faith exercise of his or its business judgment, including,
without limitation, the nature of the action proposed to be taken, the facts
and circumstances surrounding any demand for such meeting, and any plan of the
Board of Directors to call an Annual Meeting or a Special Meeting for the
conduct of related business.
(f) The corporation may engage nationally or regionally recognized
independent inspectors of elections to act as an agent of the corporation for
the purpose of promptly performing a ministerial review of the validity of any
purported written demand or demands for a Special Meeting received by the
Secretary. For the purpose of permitting the inspectors to perform such
review, no purported demand shall be deemed to have been delivered to the
corporation until the earlier of (i) 5 Business Days following receipt by the
Secretary of such purported demand and (ii) such date as the independent
inspectors certify to the corporation that the valid demands received by the
Secretary represent at least 10% of all the votes entitled to be cast on each
issue proposed to be considered at the Special Meeting. Nothing contained in
this paragraph shall in any way be construed to suggest or imply that the
Board of Directors or any shareholder shall not be entitled to contest the
validity of any demand, whether during or after such 5 Business Day period, or
to take any other action (including, without limitation, the commencement,
prosecution or defense of any litigation with respect thereto).
(g) For purposes of these by-laws, "Business Day" shall mean any
day other than a Saturday, a Sunday or a day on which banking institutions in
the State of Wisconsin are authorized or obligated by law or executive order
to close.
2.03. Place of Meeting. The Board of Directors, the Chairman of
the Board or the President may designate any place, either within or without
the State of Wisconsin, as the place of meeting for any Annual Meeting or for
any Special Meeting, or for any postponement thereof. If no designation is
made, the place of meeting shall be the principal business office of the
corporation in the State of Wisconsin. Any meeting may be adjourned to
reconvene at any place designated by vote of the Board of Directors or by the
Chairman of the Board or the President.
2.04. Notice of Meeting. Written notice stating the place, day
and hour of any Annual Meeting or Special Meeting shall be delivered not less
than 10 (unless a longer period
B-4<PAGE>
<PAGE>
is required by the Wisconsin Business Corporation Law) nor more than 70 days
before the date of such meeting, either personally or by mail, by or at the
direction of the Secretary, to each shareholder of record entitled to vote at
such meeting and to other shareholders as may be required by the Wisconsin
Business Corporation Law. In the event of any Demand Special Meeting, such
notice of meeting shall be sent not more than 30 days after the Delivery Date.
If mailed, notice pursuant to this Section 2.04 shall be deemed to be
effective when deposited in the United States mail, addressed to each
shareholder at his or her address as it appears on the stock record books of
the corporation, with postage thereon prepaid. Unless otherwise required by
the Wisconsin Business Corporation Law, a notice of an Annual Meeting need not
include a description of the purpose for which the meeting is called. In the
case of any Special Meeting, (a) the notice of meeting shall describe any
business that the Board of Directors shall have theretofore determined to
bring before the meeting and (b) in the case of a Demand Special Meeting, the
notice of meeting (i) shall describe any business set forth in the statement
of purpose of the demands received by the corporation in accordance with
Section 2.02 of these by-laws and (ii) shall contain all of the information
required in the notice received by the corporation in accordance with Section
2.13(b) of these by-laws. If an Annual Meeting or Special Meeting is
adjourned to a different date, time or place, the corporation shall not be
required to give notice of the new date, time or place if the new date, time
or place is announced at the meeting before adjournment; provided, however,
that if a new Meeting Record Date for an adjourned meeting is or must be
fixed, the corporation shall give notice of the adjourned meeting to persons
who are shareholders as of the new Meeting Record Date.
2.05. Fixing of Record Date. The Board of Directors may fix in
advance a date not less than 10 days and not more than 70 days prior to the
date of any Annual Meeting or Special Meeting as the record date for the
determination of shareholders entitled to notice of, or to vote at, such
meeting (the "Meeting Record Date"). In the case of any Demand Special
Meeting, (i) the Meeting Record Date shall be not later than the 30th day
after the Delivery Date and (ii) if the Board of Directors fails to fix the
Meeting Record Date within 30 days after the Delivery Date, then the close of
business on such 30th day shall be the Meeting Record Date. The shareholders
of record on the Meeting Record Date shall be the shareholders entitled to
notice of and to vote at the meeting. Except as provided by the Wisconsin
Business Corporation Law for a court-ordered adjournment, a determination of
shareholders entitled to notice of and to vote at any Annual Meeting or
Special Meeting is effective for any adjournment of such meeting unless the
Board of Directors fixes a new Meeting Record Date, which it shall do if the
meeting is adjourned to a date more than 120 days after the date fixed for the
original meeting. The Board of Directors may also fix in advance a date as
the record date for the purpose of determining shareholders entitled to take
any other action or determining shareholders for any other purpose. Such
record date shall be not more than 70 days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. The record date for determining shareholders entitled to a
distribution (other than a distribution involving a purchase, redemption or
other acquisition of the corporation's shares) or a share dividend is the date
on which the Board of Directors authorizes the distribution or share dividend,
as the case may be, unless the Board of Directors fixes a different record
date.
2.06. Shareholder Lists. After a Meeting Record Date has been
fixed, the corporation shall prepare a list of the names of all of the
shareholders entitled to notice of the
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meeting. The list shall be arranged by class or series of shares, if any, and
show the address of and number of shares held by each shareholder. Such list
shall be available for inspection by any shareholder, beginning two business
days after notice of the meeting is given for which the list was prepared and
continuing to the date of the meeting, at the corporation's principal office
or at a place identified in the meeting notice in the city where the meeting
will be held. A shareholder or his or her agent may, on written demand,
inspect and, subject to the limitations imposed by the Wisconsin Business
Corporation Law, copy the list, during regular business hours and at his or
her expense, during the period that it is available for inspection pursuant to
this Section 2.06. The corporation shall make the shareholders' list
available at the meeting and any shareholder or his or her agent or attorney
may inspect the list at any time during the meeting or any adjournment
thereof. Refusal or failure to prepare or make available the shareholders'
list shall not affect the validity of any action taken at a meeting of
shareholders.
2.07. Quorum and Voting Requirements; Postponements;
Adjournments.
(a) Shares entitled to vote as a separate voting group may take
action on a matter at any Annual Meeting or Special Meeting only if a quorum
of those shares exists with respect to that matter. If the corporation has
only one class of stock outstanding, such class shall constitute a separate
voting group for purposes of this Section 2.07. Except as otherwise provided
in the Articles of Incorporation, any by-law adopted under authority granted
in the Articles of Incorporation, or the Wisconsin Business Corporation Law, a
majority of the votes entitled to be cast on the matter shall constitute a
quorum of the voting group for action on that matter. Once a share is
represented for any purpose at any Annual Meeting or Special Meeting, other
than for the purpose of objecting to holding the meeting or transacting
business at the meeting, it is considered present for purposes of determining
whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new Meeting Record Date is or must be set
for the adjourned meeting. If a quorum exists, except in the case of the
election of directors, action on a matter shall be approved if the votes cast
within the voting group favoring the action exceed the votes cast opposing the
action, unless the Articles of Incorporation, any by-law adopted under
authority granted in the Articles of Incorporation, or the Wisconsin Business
Corporation Law requires a greater number of affirmative votes. Unless
otherwise provided in the Articles of Incorporation, directors shall be
elected by a plurality of the votes cast by the shares entitled to vote in the
election of directors at any Annual Meeting or Special Meeting at which a
quorum is present. For purposes of this Section 2.07(a), "plurality" means
that the individuals with the largest number of votes are elected as directors
up to the maximum number of directors to be chosen at the Annual Meeting or
Special Meeting.
(b) The Board of Directors acting by resolution may postpone and
reschedule any previously scheduled Annual Meeting or Special Meeting;
provided, however, that a Demand Special Meeting shall not be postponed beyond
the 100th day following the Delivery Date. Any Annual Meeting or Special
Meeting may be adjourned from time to time, whether or not there is a quorum,
(i) at any time, upon a resolution of shareholders if the votes cast in favor
of such resolution by the holders of shares of each voting group entitled to
vote on any matter theretofore properly brought before the meeting exceed the
number of votes cast against such resolution by the holders of shares of each
such voting group or (ii) at any time prior to
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the transaction of any business at such meeting, by the Chairman of the Board
or pursuant to resolution of the Board of Directors. No notice of the time
and place of adjourned meetings need be given except as required by the
Wisconsin Business Corporation Law. At any adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
2.08. Conduct of Meetings. The Chairman of the Board, and in
his absence the President, shall call any Annual Meeting or Special Meeting to
order and shall act as chairman of such meeting. In the absence of the
Chairman of the Board and the President, such duties shall be performed by a
Vice-President in the order provided under Section 4.07, or in their absence,
by any person chosen by the shareholders present. The Secretary of the
corporation shall act as secretary of all Annual Meetings and Special
Meetings, but, in the absence of the Secretary, the presiding officer may
appoint any other person to act as secretary of the meeting.
2.09. Proxies. At any Annual Meeting or Special Meeting, a
shareholder entitled to vote may vote in person or by proxy. A shareholder
may appoint a proxy to vote or otherwise act for the shareholder by signing an
appointment form, either personally or by his or her attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or other
officer or agent of the corporation authorized to tabulate votes. An
appointment is valid for eleven months from the date of its signing unless a
different period is expressly provided in the appointment form. The Board of
Directors shall have the power and authority to make rules establishing
presumptions as to the validity and sufficiency of proxies.
2.10. Voting of Shares. Each outstanding share shall be
entitled to one vote upon each matter submitted to a vote at any Annual
Meeting or Special Meeting except to the extent that the voting rights of the
shares of any class or classes are enlarged, limited or denied by the Articles
of Incorporation or the Wisconsin Business Corporation Law.
2.11. Acceptance of Instruments Showing Shareholder Action. If
the name signed on a vote, consent, waiver or proxy appointment corresponds to
the name of a shareholder, the corporation, if acting in good faith, may
accept the vote, consent, waiver or proxy appointment and give it effect as
the act of a shareholder. If the name signed on a vote, consent, waiver or
proxy appointment does not correspond to the name of a shareholder, the
corporation, if acting in good faith, may accept the vote, consent, waiver or
proxy appointment and give it effect as the act of the shareholder if any of
the following apply:
(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the shareholder
and, if the corporation requests, evidence of fiduciary status acceptable to
the corporation is presented with respect to the vote, consent, waiver or
proxy appointment.
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(c) The name signed purports to be that of a receiver or trustee in
bankruptcy of the shareholder and, if the corporation requests, evidence of
this status acceptable to the corporation is presented with respect to the
vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee, beneficial
owner, or attorney-in-fact of the shareholder and, if the corporation
requests, evidence acceptable to the corporation of the signatory's authority
to sign for the shareholder is presented with respect to the vote, consent,
waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
The corporation may reject a vote, consent, waiver or proxy appointment if the
Secretary or other officer or agent of the corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
2.12. Waiver of Notice by Shareholders. A shareholder may waive
any notice required by the Wisconsin Business Corporation Law, the Articles of
Incorporation or these by-laws before or after the date and time stated in the
notice. The waiver shall be in writing and signed by the shareholder entitled
to the notice, contain the same information that would have been required in
the notice under applicable provisions of the Wisconsin Business Corporation
Law (except that the time and place of meeting need not be stated) and be
delivered to the corporation for inclusion in the corporate records. A
shareholder's attendance at any Annual Meeting or Special Meeting, in person
or by proxy, waives objection to all of the following: (a) lack of notice or
defective notice of the meeting, unless the shareholder at the beginning of
the meeting or promptly upon arrival objects to holding the meeting or
transacting business at the meeting; and (b) consideration of a particular
matter at the meeting that is not within the purpose described in the meeting
notice, unless the shareholder objects to considering the matter when it is
presented.
2.13. Notice of Shareholder Business and Nomination of
Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be
considered by the shareholders may be made at an Annual Meeting (A)
pursuant to the corporation's notice of meeting, (B) by or at the
direction of the Board of Directors or (C) by any shareholder of the
corporation who is a shareholder of record at the time of giving of
notice provided for in this by-law and who is entitled to vote at
the meeting and complies with the notice procedures set forth in
this Section 2.13.
