FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 14(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 1, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to__________
Commission file Number 1-4415
PARK ELECTROCHEMICAL CORP.
(Exact Name of Registrant as Specified in Its Charter)
New York 11-1734643
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5 Dakota Drive, Lake Success, N.Y. 11042
(Address of Principal Executive Offices) (Zip Code)
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Registrant's Telephone Number, Including Area Code (516) 354-
4100
(Former Name, Former Address and Former Fiscal Year,
if Changed Since Last Report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes[X} No[ }
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes { } No { }
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 19,529,417 as of October 11, 2002.
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION: Number
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
September 1, 2002 (Unaudited) and March 3, 2002 3
Consolidated Statements of Operations
13 weeks and 26 weeks ended September 1, 2002
and August 26, 2001 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
for the 26 weeks ended September 1, 2002 and
August 26, 2001 Unaudited) 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
Factors That May Affect Future Results 21
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Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
Item 4. Controls and Procedures 21
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings 22
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 6. Exhibits and Reports on Form 8-K 23
SIGNATURES...................................................... 24
CERTIFICATIONS.................................................. 25
EXHIBIT INDEX................................................... 29
PART I. FINANCIAL INFORMATION
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Item 1. Financial Statements.
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September 1,
2002 March 3,
(Unaudited) 2002*
ASSETS
Current assets:
Cash and cash equivalents $104,921 $ 99,492
Marketable securities 49,798 51,917
Accounts receivable, net 32,466 33,628
Inventories (Note 2) 13,440 13,242
Prepaid expenses and other current assets 12,723 12,082
Total current assets 213,348 210,361
Property, plant and equipment, net 147,089 149,810
Other assets 942 473
Total $361,379 $360,644
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 15,368 $ 14,098
Accrued liabilities 24,772 27,862
Income taxes payable 666 1,401
Total current liabilities 40,806 43,361
Deferred income taxes 13,066 13,054
Deferred pension liability and other 12,891 11,683
Total liabilities 66,763 68,098
Stockholders' equity:
Common stock 2,037 2,037
Additional paid-in capital 131,308 131,138
Retained earnings 171,569 172,953
Treasury stock, at cost (5,707) (5,692)
Accumulated other non-owner changes (4,591) (7,890)
Total stockholders' equity 294,616 292,546
Total $361,379 $360,644
*The balance sheet at March 3, 2002 has been derived from the
audited financial statements at that date.
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See accompanying Notes to the Consolidated Financial Statements.
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
13 Weeks Ended 26 Weeks Ended
(Unaudited) (Unaudited)
September 1, August 26, September 1, August 26,
2002 2001 2002 2001
Net sales $56,901 $51,743 $113,462 $120,845
Cost of sales 50,692 50,321 100,992 116,157
Gross profit 6,209 1,422 12,470 4,688
Selling, general and
administrative expenses 7,884 8,428 15,995 17,920
Gain on sale of DPI (Note 9) (3,170) - (3,170) -
Loss on sale of NTI
and closure of related
support facility (Note 4) - - - 15,707
Other severance costs - - - 681
Income(loss) from operations 1,495 (7,006) (355) (29,620)
Other income 771 1,607 1,713 3,347
Earnings(loss) before
income taxes 2,266 (5,399) 1,358 (26,273)
Income tax
Provision/(benefit) 679 (1,620) 407 (7,882)
Net earnings(loss) $ 1,587 $(3,779) $ 951 $(18,391)
Earnings(loss) per
share (Note 6):
Basic $ .08 $ (.19) $ .05 $ (.94)
Diluted $ .08 $ (.19) $ .05 $ (.94)
Weighted average number
of common and common
equivalent shares outstanding:
Basic 19,669 19,545 19,665 19,482
Diluted 20,013 19,545 20,094 19,482
Dividends per share $ .06 $ .06 $ .12 $ .12
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See accompanying Notes to the Consolidated Financial Statements.
