UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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:
Title of each class Name of each exchange
None on which registered
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. [ ]
Aggregate market value of voting stock held by non-affiliates of the
registrant as of March 8, 1996: $824,361,651.
Number of shares of common stock outstanding March 8, 1996:
30,905,565.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Annual Report to Shareholders for year ended December 30, 1995
(incorporated into Parts I and II).
(2) Definitive Proxy Statement for annual meeting of shareholders to
be held on April 23, 1996 (incorporated into Part III).
<PAGE>
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 5,700 employees at
the end of fiscal 1995.
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 project management services); magazines;
and other (digital imaging services, production of point-of-purchase
displays and security products). At the end of fiscal 1995, the
Corporation's operations were conducted at 30 production facilities in the
United States located in Wisconsin, Minnesota, California, Colorado,
Connecticut, Illinois, Massachusetts, Missouri, North Carolina, Utah,
Virginia and Washington and at five European production facilities located
in Ireland, Scotland, and The Netherlands.
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.
1995 1994 1993
Commercial 47% 46% 44%
Books 34 32 34
Magazines 11 12 12
Other 8 10 10
----- ----- -----
TOTAL 100% 100% 100%
----- ----- -----
In October 1995, the Corporation acquired B.G. Turnkey Services
Limited ("B.G. Turnkey"). B.G. Turnkey, which has been included in the
book market classification since the acquisition date, reported sales for
1994 of approximately $160 million. The purchase price consisted of
236,765 shares of the Corporation's common stock and approximately $21
million of the Corporation's debentures which were called and prepaid in
December 1995. The Corporation also paid $3.2 million to former
shareholders of B.G. Turnkey in exchange for a covenant not to compete.
During 1995, the Corporation purchased Applied Technology Corporation,
which serves the single-use health care market, and New Frontiers
Information Corporation, which provides customers with online solutions
for distributing catalogs and direct marketing materials via the
Internet's World Wide Web. The combined purchase price for these two
acquisitions was approximately $9.0 million.
In August 1994, the Corporation completed its acquisition of United
Graphics Inc. ("UGI") for approximately $9.5 million in cash and a $1.5
million note. The Corporation also paid $4 million to former shareholders
of UGI in exchange for a covenant not to compete. UGI, which has been
included in the book market classification since the acquisition date,
reported sales for its fiscal year prior to acquisition of approximately
$28 million.
In March 1994, the Corporation purchased substantially all of the
assets of Danbury Printing & Litho, Inc. ("Danbury"). The purchase price
consisted of $16.3 million in cash plus the assumption of selected
liabilities. Danbury, which has been included in the commercial market
classification since the acquisition date, reported sales of approximately
$35 million in 1993.
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,
however, more frequent for magazine and catalog production. Substantially
all sales are made to customers through employees of the Corporation and
its subsidiaries based on customer specifications. The fifteen largest
customers accounted for approximately 25%, 23% and 25% of net sales
during 1995, 1994 and 1993, respectively. No customer accounted for more
than 10% of the Corporation's net sales in 1995, 1994 or 1993. In the
opinion of management, the loss of any single customer would not have a
material long-term adverse effect on the Corporation.
Backlog.
The Corporation is primarily a manufacturing services company and
provides its customers with printing, converting and other 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 backlog is not readily available.
Markets Served.
Below is a description of the primary markets the Corporation serves:
- Commercial
The Corporation produces 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 the Corporation's 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. 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. Over the
past two years, the Corporation has invested in imaging equipment which
personalizes direct mail pieces at press speeds. This capability is
becoming increasingly important to customers and the Corporation expects
to make additional investments in this important technology. The
Corporation's acquisition of Danbury in 1994 improved its ability to
provide direct marketing materials to customers in the Northeastern United
States. These three units experienced higher levels of utilization in 1995
than in 1994, which contributed to increased sales in this market.
Catalog and direct marketing materials are primarily distributed
through the United States Postal Service ("USPS") as third class or bulk
rate mail. The substantial escalation in postage rates, which increased
by in excess of 14% effective January 1, 1995, significantly impacted the
cost of doing business for the Corporation's customers, particularly when
combined with the increases in paper prices (see Raw Materials section
below).
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. The acquisition of Applied
Technology Corporation in 1995 expanded the health care product offerings
to include disposable thermometer sheaths, dental camera covers, cotton-
tipped applicators and tongue depressors.
- Books
The Corporation prints consumable elementary and high school workbooks
and 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 have decreased during the last several years. Publisher
consolidations have resulted in fewer companies offering educational
products which has reduced the number of projects printed. Additionally,
the 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 instructional materials.
To reduce its concentration in the elementary and high school markets,
the Corporation has increased its marketing efforts relating to 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 equipment 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. The acquisition of B.G. Turnkey in
1995 increased the Corporation's product offerings to include project
management, procurement, packaging, assembly and fulfillment services for
computer software and hardware manufacturers primarily in Europe. This
acquisition will also enable the Corporation to help meet customers'
international distribution needs. The Corporation's acquisition of UGI in
1994 enhanced its ability to service software publishers in the
Northwestern United States.
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, calendars,
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 primarily publishers of
specialty magazines, including religious, business and professional
journals and hobby, craft and sporting publications. The Corporation began
provides its customers with computerized mailing list and distribution
services.
The January 1, 1995 postage rate increase and increasing paper prices
(see Raw Materials section below) also increased operating costs for the
Corporation's magazine customers.
- Other
Prepress services are provided by five 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. These units
also provide electronic graphic design, digital photography and on-demand
print services. During the last several years these units have diversified
their customer base to include packaging customers and increased their
ability to maximize plant utilization by connecting their facilities
through an extensive network of high-speed T-1 telecommunication lines.
During the past several years, the Corporation has expanded its
service offerings to include CD-ROM production, CD Interactive programming
and developing interactive online products for the World Wide Web. These
services are primarily provided by three of the Corporation's subsidiaries
- KnowledgeSet Corporation, The DI Group, Inc. And New Frontiers
Information Corporation, which was acquired in 1995.
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, through a joint venture, postage stamps in
booklet, coil and sheet format for the USPS.
Competitive Conditions.
The Corporation is subject to competition from a large number of
companies, some of which have greater resources and capacity than the
Corporation. The graphic arts industry has undergone a period of
consolidation for a number of years. This trend has resulted in the
emergence of several additional competitors which are similar to the
Corporation in size and product offerings. The major competitive factors
in the Corporation's business are price, quality of finished products,
distribution capabilities, ongoing customer service and availability of
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 lower unit
prices. Despite the unit price reductions, the Corporation has been able
to improve its earnings in part because it is financially able to invest
in modern technologically advanced equipment, which helps reduce unit
costs, and because of productivity gains resulting from Continuous
Improvement programs.
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. Computer software and hardware products are also typically in
greater demand during the second half of the year, although the release of
a new product by a major customer can increase activity on an "event"
basis at any time during the year.
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.
In the fourth quarter of 1994 and throughout 1995, there was a
dramatic increase in paper prices and a tightening of availability, with
nearly all grades on allocation and delivery times extending up to six
weeks or more. During the fourth quarter of 1995 paper prices stabilized
somewhat, and it is anticipated that allocation restrictions may be
reduced or eliminated in 1996 due to the softening demand for paper. The
solid relationships the Corporation has built with paper suppliers over
the years has been beneficial during periods of limited paper availability
as the Corporation is able to meet its customers needs and was able to
accommodate its added production capacity in 1995. It is customary for
printers to adjust sales prices to reflect market fluctuations in paper
prices. The average cost of paper to the Corporation's customers was about
33% higher in 1995 than in 1994, 3% lower in 1994 than in 1993 and 2%
higher in 1993 than in 1992.
The Corporation uses a number of other raw materials including ink,
resins, solvents, adhesives, wire, packaging materials and subcontracted
components. Costs for many of these materials increased significantly
during the second half of 1994 and throughout 1995.
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, as well as working on the development of
proprietary inks, coatings, adhesives and machine modifications. The
Corporation has also increased its emphasis on the development of new
products and services using digital technology which includes video tape,
CD-ROM and data base management products. During the last several years,
eleven professional and technical employees have worked primarily on
research and development activities. Additionally, approximately fifty
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 1% to 3% 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 1996. 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 of
the U.S. Environmental Protection Agency 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.
Foreign Operations.
Footnote 11 to the Corporation's Consolidated Financial Statements in
the Corporation's Annual Report to Shareholders for the fiscal year ended
December 30, 1995 includes information on the Corporation's foreign
operations. The disclosures contained in such footnote is hereby
incorporated herein by reference.
EXECUTIVE OFFICERS OF THE CORPORATION
Name, Age, Position Business Experience During Last Five Years
Donald D. Belcher; 57; . . . Chairman of the Board of the Corporation
Chairman, President and since May 1995: President and Chief
Chief Executive Officer Executive Officer of the Corporation since
January 1995; President and Chief Operating
Officer of the Corporation from September
1994 to January 1995; Senior Group Vice
President of Avery Dennison Corporation
(diversified manufacturing company) from
1990 until joining the Corporation.
Gerald A. Henseler; 55; . . . Executive Vice President and Chief Financial
Executive Vice President Officer of the Corporation since 1992;
and Chief Financial Officer Senior Vice President, Chief Financial
Officer and Treasurer of the Corporation
prior thereto.
Ronald D. Kneezel; 39; . . . Secretary of the Corporation since December
Vice President, General 1991; Vice President and General Counsel of
Counsel and Secretary the Corporation since 1988.
Robert A. Kreider; 41; . . . Treasurer of the Corporation since November
Treasurer and Corporate 1992; Corporate Controller since July 1989;
Controller Assistant Treasurer from April 1991 to
October 1992.
Dennis J. Meyer; 40; . . . . Vice President of the Corporation since
Vice President Marketing January 1994; Vice President, Quebecor
Printing (manufacturer of printed materials)
from 1990 to December 1993.
John E. Tiffany; 57; . . . . Vice President of the Corporation.
Vice President Manufacturing
Allan J. Williamson; 64; . . President of Banta Book Group
President of Banta Book Group
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.
Item 2. Properties.