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(ii) For nominations or other business to be properly brought
before an Annual Meeting by a shareholder pursuant to clause (C) of
paragraph (a)(i) of this Section 2.13, the shareholder must have
given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be received
by the Secretary of the corporation at the principal executive
offices of the corporation not less than 60 days nor more than 90
days prior to the second Tuesday in the month of April; provided,
however, that in the event that the date of the Annual Meeting is
advanced by more than 30 days or delayed by more than 60 days from
the second Tuesday in the month of April, notice by the shareholder
to be timely must be so received not earlier than the 90th day prior
to the date of such Annual Meeting and not later than the close of
business on the later of (x) the 60th day prior to such Annual
Meeting and (y) the 10th day following the day on which public
announcement of the date of such meeting is first made. Such
shareholder's notice shall be signed by the shareholder of record
who intends to make the nomination or introduce the other business
(or his duly authorized proxy or other representative), shall bear
the date of signature of such shareholder (or proxy or other
representative) and shall set forth: (A) the name and address, as
they appear on this corporation's books, of such shareholder and the
beneficial owner or owners, if any, on whose behalf the nomination
or proposal is made; (B) the class and number of shares of the
corporation which are beneficially owned by such shareholder or
beneficial owner or owners; (C) a representation that such
shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to make the nomination or introduce the
other business specified in the notice; (D) in the case of any
proposed nomination for election or re-election as a director, (I)
the name and residence address of the person or persons to be
nominated, (II) a description of all arrangements or understandings
between such shareholder or beneficial owner or owners and each
nominee and any other person or persons (naming such person or
persons) pursuant to which the nomination is to be made by such
shareholder, (III) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be
otherwise required to be disclosed, in each case pursuant to
Regulation 14A under the Exchange Act, including any information
that would be required to be included in a proxy statement filed
pursuant to Regulation 14A had the nominee been nominated by the
Board of Directors and (IV) the written consent of each nominee to
be named in a proxy statement and to serve as a director of the
corporation if so elected; and (E) in the case of any other business
that such shareholder proposes to bring before the meeting, (I) a
brief description of the business desired to be brought before the
meeting and, if such business includes a proposal to amend these
by-laws, the language of the proposed amendment, (II) such
shareholder's and beneficial owner's or owners' reasons for
conducting such business at the meeting and (III) any material
interest in such business of such shareholder and beneficial owner
or owners.
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(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.13 to the contrary, in the event
that the number of directors to be elected to the Board of Directors
of the corporation is increased and there is no public announcement
naming all of the nominees for director or specifying the size of
the increased Board of Directors made by the corporation at least 70
days prior to the second Tuesday in the month of April, a
shareholder's notice required by this Section 2.13 shall also be
considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be received by the
Secretary at the principal executive offices of the corporation not
later than the close of business on the 10th day following the day
on which such public announcement is first made by the corporation.
(b) Special Meetings. Only such business shall be conducted at a
Special Meeting as shall have been described in the notice of meeting sent to
shareholders pursuant to Section 2.04 of these by-laws. Nominations of
persons for election to the Board of Directors may be made at a Special
Meeting at which directors are to be elected pursuant to such notice of
meeting (i) by or at the direction of the Board of Directors or (ii) by any
shareholder of the corporation who (A) is a shareholder of record at the time
of giving of such notice of meeting, (B) is entitled to vote at the meeting
and (C) complies with the notice procedures set forth in this Section 2.13.
Any shareholder desiring to nominate persons for election to the Board of
Directors at such a Special Meeting shall cause a written notice to be
received by the Secretary of the corporation at the principal executive
offices of the corporation not earlier than 90 days prior to such Special
Meeting and not later than the close of business on the later of (x) the 60th
day prior to such Special Meeting and (y) the 10th day following the day on
which public announcement is first made of the date of such Special Meeting
and of the nominees proposed by the Board of Directors to be elected at such
meeting. Such written notice shall be signed by the shareholder of record who
intends to make the nomination (or his duly authorized proxy or other
representative), shall bear the date of signature of such shareholder (or
proxy or other representative) and shall set forth: (A) the name and address,
as they appear on the corporation's books, of such shareholder and the
beneficial owner or owners, if any, on whose behalf the nomination is made;
(B) the class and number of shares of the corporation which are beneficially
owned by such shareholder or beneficial owner or owners; (C) a representation
that such shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person or by proxy
at the meeting to make the nomination specified in the notice; (D) the name
and residence address of the person or persons to be nominated; (E) a
description of all arrangements or understandings between such shareholder or
beneficial owner or owners and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination is to be made
by such shareholder; (F) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be otherwise
required to be disclosed, in each case pursuant to Regulation 14A under the
Exchange Act, including any information that would be required to be included
in a proxy statement filed pursuant to Regulation 14A had the nominee been
nominated by the Board of Directors; and (G) the written consent of each
nominee to be named in a proxy statement and to serve as a director of the
corporation if so elected.
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(c) General.
(i) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.13 shall be eligible to serve
as directors. Only such business shall be conducted at an Annual
Meeting or Special Meeting as shall have been brought before such
meeting in accordance with the procedures set forth in this Section
2.13. The chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the
procedures set forth in this Section 2.13 and, if any proposed
nomination or business is not in compliance with this Section 2.13,
to declare that such defective proposal shall be disregarded.
(ii) For purposes of this Section 2.13, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this Section
2.13, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section
2.13. Nothing in this Section 2.13 shall be deemed to limit the
corporation's obligation to include shareholder proposals in its
proxy statement if such inclusion is required by Rule 14a-8 under
the Exchange Act.
ARTICLE III. BOARD OF DIRECTORS
3.01. General Powers and Number. All corporate powers shall
be exercised by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of, its Board of Directors.
The number of directors of the corporation shall be ten (10).
3.02. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of shareholders and until his successor
shall have been elected and qualified, or until there is a decrease in the
number of directors which takes effect after the expiration of his term, or
until his prior death, resignation or removal. A director may be removed by
the shareholders only at a meeting called for the purpose of removing the
director, and the meeting notice shall state that the purpose, or one of the
purposes, of the meeting is removal of the director. A director may be
removed from office but only for cause (as defined herein) if the number of
votes cast to remove the director exceeds the number of votes cast not to
remove him; provided, however, that, if the Board of Directors, by resolution,
shall have recommended removal of a director, then the shareholders may remove
such director without cause by the vote referred to above. As used herein,
"cause" shall exist only if the director whose removal is proposed has been
convicted of a felony by a court of competent jurisdiction, where such
conviction is no longer subject to direct appeal, or has been adjudged liable
for actions or
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omissions in the performance of his duty to the corporation in a matter which
has had a materially adverse effect on the business of the corporation, where
such adjudication is no longer subject to appeal. A director may resign at
any time by delivering written notice which complies with the Wisconsin
Business Corporation Law to the Chairman of the Board or to the corporation.
A director's resignation is effective when the notice is delivered unless the
notice specifies a later effective date. Directors need not be residents of
the State of Wisconsin but must be shareholders of the corporation.
3.03. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law immediately
after the Annual Meeting, and each adjourned session thereof. The place of
such regular meeting shall be the same as the place of the Annual Meeting
which precedes it, or such other suitable place as may be announced at such
Annual Meeting. The Board of Directors may provide, by resolution, the time
and place, either within or without the State of Wisconsin, for the holding of
additional regular meetings without other notice than such resolution.
3.04. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, the
President or any three directors. The Chairman of the Board or the President
may fix any place, either within or without the State of Wisconsin, as the
place for holding any special meeting of the Board of Directors, and if no
other place is fixed the place of meeting shall be the principal business
office of the corporation in the State of Wisconsin.
3.05. Notice; Waiver. Notice of each meeting of the Board of
Directors (unless otherwise provided in or pursuant to Section 3.03) shall be
given by written notice delivered or communicated in person, by telegram,
facsimile or other form of wire or wireless communication, or by mail or
private carrier, to each director at his business address or at such other
address as such director shall have designated in writing filed with the
Secretary, in each case not less than 48 hours prior to the time of the
meeting. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If notice be given by telegram, such notice shall be deemed to be
effective when the telegram is delivered to the telegraph company. If notice
is given by private carrier, such notice shall be deemed to be effective when
the notice is delivered to the private carrier. Whenever any notice whatever
is required to be given to any director of the corporation under the Articles
of Incorporation or these by-laws or any provision of the Wisconsin Business
Corporation Law, a waiver thereof in writing, signed at any time, whether
before or after the time of meeting, by the director entitled to such notice,
shall be deemed equivalent to the giving of such notice. The corporation
shall retain any such waiver as part of the permanent corporate records. A
director's attendance at or participation in a meeting waives any required
notice to him of the meeting unless the director at the beginning of the
meeting or promptly upon his arrival objects to holding the meeting or
transacting business at the meeting and does not thereafter vote for or assent
to action taken at the meeting. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need
be specified in the notice or waiver of notice of such meeting.
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3.06. Quorum. Except as otherwise provided by the Wisconsin
Business Corporation Law or by the Articles of Incorporation or these by-laws,
a majority of the number of directors set forth in Section 3.01 shall
constitute a quorum for the transaction of business at any meeting of the
Board of Directors, but a majority of the directors present (though less than
such quorum) may adjourn the meeting from time to time without further notice.
3.07. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors, unless the act of a greater number is required by
the Wisconsin Business Corporation Law or by the Articles of Incorporation or
these by-laws.
3.08. Conduct of Meetings. The Chairman of the Board, and in
his absence, the President, or a Vice-President in the order provided under
Section 4.07, and in their absence, any director chosen by the directors
present, shall call meetings of the Board of Directors to order and shall act
as chairman of the meeting. The Secretary of the corporation shall act as
secretary of all meetings of the Board of Directors, but in the absence of the
Secretary, the presiding officer may appoint any Assistant Secretary or any
director or other person present to act as secretary of the meeting. Minutes
of any regular or special meeting of the Board of Directors shall be prepared
and distributed to each director.
3.09. Vacancies. Except as provided below, any vacancy
occurring in the Board of Directors, including a vacancy resulting from an
increase in the number of directors, may be filled by any of the following:
(a) the shareholders; (b) the Board of Directors; or (c) if the directors
remaining in office constitute fewer than a quorum of the Board of Directors,
the directors, by the affirmative vote of a majority of all directors
remaining in office. If the vacant office was held by a director elected by a
voting group of shareholders, only the holders of shares of that voting group
may vote to fill the vacancy if it is filled by the shareholders, and only the
remaining directors elected by that voting group may vote to fill the vacancy
if it is filled by the directors. A vacancy that will occur at a specific
later date, because of a resignation effective at a later date or otherwise,
may be filled before the vacancy occurs, but the new director may not take
office until the vacancy occurs.
3.10. Compensation. The Board of Directors, by affirmative vote
of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, may establish reasonable compensation
of all directors for services to the corporation as directors, officers or
otherwise, or may delegate such authority to an appropriate committee. The
Board of Directors also shall have authority to provide for or to delegate
authority to an appropriate committee to provide for reasonable pensions,
disability or death benefits, and other benefits or payments, to directors,
officers and employees to the corporation.
3.11. Presumption of Assent. A director of the corporation who
is present at a meeting of the Board of Directors or a committee thereof of
which he is a member at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless any of the following
occurs: (a) the director objects at the beginning of the meeting or promptly
upon his arrival to holding the meeting or transacting business at the
meeting; (b) the director dissents or abstains from an action taken and
minutes of the meeting are prepared that
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show the director's dissent or abstention from the action taken; (c) the
director delivers written notice that complies with the Wisconsin Business
Corporation Law of his dissent or abstention to the presiding officer of the
meeting before its adjournment or to the corporation immediately after
adjournment of the meeting; or (d) the director dissents or abstains from an
action taken, minutes of the meeting are prepared that fail to show the
director's dissent or abstention from the action taken, and the director
delivers to the corporation a written notice of that failure that complies
with the Wisconsin Business Corporation Law promptly after receiving the
minutes. Such right to dissent or abstain shall not apply to a director who
voted in favor of such action.
3.12. Committees. The Board of Directors by resolution adopted
by the affirmative vote of a majority of the number of directors set forth in
Section 3.01 may create one or more committees, appoint members of the Board
of Directors to serve on the committees and designate other members of the
Board of Directors to serve as alternates. Each committee shall have two or
more members who shall, unless otherwise provided by the Board of Directors,
serve at the pleasure of the Board of Directors. A committee may be
authorized to exercise the authority of the Board of Directors, except that a
committee may not do any of the following: (a) authorize distributions; (b)
approve or propose to shareholders action that the Wisconsin Business
Corporation Law requires to be approved by shareholders; (c) fill vacancies on
the Board of Directors or, unless the Board of Directors provides by
resolution that vacancies on a committee shall be filled by the affirmative
vote of the remaining committee members, on any Board committee; (d) amend the
corporation's Articles of Incorporation; (e) adopt, amend or repeal by-laws;
(f) approve a plan of merger not requiring shareholder approval; (g) authorize
or approve reacquisition of shares, except according to a formula or method
prescribed by the Board of Directors; and (h) authorize or approve the
issuance or sale or contract for sale of shares, or determine the designation
and relative rights, preferences and limitations of a class or series of
shares, except that the Board of Directors may authorize a committee to do so
within limits prescribed by the Board of Directors. Unless otherwise provided
by the Board of Directors in creating the committee, a committee may employ
counsel, accountants and other consultants to assist it in the exercise of its
authority.