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands)
26 Weeks Ended
(Unaudited)
September 1, August 26,
2002 2001
Cash flows from operating activities:
Net income (loss) $ 951 $(18,391)
Depreciation and amortization 9,129 8,391
Gain on sale of business (3,170) -
Loss on sale of fixed assets - 10,636
Impairment of fixed assets - 2,058
Change in operating assets and
liabilities (2,940) 16,040
Net cash provided by operating activities 3,970 18,734
Cash flows from investing activities:
Purchases of property, plant and
equipment, net (4,095) (15,425)
Proceeds from the sale of business 5,000 -
Purchases of marketable securities (19,260) -
Proceeds from sales and maturities
of marketable securities 21,463 18,022
Net cash provided by investing activities 3,108 2,597
Cash flows from financing activities:
Redemption of long-term debt (Note 3) - (1,738)
Dividends paid (2,335) (2,326)
Proceeds from exercise of stock options 155 617
Net cash used in financing activities (2,180) (3,447)
Change in cash and cash equivalents before
exchange rate changes 4,898 17,884
Effect of exchange rate changes on cash
and cash equivalents 531 376
Change in cash and cash equivalents 5,429 18,260
Cash and cash equivalents, beginning
of period 99,492 123,726
Cash and cash equivalents, end of period $104,921 $141,986
Supplemental cash flow information:
Cash paid during the period for:
Income taxes $ 500 $ 4,875
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See accompanying Notes to the Consolidated Financial Statements.
PARK ELECTROCHEMICAL CORP.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The condensed consolidated balance sheet as of September 1, 2002, the consolidated statements of operations for the 13 weeks and 26 weeks ended September 1, 2002 and August 26, 2001, and the condensed consolidated statements of cash flows for the 26 weeks then ended have been prepared by the Company, without audit. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position at September 1, 2002 and the results of operations and cash flows for all periods presented.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended March 3, 2002.
2. INVENTORIES
Inventories consisted of the following:
(Amounts in thousands)
September 1, March 3,
2002 2002
Raw materials $ 4,819 $ 4,996
Work-in-process 3,364 2,916
Finished goods 4,635 4,784
Manufacturing supplies 622 546
$13,440 $13,242
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3. LONG-TERM DEBT
On March 1, 2001, $95,934,000 principal amount of the Company's 5.5% Convertible Subordinated Notes due March 1, 2006 was converted into 3,410,908 shares of the Company's common stock, and the remaining $1,738,000 principal amount of the Notes was redeemed by the Company on March 2, 2001 for cash.
4. SALE OF NELCO TECHNOLOGY, INC.
During the Company's 1998 fiscal year and for several years prior thereto, more than 10% of the Company's total worldwide sales were to Delco Electronics Corporation, a subsidiary of General Motors Corp., and the Company's wholly owned subsidiary, Nelco Technology, Inc. ("NTI") located in Tempe, Arizona, had been Delco's principal supplier of semi-finished multilayer printed circuit board materials, commonly known as mass lamination, which were used by Delco to produce finished multilayer printed circuit boards. However, in March 1998, the Company was informed by Delco that Delco planned to close its printed circuit board fabrication plant and exit the printed circuit board manufacturing business. As a result, the Company's sales to Delco declined during the three-month period ended May 31, 1998, were negligible during the remainder of the 1999 fiscal year and have been nil in subsequent years.
After March 1998, the business of NTI languished and its performance was unsatisfactory due primarily to the absence of the unique, high-volume, high-quality business that had been provided by Delco Electronics and the absence of any other customer in the North American electronic materials industry with a similar demand for the large volumes of semi-finished multilayer printed circuit board materials that Delco purchased from NTI. Although NTI's business experienced a resurgence in the 2001 fiscal year as the North American market for printed circuit materials became extremely strong and demand exceeded supply for the electronic materials manufactured by NTI, the Company's internal expectations and projections for the NTI business were for continuing volatility in the business' performance over the foreseeable future. Consequently, the Company commenced efforts to sell the business in the second half of its 2001 fiscal year; and in April 2001, the Company sold the assets and business of NTI and closed a related support facility, also located in Tempe, Arizona. As a result of this sale, the Company exited the mass lamination business in North America.