The Corporation and its subsidiaries own operating plants located in
Wisconsin, Connecticut, Minnesota, Missouri, North Carolina, Utah and
Virginia, as well as several warehouse facilities for storage of
materials. As of the end of fiscal 1995, these owned facilities include
approximately 2,971,000 square feet of space utilized as follows: office
space 313,000, manufacturing 1,634,000 and warehouse 1,024,000. The
Corporation leases its headquarters office located in Menasha, Wisconsin.
The Corporation leases production facilities in Wisconsin, California,
Colorado, Illinois, Massachusetts, Minnesota, Utah and Washington, as well
as warehouse space in numerous locations. European production facilities
located in Ireland, Scotland and The Netherlands are also leased. The
total of all leased facilities contain approximately 1,497,000 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
$2,660,000 as of December 30, 1995.
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 8, 1996 there were approximately 1,811 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 December 30, 1995,
approximately $94,398,000 of retained earnings was not restricted under
these agreements.
The information set forth under the caption "Dividend Record and
Market Prices" (but excluding the graphs related thereto) in the
Corporation's Annual Report to Shareholders for the fiscal year ended
December 30, 1995, is hereby incorporated herein by reference in response
to this Item.
Item 6. Selected Financial Data.
The information set forth under the caption "Five-Year Summary of
Selected Financial Data" (but excluding the graphs related thereto) in the
Corporation's Annual Report to Shareholders for the fiscal year ended
December 30, 1995, is hereby incorporated herein by reference in response
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 December 30, 1995,
is hereby incorporated herein by reference in response to this Item.
Item 8. Financial Statements and Supplementary Data.
The Consolidated Balance Sheets of the Corporation and subsidiaries as
of December 30, 1995 and December 31, 1994, and the related Consolidated
Statements of Earnings, Cash Flows and Shareholders' Investment for the
fiscal years ended December 30, 1995, December 31, 1994 and January 1,
1994, together with the related notes thereto and the Report of
Independent Public Accountants thereon set forth in the Corporation's
Annual Report to Shareholders for the fiscal year ended December 30, 1995,
are hereby incorporated herein by reference in response 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 December 30, 1995, is hereby incorporated herein
by reference in response to a portion 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 captions "Election of Directors" and "Other
Matters" contained in the Corporation's definitive proxy statement for the
annual meeting of shareholders to be held on April 23, 1996, as filed with
the Securities Exchange Commission, is hereby incorporated herein by
reference in response to a portion of this item. 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 to be held on April 23, 1996, as filed with the Securities
and Exchange Commission, is hereby incorporated herein by reference in
response 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 to be held on April 23, 1996, as filed with the
Securities and Exchange Commission, is hereby incorporated herein by
reference in response to this Item.
Item 13. Certain Relationships and Related Transactions.
The information under the of Director caption "Executive Compensation
- Compensation Committee Interlocks and Insider Participation" contained
in the Corporation's definitive proxy statement for the annual meeting of
shareholders to be held on April 23, 1996, as filed with the Securities
and Exchange Commission, is hereby incorporated herein by reference in
response to this Item.
PART IV
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
December 30, 1995, and December 31,
1994 24
For the fiscal years ended December 30,
1995,
December 31, 1994 and January 1, 1994:
Consolidated Statements of Earnings 25
Consolidated Statements of Cash Flows 26
Consolidated Statements of
Shareholders' Investment 27
Notes to Consolidated Financial Statements 28-34
Report of Independent Public Accountants 35
2. Financial Statement Schedule:
Report of Independent Public Accountants 14
Schedule II - Valuation and Qualifying
Accounts 15
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) Amendment 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)
(g) Note Purchase and Private Shelf Agreement dated May 12, 1994
(8)
(h) Amendment to Note Purchase Agreements dated December 9, 1986
(9)
(I) Amendment to Promissory Note Agreement dated July 17, 1990
(10)
(j) Note Purchase and Medium-term Note Agreement Dated November 2,
1995 (11)
[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.]
*10. (a) Amended and Restated Supplemental Retirement Plan for Key
Employees
(b) Management Incentive Award Plan (12)
(c) Amendment to Management Incentive Award Plan (13)
(d) Form of Agreements with Gerald A. Henseler and Allan J.
Williamson (14)
(e) Form of Agreement with Ronald D. Kneezel (15)
(f) Form of Agreements with Robert A. Kreider, Dennis J. Meyer and
John E. Tiffany (16)
(g) Agreement with Donald D. Belcher (17)
(h) 1985 Deferred Compensation Plan for Key Employees, as amended
and restated (18)
(i) 1988 Deferred Compensation Plan for Key Employees, as amended
and restated (19)
(j) Basic Form of Deferred Compensation Agreements under (pre-
January 1994) 1985 and 1988 Deferred Compensation Plans for
Key Employees (20)
(k) Basic Form of Deferred Compensation under (post-December 1993)
1988 Deferred Compensation plan for Key Employees (21)
(l) Deferred Compensation Plan for Directors (22)
(m) Form of Deferred Compensation Agreements for Directors (23)
(n) Revised Form of Indemnity Agreements with Directors and
Certain Officers (24)
(o) 1987 Incentive Stock Option Plan; 1987 Nonstatutory Stock
Option Plan (25)
(p) Amendment to 1987 Nonstatutory Stock Option Plan (26)
(q) Executive Trust Agreement (27)
(r) Amendment to Executive Trust Agreement (28)
(s) Long-term Incentive Plan (29)
(t) Amendment to Long-term Incentive Plan
(u) Amendment to Long-term Incentive Plan (30)
(v) 1991 Stock Option Plan as amended (31)
(w) Agreement with Allan J. Williamson (32)
(x) Description of Supplemental Long-term Disability Plan (33)
(y) Letter Agreement with Donald D. Belcher (34)
(z) Letter Agreement with Dennis J. Meyer (35)
(aa) Agreement with Gerald A. Henseler (36)
(bb) Outside Directors' Retirement Plan (37)
(cc) Banta Corporation 1995 Equity Incentive Plan (38)
* Exhibits 10(a) through 10(cc) are management contracts or compensatory
plans or arrangements.
13. Portions of Annual Report to Shareholders for fiscal year ended
December 30, 1995 that are incorporated by reference herein.
21. List of Subsidiaries.
23. Consent of Arthur Andersen LLP.
27. Financial Data Schedule [EDGAR version only].
(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. 4(a) to Form 10-Q for the quarter ended July 2, 1994
is hereby incorporated herein by reference.
(9) Exhibit No. 4(b) to Form 10-Q for the quarter ended July 2, 1994
is hereby incorporated herein by reference.
(10) Exhibit No. 4(c) to Form 10-Q for the quarter ended July 2, 1994
is hereby incorporated herein by reference.
(11) Exhibit No. 4(a) to Form 10-Q for the quarter ended September
30, 1995 is hereby incorporated herein by reference.
(12) Exhibit No. 10(e) to Form 10-K for the year ended December 29,
1990 is hereby incorporated herein by reference.
(13) Exhibit No. 19(e) to Form 10-Q for the quarter ended April 3,
1993 is hereby incorporated herein by reference.
(14) Exhibit No. 10 to Form 10-K for the year ended January 1, 1983
is hereby incorporated herein by reference.
(15) Exhibit No. 10(k) to Form 10-K for the year ended December 31,
1988 is hereby incorporated herein by reference.
(16) Exhibit No. 10(g) to Form 10-K for the year ended December 28,
1991 is hereby incorporated herein by reference.
(17) Exhibit No. 10(b) to Form 10-Q for the quarter ended October 1,
1994 is hereby incorporated herein by reference.
(18) Exhibit No. 10(j) to Form 10-K for the year ended December 30,
1989 is hereby incorporated herein by reference.
(19) Exhibit No. 10(a) to Form 10-Q for the quarter ended April 2,
1994 is hereby incorporated herein by reference.
(20) Exhibit No. 10(l) to Form 10-K for the year ended December 30,
1989 is hereby incorporated herein by reference.
(21) Exhibit No. 10(b) to Form 10-Q for the quarter ended April 2,
1994 is hereby incorporated herein by reference.
(22) Exhibit No. 10(q) to Form 10-K for the year ended January 3,
1987 is hereby incorporated herein by reference.
(23) Exhibit No. 10(p) to Form 10-K for the year ended January 3,
1987 is hereby incorporated herein by reference.
(24) Exhibit No. 10(a) to Form 10-Q for the quarter ended March 28,
1992 is hereby incorporated herein by reference.
(25) Exhibit No. 6(a) to Form 10-Q for the quarter ended July 4, 1987
is hereby incorporated herein by reference.
(26) Exhibit No. 19(a) to Form 10-Q for the quarter ended October 3,
1987 is hereby incorporated herein by reference.
(27) Exhibit No. 10(r) to Form 10-K for the year ended December 30,
1989 is hereby incorporated herein by reference.
(28) Exhibit No. 10(s) to Form 10-K for the year ended January 1,
1994 is hereby incorporated herein by reference.
(29) Exhibit No. 10(t) to Form 10-K for the year ended December 29,
1990 is hereby incorporated herein by reference.
(30) Exhibit No. 19(f) to Form 10-Q for the quarter ended April 3,
1993 is hereby incorporated herein by reference.
(31) Exhibit No. 10(b) to Form 10-Q for the quarter ended July 1,
1995 is hereby incorporated herein by reference.
(32) Exhibit No. 10(v) to Form 10-K for the year ended December 29,
1990 is hereby incorporated herein by reference.
(33) Exhibit No. 10(a) to Form 10-Q for the quarter ended October 2,
1993 is hereby incorporated herein by reference.
(34) Exhibit No. 10(a) to Form 10-Q for the quarter ended October 1,
1994 is hereby incorporated herein by reference.
(35) Exhibit No. 10(bb) to Form 10-K for the year ended December 31,
1994 is hereby incorporated herein by reference.
(36) Exhibit No. 10(dd) to Form 10-K for the year ended December 31,
1994 is hereby incorporated herein by reference.
(37) Exhibit No. 10(ee) to Form 10-K for the year ended December 31,
1994 is hereby incorporated herein by reference.
(38) Exhibit No. 10(a) to Form 10-Q for the quarter ended July 1,
1995 is hereby incorporated herein by reference.