3.13. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these
by-laws, members of the Board of Directors (and any committee thereof) may
participate in regular or special meetings by, or through the use of, any
means of communication by which all participants may simultaneously hear each
other, such as by conference telephone. If a meeting is conducted by such
means, then at the commencement of such meeting the presiding officer shall
inform the participating directors that a meeting is taking place at which
official business may be transacted. Any participant in a meeting by such
means shall be deemed present in person at such meeting. Notwithstanding the
foregoing, no action may be taken at any meeting held by such means on any
particular matter which the presiding officer determines, in his sole
discretion, to be inappropriate under the circumstances for action at a
meeting held by such means. Such determination shall be made and announced in
advance of such meeting.
3.14. Unanimous Consent without Meeting. Any action required or
permitted by the Articles of Incorporation or these by-laws or any provision
of the Wisconsin Business Corporation Law to be taken by the Board of
Directors (or a committee thereof) at a meeting
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may be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all members of the Board or of the
committee, as the case may be, then in office. Such action shall be effective
when the last director or committee member signs the consent, unless the
consent specifies a different effective date.
ARTICLE IV. OFFICERS
4.01. Number. The principal officers of the corporation shall
be a Chairman of the Board, a President, one or more Vice-Presidents, not to
exceed six (6) at any given time, a Secretary, and a Treasurer, each of whom
shall be elected by the Board of Directors. Such other officers and assistant
officers as may be deemed necessary may be elected or appointed by the Board
of Directors. The Board of Directors may also authorize any duly appointed
officer to appoint one or more officers or assistant officers. Any two or
more offices may be held by the same person.
4.02. Election and Term of Office. The officers of the
corporation to be elected by the Board of Directors shall be elected annually
by the Board of Directors at the first meeting of the Board of Directors held
after the Annual Meeting. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently
may be. Each officer shall hold office until his successor shall have been
duly elected or until his prior death, resignation or removal.
4.03. Removal and Resignation. The Board of Directors may
remove any officer and, unless restricted by the Board of Directors or these
by-laws, an officer may remove any officer or assistant officer appointed by
that officer, at any time, with or without cause and notwithstanding the
contract rights, if any, of the officer removed. Election or appointment
shall not of itself create contract rights. An officer may resign at any time
by delivering notice to the corporation that complies with the Wisconsin
Business Corporation Law. The resignation shall be effective when the notice
is delivered, unless the notice specifies a later effective date and the
corporation accepts the later effective date.
4.04. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be filled by
the Board of Directors for the unexpired portion of the term. If a
resignation of an officer is effective at a later date as contemplated by
Section 4.03 hereof, the Board of Directors may fill the pending vacancy
before the effective date if the Board provides that the successor may not
take office until the effective date.
4.05. Chairman of the Board. The Chairman of the Board shall be
the principal executive officer of the corporation and, subject to the control
of the Board of Directors, shall in general supervise and control all of the
business and affairs of the corporation. He shall, when present, preside at
all Annual Meetings and Special Meetings and at all meetings of the Board of
Directors. He shall have authority, subject to such rules as may be
prescribed by the Board of Directors, to appoint such agents and employees of
the corporation as he shall deem necessary, to prescribe their powers, duties
and compensation, and to delegate authority to them. Such agents and
employees shall hold office at the discretion of the Chairman of the Board.
He shall have authority to sign, execute and acknowledge, on behalf of the
corporation,
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all deeds, mortgages, bonds, stock certificates, contracts, leases, reports
and all other documents or instruments necessary or proper to be executed in
the course of the corporation's regular business, or which shall be authorized
by resolution of the Board of Directors; and, except as otherwise provided by
law or the Board of Directors, he may authorize the President or any
Vice-President or other officer or agent of the corporation to sign, execute
and acknowledge such documents or instruments in his place and stead. In
general he shall perform all duties incident to the office of Chairman of the
Board and such other duties as may be prescribed by the Board of Directors
from time to time.
4.06. President. The President shall be the principal operating
officer of the corporation, subject to the control of the Chairman of the
Board and the Board of Directors. In the absence of the Chairman of the Board
or in the event of his death, inability or refusal to act, or in the event for
any reason it shall be impracticable for the Chairman of the Board to act
personally, the President shall perform the duties of the Chairman of the
Board, and when so acting, shall have all the powers of and be subject to all
the restrictions upon the Chairman of the Board. The President may sign, with
the Secretary or Assistant Secretary, certificates for shares of the
corporation, and shall in general perform all duties incident to the office of
President and such other duties and shall have such authority as from time to
time may be delegated or assigned to him by the Chairman of the Board or by
the Board of Directors. The execution of any instrument of the corporation by
the President shall be conclusive evidence, as to third parties, of his
authority to act in the place and stead of the Chairman of the Board.
4.07. The Vice-Presidents. In the absence of the President or
in the event of his death, inability or refusal to act, or in the event for
any reason it shall be impracticable for the President to act personally, the
Vice-President (or in the event there be more than one Vice-President, the
Vice-Presidents in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Any Vice-President
may sign, with the Secretary or Assistant Secretary, certificates for shares
of the corporation and shall perform such other duties and have such authority
as from time to time may be delegated or assigned to him by the President or
by the Board of Directors. The execution of any instrument of the corporation
by any Vice-President shall be conclusive evidence, as to third parties, of
his authority to act in the stead of the President.
4.08 The Secretary. The Secretary shall: (a) keep the minutes of
all Annual Meetings and Special Meetings and of all meetings of the Board of
Directors in one or more books provided for that purpose (including records of
actions taken without a meeting); (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by the
Wisconsin Business Corporation Law; (c) be custodian of the corporate records
and of the seal of the corporation and see that the seal of the corporation is
affixed to all documents the execution of which on behalf of the corporation
under its seal is duly authorized; (d) maintain a record of the shareholders
of the corporation, in a form that permits preparation of a list of the names
and addresses of all shareholders, by class or series of shares and showing
the number and class or series of shares held by each shareholder; (e) sign
with the Chairman
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of the Board, the President, or a Vice-President, certificates for shares of
the corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the corporation; and (g) in general perform all duties
incident to the office of Secretary and have such other duties and exercise
such authority as from time to time may be delegated or assigned to him by the
President or by the Board of Directors.
4.09. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
(b) maintain appropriate accounting records; (c) receive and give receipts for
moneys due and payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with the
provisions of Section 5.04; and (d) in general perform all of the duties
incident to the office of Treasurer and have such other duties and exercise
such other authority as from time to time may be delegated or assigned to him
by the President or by the Board of Directors. If required by the Board of
Directors, the Treasurer shall give a bond for the faithful discharge of his
duties in such sum and with such surety or sureties as the Board of Directors
shall determine.
4.10. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as the
Board of Directors may from time to time authorize. The Assistant Secretaries
may sign with the Chairman of the Board, the President or a Vice-President
certificates for shares of the corporation the issuance of which shall have
been authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with such
sureties as the Board of Directors shall determine. The Assistant Secretaries
and Assistant Treasurers, in general, shall perform such duties and have such
authority as shall from time to time be delegated or assigned to them by the
Secretary or the Treasurer, respectively, or by the President or the Board of
Directors.
4.11 Other Assistants and Acting Officers. The Board of Directors
shall have the power to appoint, or to authorize any duly appointed officer of
the corporation to appoint, any person to act as assistant to any officer, or
as agent for the corporation in his stead, or to perform the duties of such
officer whenever for any reason it is impracticable for such officer to act
personally, and such assistant or acting officer or other agent so appointed
by the Board of Directors or the appointing officer shall have the power to
perform all the duties of the office to which he is so appointed to be
assistant, or as to which he is so appointed to act, except as such power may
be otherwise defined or restricted by the Board of Directors or the appointing
officer.
4.12 Salaries. The salaries of the principal officers shall be
fixed from time to time by the Board of Directors or by a duly authorized
committee thereof, and no officer shall be prevented from receiving such
salary by reason of the fact that he is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS; SPECIAL
CORPORATE ACTS
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5.01. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute or
deliver any instrument in the name of and on behalf of the corporation, and
such authorization may be general or confined to specific instances. In the
absence of other designation, all deeds, mortgages and instruments of
assignment or pledge made by the corporation shall be executed in the name of
the corporation by the Chairman of the Board, the President or one of the
Vice-Presidents and by the Secretary, an Assistant Secretary, the Treasurer or
an Assistant Treasurer; the Secretary or an Assistant Secretary, when
necessary or required, shall affix the corporate seal thereto; and when so
executed no other party to such instrument or any third party shall be
required to make any inquiry into the authority of the signing officer or
officers.
5.02. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the corporation and no evidences of such indebtedness
shall be issued in its name unless authorized by or under the authority of a
resolution of the Board of Directors. Such authorization may be general or
confined to specific instances.
5.03. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the corporation, shall be signed by such officer or officers,
agent or agents of the corporation and in such manner as shall from time to
time be determined by or under the authority of a resolution of the Board of
Directors.
5.04. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as may be selected by or
under the authority of a resolution of the Board of Directors.
5.05 Voting of Securities Owned by this Corporation. Subject always
to the specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the Chairman of the Board of this corporation if he be present,
or in his absence by the President of this corporation if he be present, or in
his absence by any Vice-President of this corporation who may be present, and
(b) whenever, in the judgment of the Chairman of the Board, or in his absence,
of the President, or in his absence, of any Vice-President, it is desirable
for this corporation to execute a proxy or written consent in respect to any
shares or other securities issued by any other corporation and owned by this
corporation, such proxy or consent shall be executed in the name of this
corporation by the Chairman of the Board, the President or one of the
Vice-Presidents of this corporation, without necessity of any authorization by
the Board of Directors, affixation of corporate seal or countersignature or
attestation by another officer. Any person or persons designated in the
manner above stated as the proxy or proxies of this corporation shall have
full right, power and authority to vote the shares or other securities issued
by such other corporation and owned by this corporation the same as such
shares or other securities might be voted by this corporation.
5.06. No Nominee Procedures. The corporation has not
established, and nothing in these by-laws shall be deemed to establish, any
procedure by which a beneficial owner of the
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corporation's shares that are registered in the name of a nominee is
recognized by the corporation as the shareholder under Section 180.0723 of the
Wisconsin Business Corporation Law.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.01. Certificates for Shares. Certificates representing shares
of the corporation shall be in such form, consistent with the Wisconsin
Business Corporation Law, as shall be determined by the Board of Directors.
Such certificates shall be signed by the Chairman of the Board, the President
or a Vice-President and by the Secretary or an Assistant Secretary. All
certificates for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the corporation. All certificates
surrendered to the corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and cancelled, except as provided in
Section 6.06.
6.02. Facsimile Signatures and Seal. The seal of the
corporation on any certificates for shares may be a facsimile. The signatures
of the Chairman of the Board, the President or any Vice-President and the
Secretary or Assistant Secretary upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a
registrar, other than the corporation itself or an employee of the
corporation.
6.03. Signature by Former Officers. In case any officer, who
has signed or whose facsimile signature has been placed upon any certificate
for shares, shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issue.
6.04. Transfer of Shares. Prior to due presentment of a
certificate for shares for registration of transfer the corporation may treat
the registered owner of such shares as the person exclusively entitled to
vote, to receive notifications and otherwise to exercise all the rights and
powers of an owner. Where a certificate for shares is presented to the
corporation with a request to register for transfer, the corporation shall not
be liable to the owner or any other person suffering loss as a result of such
registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation had no duty to inquire into
adverse claims or has discharged any such duty. The corporation may require
reasonable assurance that said endorsements are genuine and effective and in
compliance with such other regulations as may be prescribed under the
authority of the Board of Directors.
6.05. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of any
restriction imposed by the corporation upon the transfer of such shares.
6.06. Lost, Destroyed or Stolen Certificates. Where the owner
claims that his certificate for shares has been lost, destroyed or wrongfully
taken, a new certificate shall be issued in place thereof if the owner (a) so
requests before the corporation has notice that such
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shares have been acquired by a bona fide purchaser, and (b) files with the
corporation a sufficient indemnity bond, and (c) satisfies such other
reasonable requirements as the Board of Directors may prescribe.