In connection with the sale of NTI and the closure of the related support facility, the Company recorded non- recurring, pre-tax charges of $15.7 million in its fiscal year 2002 first quarter ended May 27, 2001. The components of these charges and the related liability balances and activity from the May 27, 2001 balance sheet date to the September 1, 2002 balance sheet date are set forth below.
(Amounts in thousands)
Charges 9/1/02
Closure Incurred or Remaining
Charges Paid Reversals Liabilities
NTI charges:
Loss on sale of assets
and business $10,580 $10,580 $ - $ -
Severance payments 387 387 - -
Medical and other costs 95 95 - -
Support facility charges:
Impairment of long
lived assets 2,058 2,058 - -
Write down of accounts
receivable 350 319 31 -
Write down of inventory 590 590 - -
Severance payments 688 688 - -
Medical and other costs 133 133 - -
Lease payments, taxes,
utilities, maintenance 781 275 - 506
Other 45 45 - -
------- ------- --- ----
$15,707 $15,170 $31 $506
======= ======= === ====
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The severance payments and medical and other costs incurred in connection with the sale of NTI and the closure of the related support facility were for the termination of hourly and salaried, administrative, manufacturing and support employees, all of whom were terminated during the first and second fiscal quarters ended May 27, 2001 and August 26, 2001, respectively, and substantially all of the severance payments and related costs for such terminated employees (totaling $1.3 million) were paid during such quarters. The lease obligations will be paid through August 2004 pursuant to the related lease agreements.
NTI did not have a material effect on Park's consolidated financial position, results of operations, capital resources, liquidity or continuing operations, and the sale of NTI is not expected to have a material effect on the Company's future operating results.
5. RESTRUCTURING AND SEVERANCE CHARGES
The Company recorded non-recurring, pre-tax charges of $2,921,000 in its fiscal year 2002 third quarter ended November 25, 2001 in connection with the closure of the conventional lamination line of Dielektra GmbH ("Dielektra"), its electronic materials business located in Cologne, Germany, and the reduction of the size of Dielektra's mass lamination operations to enable Dielektra to focus on its DatlamT automated continuous lamination and paneling technology and on the marketing and manufacturing of high technology, higher layer count mass lamination product. The charges included $2,020,000 for severance payments and related costs for terminated employees. In addition, the Company recorded non- recurring, pre-tax severance charges of $681,000 in its fiscal 2002 first quarter ended May 27, 2001 and $125,000 in its third quarter ended November 25, 2001 for severance payments and related costs for terminated employees at the Company's continuing operations in Asia, Europe and North America. The terminated employees were hourly and salaried, administrative, manufacturing and support employees. The components of these charges and the related liability balances and activity from the November 25, 2001 and May 27, 2001 balance sheet dates to the September 1, 2002 balance sheet date are set forth below.
(Amounts in thousands)
Charges 9/1/02
Closure Incurred or Remaining
Charges Paid Reversals Liabilities
Dielektra GmbH charges:
Impairment of long
lived assets $ 378 $ 378 $ - $ -
Write down of assets 523 523 - -
Severance payments and
related costs 2,020 2,020 - -
------ ------ ----- ----
2,921 2,921 - -
Other severance payments
and related costs 806 806 - -
------ ------ ----- ----
$3,727 $3,727 $ - $ -
====== ====== ===== ====
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The charge for fixed asset impairments was comprised of $378,000 to write off the net book value of machinery and equipment and $523,000 to write down related land and building that are no longer used as a result of the close- down of the conventional lamination line of Dielektra. The machinery and equipment have no residual value. The land and building that previously housed the closed operations are being held for sale and have been written down to their estimated net realizable value of $2,050,000.
All the terminated employees referred to in this Note were hourly and salaried, administrative, manufacturing and support employees, all such employees were terminated during the first, second and third fiscal quarters ended May 27, 2001, August 26, 2001 and November 25, 2001, respectively, and substantially all the severance payments and related costs for such terminated employees were paid during such quarters, except payments and costs of $1,212,000 in Germany, which were paid in installments to terminated employees in Germany during the six months ended September 1, 2002.