All documents incorporated herein by reference are filed with the
Commission under File No. 0-6187.
(b) Reports on Form 8-K. No Current Reports on Form 8-K were filed
by the Corporation during the quarter ended December 30, 1995.
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
We have audited, in accordance with generally accepted auditing 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 30, 1996. Our audit
was made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed in the index in item 14(a) (2) is the
responsibility of the Corporation's management and is presented for
purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic financial statements. The schedule has been
subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, fairly states 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 LLP
Milwaukee, Wisconsin,
January 30, 1996.
<PAGE>
<TABLE>
BANTA CORPORATION
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED December 30, 1995 (1995), December 31, 1994 (1994)
and JANUARY 1, 1994 (1993)
<CAPTION>
DOLLARS IN THOUSANDS
BALANCE ADDITIONS CHARGES BALANCE,
BEGINNING OF CHARGED TO TO RESERVE, END OF
YEAR EARNINGS NET OTHER YEAR
<S> <C> <C> <C> <C> <C>
Reserve for Doubtful
Receivables:
1995 $ 3,984 $ 861 $ 1,431 $ 0 $ 3,414
========= ======== ======== ====== ========
1994 $ 2,943 $ 1,565 $ 524 $ 0 $ 3,984
========= ======== ======== ====== ========
1993 $ 2,933 $ 938 $ 928 $ 0 $ 2,943
========= ======== ======== ====== ========
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements Section 13 or 15(d) 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, 1996 BY: /s/ DONALD D. BELCHER
Donald D. Belcher
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/ DONALD D. BELCHER March 23, 1996
Donald D. Belcher, Chairman, President
and Chief Executive Officer
/s/ GERALD A. HENSELER March 23, 1996
Gerald A. Henseler, Executive Vice
President, Chief Financial Officer,
and Director
/s/ ROBERT A. KREIDER March 23, 1996
Robert A. Kreider, Treasurer
/s/ BERNARD S. KUBALE March 23, 1996
Bernard S. Kubale, Director
/s/ DONALD TAYLOR March 23, 1996
Donald Taylor, Director
/s/ ALLAN J. WILLIAMSON March 23, 1996
Allan J. Williamson, Director
<PAGE>
BANTA CORPORATION - File No. 0-6187
Form 10-K, Year Ended December 30, 1995
EXHIBIT INDEX
Page Numbering
In Sequential
Exhibit Number Numbering System
3. (b) Amendment to Bylaws -----
(c) Bylaws, as amended -----
10. (a) Amended and Restated Supplemental Retirement
Plan for Key Employees -----
(t) Amendment to Long-term Incentive Plan -----
13. Portions of Annual Report to Shareholders for fiscal
year ended December 30, 1995 that are incorporated
by reference herein. -----
21. List of Subsidiaries. -----
23. Consent of Arthur Andersen LLP. -----
27. Financial Data Schedule [EDGAR version only].
BY-LAW AMENDMENT
RESOLVED, that effective December 31, 1995, Article III, Section
3.01 of the By-Laws of the Corporation shall be amended to reduce the
number of authorized directors to nine (9).
12/31/95
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 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 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 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 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 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 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.
(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.
(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.
(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.
(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
nine (9).
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
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.
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 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 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, when present, preside at all Annual Meetings and Special Meetings
and at all meetings of the Board of Directors. He shall perform such
other duties and functions as shall be assigned to him from time to time
by the Board of Directors or in these by-laws. Except where by law the
signature of the President of the corporation is required, the Chairman of
the Board shall possess the same power and authority as the President to
sign, execute and acknowledge, on behalf of the corporation, all deeds,
mortgages, bonds, stock certificates, contracts, leases, reports and all
other documents or instruments and shall have such additional power to
sign, execute and acknowledge, on behalf of the corporation, as may be
authorized by resolution of the Board of Directors.
4.06. President. The President shall be the chief 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 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 President. He shall have authority to sign, execute and acknowledge,
on behalf of the corporation, 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 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 President and such other
duties as may be prescribed by the Board of Directors from time to time.
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 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
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 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
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.
(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 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;
(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:
(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 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 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.
BANTA CORPORATION
SUPPLEMENTAL RETIREMENT PLAN FOR KEY EMPLOYEES
As Amended and Restated Effective July 1, 1995
<PAGE>
BANTA CORPORATION
SUPPLEMENTAL RETIREMENT PLAN FOR KEY EMPLOYEES
1. Purpose of the Plan
The purpose of this Banta Corporation Supplemental Retirement
Plan for Key Employees (hereinafter referred to as the "Supplemental
Plan") is to provide retirement income to Eligible Employees. It is
intended that the benefits provided hereunder, together with benefits paid
under the tax-qualified pension plans maintained by the Employers, will
provide Eligible Employees with total retirement benefits consistent with
current trends in retirement pay planning, and thus better enable the
Employers to attract and retain the key management personnel upon whose
efforts the continued successful and profitable operation of their
businesses depend.
2. Effective Date
The Supplemental Plan became effective as of January 1, 1980.
3. Definitions
The following terms used herein shall have the same meanings as
the similar terms defined by the Banta Corporation Salaried Employees
Pension Plan (hereinafter referred to as the "Retirement Plan"):
(a) Average Monthly Compensation
(b) Compensation
(c) Corporation
(d) Disability
(e) Employers
(f) Normal Retirement Date
The term "Committee" shall have the same meaning as the term
"Administrative Committee" in the Retirement Plan. Notwithstanding the
foregoing, for purposes of this Supplemental Plan, "Compensation" and
"Average Monthly Compensation" for any period (1) shall be deemed to
include any amounts not otherwise included therein or taken into account
in the calculation thereof which the Eligible Employee would have received
for such period but for his election to defer such amount pursuant to the
Banta Corporation 1985 Deferred Compensation Plan and/or the Banta
Corporation 1988 Deferred Compensation Plan, and (2) shall be calculated
without regard to the limitations imposed by Section 401(a)(17) of the
Internal Revenue Code of 1986 on the amount of compensation that may be
taken into account by plans qualifying under such Section.
The following terms shall have the meanings set forth below:
"Qualified Plan Benefits" means an Eligible Employee's
aggregate benefits accrued under the terms of the
Retirement Plan (or any successor to such Plan) and any
other tax-qualified defined benefit pension plan to which
an Employer contributes, stated as a benefit payable in the
form of a single life annuity commencing on his Normal
Retirement Date.
"Eligible Employee" means an employee of an Employer who:
(i) is the president of an Employer, or is in compensation
grade 23 or above under the corporate compensation program
in effect as of January 1, 1984 (or the comparable
compensation grade under any modified or successor program,
as determined by the Committee); (ii) has been approved for
participation in this Supplemental Plan by the Executive
Committee of the Board of Directors of the Corporation; and
(iii) has entered into an agreement with the Corporation
calling for his participation herein.
"Credited Service" means the Eligible Employee's years and
fractional portions thereof of Credited Service accumulated
under the terms of the Retirement Plan plus, for an
Eligible Employee whose employment is terminated on account
of a Disability, the period of such Disability prior to his
Normal Retirement Date which is not counted as Credited
Service under the Retirement Plan, if any.
"Eligibility Date" means the date on which the employee
first enters compensation grade 23 or above or becomes the
president of an Employer.
4. Administration
The Supplemental Plan shall be administered by the Committee.
The Committee shall have the discretionary authority to construe and
interpret the terms of the Supplemental Plan, to promulgate and revise
rules and regulations relating to the Supplemental Plan and to make any
other determinations which it deems necessary or advisable for the
administration thereof. Decisions and determinations by the Committee
shall be final and binding on all parties, unless arbitrary and
capricious.
5. Amount of Supplemental Retirement Benefits
An eligible Employee's monthly benefits under this Supplemental
Plan shall be equal to the sum of (i) and (ii) below, less (iii) below,
determined as of the date his first monthly benefit payment is paid under
the terms of the Retirement Plan:
(i) 2.5% of the Eligible Employee's Average
Monthly Compensation multiplied by his years
of Credited Service, to a maximum of 10
years; plus
(ii) 1.5% of his Average Monthly Compensation
multiplied by his years of Credited Service
in excess of 10 years to a maximum of 25
such years; minus
(iii) the amount of his Qualified Plan Benefits.
6. Eligibility For and Form and Timing of Benefits
(a) Except for the benefits described in subparagraphs (c) and
(d) of this Paragraph, no benefits shall be payable under this Plan on
account of an Eligible Employee, unless:
(i) Such Eligible Employee or his spouse becomes
entitled to benefits under the Retirement
Plan; and
(ii) In the case of an Eligible Employee approved
for participation herein on or after January
1, 1984, he shall have met one of the
following requirements as of the date his
employment terminates:
(A) Completion of 10 years of continuous
service after his Eligibility Date;
(B) Completion of 5 years of continuous
service after his Eligibility Date and
attainment of age 57;
(C) Attainment of age 65; or
(D) Death while employed with the Employers.
(b) The benefits computed under Paragraph 5 shall be paid to
the Eligible Employee (and/or his spouse or other contingent annuitant or
beneficiary) at such times and in such form and amounts as if such
benefits were accrued under the Retirement Plan (including reductions for
early commencement and form of benefits under said Retirement Plan).
Elections made under the Retirement Plan as to the form and timing of
benefit payments shall also apply to benefits under this Supplemental
Plan.
(c) In the event of the death of an Eligible Employee while
actively employed by an Employer or during a period of Disability counted
as Credited Service hereunder, but prior to the date on which his spouse
would be eligible to receive any benefits under the Retirement Plan, his
surviving spouse, if any, shall be entitled to monthly benefits for life
under this Supplemental Plan equal to one-half of the amount determined
under Paragraph 5 above, provided that clause (iii) thereof shall not
apply. Such benefits shall be calculated as of the date of the Eligible
Employee's death and shall commence as of the first day of the following
month.