6.07. Consideration for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any tangible or
intangible property or benefit to the corporation, including cash, promissory
notes, services performed, contracts for services to be performed or other
securities of the corporation. Before the corporation issues shares, the
Board of Directors shall determine that the consideration received or to be
received for the shares to be issued is adequate. In the absence of a
resolution adopted by the Board of Directors expressly determining that the
consideration received or to be received is adequate, Board approval of the
issuance of the shares shall be deemed to constitute such a determination.
The determination of the Board of Directors is conclusive insofar as the
adequacy of consideration for the issuance of shares relates to whether the
shares are validly issued, fully paid and nonassessable. The corporation may
place in escrow shares issued in whole or in part for a contract for future
services or benefits, a promissory note, or other property to be issued in the
future, or make other arrangements to restrict the transfer of the shares, and
may credit distributions in respect of the shares against their purchase
price, until the services are performed, the benefits or property are received
or the promissory note is paid. If the services are not performed, the
benefits or property are not received or the promissory note is not paid, the
corporation may cancel, in whole or in part, the shares escrowed or restricted
and the distributions credited.
6.08. Stock Regulation. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the statutes of the State of Wisconsin as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE VII. SEAL
7.01. The Board of Directors shall provide a corporate seal
which shall be circular in form and shall have inscribed thereon the name of
the corporation and the state of incorporation and the words, "Corporate
Seal".
ARTICLE VIII. INDEMNIFICATION
8.01. Certain Definitions. All capitalized terms used in this
Article VIII and not otherwise hereinafter defined in this Section 8.01 shall
have the meaning set forth in Section 180.0850 of the Statute. The following
capitalized terms (including any plural forms thereof) used in this Article
VIII shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise
that directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the Corporation.
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(b) "Authority" shall mean the entity selected by the Director or
Officer to determine his or her right to indemnification pursuant to Section
8.04.
(c) "Board" shall mean the entire then elected and serving Board of
Directors of the Corporation, including all members thereof who are Parties to
the subject Proceeding or any related Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer breached or
failed to perform his or her duties to the Corporation and his or her breach
of or failure to perform those duties is determined, in accordance with
Section 8.04, to constitute misconduct under Section 180.0851 (2) (a) 1, 2, 3
or 4 of the Statute.
(e) "Corporation," as used herein and as defined in the Statute and
incorporated by reference into the definitions of certain other capitalized
terms used herein, shall mean this Corporation, including, without limitation,
any successor corporation or entity to this Corporation by way of merger,
consolidation or acquisition of all or substantially all of the capital stock
or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set forth in the
Statute; provided, that, for purposes of Article VIII, it shall be
conclusively presumed that any Director or Officer serving as a director,
officer, partner, trustee, member of any governing or decision-making
committee, employee or agent of an Affiliate shall be so serving at the
request of the Corporation.
(g) "Disinterested Quorum" shall mean a quorum of the Board who are
not Parties to the subject Proceeding or any related Proceeding.
(h) "Party" shall have the meaning set forth in the Statute;
provided, that, for purposes of this Article VIII, the term "Party" shall also
include any Director or Officer or employee who is or was a witness in a
Proceeding at a time when he or she has not otherwise been formally named a
Party thereto.
(i) "Proceeding" shall have the meaning set forth in the Statute;
provided, that, for purposes of this Article VIII, the term "Proceeding" shall
also include all Proceedings (i) brought under (in whole or in part) the
Securities Act of 1933, as amended, the Exchange Act, their respective state
counterparts, and/or any rule or regulation promulgated under any of the
foregoing; (ii) brought before an Authority or otherwise to enforce rights
hereunder; (iii) any appeal from a Proceeding; and (iv) any Proceeding in
which the Director or Officer is a plaintiff or petitioner because he or she
is a Director or Officer; provided, however, that such Proceeding is
authorized by a majority vote of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.0850 through 180.0859,
inclusive, of the Wisconsin Business Corporation Law, Chapter 180 of the
Wisconsin Statutes, as the same shall then be in effect, including any
amendments thereto, but, in the case of any such amendment, only to the extent
such amendment permits or requires the Corporation to provide broader
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indemnification rights than the Statute permitted or required the Corporation
to provide prior to such amendment.
8.02. Mandatory Indemnification. To the fullest extent
permitted or required by the Statute, the Corporation shall indemnify a
Director or Officer against all Liabilities incurred by or on behalf of such
Director or Officer in connection with a Proceeding in which the Director or
Officer is a Party because he or she is a Director or Officer.
8.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification under Section
8.02 shall make a written request therefor to the Corporation. Subject to
Section 8.03(b), within 60 days of the Corporation's receipt of such request,
the Corporation shall pay or reimburse the Director or Officer for the entire
amount of Liabilities incurred by the Director or Officer in connection with
the subject Proceeding (net of any Expenses previously advanced pursuant to
Section 8.05).
(b) No indemnification shall be required to be paid by the
Corporation pursuant to Section 8.02 if, within such 60-day period, (i) a
Disinterested Quorum, by a majority vote thereof, determines that the Director
or Officer requesting indemnification engaged in misconduct constituting a
Breach of Duty or (ii) a Disinterested Quorum cannot be obtained.
(c) In either case of nonpayment pursuant to Section 8.03(b), the
Board shall immediately authorize by resolution that an Authority, as provided
in Section 8.04, determine whether the Director's or Officer's conduct
constituted a Breach of Duty and, therefore, whether indemnification should be
denied hereunder.
(d) (i) If the Board does not authorize an Authority to determine
the Director's or Officer's right to indemnification hereunder within such
60-day period and/or (ii) if indemnification of the requested amount of
Liabilities is paid by the Corporation, then it shall be conclusively presumed
for all purposes that a Disinterested Quorum has determined that the Director
or Officer did not engage in misconduct constituting a Breach of Duty and, in
the case of subsection (i) above (but not subsection (ii)), indemnification by
the Corporation of the requested amount of Liabilities shall be paid to the
Director or Officer immediately.
8.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a Director's
or Officer's right to indemnification pursuant to Section 8.03, then the
Director or Officer requesting indemnification shall have the absolute
discretionary authority to select one of the following as such Authority:
(i) An independent legal counsel; provided, that such counsel
shall be mutually selected by such Director or Officer and by a
majority vote of a Disinterested Quorum or, if a Disinterested
Quorum cannot be obtained, then by a majority vote of the Board;
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(ii) A panel of three arbitrators selected from the panels of
arbitrators of the American Arbitration Association in Milwaukee,
Wisconsin; provided, that (A) one arbitrator shall be selected by
such Director or Officer, the second arbitrator shall be selected by
a majority vote of a Disinterested Quorum or, if a Disinterested
Quorum cannot be obtained, then by a majority vote of the Board, and
the third arbitrator shall be selected by the two previously
selected arbitrators, and (B) in all other respects, such panel
shall be governed by the American Arbitration Association's then
existing Commercial Arbitration Rules; or
(iii) A court pursuant to and in accordance with Section
180.0854 of the Statute.
(b) In any such determination by the selected Authority there shall
exist a rebuttable presumption that the Director's or Officer's conduct did
not constitute a Breach of Duty and that indemnification against the requested
amount of Liabilities is required. The burden of rebutting such a presumption
by clear and convincing evidence shall be on the Corporation or such other
party asserting that such indemnification should not be allowed.
(c) The Authority shall make its determination within 60 days of
being selected and shall submit a written opinion of its conclusion
simultaneously to both the Corporation and the Director or Officer.
(d) If the Authority determines that indemnification is required
hereunder, the Corporation shall pay the entire requested amount of
Liabilities (net of any Expenses previously advanced pursuant to Section
8.05), including interest thereon at a reasonable rate, as determined by the
Authority, within 10 days of receipt of the Authority's opinion; provided,
that, if it is determined by the Authority that a Director or Officer is
entitled to indemnification as to some claims, issues or matters, but not as
to other claims, issues or matters, involved in the subject Proceeding, the
Corporation shall be required to pay (as set forth above) only the amount of
such requested Liabilities as the Authority shall deem appropriate in light of
all of the circumstances of such Proceeding.
(e) The determination by the Authority that indemnification is
required hereunder shall be binding upon the Corporation regardless of any
prior determination that the Director or Officer engaged in a Breach of Duty.
(f) All Expenses incurred in the determination process under this
Section 8.04 by either the Corporation or the Director or Officer, including,
without limitation, all Expenses of the selected Authority, shall be paid by
the Corporation.
8.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse, within 10 days after
the receipt of the Director's or Officer's written request therefor, the
reasonable Expenses of the Director or Officer as such Expenses are incurred;
provided, the following conditions are satisfied:
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(i) The Director or Officer furnishes to the Corporation an
executed written certificate affirming his or her good faith belief
that he or she has not engaged in misconduct which constitutes a
Breach of Duty; and
(ii) The Director or Officer furnishes to the Corporation an
unsecured executed written agreement to repay any advances made
under this Section 8.05 if it is ultimately determined by an
Authority that he or she is not entitled to be indemnified by the
Corporation for such Expenses pursuant to this Section 8.04.
(b) If the Director or Officer must repay any previously advanced
Expenses pursuant to this Section 8.05, such Director or Officer shall not be
required to pay interest on such amounts.
8.06. Indemnification and Allowance of Expenses of Certain
Others.
(a) The Corporation shall indemnify a director or officer of an
Affiliate (who is not otherwise serving as a Director or Officer) against all
Liabilities, and shall advance the reasonable Expenses, incurred by such
director or officer in a Proceeding to the same extent hereunder as if such
director or officer incurred such Liabilities because he or she was a Director
or Officer, if such director or officer is a Party thereto because he or she
is or was a director or officer of the Affiliate.
(b) The Corporation shall indemnify an employee who is not a
Director or Officer, to the extent that he or she has been successful on the
merits or otherwise in defense of a Proceeding, for all reasonable Expenses
incurred in the Proceeding if the employee was a Party because he or she was
an employee of the Corporation.
(c) The Board may, in its sole and absolute discretion as it deems
appropriate, pursuant to a majority vote thereof, indemnify (to the extent not
otherwise provided in Section 8.06(b) hereof) against Liabilities incurred by,
and/or provide for the allowance of reasonable Expenses of, an employee or
authorized agent of the Corporation acting within the scope of his or her
duties as such and who is not otherwise a Director or Officer.
8.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of a Director or Officer or any individual who is or was
an employee or authorized agent of the Corporation against any Liability
asserted against or incurred by such individual in his or her capacity as such
or arising from his or her status as such, regardless of whether the
Corporation is required or permitted to indemnify against any such Liability
under this Article VIII.
8.08. Notice to the Corporation. A Director, Officer or
employee shall promptly notify the Corporation in writing when he or she has
actual knowledge of a Proceeding which may result in a claim of
indemnification against Liabilities or allowance of Expenses hereunder, but
the failure to do so shall not relieve the Corporation of any liability to the
Director, Officer or employee hereunder unless the Corporation shall have been
irreparably prejudiced by such
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failure (as determined, in the case of Directors or Officers only, by an
Authority selected pursuant to Section 8.04(a)).
8.09. Severability. If any provision of this Article VIII shall
be deemed invalid or inoperative, or if a court of competent jurisdiction
determines that any of the provisions of this Article VIII contravene public
policy, this Article VIII shall be construed so that the remaining provisions
shall not be affected, but shall remain in full force and effect, and any such
provisions which are invalid or inoperative or which contravene public policy
shall be deemed, without further action or deed by or on behalf of the
Corporation, to be modified, amended and/or limited, but only to the extent
necessary to render the same valid and enforceable.
8.10. Nonexclusivity of Article VIII. The rights of a Director,
Officer or employee (or any other person) granted under this Article VIII
shall not be deemed exclusive of any other rights to indemnification against
Liabilities or advancement of Expenses which the Director, Officer or employee
(or such other person) may be entitled to under any written agreement, Board
resolution, vote of shareholders of the Corporation or otherwise, including,
without limitation, under the Statute. Nothing contained in this Article VIII
shall be deemed to limit the Corporation's obligations to indemnify against
Liabilities or advance Expenses to a Director, Officer or employee under the
Statute.