As a result of the foregoing employee terminations and other less significant employee terminations in connection with business contractions and in the ordinary course of business and substantial numbers of employee resignations and retirements in the ordinary course of business, the total number of employees employed by the Company declined to approximately 1,700 as of March 3, 2002 from approximately 3,000 as of February 25, 2001, the end of the Company's 2001 fiscal year, and was approximately 1,700 as of September 1, 2002.
6. EARNINGS (LOSS) PER SHARE
Basic earning (loss) per share is computed by dividing the net earnings (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted earnings per share is computed by dividing net earnings by the sum of (a) the weighted average number of shares of common stock outstanding during the period and (b) the potential common stock equivalents during the period. Stock options are the only common stock equivalents and are computed using the treasury stock method.
The table below sets forth the basic and diluted weighted average number of shares of common stock and potential common stock equivalents outstanding for the periods specified:
(Amounts in thousands)
13 weeks ended 26 weeks ended
September 1, August 26, September 1, August 26,
2002 2001 2002 2001
Weighted average common shares
outstanding for basic EPS 19,669 19,545 19,665 19,482
Weighted averages shares
outstanding for diluted EPS 20,013 19,545 20,094 19,482
Common stock equivalents not included in the computation
of diluted loss per share because the effect would have
been antidilutive, were 439,011 and 455,350 for the 13
weeks and 26 weeks ended August 26, 2001, respectively.
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Common stock equivalents, not included in the computation of diluted earnings (loss) per share because the options' exercise prices were greater than the average market price of the common stock, were 90,582 and 73,574 for the 13 weeks ended September 1, 2002 and August 26, 2001, respectively, and 54,089 and 55,111 for the 26 weeks ended September 1, 2002 and August 26, 2001, respectively.
7. BUSINESS SEGMENTS
The Company's specialty adhesive tape and film business, advanced composite materials business and plumbing hardware business were previously aggregated into the engineered materials and plumbing hardware segment. In June 2002 the Company sold its specialty adhesive tape and film business. During fiscal year 2001, the Company closed and liquidated its plumbing hardware business. In fiscal years 2001, 2000 and 1999, the specialty adhesive tape, advanced composite materials and plumbing hardware businesses comprised less than 10% of the Company's consolidated revenues and assets, and the Company considered itself to operate in one business segment. The Company's electronic materials products are marketed primarily to leading independent printed circuit board fabricators, electronic manufacturing service companies, electronic contract manufacturers and major electronic original equipment manufacturers ("OEMs") located throughout North America, Europe and Asia. The Company's advanced composite materials customers, the majority of which are located in the United States, include OEMs, independent firms and distributors in the electronics, aerospace and industrial industries.
Sales are attributed to geographic region based upon the region from which the materials were shipped to the customer. Sales between geographic regions were not significant.
Financial information concerning the Company's operations by geographic area follows:
(Amounts in thousands)
13 Weeks Ended 26 Weeks Ended
September 1, August 26, September 1, August 26,
2002 2001 2002 2001
Sales:
North America $31,079 $29,698 $ 63,327 $ 71,157
Europe 13,935 13,300 26,869 30,281
Asia 11,887 8,745 23,266 19,407
Total sales $56,901 $51,743 $113,462 $120,845
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September 1. March 3,
2002 2002
Long-lived assets:
United States $ 99,000 $104,386
Europe 27,113 22,954
Asia 21,918 22,943
Total long-lived assets $148,031 $150,283
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8. COMPREHENSIVE INCOME (LOSS)
Total comprehensive income (loss) for the 13 weeks ended
September 1, 2002 and August 26, 2001 was $3,041,000 and
$(1,937,000), respectively. Total comprehensive income
(loss) for the 26 weeks ended September 1, 2002 and August
26, 2001 was $4,250,000 and $(18,496,000), respectively.
Comprehensive income (loss) consisted primarily of net
income and foreign currency translation adjustments and
unrealized gains and losses on investments.
9. SALE OF DIELECTRIC POLYMERS, INC.
On June 27, 2002, the Company sold its Dielectric Polymers, Inc. ("DPI") subsidiary to Adhesive Applications, Inc. of Easthampton, Massachusetts. The Company recorded a gain of approximately $3.2 million in its fiscal year 2003 second quarter ended September 1, 2002 in connection with the sale.