(d) If an Eligible Employee's employment is terminated on
account of a Disability and either (i) such Disability continues to his
Normal Retirement Date, or (ii) at the cessation of such Disability such
Eligible Employee has accumulated at least 10 years of Credited Service,
then such Eligible Employee shall be entitled to benefits hereunder
commencing on his Normal Retirement Date. The amount of such benefits
shall be the amount calculated under Paragraph 5 above, provided that
clause (iii) thereof shall apply only if and to the extent the Eligible
Employee is entitled to receive Qualified Plan Benefits. Such benefits
shall be paid as provided in subparagraph (b) of this Paragraph.
7. Effect of Change in Employment Status
In the event an Eligible Employee (who is approved for
participation herein on or after January 1, 1984) is transferred to a
position with the Employer in which he is not an Eligible Employee as
defined herein, such former Eligible Employer shall be entitled to
benefits hereunder if at the time of his actual termination of employment
with the Employers he has satisfied the conditions of Paragraph 6(a), (c)
or (d). The amount of such benefits shall be calculated under Paragraph 5
on the basis of his Average Monthly Compensation and Credited Service as
of the date such transfer occurred, reduced by the amount of his Qualified
Plan Benefit calculated as of that date but adjusted for any increase in
Qualified Plan Benefits resulting from subsequent amendments to the
Retirement Plan.
8. Nature of Benefit
Eligible Employees who are entitled to benefits hereunder have
the status of general unsecured creditors of the Employers. The
Supplemental Plan constitutes a mere promise by the Employers to make
benefit payments in the future as provided herein. It is intended that
the Supplemental Plan be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974, as
amended.
9. Non-Alienation of Payments
Benefits payable under the Supplemental Plan shall not be
subject in any manner to alienation, sale, transfer, assignment, pledge,
attachment, garnishment, anticipation or encumbrance of any kind, by will,
or by inter vivos instrument. Any attempt to alienate, sell, transfer,
assign, pledge, anticipate or otherwise encumber any such benefit payment,
whether currently or thereafter payable, shall not be recognized by the
Committee or the Corporation. Any benefit payment due hereunder shall not
in any manner be liable for or subject to the debts or liabilities of any
Eligible Employee or other person entitled thereto hereunder. If any such
person shall attempt to alienate, sell, transfer, assign, pledge,
anticipate or encumber any benefit payments to be made to that person
under the Supplemental Plan or any part thereof, or if by reason of such
person's bankruptcy or other event happening at any time, such payments
would devolve upon anyone else or would not be enjoyed by such person,
then the Committee in its discretion, may terminate such person's interest
in any such benefit payment, and hold or apply it to or for the benefit of
that person, the spouse, children or other dependents thereof, or any of
them, in such manner as the Committee deems proper.
10. Limitation of Rights Against the Employers
Participation in this Supplemental Plan, or any modifications
thereof, or the payments of any benefits hereunder, shall not be construed
as giving to any person any right to be retained in the service of the
Employers, limiting in any way the right of the Employers to terminate
such person's employment at any time, evidencing any agreement or
understanding that the Employers will employ such person in any particular
position or at any particular rate of compensation or guaranteeing such
person any right to receive any other form or amount of remuneration from
the Employers.
11. Applicable Laws
The Supplemental Plan shall be construed, administered and
governed in all respects under and by the laws of the State of Wisconsin
to the extent not preempted by federal law.
12. Liability
Neither the Employers nor any shareholder, director, officer or
other employee of the Employers or any other person shall be liable for
any act or failure to act hereunder except for gross negligence or fraud.
13. Amendment or Termination
(a) The Corporation, by action of its board of directors,
reserves the right to amend or modify this Supplemental Plan at any time,
provided that no such amendment or modification shall adversely affect an
Eligible Employee's right to benefits hereunder without his written
consent, unless the Corporation shall have substituted therefor an
equivalent amount of immediate or deferred compensation under some other
plan, program or individual agreement with the Eligible Employee.
(b) It is understood that an Eligible Employee's entitlement to
benefits under this Supplemental Plan may be automatically reduced as the
result of an increase in his Qualified Plan Benefits. If, as of any date,
an Eligible Employee's Qualified Plan Benefits projected to his Normal
Retirement Date are such that if the Eligible Employee continued in the
service of the Employers through his Normal Retirement Date he would not
be expected to be entitled to any benefits from this Supplemental Plan,
then such Eligible Employee's rights to any benefits hereunder shall
cease, whether or not he ultimately becomes entitled to the full amount of
such projected Qualified Plan Benefits. Nothing herein shall be construed
in any way to limit the right of the Corporation to amend or modify the
Retirement Plan or any other employee benefit plan in its sole discretion.
AMENDMENT TO LONG-TERM INCENTIVE PLAN
Effective January 30, 1996, the Company's Long-Term Incentive
Plan was amended in the following respects:
1. The first sentence of Section 9 of the Plan was amended in
its entirety to provide as follows:
In the event a Participant's employment is terminated by
reason of death, disability or normal or early retirement (as
permitted by the Company's retirement plans), the Participant
will be entitled to receive a partial award for any Performance
Period in which he was a Participant and during which he was
employed for at least 24 months (or such shorter period as shall
be determined by the Committee).
2. The first sentence of Section 10 of the Plan was amended in
its entirety to provide as follows:
With the approval of the Committee, a person who is hired
or first promoted to an eligible position during the first two
years of a Performance Period may be permitted to receive a
partial award for such Performance Period.
* * *
[Page 20 of the Annual Report]
Five-Year Summary of Selected Financial Data
Not Covered by Report of Independant Public Accountants
<TABLE>
<CAPTION>
Dollars in thousands (except per share data)
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Summary of Earnings (1)
Net sales $1,022,650 $811,330 $691,244 $637,416 $565,473
Net earnings from continuing
operations 53,550 47,228 40,992 35,662 28,219
Net earnings 53,550 47,228 40,992 35,662 20,619
Net earnings per common share
from continuing operations (2) 1.75 1.56 1.36 1.19 .96
Net earnings per common share (2) 1.75 1.56 1.36 1.19 .70
Dividends paid per common share (2) .37 .35 .31 .27 .25
Financial Summary
Working capital 187,956 101,422 106,171 102,214 98,323
Net plant and equipment 313,718 293,662 232,888 205,246 200,938
Total assets 678,809 577,763 457,433 410,182 397,464
Long-term debt 134,953 67,834 45,603 52,491 64,061
Interest expense 9,891 5,902 5,346 5,786 5,398
Shareholders' investment 387,112 331,587 292,428 258,237 226,967
Book value per share of
common stock (2) (3) 12.55 10.98 9.75 8.67 7.71
<FN>
(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 splits distributed in March 1996 and April 1993.
(3) Book values per share for common stock are based on shares outstanding at year-end, as adjusted for stock splits.
</TABLE>
[Pages 21 through 23 of the Annual Report]
Management's Discussion and Analysis of Financial Position and Operations
Operational Highlights
Banta Corporation achieved record sales and earnings in 1995,
including a sales milestone by recording revenue of more than one billion
dollars for the first time. The strong sales gain of $211 million, an
increase of 26% from 1994 levels, to $1.023 billion was aided by:
- The October 1995 acquisition of B.G. Turnkey Services Limited, a
company serving the computer software and hardware industry primarily
in Europe, representing about one-quarter of the 1995 sales gain.
- Historical and significant increases in paper prices during 1995,
representing approximately one-half of the sales increase.
- Continued market penetration for most of our operating units.
- Utilization of the new press capacity installed during 1994 and 1995.
Along with record sales were record profits. Net earnings of $53.5
million represented an increase of 13.4% over 1994's record of $47.2
million. Earnings per share increased 12.2% to $1.75 per share.
During 1995, Banta advanced its goal of increasing the proportion of
its revenue from non-traditional print related activity. The acquisition
of B.G. Turnkey Services significantly increases Banta's assembly,
fulfillment and distribution services revenue. At the same time the
acquisition of these European operations increases Banta's global scope,
also a primary goal. Two smaller acquisitions improved Banta's ability to
provide online services via the Internet's World Wide Web and expanded its
coverage of the single-use health care products market.
Acquisitions have been and are expected to continue to play a
strategic and significant part in Banta's growth strategies. Management
currently expects acquisitions to provide about one-third of Banta's
future revenue gains. Banta's acquisitions reinforce its commitment to
provide growth opportunities for its business units. Banta's 1994
acquisitions, which accounted for 40% of that year's sales gain, were both
traditional print companies.
Significant increases in paper prices occurred during the fourth
quarter of 1994 and throughout 1995. Paper prices averaged more than one-
third higher in 1995 than in 1994. As is customary in the graphic arts
industry, sales prices to Banta's customers were increased to reflect the
higher paper costs. Most paper grades were on allocation during 1995,
however the solid relationships Banta maintains with major paper suppliers
allowed Banta to meet customer needs and accomodate the Corporation's
added production capacity. Due to the substantial increase in delivery
times, Banta's paper inventories increased by approximately one-third
during late 1994 and early 1995. These quantities were aggressively
reduced to more traditional levels at 1995 year-end. During the fourth
quarter of 1995 paper prices stabilized somewhat, and it is anticipated
that allocation restrictions may be reduced or eliminated in 1996 due to
the softening demand for paper.
During 1995, pricing remained competitive within the graphic arts
industry as customers were burdened by the significant paper price
increases, as well as postage rate increases, and they continued to look
for ways to reduce costs. Unit value-added sales prices continue to trend
lower, reflecting the competitive markets. Banta has, however, generally
been able to accommodate the lower pricing and still maintain its historic
margin levels for these services primarily due to productivity
improvements. Banta has aggressively invested in modern, technologically
advanced equipment which has led to productivity gains. Banta also
achieved gains through its Continuous Improvement programs and the efforts
of its conscientious, dedicated employees in providing superior responses
to customers' needs.
Banta's earnings from operations as a percentage of sales dropped
from 10.3% in 1994 to 9.6% in 1995. This reduction was primarily due to
the higher paper prices, which generate lower margins, and the increased
proportion of sales from assembly, packaging and distribution services,
which contain a higher material content and therefore lower margins. These
project management activities, however, require less capital investment
and therefore are expected to provide greater return on investment than
traditional print activities.
Banta continues to investigate and invest in alternative methods of
providing services that are expected to assist customers in distributing
their information in a broad spectrum of media, including traditional
print, digital print, CD-ROM and online. Banta also continues to make
strategically important investments in digital technologies, remaining at
the forefront of the graphic arts industry.