8.11. Contractual Nature of Article VIII; Repeal or Limitation
of Rights. This Article VIII shall be deemed to be a contract between the
Corporation and each Director, Officer and employee of the Corporation and any
repeal or other limitation of this Article VIII or any repeal or limitation of
the Statute or any other applicable law shall not limit any rights of
indemnification against Liabilities or allowance of Expenses then existing or
arising out of events, acts or omissions occurring prior to such repeal or
limitation, including, without limitation, the right to indemnification
against Liabilities or allowance of Expenses for Proceedings commenced after
such repeal or limitation to enforce this Article VIII with regard to acts,
omissions or events arising prior to such repeal or limitation.
ARTICLE IX. AMENDMENTS
9.01. By Shareholders. These by-laws may be altered, amended or
repealed and new by-laws may be adopted by the shareholders at any Annual
Meeting or Special Meeting at which a quorum is in attendance.
9.02. By Directors. These by-laws may also be altered, amended
or repealed and new by-laws may be adopted by the Board of Directors by
affirmative vote of a majority of the number of directors present at any
meeting at which a quorum is in attendance; provided, however, that the
shareholders in adopting, amending or repealing a particular by-law may
provide therein that the Board of Directors may not amend, repeal or readopt
that by-law.
9.03. Implied Amendments. Any action taken or authorized by the
shareholders or by the Board of Directors, which would be inconsistent with
the by-laws then in effect but is taken or authorized by affirmative vote of
not less than the number of shares or the number of directors required to
amend the by-laws so that the by-laws would be consistent with such
B-25<PAGE>
<PAGE>
action, shall be given the same effect as though the by-laws had been
temporarily amended or suspended so far, but only so far, as is necessary to
permit the specific action so taken or authorized.
EXHIBIT 10(s)
Revised 10/26/93
Schedule A
BANTA CORPORATION
Executive Plans and Agreements
Deferred Compensation Plan for Key Employees adopted
by the Company's Board of Directors on April 23, 1985 and
all individual agreements thereunder
Deferred Compensation Plan for Key Employees adopted
by the Company's Board of Directors on October 25, 1988 and
all individual agreements thereunder
Amounts deferred pursuant to Deferred Payment sections of
Management Incentive Award Plan and Long Term Incentive Plan
Supplemental Retirement Plan for Key Employees<PAGE>
<PAGE>
Revised 10/26/93
Schedule B
BANTA CORPORATION
TRUST FOR EXECUTIVES
Priority of Benefits
FIRST - Deferred Compensation Plans for Key Employees adopted by
the Company's Board of Directors on April 23, 1985 and
October 25, 1988, respectively, and all individual
agreements under either of such Plans; amounts deferred
pursuant to Deferred Payment sections of Management
Incentive Award Plan and Long Term Incentive Plan
SECOND - Supplemental Retirement Plan for Key Employees
EXHIBIT 13
FIVE-YEAR SUMMARY OF SELECTED FINANCIAL DATA
Not Covered by Auditors' Report
<TABLE>
<CAPTION>
Dollars in thousands
(except per share data)
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Summary of Earnings (1)
Net sales $691,244 $637,416 $565,473 $577,614 $517,235
Net earnings from continuing
operations 40,992 35,662 28,219 29,352 25,688
Net earnings 40,992 35,662 20,619 18,171 33,599
Net earnings per common share from
continuing operations (2) 2.03 1.79 1.44 1.53 1.34
Net earnings per
common share (2) 2.03 1.79 1.05 .95 1.75
Dividends paid per
common share (2) .47 .41 .38 .37 .35
Financial Summary
Working capital 106,171 102,214 98,323 94,151 96,018
Net plant and equipment 232,888 205,246 200,938 194,977 171,102
Total assets 457,433 410,182 397,464 397,580 378,884
Long-term debt 45,603 52,491 64,061 75,378 69,005
Interest expense 5,346 5,786 5,398 5,378 5,511
Shareholders' investment 292,428 258,237 226,967 206,585 194,677
Book value per share
of common stock (2) (3) 14.62 13.00 11.56 10.80 10.24
</TABLE>
(1) All years comprised 52 weeks except 1992 which comprised 53 weeks.
(2) Per share amounts have been adjusted for the three-for-two stock split
distributed in April 1993.
(3) Book values per share for common stock are based on shares outstanding at
year-end.
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL POSITION AND OPERATIONS
Operational Highlights
1993 was another excellent year for Banta Corporation, resulting in
record sales and earnings. Exceptional support from our dedicated employees, a
strong capital investment program and high plant utilization fueled these
results. Sales for the year were $691 million, 8% above the $637 million for
1992. Net earnings were $41 million, a 15% increase over 1992. Earnings per
share were $2.03 compared with $1.79 in 1992. Record sales and earnings were
achieved during each quarter of 1993. These results continued the strong
overall performance achieved by the Corporation over the past five years,
during which time sales and net earnings from continuing operations grew at
average annual rates of 10% and 13%, respectively.
During early 1993, our print markets were influenced by overall
sluggishness in advertising which resulted in fewer market opportunities for
magazines, consumer catalogs, direct marketing pieces and the point-of-
purchase sign and display markets. Early in the third quarter the consumer
catalog market experienced a sharp increase in demand, resulting in a near
over-sold condition. Despite the underlying market softness, the other
commercial print markets increased activity in the second half due to typical
seasonality and due to increased market penetration. The Corporation's
software manual business made excellent progress in 1993 by increasing its
market penetration. Sales increases were also recorded in the educational,
general book and trade book markets.
The Corporation's average cost of paper fluctuated in 1993 with lower
costs during the first six months. A midyear price increase averaged about
10% on most coated paper and much of that increase eroded in the fourth
quarter. Overall, the average cost of paper to our customers was about 2%
higher in 1993 than in 1992.
Very competitive pricing continues within most print markets, including
the Corporation's markets, and on average, unit sales prices were lower in
1993 than in 1992. The Corporation's aggressive commitment to capital
expenditures adds capacity and the new more efficient equipment reduces unit
operating costs. These efficiencies enable the Corporation to produce at a
lower average unit cost.
Technologies are being developed within the television, telephone and
entertainment markets, which may result in a moderating of the future rate of
growth within print markets. These alternate media are discussed in such
broad terms as the Electronic Superhighway and Interactive Media. The
Corporation is investigating the opportunities provided by these developments
but, to date has not committed large portions of its capital expenditures to
alternate media. However, the Corporation's expertise in electronic prepress
technology and CD-ROM capabilities provide excellent positions from which to
pursue opportunities that we identify.
Sales
The Corporation classifies its sales as follows: commercial (catalogs,
direct marketing materials and single-use products); books (educational,
general, trade, data manuals and software services); magazines; and other
(point-of-purchase and prepress services). Sales for the market
classifications, as a percent of consolidated sales, are as follows:
1993 1992 1991
Commercial 44% 46% 47%
Books 34 30 31
Magazines 12 13 12
Other 10 11 10
---- ---- ----
100% 100% 100%
==== ==== ====
The percentage of sales by market classification has remained fairly
constant for the past three years. Percentage increases in sales by market
classification for 1993 compared with 1992 were as follows: commercial -- 3%;
books -- 21%; magazines -- 10%; and other -- 1%.
During the last three years, most of the operating units serving the
commercial market ran substantially on seven-day work weeks during much of the
second half of each year due to seasonal customer demand. Approximately 15%
additional press capacity was installed in 1993. An additional 20% increase
in capacity for these operating units is expected to be completed by midyear
1994. Sales of direct marketing materials increased 22% over 1992 as the
Corporation continues to be a leading supplier to this market.
During 1993, the consumer catalog printing market was characterized by
slower activity early in the year with significantly improved volume during
the last five months as retail catalog spending increased. The unexpected,
significant volume increase in the third quarter resulted in an over-sold
condition within our plants. This environment forced us to turn down sales
opportunities, increased our costs and reduced flexibility within our
production facilities. The Corporation's overall catalog sales were up only
modestly primarily because of the absence of certain cyclical business
catalogs, competitive pricing pressures and an increased amount of customer-
furnished paper within the consumer catalog market.
Sales of single-use products for the food service and non-sterile medical
markets were flat compared to 1992 primarily because the uncertainty in the
national health care scene altered buying patterns of health care providers.
<PAGE>
Book product sales for 1993, much like 1992, increased for educational,
trade, general books, and data and software manuals. The Corporation
continues to emphasize the diversification of its book market product
offerings, reducing its reliance on educational products. Although school
systems are recording increased student enrollments, their funding is limited
due to budget constraints and a portion of the funding is being used for
alternate non-print products.
The Corporation has made good progress by increasing its share of the
market for computer hardware and software documentation services, which are
part of our book market. Service to this market is characterized by short
manufacturing cycles, flexibility in meeting the rapidly changing needs of
each customer and an "event" orientation, which results in variations in
manufacturing requirements. In 1993, the Corporation expanded the array of
services it offers customers in this market. New services include 1-800
telephone order fulfillment services, which allows orders to be received
directly by our fulfillment facility. The CYCLESpeed (SM) service is a new
manufacturing system that emphasizes shorter, more frequent production of
print orders to minimize our customers' inventory and provides constant
monitoring of inventory levels. The use of digital on-demand printing
technologies at our Minneapolis and Boston locations provides rapid response
for lower quantity requirements for manuals and parts lists. The Corporation
completed the construction and relocation of Bushman Press to a new
manufacturing facility in 1993. The Banta Digital Services facility,
providing both on-demand printing and prepress services, opened in Boston in
1993. A similar facility recently opened in the San Francisco Bay area.
The Corporation continued to gain new titles and market share in special-
interest magazines. The 10% sales gain was achieved by increased market
penetration and a modest increase in spending for magazine advertising pages.
The percentage of new titles printed in 1993 was less than in 1992 because
there was an increase in the competitive environment.
The 1% increase in the "Other" classification for 1993 resulted from an
increase in prepress volume offset by the expected lower demand for point-of-
purchase products for the brewing industry and major displays for the
electronic game market. Stamp production for the U.S. Postal Service was
fairly even compared to 1992. The Corporation completed the final year of its
initial stamp project and, together with its joint venture partners, was
successful in achieving substantial contract awards under the new five-year
multiprint stamp solicitation, with production scheduled to begin in the first
quarter of 1994.
Sales for 1992 increased 13% from 1991. All of the Corporation's major
market sectors registered sales increases for 1992: commercial -- 13%; books -
- - 12%; magazines -- 13%; and other -- 28%. Catalog sales, which benefited
from the introduction of advanced distribution and mailing services, accounted
for the majority of the increase in the commercial market classification.
Direct marketing sales, also within the commercial sector were about 5% higher
than 1991 and the Corporation continued its position as a prominent supplier
to the industry. In our other commercial market business, sales of single-use
products for the food service and non-sterile medical markets, along with
sales of extruded films for specialty markets, continued strong. Book product
sales for 1992 increased for educational, trade, general books, and data and
software manuals. During 1992, emphasis was placed on the development of the
infrastructure necessary to serve the computer hardware and software
documentation market. The Corporation's special-interest magazine units
registered a 13% sales gain with new titles and market share penetration.
Advertising for the magazine market increased modestly in 1992, after several
consecutive years of decreased spending.
The 28% increase in the "Other" classification for 1992 resulted from an
increase in prepress work for commercial customers, increased demand for
point-of-purchase products for the brewing industry and a strong second year
of postage stamp production for the U.S. Postal Service.
COST OF GOODS SOLD
In 1993, cost of goods sold as a percent of sales was 76.8% compared with
77.0% in 1992 and 77.8% in 1991. The reduction in cost of sales for 1993 is
primarily the result of increased utilization at units serving the direct
marketing and magazine markets. Also contributing to the cost of sales
percentage reduction were productivity improvements resulting from the
Corporation's Continuous Improvement processes and the absence of $1.8 million
of cost related to plant relocations incurred in 1992. The cost of sales
percentage reduction in 1992 from 1991 resulted from many of the same factors
which impacted 1993. In 1992, utilization increases particularly benefited
the cost of goods sold percentages for the operations serving the consumer and
business-to-business catalog markets. The Corporation utilizes the last-in,
first-out (LIFO) method of valuing the majority of the inventory of its print
operations. Lower year-end paper prices resulted in LIFO valuation
adjustments which reduced cost of goods sold by $272,000, $225,000 and
$663,000 in 1993, 1992 and 1991, respectively. Due to the significant ($63
million) capital expenditures in 1993, depreciation expense increased $2.9
million compared with 1992. In 1992, depreciation increased $2.3 million.
Health care costs, which were allocated both to cost of goods sold and
administrative expenses, increased in 1993 and 1992 by approximately $850,000
(7%) and $1.1 million (11%), respectively.