10. SUBSEQUENT EVENTS
On October 2, 2002 the Company announced that it was proposing to close its Nelco U.K. manufacturing facility located in Skelmersdale, England and commence a consultation process with its Nelco U.K. employees regarding the proposed closure. The Company expects to record a non-recurring, pre-tax charge of $4.0 million to $5.0 million in its 2003 fiscal year third quarter in connection with this proposed closure.
11. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In June 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("SFAS 146"). The Statement is effective for exit or disposal activities initiated after December 31, 2002. SFAS 146 addresses significant issues relating to the recognition, measurement and reporting of costs associated with exit and disposal activities, including restructuring activities. The Company has not yet determined what effect SFAS 146 will have on the Company's consolidated results of operations or financial position.
In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 141, "Business Combinations", and Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", effective for fiscal years beginning after December 15, 2001. Under the new rules set forth in these Statements, goodwill and other intangible assets deemed to have indefinite lives will no longer be amortized but will be subject to annual impairment tests in accordance with the Statements. Other intangible assets will continue to be amortized over their useful lives. In addition, Statement 141 eliminates the pooling-of- interests method of accounting for business combinations, except for qualifying business combinations that were initiated prior to July 1, 2001. The Company adopted SFAS 142 for the fiscal quarter ended June 2, 2002. The Company does not have any goodwill on its balance sheet, has virtually no intangible assets, and is not engaged in any transactions that are affected by the Statements; and, therefore, the application of the non-amortization provisions of the Statements did not have a material adverse effect on the Company's consolidated results of operations or financial position.
In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143") effective for fiscal years beginning after June 15, 2002. SFAS 143 requires the fair value of liabilities for asset retirement obligations to be recognized in the period in which the obligations are incurred if a reasonable estimate of fair value can be made. The associated asset retirement costs are capitalized as part of the carrying amount of the long-lived asset. The Company has not yet determined what effect SFAS 143 will have on the Company's consolidated results of operations or financial position.
In October 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 144, "Accounting for the Impairment or Disposal of Long- Lived Assets" ("SFAS 144"), which supercedes Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121"). Although it retains the basic requirements of SFAS 121 regarding when and how to measure an impairment loss, SFAS 144 provides additional implementation guidance. SFAS 144 is effective for all fiscal years beginning after December 15, 2001. The Company adopted SFAS 144 for the quarter ended June 2, 2002. The adoption did not have a material effect on the Company's results of operations or financial condition.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
General
Park is a leading global designer and producer of advanced electronic materials used to fabricate complex multilayer printed circuit boards and other electronic interconnect systems. The Company's customers include leading independent printed circuit board fabricators, electronic manufacturing service companies, electronic contract manufacturers and major electronic original equipment manufacturers in the computer, telecommunications, transportation, aerospace and instrumentation industries.
The Company's sales increased in the three-month period ended September 1, 2002 compared with last fiscal year's comparable period, with increases in sales by the Company's Asian, North American and European operations, while the Company's sales in the six-month period ended September 1, 2002 declined compared with last year's comparable period, with declines in sales by the Company's North American and European operations, with the decline in Europe attributable primarily to Germany. However, the Company's sales in last year's comparable six-month period benefited from significantly higher sales in March 2001 than in any subsequent month, as the downturn in the global electronics industry and in the Company's sales occurred in the 2002 fiscal year first quarter.
The earnings growth that the Company achieved during its 2001 and 2000 fiscal years halted in the 2002 fiscal year as a result of the severe downturn in the global electronics industry, and the global electronics industry continued to be very depressed during the 2003 fiscal year first and second quarters, with no clear signs of recovery.
In response to devastating losses in the U.K. high technology circuit board industry, the Company announced on October 2, 2002 that it was proposing to close its Nelco U.K. manufacturing facility in Skelmersdale, England and that it was commencing a consultation process with its Nelco U.K. employees regarding the proposed closure. The Company also announced that it expects to record a non-recurring, pre-tax charge of $4.0 million to $5.0 million in its 2002 fiscal year third quarter in connection with this proposed closure.