Net Sales
The Corporation classifies its sales as follows: commercial
(catalogs, direct marketing materials and single-use products); books
(educational, general, trade, data manuals and project management
services); magazines; and other (point-of-purchase, security products and
digital imaging services). Net sales for the market classifications, as a
percent of consolidated net sales, were as follows:
1995 1994 1993
Commercial 47% 46% 44%
Books 34 32 34
Magazines 11 12 12
Other 8 10 10
--- --- ---
100% 100% 100%
=== === ===
Percentage increases (decreases) in sales by market classification
for 1995 compared with 1994 were as follows: commercial - 29%; books -
34%; magazines - 18%; and other - (4)%.
Acquisitions completed during 1994 and 1995 represented
approximately 26% of the sales increase in the commercial market
classification. Paper price increases represented approximately 50% of the
commercial market sales increase. High utilization of the Corporation's
first new-generation, 48-page press, which was installed during the third
quarter of 1994, also contributed to the sales increase. The units which
comprise the Banta Direct Marketing Group experienced higher levels of
utilization in 1995 than they did in 1994, which also contributed to the
sales increase.
Book market sales increased in all categories. The acquisition of
B.G. Turnkey Services represented over 60% of the sales increase in this
market classification for 1995, which resulted in a large increase in
project management services sales. Paper price increases represented
approximately 30% of this market's sales increase. The remainder of the
sales gain came primarily from educational and trade books. Demand for
printed software documentation softened as digital documentation delivery
gained wider acceptance, a trend expected to continue.
During 1995, Banta continued to gain new titles and market share in
special-interest magazines. The 1995 sales increase resulted from
increased market penetration, higher paper prices and increased spending
for magazine advertising pages. The two plants serving this market each
added an eight-unit press during the second half of 1995, which provided
the capacity necessary to service the sales increase.
The sales decrease in the "other" classification resulted from lower
utilization in each of the plants included in the classification. Activity
levels at the Banta Digital Group facilities were impacted by the absence
of 1994's large volume of packaging work that resulted from the new
government labeling requirements. Sales volume was also affected by the
conversion of more projects from manual to electronic processes, which
reduced sales prices per unit.
Sales for 1994 increased 17% over 1993. All of the Corporation's
market classifications registered sales increases for 1994; commercial -
22%; books - 10%; magazines - 14%; and other - 16%.
The acquisition of Danbury Printing & Litho in 1994 accounted for
50% of the increase in the commercial market. Also contributing to the
increase were the production of several biennial business-to-business
catalog projects, press additions at three plants, and high levels of
production activity late in the year due to customers' desire to mail
product prior to the January 1, 1995, postage rate increase. The increase
in book market sales resulted from the acquisition of United Graphics
during the third quarter of 1994 and the increased sale of software
documentation and project management services, which were facilitated by
new fulfillment capabilities and capacity additions. The Corporation's
special-interest magazine facilities increased sales as a result of
greater market penetration and increased advertising pages. The increase
in the "other" classification resulted from higher prepress service sales,
which benefited from the government labeling requirements and new service
offerings.
Cost of Goods Sold
In 1995, cost of goods sold as a percent of sales was 78.9% compared
with 77.0% in 1994 and 76.8% in 1993. This overall margin decline in 1995
resulted from several factors. Since the sale of paper generally has lower
margins than manufacturing sales, the increase in paper sales reduced
average margins. Also contributing to the margin decline was the inclusion
of B.G. Turnkey Services in the fourth quarter. Its project management
services generally provide lower margins than Banta's traditional print
businesses because material content for these services represents a
significantly greater proportion of the total sales. The Corporation's use
of the LIFO inventory valuation method resulted in LIFO adjustments, which
increased (reduced) cost of goods sold by $4,014,000, $844,000 and
($272,000) in 1995, 1994 and 1993, respectively. The change in LIFO
valuation adjustment between 1995 and 1994, which is primarily due to the
significant paper price increases, represents about one-third of the cost
of goods sold percentage increase. Offsetting a portion of the increase in
the cost of goods sold percentage were increased margins for the direct
marketing materials operations of the commercial market due to increased
plant utilization. Depreciation expense increased $9.2 million in 1995
compared to 1994 as a result of the $64 million in capital expenditures in
1995 and the acquisitions completed in 1994 and 1995. In 1994,
depreciation increased $7.7 million compared to 1993. The increase in the
cost of sales percentage for 1994 compared to 1993 was primarily the
result of the increased LIFO valuation adjustments, as well as the cost of
new capacity added in 1994 and lower margins associated with operations
acquired in 1994.
Expenses
Selling and administrative expenses as a percentage of sales were
11.5%, 12.7% and 12.7% in 1995, 1994 and 1993, respectively. Selling and
administrative expenses increased $15.1 million (14.7%) in 1995 and $15.1
million (17.2%) in 1994. The 1995 increase includes $7.9 million of costs
(52% of the increase) related to the 1995 and 1994 acquisitions.
The remainder of the increase is due to costs required to support
the sales increases generated from the Corporation's other operations,
including sales commissions on the large revenue gains. Of the 1994
expense increase, $5.3 million (35%) was due to acquisitions, with the
remainder being costs necessary to support the additional 1994 sales
volume.
Earnings From Operations and Interest Expense
Earnings from operations as a percent of sales were 9.6%, 10.3%, and
10.5% in 1995, 1994 and 1993, respectively. Interest expense was $9.9
million, $5.9 million and $5.3 million in 1995, 1994 and 1993,
respectively. During 1995, the Corporation's average debt levels increased
due to acquisitions, capital expenditures and increased average investment
in working capital as a result of higher paper prices, higher inventory
levels due to the tight paper market and higher activity levels in
general. The increased debt levels caused the higher interest expense in
1995. The interest expense increase in 1994 compared to 1993 resulted from
higher average borrowing levels and rising interest rates.
Pretax earnings as a percent of sales were 8.7%, 9.7% and 9.9% in
1995, 1994 and 1993, respectively. Effective income tax rates were 39.9%,
40.0% and 40.3% in 1995, 1994 and 1993, respectively. The small reduction
in the effective tax rate in 1995 was due to lower tax rates on earnings
of the European operations. An additional slight reduction in the
effective tax rate is expected in 1996 as the European operations will be
included for a full year.
Liquidity and Capital Resources
Selected Dollars in thousands
Financial Data (except current ratio)
1995 1994 1993
Cash $ 27,130 $ 370 $ 8,230
Receivables 199,151 169,613 125,004
Inventories 70,750 67,797 52,447
Notes payable - 56,001 20,800
Accounts payable and
accrued liabilities 114,997 82,668 64,074
Working capital 187,956 101,422 106,171
Long-term debt 134,953 67,834 45,603
Shareholders' investment 387,112 331,587 292,428
Long-term debt to total
long-term debt and
shareholders' investment 25.8% 17.0% 13.5%
Current Ratio 2.53 1.69 2.16
During 1995, the Corporation issued $75 million of long-term debt at
interest rates ranging from 6.81% to 7.98%. The proceeds were used to
repay all of Banta's short-term debt and to finance acquisitions.
Management believes the Corporation's liquidity continues to be strong and
the degree of leverage allows the Corporation to finance, at attractive
borrowing rates, its capital expenditures, as well as any other investment
opportunities that may arise.
The $56 million reduction in short-term debt and the $27 million
increase in cash during 1995 were the primary reasons that the
Corporation's working capital increased $86 million. Due to the softening
paper market in late 1995 and an emphasis on working capital control,
Banta's year-end investment in operating working capital (excluding cash,
notes payable and current maturities of long-term debt) increased only $3
million in 1995.
The Corporation's capital investment program reflects its commitment
to maintain modern, efficient plants and to be able to utilize new
printing and digital imaging technologies. Preliminary plans for 1996 are
for capital commitments to exceed $70 million. Cash requirements should
exceed that amount as the unpaid balance of prior commitments exceeded $30
million at the end of 1995.
The Corporation generally raises short-term funds by selling
commercial paper and issuing unsecured bank notes. Such borrowings are
primarily supported by lines of credit from three banks totaling $65
million. The Corporation also has available uncommitted short-term
borrowing facilities under which it can borrow on an unsecured basis.
Average outstanding short-term borrowings during 1995 and 1994 were $19.4
million and $26.0 million, respectively.
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of." The Corporation intends to adopt this standard during the first
quarter of 1996. The adoption of this standard is not expected to have a
material effect on the Corporation's financial position or results of
operations.
[Page 24 of the Annual Report]
Consolidated Balance Sheets
December 30, 1995 and December 31, 1994
Dollars in thousands
Assets 1995 1994
Current Assets:
Cash and short-term investments, at cost which
approximates market $27,130 $370
Receivables, less reserves of $3,414,000 and
$3,984,000, respectively 199,151 169,613
Inventories 70,750 67,797
Prepaid expenses 4,324 2,584
Deferred income taxes 9,451 8,060
-------- --------
310,806 248,424
Plant and Equipment:
Land 6,295 6,035
Buildings and improvements 85,161 79,890
Machinery and equipment 501,251 437,810
--------- ---------
592,707 523,735
Less accumulated depreciation 278,989 230,073
--------- ---------
Plant and equipment, net 313,718 293,662
Other Assets 13,292 11,766
Cost in Excess of Net Assets
Of Businesses Acquired 40,993 23,911
--------- ---------
$ 678,809 $ 577,763
========= =========
Liabilities and Shareholders'
Investment
Current Liabilities:
Notes payable $ - $ 56,001
Accounts payable 68,365 44,960
Accrued salaries and wages 21,784 20,239
Other accrued liabilities 24,848 17,469
Current maturities of long-term debt 7,853 8,333
--------- --------
122,850 147,002
--------- --------
Non-current Liabilities:
Long-term debt 134,953 67,834
Deferred income taxes 20,785 19,218
Other non-current liabilities 13,109 12,122
--------- ---------
168,847 99,174
--------- ---------
Shareholders' Investment:
Common stock -
$.10 par value, authorized 75,000,000
shares; 20,559,614 and 20,126,026
shares issued outstanding in 1995 and
1994, respectively 2,056 2,013
Amount in excess of par value of stock 70,138 56,780
Cumulative translation adjustment (118) -
Retained earnings 315,036 272,794
-------- --------
387,112 331,587
-------- --------
$ 678,809 $ 577,763
======== ========
The accompanying notes to consolidated financial statements are an
integral part of these balance sheets.