<PAGE>
<PAGE>
As evidenced by the large capital expenditures in 1993 and expenditures
planned for 1994, the Corporation is committed to continued investment in
equipment that will improve product quality, reduce turnaround time and reduce
unit manufacturing costs. Both capital and operating costs associated with
environmental issues (air quality and solid waste) have continued to increase.
The Corporation recycles substantially all of its waste materials generated by
the manufacturing process and emphasizes environmental safety in the
workplace.
EXPENSES
Selling and administrative expenses increased $4.7 million (5.6%) in 1993
and $9.2 million (12.4%) in 1992. Selling and administrative expenses as a
percentage of sales were 12.7%, 13.0% and 13.1% in 1993, 1992 and 1991,
respectively. The 1993 expense increase generally reflects increases required
to support the additional volume of sales produced in 1993. The larger cost
increase in 1992 was a result of significant sales office expansion, inclusion
of Bushman Press for a full year in 1992 and higher provisions for bad debts
in 1992. Costs associated with incentive programs also increased
administrative expenses in both 1993 and 1992 due to the strong performance of
the Corporation.
During 1993, the Corporation adopted Statement of Financial Accounting
Standard No. 106, "Employers' Accounting for Postretirement Benefits Other
than Pensions," as described in footnote [3] of the financial statements.
Adoption of this statement increased costs, which are allocated both to cost
of goods sold and selling and administrative expenses, by $901,000.
EARNINGS FROM OPERATIONS AND INTEREST EXPENSE
Earnings from operations as a percent of sales were 10.5%, 9.9%, and 9.1%
in 1993, 1992 and 1991, respectively. Interest expense has been $5.3 million,
$5.8 million and $5.4 million in 1993, 1992 and 1991, respectively. In
general, over the three-year period the Corporation's average debt levels have
declined, as have interest rates. The reduced interest on debt was partially
offset in 1993 by interest on tax assessments and in 1992 by a reduction in
the amount of interest expense allocated to the discontinued operation.
Pretax earnings from continuing operations as a percent of sales were
9.9%, 9.2% and 8.2% in 1993, 1992 and 1991, respectively. Effective income
tax rates were 40.3%, 39.0% and 38.9% in 1993, 1992 and 1991, respectively.
The increase in the effective tax rate for 1993 was a result of the federal
tax rate increase, which was enacted during 1993. The tax rate increase
reduced earnings per share approximately 4.5 cents.
LIQUIDITY AND CAPITAL RESOURCES
At Year-End
Selected Dollars in thousands
Financial Data (except current ratio)
1993 1992 1991
Receivables $125,004 $106,581 $ 95,939
Inventories 52,447 42,623 38,060
Notes payable 20,800 - 9,985
Accounts payable and
accrued liabilities 64,074 61,333 55,956
Working capital 106,171 102,214 98,323
Long-term debt 45,603 52,491 64,061
Shareholders' investment 292,428 258,237 226,967
Long-term debt to total long-term debt
and shareholders' investment 13.5% 16.9% 22.0%
Current ratio 2.16 2.40 2.27
The Corporation was generally able to fund its capital expenditures of
$63 million, $33 million and $32 million in 1993, 1992 and 1991, respectively,
from cash generated by operations and by issuing short-term commercial paper.
Management believes the Corporation's liquidity is very strong and the degree
of leverage puts the Corporation in the position to finance, at very
attractive borrowing rates, its capital expenditure program, as well as any
investment opportunities that may arise.
During the second quarter of 1992, the Corporation completed the sale of
the majority of its video operation for consideration that included $12
million in cash, 100,000 convertible preferred shares of the buyer, a $2.5
million note and the assumption of selected liabilities by the buyer. During
the second quarter of 1993, the preferred shares were converted into common
shares of the buyer, which were then sold in a secondary public offering
resulting in net proceeds to the Corporation of approximately $3.5 million.
The Corporation's capital investment program reflects its commitment to
maintain modern, efficient plants. Preliminary plans for 1994 are for capital
commitments of $75 million and approximately $100 million of cash
requirements, including unpaid commitments from 1993.
The Corporation generally raises short-term funds by selling commercial
paper. Such borrowings are supported by bank lines of credit totaling $40
million. Additionally, the Corporation has other committed bank lines of
credit totaling $5.2 million. Average outstanding commercial paper borrowings
during 1993 and 1992 were $7.4 million and $2.9 million, respectively.
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEETS
January 1, 1994 (1993) and January 2, 1993 (1992)
<TABLE>
<CAPTION>
Dollars in Thousands
ASSETS 1993 1992
<S> <C> <C>
Current Assets:
Cash and short-term investments, at cost which
approximates market $ 8,230 $ 13,305
Receivables, less reserves of 2,943,000 and
$2,933,000, respectively 125,004 106,581
Inventories 52,447 42,623
Prepaid expenses 4,511 4,244
Deferred income taxes 7,714 8,532
----------- ---------
197,906 175,285
----------- ---------
Plant and Equipment:
Land 6,597 6,551
Buildings 73,110 68,223
Machinery and equipment 350,650 296,296
----------- ---------
430,357 371,070
Less accumulated depreciation 197,469 165,824
----------- ---------
Plant and equipment, net 232,888 205,246
----------- ---------
Other Assets 9,303 11,786
Cost in Excess of Net Assets
Of Subsidiaries Acquired 17,336 17,865
----------- ---------
$ 457,433 $ 410,182
=========== =========
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current Liabilities:
Notes payable $ 20,800 $ -
Accounts payable 27,364 27,142
Accrued salaries and wages 16,903 15,091
Other accrued liabilities 19,807 19,100
Current maturities of long-term debt 6,861 11,738
----------- ---------
91,735 73,071
----------- ---------
Non-current Liabilities:
Long-term debt 45,603 52,491
Deferred income taxes 18,257 18,359
Other non-current liabilities 9,410 8,024
----------- ---------
73,270 78,874
----------- ---------
Shareholders' Investment:
Common stock -
$.10 par value, authorized 75,000,000 shares in 1993
and 30,000,000 shares in 1992; 19,996,532 and 13,240,027
shares issued outstanding in 1993 and 1992, respectively 2,000 1,324
Amount in excess of par value of stock 54,436 51,948
Retained earnings 235,992 204,965
----------- ---------
292,428 258,237
----------- ---------
$ 457,433 $410,182
=========== =========
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these balance sheets.<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF EARNINGS
For the Periods Ended January 1, 1994 (1993), January 2, 1993 (1992),
and December 28, 1991 (1991)
<TABLE>
<CAPTION>
Dollars in thousands
(except earnings per share)
1993 1992 1991
(52 Weeks) (53 Weeks) (52 Weeks)
<S> <C> <C> <C>
Net sales $691,244 $637,416 $565,473
Cost of goods sold 530,746 491,086 439,967
-------- -------- --------
Gross Earnings 160,498 146,330 125,506
Selling and administrative expenses 87,812 83,133 73,955
-------- -------- --------
Earnings from Operations 72,686 63,197 51,551
Interest expense (5,346) (5,786) (5,398)
Other income, net 1,352 1,051 66
-------- -------- --------
Earnings from Continuing
Operations Before Income Taxes 68,692 58,462 46,219
Provision for income taxes 27,700 22,800 18,000
-------- -------- --------
Net Earnings from
Continuing Operations 40,992 35,662 28,219
Discontinued Operations -
Provision for loss on sale - - (7,600)
-------- -------- --------
Net Earnings $ 40,992 $ 35,662 $ 20,619
======== ======== ========
Net earnings per share of common stock:
Continuing operations $ 2.03 $ 1.79 $ 1.44
Discontinued operations -
Provision for loss on sale - - (.39)
-------- -------- --------
TOTAL $ 2.03 $ 1.79 $ 1.05
======== ======== ========
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Periods Ended January 1, 1994 (1993), January 2, 1993 (1992), and
December 28, 1991 (1991)
<TABLE>
<CAPTION>
Dollars in thousands
1993 1992 1991
(52 Weeks) (53 Weeks) (52 Weeks)
<S> <C> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
Net earnings $ 40,992 $ 35,662 $ 20,619
Adjustments to reconcile net earnings to net
cash provided by operating activities
Depreciation and amortization 33,701 30,839 28,558
Deferred income taxes 479 (1,083) (535)
Provision for loss on sale of video operations - - 7,600
Change in assets and liabilities, net of
effects of acquisitions and divestitures:
(Increase) decrease in receivables (18,423) (10,642) 4,817
Increase in inventories (9,824) (4,563) (114)
(Increase) decrease in net assets of businesses
held for sale - (283) 1,941
(Increase) decrease in other current assets (267) 1,949 (2,083)
Increase (decrease) in accounts payable
and accrued liabilities 4,710 3,491 (2,153)
Increase in other non-current assets (1,017) (802) (176)
Other, net 1,386 (332) 832
-------- -------- --------
Cash provided by operating activities 51,737 54,236 59,306
-------- --------- --------
CASH FLOW FROM INVESTING ACTIVITIES
Capital expenditures (62,960) (33,006) (31,619)
Proceeds from sale of video business assets 3,500 12,000 -
Proceeds from sale of plant and equipment 414 859 1,262
Cash used for acquisition - - (2,499)
-------- -------- --------
Cash used for investing activities (59,046) (20,147) (32,856)
-------- -------- --------
CASH FLOW FROM FINANCING ACTIVITIES
Notes payable proceeds (payments), net 20,800 (9,985) (9,339)
Payments on long-term debt (11,765) (11,175) (10,358)
Proceeds and tax benefit from exercise of stock options 2,506 3,634 4,641
Dividends paid (9,303) (8,026) (7,366)
Purchase of treasury stock - - (118)
Fractional shares and rights redeemed (4) - (654)
-------- -------- --------
Cash provided by (used for) financing activities 2,234 (25,552) (23,194)
-------- -------- --------
Net (decrease) increase in cash (5,075) 8,537 3,256
Cash and short-term investments at beginning of year 13,305 4,768 1,512
-------- -------- --------
Cash and short-term investments at end of year $ 8,230 $ 13,305 $ 4,768
======== ======== ========
Cash payments for:
Interest, net of amount capitalized $ 5,471 $ 5,925 $ 5,579
Income taxes 23,789 24,224 14,552
</TABLE>
The accompanying notes to consolidated financial statements are an integral
part of these statements.<PAGE>
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
For the Periods Ended January 1, 1994 (1993), January 2, 1993 (1992), and
December 28, 1991 (1991)
<TABLE>
<CAPTION>
Dollars in thousands
Common Stock Treasury Stock
------------ --------------
Amount in Number
Shares Par Excess of Retained of
Outstanding Value Par Value Earnings Shares Cost
----------- ----- ---------- -------- ------ ----
<S> <C> <C> <C> <C> <C> <C>
Balance, December 29, 1990 12,747,570 $1,275 $40,728 $164,730 9,052 $ 148
Stock options exercised 229,088 23 4,618
Shares issued for acquisition 124,206 12 3,248
Treasury shares purchased 4,243 118
Retirement of treasury shares (13,295) (1) (265) (13,295) (266)
Net earnings for the period 20,619
Rights redemption ($.03 per share) (654)
Cash dividends($.38 per share) (7,366)
---------- ------ ------- -------- ----- ------
Balance, December 28, 1991 13,087,569 1,309 48,329 177,329 - -
Stock options exercised 152,458 15 3,619
Net earnings for the period 35,662
Cash dividends($.41 per share) (8,026)
---------- ------ ------- -------- ----- ------
Balance, January 2, 1993 13,240,027 1,324 51,948 204,965 - -
Stock Options exercised 136,635 14 2,492
Three-for-two stock split
effected in the form of
a 50% stock dividend 6,619,870 662 (4) (662)
Net earnings for the period 40,992
Cash dividends ($.47 per share) (9,303)
---------- ------ ------- -------- ----- ------
Balance, January 1, 1994 19,996,532 $2,000 $54,436 $235,992 - $ -
========== ====== ======= ======== ===== ======
</TABLE>
There are 300,000 shares of $10 par value preferred stock authorized, none of
which are issued.
The accompanying notes to consolidated financial statements are an integral
part of these statements.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Periods Ended January 1, 1994 (1993), January 2, 1993 (1992), and
December 28, 1991 (1991)
(1) STATEMENT OF ACCOUNTING POLICIES
Significant accounting policies followed by the Banta Corporation (the
"Corporation") in maintaining financial records and preparing financial
statements are:
Business - The Corporation operates in a single business segment - printing
services. Customers, which consist primarily of publishers located throughout
the United States, are granted credit on an unsecured basis. No one customer
accounted for more than 10% of consolidated sales during 1993, 1992, or 1991.