The Company is not engaged in any related party transactions involving relationships or transactions with persons or entities that derive benefits from their non- independent relationship with the Company or the Company's related parties, or in any transactions with parties with whom the Company or its related parties have a relationship that enables the parties to negotiate terms of material transactions that may not or would not be available from other, more clearly independent parties on an arm's-length basis, or in any trading activities involving non-exchange traded commodity or other contracts that are accounted for at fair value or otherwise or in any energy trading or risk management activities, other than certain limited foreign currency contracts intended to hedge the Company's contractual commitments to pay certain obligations or to realize certain receipts in foreign currencies.
Three and Six Months Ended September 1, 2002 Compared with Three and Six Months Ended August 26, 2001
The Company's operations continued to be weak during the three-month and six-month periods ended September 1, 2002 as the North American, European and Asian markets for sophisticated printed circuit materials continued to experience severely depressed conditions during the 2003 fiscal year first and second quarters.
Nevertheless, the Company's operating results in the 2003 fiscal year first and second quarters improved over last year's comparable periods as a result of the Company's reductions of its costs and expenses, higher sales volumes and higher percentages of sales of higher technology, higher margin products. In addition, the Company reported positive net earnings in the three-month and six-month periods ended September 1, 2002 as a result of the non-recurring, pre-tax gain of $3.2 million that the Company realized during the 2003 fiscal year second quarter in connection with the sale of its Dielectric Polymers, Inc. ("DPI") subsidiary, compared to losses in last year's comparable periods, which included a non- recurring, pre-tax charge of $15.7 million that the Company incurred during the 2002 fiscal year first quarter in connection with the sale of the assets and business of Nelco Technology, Inc. ("NTI"), the Company's wholly owned subsidiary that manufactured semi-finished printed circuit boards, commonly known as mass lamination, in Tempe, Arizona, the closure of a related support facility in Arizona and pre-tax severance charges of $0.7 million that the Company incurred during the 2002 fiscal year first quarter related to the layoff of employees at the Company's continuing operations.
Results of Operations
Net sales for the three-month period ended September 1, 2002 increased 10% to $56.9 million, while net sales for the six-month period ended September 1, 2002 declined 6.0% to $113.5 million, from $51.7 million and $120.8 million, respectively, for last fiscal year's comparable periods. The increase in net sales during the three-month period was primarily the result of higher unit volumes of materials shipped by the Company's operations in Asia and North America, while the decrease in net sales during the six-month period was the result of lower unit volumes of materials shipped during the first quarter of the 2003 fiscal year by the Company's operations in Europe and North America, partially offset by higher unit volumes of materials shipped by the Company's operations in Asia. The comparative decrease in net sales during the six-month period ended September 1, 2002 was also influenced by the fact that the Company's net sales in the six- month period ended August 26, 2001 benefited from significantly higher sales in March 2001 than in any subsequent month, as the downturn in the global electronics industry and in the Company's sales occurred in the 2002 fiscal year first quarter.
The Company's foreign operations accounted for $25.8 million and $50.1 million, respectively, of sales, or 45% and 44% of the Company's total sales worldwide, during the three- month and six-month periods ended September 1, 2002 compared with $22.0 million and $49.7 million, respectively, of sales, or 43% and 41%, respectively, of total sales worldwide, during last fiscal year's comparable periods. Net sales by the Company's foreign operations during the three-month and six- month periods ended September 1, 2002 increased 17% and 1%, respectively, from the 2002 fiscal year comparable periods. The increases in sales by foreign operations were due primarily to increases in sales in Asia, although sales by the Company's operations in Europe declined during the first quarter of the 2003 fiscal year and compared with last fiscal year's first quarter, and sales by the Company's operations in Germany declined during the three-month and six-month periods ended September 1, 2002 compared with last year's comparable periods.