[Page 25 of the Annual Report]
Consolidated Statements of Earnings
For the Periods Ended December 30, 1995 (1995), December 31, 1994 (1994)
and January 1, 1994 (1993)
Dollars in thousands
(except earnings per share)
1995 1994 1993
Net sales $1,022,650 $811,330 $691,244
Cost of goods sold 806,651 625,049 530,746
-------- ------- -------
Gross Earnings 215,999 186,281 160,498
Selling and administrative
expenses 118,068 102,923 87,812
------- ------- --------
Earnings from Operations 97,931 83,358 72,686
Interest expense (9,891) (5,902) (5,346)
Other income, net 1,010 1,272 1,352
------- ------- --------
Earnings Before Income Taxes 89,050 78,728 68,692
Provision for income taxes 35,500 31,500 27,700
------- ------- --------
Net Earnings $ 53,550 $ 47,228 $ 40,992
======= ======= ========
Net Earnings per Share
of Common Stock $ 1.75 $ 1.56 $ 1.36
======= ======= ========
The accompanying notes to consolidated financial statements are an
integral part of these statements.
[Page 26 of the Annual Report]
Consolidated Statements of Cash Flows
For the Periods Ended December 30, 1995 (1995), December 31, 1994 (1994)
and January 1, 1994(1993)
Dollars in thousands
1995 1994 1993
Cash Flow from Operating
Activities
Net earnings $ 53,550 $ 47,228 $ 40,992
Adjustments to reconcile net
earnings to net cash provided by
operating activities, net of
acquisitions
Depreciation and amortization 51,055 41,502 33,701
Deferred income taxes 2,313 459 479
Change in assets and liabilities,
net of effects of acquisitions:
(Increase) in receivables (8,966) (32,942) (18,423)
Decrease (increase) in
inventories 9,785 (12,759) (9,824)
Decrease (increase) in other
current assets 805 2,166 (267)
Increase in accounts payable
and accrued liabilities 5,908 11,048 4,710
(Increase) decrease in other
non-current assets (1,526) 1,715 (1,017)
Other, net 869 2,830 1,386
------- ------ ------
Cash provided by operating
activities 113,793 61,247 51,737
------- ------ -------
Cash Flow from Investing Activities
Capital expenditures (63,822) (87,048) (62,960)
Proceeds from sale of plant,
equipment and other assets 733 3,205 3,914
Cash used for acquisitions,
net of cash acquired (27,441) (29,831) -
------- ------- -------
Cash used for investing activities (90,530) (113,674) (59,046)
------- ------- -------
Cash Flow from Financing Activities
Notes payable (payments) proceeds,
net (56,001) 35,201 20,800
Proceeds from issuance of long-term
debt 75,000 25,000 -
Payments on long-term debt (8,361) (7,565) (11,765)
Proceeds and tax benefit from exercise
of stock options 4,167 2,357 2,506
Dividends paid and stock redemptions (11,308) (10,426) (9,307)
-------- ------- -------
Cash provided by financing
activities 3,497 44,567 2,234
-------- ------- -------
Net increase (decrease) in cash
and short-term investments 26,760 (7,860) (5,075)
Cash and short-term investments
at beginning of year 370 8,230 13,305
-------- ------- --------
Cash and short-term investments
at end of year $ 27,130 $ 370 $ 8,230
======== ======== ========
Cash payments for:
Interest, net of amount
capitalized $ 9,487 $ 5,788 $ 5,471
Income taxes 33,023 32,250 23,789
The accompanying notes to consolidated financial statements are an
integral part of these statements.
[Page 27 of the Annual Report]
Consolidated Statements of Shareholders' Investment
For the Periods Ended December 30, 1995 (1995), December 31, 1994(1994)
and January 1, 1994 (1993)
<TABLE>
<CAPTION>
Dollars in thousands
Common Stock Amount in Cumulative
Shares Par Excess of Translation Retained
Outstanding Value Par Value Adjustment Earnings
<S> <C> <C> <C> <C> <C>
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 40,992
Cash dividends ($.31
per share) (9,303)
---------- ------- -------- -------- --------
Balance, January 1, 1994 19,996,532 2,000 54,436 - 235,992
Stock options exercised 129,494 13 2,344
Net earnings 47,228
Cash dividends ($.35
per share) (10,426)
---------- ------- -------- -------- --------
Balance, December 31, 1994 20,126,026 2,013 56,780 - 272,794
Stock options exercised 196,823 19 4,148
Net earnings 53,550
Cash dividends ($.37 per share) (11,308)
Stock issued for acquisition 236,765 24 9,210
Foreign currency translation
adjustment (118)
---------- ------ ------ ------- --------
Balance, December 30, 1995 20,559,614 $ 2,056 $ 70,138 $ (118) $ 315,036
========== ====== ====== ======= ========
</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.
[Pages 28 through 34 of the Annual Report]
Notes to Consolidated Financial Statements
For the Periods Ended December 30, 1995 (1995), December 31, 1994 (1994)
and January 1, 1994 (1993)
(1) SUMMARY 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 are primarily located throughout the
United States, are granted credit on an unsecured basis. No one customer
accounted for more than 10% of consolidated sales during 1995, 1994 or
1993.
Year-end - The Corporation's operating year ends on the Saturday closest
to December 31. The years 1995, 1994 and 1993 ended December 30, 1995,
December 31, 1994 and January 1, 1994, respectively, and comprised 52
weeks each.
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 30,624,134, 30,365,840 and
30,219,567 in 1995, 1994 and 1993, respectively.
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.
Foreign Currency Translation - Financial statements of foreign
subsidiaries are translated into United States dollars in accordance with
the provisions of Statement of Financial Accounting Standards No. 52.
Foreign currency translation gains and losses were insignificant in 1995.
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 $11,128,000
in 1995, $7,588,000 in 1994 and $6,547,000 in 1993 of which $1,237,000,
$1,686,000 and $1,201,000 was capitalized in 1995, 1994 and 1993,
respectively.
Cash and Short-term Investments - Short-term investments, with maturities
of less than 90 days at the date of purchase, are considered cash
equivalents for purposes of the accompanying consolidated balance sheets
and statements of cash flows.
Inventories - Approximately 36% and 49% of total inventories in 1995 and
1994, respectively, and the majority of the Corporation's inventories used
in its printing operations, 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.
Inventories include material, labor and manufacturing overhead. Inventory
amounts at year-end are as follows:
Dollars in thousands
1995 1994
Raw materials and supplies $ 44,815 $37,106
Work-in-process and finished goods 34,789 35,531
-------- -------
FIFO value (current cost) of
all inventories 79,604 72,637
Excess of current cost over carrying
value of LIFO inventories (8,854) (4,840)
-------- -------
Net inventories $ 70,750 $67,797
======== =======
During 1995, inventory quantities were reduced in certain printing
facilities. These reductions resulted in liquidations of LIFO inventory
layers carried at lower costs which prevailed in prior years. The effect
of these liquidations was to decrease cost of goods sold by $1,915,000.
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 - Deferred tax liabilities and assets are determined based on
the difference between the financial statement and the 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 Businesses Acquired - Cost in excess of
net assets of businesses acquired ("goodwill") is amortized and charged
against operations on a straight-line method over periods of 25 to 40
years. The realizability of goodwill is evaluated annually based upon the
undiscounted earnings of the businesses acquired compared with the
unamortized amount of goodwill. Accumulated amortization of goodwill was
$4,719,000 and $3,807,000 as of December 30, 1995, and December 31, 1994,
respectively.
Derivative Financial Instruments - The Corporation occasionally utilizes
interest rate swaps and foreign currency forward exchange contracts to
hedge specific interest rate and foreign currency exposures. These
derivative financial instruments are not used for trading purposes. The
Corporation was party to no material derivative financial instrument
contracts in 1995, 1994 and 1993.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reported periods. Actual results could differ from
those estimates.
Long-Lived Assets - In March 1995, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of." The Corporation intends to adopt this standard
during the first quarter of 1996. The adoption of this standard is not
expected to have a material effect on the Corporation's financial position
or results of operations.
Stock-Based Compensation - In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation." The Corporation intends to
adopt this standard in 1996 by making the required footnote disclosures
only. Therefore, the adoption of this standard is not expected to have an
effect on the Corporation's financial position or results of operations.
(2) ACQUISITIONS
Acquisition of B.G. Turnkey Services Limited - In October 1995, the
Corporation acquired B.G. Turnkey Services Limited ("B.G. Turnkey"). B.G.
Turnkey, headquartered in Cork, Ireland, provides project management,
product assembly, fulfillment and product localization services to
computer software and hardware companies primarily from facilities
located in Ireland, Scotland and The Netherlands. B.G. Turnkey reported
sales for 1994 of approximately $160 million. The purchase price consisted
of 236,765 shares of the Corporation's common stock and approximately $21
million of the Corporation's debentures which were called and prepaid in
December 1995. The payment of these debentures is classified as cash used
for acquisitions in the Statement of Cash Flows. The Corporation also paid
$3.2 million to former shareholders of B.G. Turnkey in exchange for a
covenant not to compete. The purchase price plus the liabilities assumed
exceeded the fair value of the tangible assets and identified intangible
assets purchased by a preliminary estimate of $12.2 million. The final
adjustments to the purchase price are not expected to be significant. This
acquisition was accounted for as a purchase and accordingly, the
accompanying financial statements include B.G. Turnkey's results beginning
with the acquisition date.
Acquisition of United Graphics Inc. - In August 1994, the Corporation
acquired the outstanding shares of United Graphics Inc. ("UGI") for
approximately $9.5 million in cash and a $1.5 million note. The purchase
price plus the liabilities assumed exceeded the fair value of the tangible
and identified intangible assets purchased by $7.2 million. The
Corporation also paid $4 million to former shareholders of UGI in exchange
for covenants not to compete. UGI reported sales for its most recent
fiscal year prior to the acquisition of approximately $28 million. This
acquisition was accounted for as a purchase and accordingly, the
accompanying financial statements include UGI's results beginning with the
acquisition date.