Year-end - The Corporation's operating year ends on the Saturday closest to
December 31. The years 1993 and 1991 ended January 1, 1994 and December 28,
1991, respectively, and comprised 52 weeks each. Operating year 1992 ended on
January 2, 1993, and comprised 53 weeks.
Principles of Consolidation - The consolidated financial statements include
the accounts of the Corporation and its subsidiaries. All significant
intercompany accounts and transactions have been eliminated.
Earnings Per Share of Common Stock - Net earnings per share of common stock is
computed by dividing net earnings by the weighted average number of common
shares and common equivalent shares related to the assumed exercise of stock
options. Average common and common equivalent shares for computation of
earnings per share were 20,146,378, 19,939,436 and 19,617,963 in 1993, 1992
and 1991, respectively.
Cash and Short-term Investments - Short-term investments, with initial
maturities of generally less than 90 days, are considered cash equivalents for
purposes of the accompanying consolidated statements of cash flows.
Recognition of Sales - In accordance with trade practices of the printing
industry, sales are recorded by the Corporation primarily upon completion of
manufacturing. Substantially all such sales are produced to customer
specifications, therefore, the Corporation has no material amounts of finished
goods inventory.
Capitalized Interest - The Corporation capitalizes interest on major building
and equipment installations and depreciates the amount over the lives of the
related assets. The total interest incurred was $6,547,000 in 1993,
$6,473,000 in 1992 and $5,680,000 in 1991 of which $1,201,000, $687,000 and
$282,000 was capitalized in 1993, 1992 and 1991, respectively.
Inventories - The majority of the Corporation's inventories used in its
printing operations (approximately 46% and 52% of total inventories in 1993
and 1992, respectively) are accounted for at cost, determined by a last-in,
first-out (LIFO) basis, which is not in excess of market. The remaining
inventories are stated at the lower of cost or market using the first-in,
first-out (FIFO) method.
<PAGE>
<PAGE>
Inventories include material, labor and manufacturing overhead. Inventory
amounts at year end are as follows:
Dollars in thousands
1993 1992
Raw materials and supplies $25,502 $22,751
Work-in-process and finished goods 30,941 24,140
------- -------
FIFO value (current cost) of all inventories 56,443 46,891
Excess of current cost over carrying value of
LIFO inventories (3,996) (4,268)
------- -------
Net inventories $52,447 $42,623
======= =======
Plant and Equipment - Plant and equipment (including major renewals and
betterments) are carried at cost and depreciated by ratable charges over the
estimated useful life of the assets. Substantially all depreciation is
computed using the straight-line method for financial reporting purposes.
Accelerated depreciation methods are used for tax purposes. Leasehold
improvements are generally amortized over the term of the leases on a
straight-line basis.
Income Taxes - The Corporation accounts for income taxes in accordance with
the Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes." Under the provisions of the Statement, deferred tax
liabilities and assets are determined based on the difference between the
financial statement and tax basis of assets and liabilities using enacted tax
rates in effect for the year in which the differences are expected to reverse.
Cost in Excess of Net Assets of Subsidiaries Acquired - Cost in of excess of
net assets of subsidiaries acquired is amortized and charged against
operations on a straight-line method over periods not exceeding 40 years.
Accumulated amortization of cost in excess of net assets of subsidiaries
acquired was $3,212,000 and $2,683,000 as of January 1, 1994 and January 2,
1993, respectively.<PAGE>
<PAGE>
(2) LONG-TERM DEBT
Long-term debt, including amounts payable within one year, consists of the
following:
<TABLE>
<CAPTION>
Dollars in thousands
1993 1992
<S> <C> <C>
9.53% Promissory Note payable in annual installments of
$1,818,000 from 1995 through 2005, interest payable semi-annually $20,000 $20,000
10.11% Promissory Note payable in annual installments of
$2,000,000 through 1995, $2,500,000 from
1996 through 1998 and $1,500,000 in 1999,
interest payable quarterly 13,000 15,000
8.58% Promissory Notes payable in annual installments of
$2,137,000 through 1995 and $2,176,000 in 1996,
interest payable quarterly 6,450 8,588
Notes Payable and Capital Lease Obligations,
generally fixed rates of interest, 6.0% to 11.3% due in
installments through 1995 3,074 10,411
Industrial Revenue Bonds:
Floating rates of interest, approximating 80% of the prime rate,
due in installments through 2015 7,200 7,350
Fixed rate of interest at 5.8% to 7.5% due in
installments through 2002 2,740 2,880
------- -------
52,464 64,229
Less current maturities 6,861 11,738
------- -------
Long-term debt $45,603 $52,491
======= =======
</TABLE>
Maturities of long-term debt, during the next five years are: 1994,
$6,861,000; 1995, $6,887,000; 1996, $6,783,000; 1997, $4,608,000; and 1998,
$4,608,000. Industrial Revenue Bonds aggregating $3,240,000 are secured by
certain real estate and equipment.
The Promissory Note agreements contain various operating and financial
covenants. The more restrictive of these covenants require that working
capital be maintained at a minimum of $40,000,000, current assets be 175% of
current liabilities and consolidated tangible net worth be not less than
$100,000,000. Additional funded debt of up to 50% of the sum of consolidated
net worth and consolidated funded debt may be incurred without prior consent
of the noteholders.
The Corporation may incur short-term debt of up to $25,000,000 at any time and
is required to be free of all such obligations in excess of $15,000,000 for 60
consecutive days each year. The agreements also contain limitations on leases
and on the granting of security interests in the Corporation's assets.
Each of the Promissory Note agreements contain covenants which restrict the
payment of dividends to 60% of net earnings, as defined. As of January 1,
1994, $56,032,000 of retained earnings was available for the payment of
dividends under the most restrictive of such covenants.
Based on the borrowing rates currently available to the Corporation for bank
loans with similar terms and average maturities, the fair value of long-term
debt, including current maturities, as of January 1, 1994 was $56,929,000.
<PAGE>
(3) EMPLOYEE BENEFIT PLANS
Pension Plans - The Corporation and its unions have several pension plans
covering substantially all employees. The plans are non-contributory and
benefits are based on an employee's years of service and earnings. The
Corporation makes contributions to the qualified plans each year, at least
equal to the minimum required contributions as defined by the Employee
Retirement Income Security Act (ERISA) of 1974. A Non-qualified Supplemental
Retirement Plan is not funded.
Total pension expense of continuing operations, including multiemployer and
union sponsored plans for 1993, 1992 and 1991 was $4,370,000, $3,868,000 and
$3,657,000, respectively. Net periodic pension cost for the Corporation-
sponsored qualified and supplemental plans was as follows:
<TABLE>
<CAPTION>
Dollars in thousands
Qualified Plans Supplemental Plan
1993 1992 1991 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Service cost-benefits earned during the year $2,598 $2,284 $2,280 $119 $106 $ 97
Interest cost on projected benefit obligation 3,669 3,320 2,988 184 169 141
Actual return on plan assets, less unrecognized
gains of $2,671,000, $409,000,and $5,567,000
in 1993, 1992 and 1991, respectively (3,415) (3,100) (2,870) - - -
Net amortization (427) (427) (427) 54 53 40
------ ------ ------ ---- ---- ----
Net pension expense $2,425 $2,077 $1,971 $357 $328 $278
====== ====== ====== ==== ==== ====
</TABLE>
Significant assumptions used for all periods in determining net pension
expense for the Corporation's plans are as follows:
Qualified Supplemental
Plans Plan
Discount rate 8.0% 8.0%
Expected rate of increase in compensation 5.0 5.0
Expected long-term rate of return on plan assets 8.5 -
All of the Corporation's plans, except the Supplemental Plan, have assets in
excess of the accumulated benefit obligation. Plan assets include commingled
funds, marketable equity securities and corporate and government debt
securities. The following table presents a reconciliation of the funded
status of the plans using an assumed discount rate of 7.5% and 8.0% for 1993
and 1992, respectively:
<TABLE>
<CAPTION>
Dollars in thousands
Qualified Plans Supplemental Plan
1993 1992 1993 1992
<S> <C> <C> <C> <C>
Projected benefit obligation:
Vested benefits $(40,027) $(34,790) $(2,066) $ (1,934)
Non-vested benefits (4,596) (4,023) (193) (236)
-------- -------- ------- --------
Accumulated benefit obligation (44,623) (38,813) (2,259) (2,170)
Effect of projected future
compensation levels (10,173) (7,258) (347) (157)
-------- -------- ------- --------
(54,796) (46,071) (2,606) (2,327)
Plan assets at fair value 56,943 50,944 - -
-------- -------- ------- --------
Plan assets in excess of (less than)
projected benefit obligation 2,147 4,873 (2,606) (2,327)
Unrecognized net (gain) loss (1,744) (3,759) 632 545
Adjustment required to recognize minimum liability - - (473) (604)
Unrecognized net (asset) obligation being
amortized over 16 years (3,526) (3,953) 188 216
-------- -------- ------- --------
Accrued pension cost $ (3,123) $ (2,839) $(2,259) $ (2,170)
======== ======== ======= ========
</TABLE>
Approximately 50% of the Corporation's non-salaried employees are covered by
multiemployer union sponsored, collectively bargained defined benefit pension
plans. Pension expense includes $1,588,000, $1,463,000 and $1,408,000 in
1993, 1992 and 1991, respectively, attributable to the multiemployer plans.
These costs are determined in accordance with the provisions of negotiated
labor contacts.
Postretirement Health Care Costs - The Corporation and its subsidiaries
provide non-contractual limited health care benefits for certain retired
employees. Through 1992 the cost of retiree health care benefits was
recognized as expense when claims were paid. Effective in 1993, the
Corporation established a new unfunded postretirement health care program
which covers most of its non-union employees. The new program provides for
defined initial contributions by the Corporation toward the cost of
postretirement health care coverage. The balance of the cost is borne by the
retirees. The program provides that increases in the Corporation's
contribution toward coverage will not exceed 4% per year.
Effective January 3, 1993, the Corporation adopted Statement of Financial
Accounting Standard No. 106, "Employers' Accounting for Postretirement
Benefits Other than Pensions." In connection with the adoption of this
statement, the Corporation elected to amortize the accumulated postretirement
benefit obligation (transition obligation), aggregating $5,088,000 as of
January 3, 1993, over a 20-year period.
The following table sets forth the program's status at January 1, 1994:
Dollars in thousands
Accumulated postretirement benefit obligation:
Retirees $2,115
Other active plan participants 3,452
Fully eligible active plan participants 586
------
6,153
Unrecognized transition obligation (4,837)
Unrecognized net loss (415)
------
Accrued postretirement benefit cost $ 901
======
The net periodic postretirement benefit cost for 1993 included the following
components:
Dollars in thousands
Service cost - benefits earned during the year $ 385
Interest cost on accumulated postretirement benefit
obligation 400
Amortization of transition obligation 254
-------
Net periodic postretirement benefit cost $ 1,039
=======
The amounts charged to expense under the previous method of accounting for
postretirement health care were $243,000 and $174,000 in 1992 and 1991,
respectively.
The discount rate used in determining the accumulated postretirement benefit
obligation was 7.5%. Due to the terms of the Corporation's postretirement
health care program, assumed health care cost rate trends do not affect the
Corporation's costs.
Other Benefits - The Corporation has established an Incentive Savings Plan
(401K) for substantially all of its non-bargained employees. Employee
contributions are partially matched by the Corporation in accordance with
criteria set forth in the plan. Matching contributions charged to earnings
for 1993, 1992 and 1991 were $1,311,000, $1,116,000 and $995,000,
respectively.
<PAGE>
<PAGE>
(4) CONTINGENCIES
The Corporation is involved in various claims, including those related to
environmental matters, and lawsuits arising in the normal course of business.
In the opinion of management, the ultimate liability, if any, for these claims
and lawsuits beyond any reserves already provided, will not have a material
adverse effect on the consolidated statements of earnings of the Corporation.
<PAGE>
<PAGE>
(5) CAPITAL STOCK
In April 1993, the Corporation distributed a three-for-two stock split
effected in the form of a 50% stock dividend, following the action of the
shareholders increasing the authorized shares of common stock from 30,000,000
shares to 75,000,000 shares. The par value of the additional shares issued
was capitalized by a transfer of $662,000 from retained earnings to common
stock. All per share of common stock amounts and common stock data have been
restated in the consolidated financial statements and throughout the Annual
Report to reflect the stock split.
In connection with a 1988 acquisition, options to purchase 225,000 shares of
common stock were granted to a former owner and employees of the acquired
companies. These options became fully exercisable in 1990 at $11.33 per
share. Options were exercised for 9,975, 4,725 and 175,500 shares in 1993,
1992 and 1991, respectively. Options were canceled for 3,000 shares in 1991.