The gross margins for the Company's worldwide operations were 10.9% and 11.0%, respectively, during the three-month and six-month periods ended September 1, 2002 compared with 2.7% and 3.9%, respectively, for last fiscal year's comparable periods. The improvements in the gross margins were attributable to the Company's ongoing cost reduction measures, including significant workforce reductions and production efficiencies resulting from enhanced manufacturing automation, and manufacturing efficiencies and improved plant utilization resulting from the higher sales volumes in the three-month period ended September 1, 2002. Gross profit was also positively impacted by higher percentages of sales of higher technology, higher margin products, as high performance materials accounted for 76% and 77%, respectively, of worldwide sales for the first and second quarters of the 2003 fiscal year compared with 66% and 62%, respectively, for the first and second quarters of the 2002 fiscal year. The Company also continued to implement an annual salary freeze for significant numbers of salaried employees, especially senior management employees, and paid no performance bonuses or significantly reduced bonuses and other incentives.
Selling, general and administrative expenses declined by $0.5 million and $1.9 million, respectively, or by 6% and 11%, during the three-month period and six-month period, respectively, ended September 1, 2002 compared with last fiscal year's comparable periods, and these expenses, measured as a percentage of sales, were 14% during the three-month and six- month periods ended September 1, 2002 compared with 16% and 15%, respectively, during last fiscal year's comparable periods. The decreases in the expenses as percentages of sales in the 2003 fiscal year periods resulted from higher sales and lower expenses in the three-month period ended September 1, 2002 compared to the comparable period in the last fiscal year and from lower expenses in the six-month period ended September 1, 2002 compared to the comparable periods in the last fiscal year.
The Company incurred a non-recurring, pre-tax charge of $15.7 million during the 2002 fiscal year first quarter in connection with the sale of the assets and business of Nelco Technology, Inc. ("NTI"), the Company's wholly owned subsidiary that manufactured semi-finished printed circuit boards, commonly known as mass lamination, in Tempe, Arizona, and the closure of a related support facility in Arizona. NTI formerly supplied Delco Electronics Corporation with semi-finished printed circuit boards. The Company also incurred pre-tax severance charges of $0.7 million during the 2002 fiscal year first quarter related to the layoff of employees at the Company's continuing operations.
The Company recorded a non-recurring, pre-tax gain of $3.2 million in the 2003 fiscal year second quarter in connection with the sale of DPI on June 27, 2002 for $5.0 million cash.
For the reasons set forth above, income from operations was $1.5 million for the three months ended September 1, 2002, including the non-recurring, pre-tax gain described above relating to the sale of DPI, compared with a loss of $7.0 million for the three months ended August 26, 2001, and the loss from operations was $0.4 million for the six months ended September 1, 2002, including the non-recurring, pre-tax gain described above, compared with $29.6 million for last fiscal year's comparable period, including the non-recurring pre-tax charges described above related to the sale of NTI, the closure of a related support facility and severance for the lay-off of employees at the Company's continuing operations.
Interest and other income, net, principally investment income, was $0.8 million and $1.7 million, respectively, for the three-month and six-month periods ended September 1, 2002 compared with $1.6 million and $3.3 million, respectively, for last fiscal year's comparable periods. The decreases in investment income were attributable to decreases in prevailing interest rates. The Company's investments were primarily short- term taxable instruments.
The Company's effective income tax rates for the three- month and six-month periods ended September 1, 2002 were 30.0% compared with the same rates for the three-month and six-month periods ended August 26, 2001.
For the reasons set forth above, net income for the three-month period ended September 1, 2002, including the non- recurring, pre-tax gain described above relating to the sale of DPI, was $1.6 million compared to a net loss of $3.8 million for the three months ended August 26, 2001. Net income for the six-month period ended September 1, 2002, including the non- recurring, pre-tax gain described above, was $1.0 million compared to a net loss of $18.4 million for the six-month period ended August 26, 2001, including the non-recurring, pre- tax charges described above related to the sale of NTI, the closure of a related support facility and severance for the lay- off of employees at the Company's continuing operations. Before the non-recurring, pre-tax gain described above relating to the sale of DPI, the net losses for the three-month and six-month periods ended September 1, 2002 were $0.6 million and $1.3 million, respectively, compared to net losses for the three- month and six-month periods ended August 26, 2001, before the non-recurring, pre-tax charges described above of $3.8 million and $6.9 million, respectively.