Acquisition of Danbury Printing & Litho, Inc. - In March 1994, the
Corporation purchased substantially all of the assets of Danbury Printing
& Litho, Inc. ("Danbury"). The purchase price of $16.3 million in cash
plus the assumption of selected liabilities was equal to the fair value of
the assets acquired. Danbury reported sales of approximately $35 million
in 1993. This acquisition was accounted for as a purchase and
accordingly, the accompanying financial statements include Danbury's
results beginning with the acquisition date.
Other Acquisitions - During 1995, the Corporation purchased Applied
Technology Corporation, which serves the single-use health care market,
and New Frontiers Information Corporation, which provides customers with
online solutions for distributing catalogs and direct marketing materials
via the Internet's World Wide Web. The combined purchase price for these
two acquisitions was $9.0 million.
(3) NOTES PAYABLE
The Corporation generally obtains short-term financing through the
issuance of commercial paper and unsecured notes to banks. At December 30,
1995, the Corporation had no such borrowings outstanding. At December 31,
1994, the Corporation had outstanding commercial paper and unsecured notes
aggregating $44,351,000 and $11,650,000, respectively, at a weighted
average interest rate of 6.19%. The average outstanding borrowings during
1995 and 1994 were $19.4 million and $26.0 million, respectively. The
weighted-average interest rates on such borrowings during 1995 and 1994
were 6.12% and 4.89%, respectively.
At December 30, 1995, the Corporation had lines of credit available
totaling $68.2 million, none of which were in use. Of this total, $65.0
million represents a credit facility made available by three banks which
can be used to support both commercial paper and unsecured notes.
(4) LONG-TERM DEBT
Long-term debt, including amounts payable within one year, consists of the
following:
Dollars in thousands
1995 1994
6.81% Promissory Notes payable in annual
installments of $5 million from 2004 through
2010, interest payable semi-annually $ 35,000 $ -
7.62% Promissory Note payable in semi-annual
installments of $1,190,000 from 1999 through
2009, interest payable quarterly 25,000 25,000
7.98% Promissory Notes payable in semi-annual
installments of $1,190,000 from 2000 through
2010, interest payable quarterly 25,000 -
9.53% Promissory Note payable in annual
installments of $1,818,000 from 1996 through
2005, interest payable semi-annually 18,182 20,000
7.38% Promissory Notes payable in annual
installments of $1,364,000 from 2005 through
2015, interest payable quarterly 15,000 -
10.11% Promissory Note payable in annual
installments of $2,500,000 from 1996 through
1998 and $1,500,000 in 1999, interest payable
quarterly 9,000 11,000
8.58% Promissory Notes payable in 1996, interest
payable quarterly 2,175 4,312
Notes Payable and Capital Lease Obligations,
generally fixed rates of interest, 6.5% to 9.8%
due in installments through 2001 4,089 6,205
Industrial Revenue Bonds:
Floating rates of interest, approximating 80%
of the prime rate, due in installments
through 2015 6,900 7,050
Fixed rate of interest at 5.8% to 7.5% due in
installments through 2002 2,460 2,600
------- -------
142,806 76,167
Less current maturities 7,853 8,333
------- -------
Long-term debt $134,953 $ 67,834
======= =======
Maturities of long-term debt during the next five years are: 1996,
$7,853,000; 1997, $5,518,000; 1998, $5,987,000; 1999, $7,803,000; and
2000, $7,154,000. Industrial Revenue Bonds aggregating $2,660,000 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 150%
of current liabilities and consolidated tangible net worth be not less
than $125,000,000. 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%
of consolidated net worth at any time and is required to be free of all
such obligations in excess of 12.5% of consolidated net worth for 60
consecutive days each year. The agreements also contain limitations on
leases and ratable security on certain types of liens.
One of the Promissory Note agreements contains covenants which restrict
the payment of dividends. As of December 30, 1995, $94,398,000 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
loans with similar terms and average maturities, the fair value of long-
term debt as of December 30, 1995, including current maturities, was
$154,096,000.
(5) 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 $2,799,000 in
1995, $2,770,000 in 1994 and $2,710,000 in 1993.
The Corporation also has 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 $511,000 for the 1993 to 1995
performance period, $609,000 for the 1992 to 1994 performance period and
$530,000 for the 1991 to 1993 performance period.
At December 30, 1995, the Corporation had options outstanding or available
for grant under several stock option plans - the 1995 Equity Incentive
Plan, the 1991 Stock Option Plan and the 1987 Nonstatutory Stock Option
Plan. Options may no longer be granted under the 1987 plan. 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. Options granted under the 1987 plan and the
1991 plan may be exercised up to five years after the date of grant.
Options granted under the 1995 plan may be exercised up to 10 years from
the date of the grant.
The plans permit participants to use option shares for the purpose of
offsetting income tax liabilities incurred upon the exercise of stock
options. The terms of the 1995 and 1991 Plans allow for grants of either
Incentive Stock Options or Nonstatutory Stock Options. The 1995 and 1991
Plans include provisions which authorize options to be granted to non-
employee Directors.
The following table summarizes activity under the stock option plans:
Options Price Range
Outstanding at January 2, 1993 1,512,682 $9 5/8 - $16 5/8
Granted 334,875 18 1/4 - 23 3/8
Exercised (269,020) 9 5/8 - 16 5/8
Canceled or expired (4,557) 9 5/8 - 11 3/8
---------
Outstanding at January 1, 1994 1,573,980 9 5/8 - 23 3/8
Granted 421,950 20 5/8 - 24 1/8
Exercised (280,331) 9 5/8 - 21 7/8
Canceled or expired (44,119) 11 3/8 - 23 3/8
---------
Outstanding at December 31, 1994 1,671,480 9 5/8 - 24 1/8
Granted 468,300 20 1/8 - 29 1/2
Exercised (419,313) 9 5/8 - 23 3/8
Canceled or expired (8,437) 20 5/8 - 23 3/8
---------
Outstanding at December 30, 1995 1,712,029 $11 1/8 - $29 1/2
=========
Of the options outstanding at December 30, 1995, 833,142 were exercisable
at prices ranging from $111/8 to $24 1/8. The balance of the options
become exercisable at various times through 1998 at prices ranging from
$20 5/8 to $29 1/2. At December 30, 1995, 1,333,464 shares of the
Corporation's common stock were reserved for future option grants.
During 1995, 1994 and 1993, 124,078, 86,090 and 64,068 shares,
respectively, were submitted to the Corporation in partial payment for
stock option exercises and to offset income tax liabilities. These shares
were canceled by the Corporation.
(6) CAPITAL STOCK
In January 1996, the Corporation's Board of Directors approved a three-
for-two stock split to be effected in the form of a 50% stock dividend,
which will be paid in March 1996. All common stock per share amounts and
common stock data, other than the actual shares outstanding, have been
restated in the consolidated financial statements and throughout the
Annual Report to reflect the stock split.
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.
The Corporation has been authorized by the Board of Directors to purchase
up to 1,500,000 shares of outstanding common stock in the open market. As
of December 30, 1995, no shares of the Corporation's stock had been
repurchased under this program.
Pursuant to the Corporation's Shareholder Rights Plan, one common stock
purchase right is included with each outstanding share of common stock. In
the event the rights become exercisable, each right will initially
entitle its holder to buy one-half of one share of the Corporation's
common stock at a price of $40 per share (equivalent to $20 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 will entitle the
holder to purchase, at the right's then-current exercise price, common
stock of the Corporation or, depending on the circumstances, common stock
of the acquiring 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.
(7) 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 $7,661,000,
$5,261,000 and $3,199,000 in 1995, 1994 and 1993, respectively. Minimum
rental commitments for the years 1996 through 2000 aggregate $8,010,000,
$7,202,000, $6,717,000, $4,753,000 and $4,331,000, respectively, and
$25,385,000 thereafter.
(8) 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, including multiemployer and union sponsored plans
for 1995, 1994 and 1993 was $4,941,000, $5,204,000 and $4,370,000
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
1995 1994 1993 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Service cost-benefits earned during the year $2,651 $3,039 $2,598 $131 $200 $119
Interest cost on projected benefit obligation 4,220 4,022 3,669 301 249 184
Actual return on plan assets, net of
unrecognized gains (losses) of $12,038,000,
($4,564,000) and $2,671,000 in 1995, 1994
and 1993, respectively (4,373) (3,773) (3,415) - - -
Net amortization (113) (427) (427) 97 107 54
------ ------ ------ ------ ----- -----
Net pension expense $ 2,385 $ 2,861 $2,425 $ 529 $ 556 $ 357
====== ====== ====== ====== ===== =====
</TABLE>
Significant assumptions used in determining net pension
expense for the Corporation's plans are as follows:
<TABLE>
<CAPTION>
Qualified Plans Supplemental Plan
1995 1994 1993 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Discount rate 8.5% 7.5% 8.0% 8.5% 7.5% 8.0%
Expected rate of increase in
compensation 5.0 5.0 5.0 5.0 5.0 5.0
Expected long-term rate of return
on plan assets 8.5 8.5 8.5 - - -
</TABLE>
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 assumed discount rates of 7.25% and
8.5% for 1995 and 1994, respectively:
Dollars in thousands
Qualified Plans Supplemental Plan
1995 1994 1995 1994
Projected benefit
obligation:
Vested benefits $ 48,468 $ 38,565 $ 2,859 $ 2,505
Non-vested benefits 4,205 4,119 580 2
------ ------ ------ ------
Accumulated benefit
obligation 52,673 42,684 3,439 2,507
Effect of projected
future compensation
levels 14,097 8,910 1,707 842
------ ------ ------ -------
66,770 51,594 5,146 3,349
Plan assets at fair value 73,076 56,254 - -
------ ------ ------ -------
Plan assets (in excess of)
less than projected benefit
obligation (6,306) (4,660) 5,146 3,349
Unrecognized net gain (loss) 6,582 5,054 (2,437) (982)
Adjustment required to
recognize minimum liability - - 866 302
Unrecognized net asset
(obligation) being
amortized over 16 years 2,671 3,099 (136) (162)
------ ------ ------ -------
Accrued pension cost $ 2,947 $ 3,493 $ 3,439 $ 2,507
====== ====== ====== =======
Approximately 54% of the Corporation's non-salaried employees are covered
by multiemployer union sponsored, collectively bargained defined benefit
pension plans. Pension expense includes $2,027,000, $1,787,000 and
$1,588,000 in 1995, 1994 and 1993, 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. The 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 Standards 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 plan's status at December 30, 1995, and
December 31, 1994:
Dollars in thousands
1995 1994
Accumulated postretirement benefit
obligation:
Retirees $ 2,512 $2,477
Other active plan participants 4,477 3,001
Fully eligible active plan participants 776 439
------- -----
7,765 5,917
Unrecognized transition obligation (4,328) (4,582)
Unrecognized net (loss) gain (614) 563
------- ------
Accrued postretirement benefit cost $ 2,823 $ 1,898
======= ======
The net periodic postretirement benefit cost for 1995, 1994 and 1993
included the following components:
Dollars in thousands
1995 1994 1993
Service cost - benefits attributed to
service during the year $ 423 $ 468 $ 385
Interest cost on accumulated
postretirement benefit obligation 476 456 400
Amortization of transition obligation 247 254 254
----- ----- ----
Net periodic postretirement
benefit cost $ 1,146 $ 1,178 $ 1,039
===== ===== =====
The discount rate used in determining the accumulated postretirement
benefit obligation was 7.25% and 8.50% at December 30, 1995, and December
31, 1994, respectively. 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 1995, 1994 and 1993 were $2,148,000, $1,467,000 and
$1,311,000, respectively.