At January 1, 1994, there were no remaining options outstanding.
The Corporation has been authorized by the Board of Directors to purchase up
to 2,250,000 shares of outstanding common stock in the open market. As of
January 1, 1994, 11,250 shares of the Corporation's stock had been repurchased
and retired under this program.
Pursuant to the Shareholder Rights Plan, one common stock purchase right is
included with each outstanding share of common stock. When exercisable, each
right will entitle its holder to buy one-half of one share of the
Corporation's common stock at a price of $60 per share (equivalent to $30 per
one-half share), subject to adjustment. The rights will become exercisable if
a person or group acquires 20% or more of the Corporation's common stock or
announces a tender offer for 20% or more of the common stock. Upon the
occurrence of certain events, including a person, or group, acquiring 20% or
more of the Corporation's common stock, each right entitles the holder to
purchase, at the right's then-current exercise price, common stock of the
Corporation having a market value of twice such exercise price. The rights
may be redeemed by the Corporation at a price of one cent per right at any
time prior to the rights becoming exercisable or prior to their expiration in
November 2001.
<PAGE>
<PAGE>
(6) INCOME TAXES
The provision for federal and state income taxes consists of the following:
Dollars in thousands
1993 1992 1991
Current:
Federal $21,313 $18,405 $14,622
State 4,720 4,590 3,363
------- ------- -------
26,033 22,995 17,985
Tax impact of option exercises 1,188 888 550
Deferred 479 (1,083) (535)
------- ------- -------
Provision for income taxes $27,700 $22,800 $18,000
======= ======= =======
Below is a reconciliation of the statutory federal income tax rate and the
effective income tax rate:
1993 1992 1991
Statutory federal tax rate 35.0% 34.0% 34.0%
State and local income taxes,
less applicable federal tax benefit 4.5 5.2 4.7
Adjustment to deferred taxes resulting
from federal tax rate increase .3 - -
Other, net .5 (.2) .2
---- ---- ----
Effective income tax rate 40.3% 39.0% 38.9%
==== ==== ====
The components of the net deferred tax liability as of January 1, 1994 and
January 2, 1993 were as follows:
<TABLE>
<CAPTION>
Dollars in thousands
1993 1992
<S> <C> <C>
Deferred tax liabilities:
Accelerated depreciation and capitalized interest $ 23,140 $ 23,187
Other 1,055 1,721
---------- ---------
Total deferred tax liabilities 24,195 24,908
---------- ---------
Deferred tax assets:
Accruals, not currently deductible for tax purposes (7,592) (8,270)
Pension accruals (2,048) (1,839)
Reserve for uncollectible accounts (1,237) (1,228)
Deferred compensation (1,831) (1,462)
Other (944) (2,282)
---------- ---------
Total deferred tax assets (13,652) (15,081)
---------- ---------
Net deferred tax liability $ 10,543 $ 9,827
========== =========
</TABLE>
The net deferred tax liability is classified in the January 1, 1994, and
January 2, 1993 balance sheets as follows:
Dollars in thousands
1993 1992
Non-current deferred income taxes $ 18,257 $ 18,359
Current deferred income taxes (7,714) (8,532)
--------- ---------
Net deferred tax liability $ 10,543 $ 9,827
========= =========
<PAGE>
<PAGE>
(7) STOCK AND INCENTIVE PROGRAMS FOR MANAGEMENT EMPLOYEES
The Corporation has a Management Incentive Award Plan which provides for the
payment of cash awards or bonuses to officers and other key employees with
respect to any year in which the Corporation and its operating units achieve
specified objectives. Awards under the plan were $2,710,000 in 1993,
$2,280,000 in 1992 and $1,160,000 in 1991.
In January 1991, the Corporation's Compensation Committee approved a Long-term
Incentive Plan which provides for payment of cash awards to key officers and
executives of the Corporation upon achievement of specified objectives over
three-year performance periods. Awards under the plan were $530,000 for the
1991 to 1993 performance period.
At January 1, 1994, the Corporation had options outstanding or available for
grant under several stock option plans - the 1991 Stock Option Plan, the 1987
Incentive Stock Option Plan (1987 ISO Plan) and the 1987 Nonstatutory Stock
Option Plan (1987 NSO Plan). Options may no longer be granted under the 1987
plans. Under the plans, options to purchase common stock are granted to
officers and key employees at prices not less than the fair market value of
the common stock on the date of grant. None of the options may be exercised
more than five years after the date of grant.
The 1987 ISO Plan provides for a $100,000 annual exercise limitation and the
1987 NSO Plan permits participants to use option shares for the purpose of
offsetting income tax liability incurred upon the exercise of nonstatutory
stock options. No options were granted under the 1987 ISO Plan. The terms of
the 1991 Plan allow for grants of either Incentive Stock Options or
Nonstatutory Stock Options and are similar to the separate 1987 Plans. The
1991 Plan includes provisions which authorize options to be granted to non-
employee Directors and which authorize option grants to contain "re-load"
provisions entitling an employee to a further option in the event the employee
exercises an option by surrendering previously acquired shares of the
Corporation's common stock. At January 1, 1994, no options containing re-load
provisions have been granted.
<PAGE>
<PAGE>
The following table summarizes activity under the stock plans:
OUTSTANDING
OPTIONS PRICE RANGE
December 29, 1990 989,400 11 3/8 - 18 1/2
Granted 287,400 16 5/8 - 20 1/8
Exercised (207,264) 11 3/8 - 15 7/8
Canceled or expired (44,175) 14 1/2 - 15 7/8
---------
December 28, 1991 1,025,361 11 3/8 - 20 1/8
Granted 306,300 22 1/2 - 24 7/8
Exercised (296,506) 11 3/8 - 20 1/8
Canceled or expired (26,700) 14 1/2 - 17
---------
January 2, 1993 1,008,455 14 1/2 - 24 7/8
Granted 223,250 27 3/8 - 35 1/8
Exercised (179,347) 14 1/2 - 24 7/8
Canceled or expired (3,038) 14 1/2 - 17
---------
January 1, 1994 1,049,320 14 1/2 - 35 1/8
=========
Of the options outstanding at January 1, 1994, 487,993 were exercisable at
prices ranging from $14 1/2 to $27 3/8. The balance of the options become
exercisable at various times through 1996 at prices ranging from $17 to
$35 1/8. At January 1, 1994, 447,438 shares of the Corporation's common stock
were reserved for future option grants.
During 1993, 1992 and 1991; 31,241, 53,157 and 39,282 shares, respectively,
were submitted to the Corporation in partial payment for stock option
exercises. These shares were canceled by the Corporation.
<PAGE>
<PAGE>
(8) OPERATING LEASES
The Corporation leases a variety of assets used in its operations including
manufacturing facilities, warehouses, office space, office equipment,
automobiles and trucks. Annual rentals amounted to $3,199,000, $3,093,000 and
$2,943,000 in 1993, 1992 and 1991, respectively. Minimum rental commitments
for the years 1994 through 1998 aggregate $2,254,000, $1,771,000, $1,554,000,
$1,388,000 and $1,371,000, respectively, and $6,402,000 thereafter.
<PAGE>
<PAGE>
(9) NOTES PAYABLE
At January 1, 1994, the Corporation had lines of credit available totaling
$5,200,000, none of which were in use. Compensating balances approximating 2%
are required to support these lines. Compensating balances are not legally
restricted as to withdrawal. In addition, the Corporation has established
lines of credit aggregating $40,000,000 which support commercial paper
borrowings.
The Corporation had commercial paper aggregating $20,800,000 outstanding at
January 1, 1994. The weighted-average interest rate on borrowings outstanding
at January 1, 1994 was 3.43%. The average outstanding borrowings during 1993
and 1992 were $7,364,000 and $2,873,000, respectively. The weighted-average
interest rates on such borrowings during 1993 and 1992 were 3.32% and 4.33%,
respectively.
<PAGE>
<PAGE>
(10) DISCONTINUED OPERATIONS
During 1990, the Corporation announced its intention to sell its Banta
Ventures, Inc. (BVI) subsidiary and its net assets were written down to
estimated realizable value. BVI was primarily engaged in the video post-
production business. The accompanying financial statements reflect BVI as a
Discontinued Operation for all periods presented. During the third quarter of
1991, the Corporation revised its initial estimate of the realizable value of
BVI and recorded an additional $7,600,000 loss provision, net of applicable
income tax credits of $3,000,000.
During the second quarter of 1992, the Corporation completed the sale of the
majority of the video operations for consideration including $12,000,000 cash,
100,000 convertible preferred shares of the buyer, a $2,500,000 note and the
assumption of selected liabilities by the buyer. During the second quarter of
1993, the preferred shares were converted into common shares of the buyer
which were then sold in a secondary public offering resulting in net proceeds
to the Corporation of approximately $3,500,000. The remaining assets of BVI
are included in other assets and plant and equipment in the accompanying
balance sheets. The BVI operations remaining after the second quarter of 1992
are not material.
Net sales of BVI were and $44,912,000 for 1991. The net loss of BVI for 1991
was $1,927,000; which includes income tax credits of $1,000,000. Interest
expense totalling $2,920,000 was allocated to BVI in 1991. Losses since the
intent to dispose was announced have been applied to the reserves provided
therefore.
<PAGE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders of Banta Corporation:
We have audited the accompanying consolidated balance sheets of BANTA
CORPORATION (a Wisconsin corporation) and subsidiaries as of January 1, 1994
and January 2, 1993, and the related consolidated statements of earnings,
shareholders' investment and cash flows for each of the fiscal years in the
three-year period ended January 1, 1994. These financial statements are the
responsibility of the Corporation's management. Our responsibility is to
express an opinion on these financial statements 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 Banta Corporation and
subsidiaries as of January 1, 1994 and January 2, 1993, and the results of
their operations and their cash flows for each of the fiscal years in the
three-year priod ended January 1, 1994, in conformity with generally accepted
accounting principles.
Arthur Andersen & Co.
Milwaukee, Wisconsin,
January 31, 1994.
<PAGE>
<PAGE>
UNAUDITED QUARTERLY FINANCIAL INFORMATION
The following table presents financial information by quarter for the years
1993 and 1992.
<TABLE>
<CAPTION>
Dollars in thousands (except per share data)
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
March June September December
1993 1992 1993 1992 1993 1992 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $162,027 $152,530 $165,928 $151,785 $184,379 $166,158 $178,910 $166,943
Gross earnings 36,207 33,481 40,567 35,561 42,650 39,727 41,074 37,561
Net earnings 8,272 7,293 10,478 8,604 11,564 10,690 10,678 9,075
Net earnings per
share of common stock .41 .37 .52 .43 .57 .54 .53 .45
</TABLE>
All periods shown consist of 13 weeks except the quarter ended December 1992,
which includes 14 weeks.
Per share amounts have been adjusted for the three-for-two stock split
distributed in April 1993.
<PAGE>
<PAGE>
DIVIDEND RECORD AND MARKET PRICES
<TABLE>
<CAPTION>
Per Share of Common Stock
First Second Third Fourth Entire
Quarter Quarter Quarter Quarter Year
<S> <C> <C> <C> <C> <C>
1993 dividends paid $ .11 $ .12 $ .12 $ .12 $ .47
Price range:
High 31 3/8 32 1/4 34 37 37
Low 26 5/8 26 5/8 29 1/4 31 1/2 26 5/8
1992 dividends paid .10 .10 .10 .11 .41
Price range:
High 23 1/8 25 5/8 25 1/2 27 5/8 27 5/8
Low 18 5/8 21 1/8 22 7/8 24 18 5/8
</TABLE>
Banta Corporation is included in the NASDAQ National Market List and the
symbol is BNTA. The stock prices listed above are the high and low trades.
Per share amounts have been adjusted for the three-for-two stock split
distributed in April 1993.
EXHIBIT 21
SUBSIDIARIES OF BANTA CORPORATION
STATE OF INCORPORATION
LIST OF SUBSIDIARIES OR ORGANIZATION
Banta Direct Marketing, Inc. Minnesota
Banta Security Printing, Inc. Wisconsin
Banta Ventures, Inc. Wisconsin
Danbury Printing & Litho, Inc. Minnesota
Dimensional Neon, Inc. Wisconsin
The DI Group, Inc. Massachusetts
KCS Industries Inc. Wisconsin
KnowledgeSet Corporation California
Ling Products, Inc. Wisconsin
One Pass, Inc. Delaware
One Pass Network, Inc. California
Wrapper, Inc. Wisconsin