(9) 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.
(10) INCOME TAXES
The provision for income taxes consists of the following:
Dollars in thousands
1995 1994 1993
Current
Federal $25,225 $24,603 $21,313
State 5,564 5,066 4,720
Foreign 276 - -
------ ------ ------
31,065 29,669 26,033
Tax impact of option exercises 2,122 1,372 1,188
Deferred 2,313 459 479
------ ------ ------
Provision for income taxes $35,500 $31,500 $27,700
====== ====== ======
Below is a reconciliation of the statutory federal income tax rate
and the effective income tax rate:
Dollars in thousands
1995 1994 1993
Statutory federal tax rate 35.0% 35.0% 35.0%
State and local income taxes,
less applicable federal tax benefit 4.3 4.4 4.5
Adjustment to deferred taxes resulting
from federal tax rate increase - - .3
Other, net .6 .6 .5
---- ---- ----
Effective income tax rate 39.9% 40.0% 40.3%
==== ==== ====
The components of the net deferred tax liability as of December 30, 1995,
and December 31, 1994, were as follows:
Dollars in thousands
1995 1994
Deferred tax liabilities:
Accelerated depreciation and capitalized
interest $ 28,466 $25,583
Other 184 1,711
------ ------
Total deferred tax liabilities 28,650 27,294
------ ------
Deferred tax assets:
Accrued liabilities (8,614) (9,024)
Accrued pension cost (2,226) (2,424)
Deferred compensation (2,234) (2,038)
Reserve for uncollectible accounts (1,285) (1,766)
Other (2,957) (884)
------- -------
Total deferred tax assets (17,316) (16,136)
------- -------
Net deferred tax liability $11,334 $11,158
======= =======
No United States deferred taxes have been provided on the undistributed
foreign subsidiary earnings which aggregated $1,304,000 at December 30,
1995, and are considered permanently invested.
The non-United States component of income before income taxes was
$1,580,000 in 1995.
The net deferred tax liability is classified in the December 30, 1995, and
December 31, 1994, balance sheets as follows:
Dollars in thousands
1995 1994
Non-current deferred income taxes $ 20,785 $ 19,218
Current deferred income taxes (9,451) (8,060)
------- -------
Net deferred tax liability $ 11,334 $ 11,158
======= =======
(11) FOREIGN OPERATIONS
Summarized data for the Corporation's European operations for 1995, which
consist entirely of the B.G. Turnkey operations, are as follows:
Dollars in thousands
1995
Net sales $54,638
Earnings from operations 1,654
Identifiable assets 66,147
There are no significant transactions between the Corporation's domestic
and European operations.
[Page 35 of the Annual Report]
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 December 30,
1995 and December 31, 1994, and the related consolidated statements of
earnings, shareholders' investment and cash flows for each of the fiscal
years in the three-year period ended December 30, 1995. 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 December 30, 1995 and December 31, 1994, and the
results of their operations and their cash flows for each of the fiscal
years in the three-year priod ended December 30, 1995, in conformity with
generally accepted accounting principles.
Arthur Andersen LLP
Milwaukee, Wisconsin,
January 30, 1996.
Responsibility for Financial Statements
The Consolidated Financial Statements and other financial references
appearing in this Annual Report were prepared by management in conformity
with generally accepted accounting principles appropriate for the
circumstances. Where acceptable alternative accounting principles exist,
as described in Note 1 of the Notes to the Consolidated Financial
Statements, management uses its best judgment in selecting those
principles that reflect fairly the financial position and results of
operations of the Corporation. The accounting records and systems of
internal control are designed to reflect the transactions of the
Corporation in accordance with established policies and procedures.
Financial and operational reviews are undertaken by management to provide
assurance that the books and records properly reflect transactions
authorized by the Corporation.
The Consolidated Financial Statements appearing in this Annual Report have
been audited by Arthur Andersen LLP. Their audits were made in accordance
with generally accepted auditing standards and provide an independent
review of those management responsibilities that relate to the preparation
of this Annual Report.
The Audit Committee of the Board of Directors, comprised of directors who
are not officers or employees, reviews the financial and accounting
reports of the Corporation, including a review and discussion of the
principles and procedures used by management in preparation of the
financial statements. The independent auditors have full and free access
to the Audit Committee and meet with it to review the results of the audit
engagement, the preparation of the Annual Report and to discuss auditing
and financial reporting matters.
[Page 36 of the Annual Report]
Unaudited Quarterly Financial Information
The following table presents financial information by quarter for the
years 1995 and 1994.
<TABLE>
<CAPTION>
Dollars in thousands (except per share data)
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
March June September December
1995 1994 1995 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $232,954 $187,464 $235,346 $185,831 $249,267 $207,735 $305,083 $230,300
Gross earnings 46,689 41,064 53,105 46,066 55,743 47,595 57,462 51,536
Net earnings 11,002 9,565 12,758 11,957 15,474 13,310 14,321 12,396
Net earnings per
share of common stock .36 .32 .42 .39 .51 .44 .46 .41
</TABLE>
Per share amounts have been adjusted for three-for-two stock split
distributed in March 1996.
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>
1995 dividends paid $ .0925 $ .0925 $ .0925 $ .0925 $ .37
Price range:
High $ 22 1/2 $ 23 5/8 $ 28 3/4 $ 30 1/8 $ 30 1/8
Low 19 21 1/2 21 1/8 25 3/4 19
1994 dividends paid $ .0875 $ .0875 $ .0875 $ .0875 $ .35
Price range:
High $ 25 5/8 $ 24 3/8 $ 23 3/8 $ 22 5/8 $ 25 5/8
Low 22 21 1/8 20 3/4 18 18
</TABLE>
Per share amounts have been adjusted for three-for-two stock split
distributed in March 1996.
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. As of January 31, 1996, the Corporation had 2,496 shareholders of
record.
EXHIBIT 21
SUBSIDIARIES OF BANTA CORPORATION
OWNERSHIP BY STATE OR
BANTA CORPORATION JURISDICTION OF
OR ONE OF IT'S INCORPORATION
LIST OF SUBSIDIARIES SUBSIDIARIES OR ORGANIZATION
ATC Acquisition Corp. 100% Wisconsin
Banta Direct Marketing, Inc. 100% Minnesota
Banta Europe Corp. 100% Ireland
Banta Security Printing, Inc. 100% Wisconsin
Banta Software Services
International, Inc. 100% Minnesota
Banta Ventures, Inc. 100% Wisconsin
B.G. Turnkey Services, Inc. 100% Delaware
B.G. Turnkey Services Limited 100% Ireland
B.G. Turnkey Services
Netherlands B.V. 100% The Netherlands
B.G. Turnkey Services
Scotland Limited 100% Scotland
Danbury Printing & Litho, Inc. 100% Minnesota
Dimensional Neon, Inc. 100% Wisconsin
The DI Group, Inc. 100% Massachusetts
KCS Industries Inc. 100% Wisconsin
KnowledgeSet Corporation 100% California
Ling Products, Inc. 100% Wisconsin
New Frontiers Information
Corporation 100% Massachusetts
One Pass Network, Inc. 100% California
United Graphics Inc. 100% Washington
Wrapper, Inc. 100% Wisconsin
EXHIBIT 23
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, 33-54576, 33-61683 and 333-01289 and Form S-3
Registration Statement No. 33-55829.
ARTHUR ANDERSEN LLP
Milwaukee, Wisconsin,
March 23, 1996.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF BANTA CORPORATION AS OF AND FOR THE TWELVE
MONTHS ENDED DECEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-30-1995
<CASH> 27,130
<SECURITIES> 0
<RECEIVABLES> 199,151
<ALLOWANCES> 3,414
<INVENTORY> 70,750
<CURRENT-ASSETS> 310,806
<PP&E> 592,707
<DEPRECIATION> 278,989
<TOTAL-ASSETS> 678,809
<CURRENT-LIABILITIES> 122,850
<BONDS> 134,953
0
0
<COMMON> 2,056
<OTHER-SE> 385,056
<TOTAL-LIABILITY-AND-EQUITY> 678,809
<SALES> 1,022,650
<TOTAL-REVENUES> 1,022,650
<CGS> 806,651
<TOTAL-COSTS> 806,651
<OTHER-EXPENSES> 118,068
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,891
<INCOME-PRETAX> 89,050
<INCOME-TAX> 35,500
<INCOME-CONTINUING> 53,550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,550
<EPS-PRIMARY> 1.75
<EPS-DILUTED> 1.75
</TABLE>