Basic and diluted earnings per share for the three-month period ended September 1, 2002 were $0.08, including the non- recurring, pre-tax gain described above relating to the sale of DPI, compared to a loss of $0.19 for the three-month period ended August 26, 2001.Basic and diluted earnings per share for the six-month period ended September 1, 2002 were $0.05, including the non-recurring, pre-tax gain, compared to a loss of $0.94 for the six-month period ended August 26, 2001, including the non-recurring, pre-tax charges. Basic and diluted per share losses for the three-month and six-month periods ended September 1, 2002, before the non-recurring, pre-tax gain, were $0.03 and $0.06, respectively, compared to basic and diluted per share losses before the non-recurring, pre-tax charges for the prior year's comparable periods of $0.19 and $0.36, respectively.
Liquidity and Capital Resources:
At September 1, 2002, the Company's cash and temporary investments were $154.7 million compared with $151.4 million at March 3, 2002, the end of the Company's 2002 fiscal year. The Company's working capital (which includes cash and temporary investments) was $172.5 million at September 1, 2002 compared with $167.0 million at March 3, 2002. The Company's current ratio (the ratio of current assets to current liabilities) was 5.2 to 1 and 4.9 to 1 at September 1, 2002 and at March 3, 2002, respectively.
During the six-months ended September 1, 2002, the Company generated $4.0 million of cash from operating activities. During the same six-month period, the Company expended $4.1 million for the purchase of property, plant and equipment compared with $15.4 million for the six-month period ended August 26, 2001 and paid $2.3 million in dividends on its common stock in each of such six-month periods. Net expenditures for property, plant and equipment were $22.8 million in the 2002 fiscal year and $51.8 million in the 2001 fiscal year. During the past two fiscal years, the Company completed significant expansions of its electronic materials manufacturing facilities in California and New York and its higher technology product line manufacturing facility in Arizona.
The Company sold its DPI subsidiary on June 27, 2002 for $5.0 million cash and recorded a non-recurring, pre-tax gain of $3.2 million in the 2003 fiscal year second quarter in connection with the sale.
At September 1, 2002, the Company had no long-term debt. The Company believes its financial resources will be sufficient, for the foreseeable future, to provide for continued investment in working capital and property, plant and equipment and for general corporate purposes. Such resources would also be available for appropriate acquisitions and other expansion of the Company's business.
The Company is not aware of any circumstances or events that are reasonably likely to occur that could materially affect its liquidity.
The Company's liquidity is not dependent on the use of, and the Company is not engaged in, any off-balance sheet financing arrangements, such as securitization of receivables or obtaining access to assets through special purpose entities.
The Company's contractual obligations and other commercial commitments to make future payments under contracts, such as lease agreements, consist only of the operating lease commitments. The Company has no long-term debt, capital lease obligations, unconditional purchase obligations or other long- term obligations, standby letters of credit, guarantees, standby repurchase obligations or other commercial commitments or contingent commitments, other than a standby letter of credit in the amount of $1,042,000 to secure the Company's obligations under the workers' compensation insurance program.
Environmental Matters:
In the six-month periods ended September 1, 2002 and August 26, 2001, the Company charged less than $0.1 million against pretax income for environmental remedial response and voluntary cleanup costs (including legal fees). While annual expenditures have generally been constant from year to year and may increase over time, the Company expects it will be able to fund such expenditures from available cash. The timing of expenditures depends on a number of factors, including regulatory approval of cleanup projects, remedial techniques to be utilized and agreements with other parties. At September 1, 2002 and March 3, 2002, the recorded liability in accrued liabilities for environmental matters was approximately $4.0 million. Management does not expect that environmental matters will have a material adverse effect on the liquidity, capital resources, business, consolidated results of operations or consolidated financial position of the Company.
Critical Accounting Policies and Estimates:
In response to financial reporting release, FR-60, "Cautionary Advice Regarding Disclosure About Critical Accounting Policies", issued by the Securities and Exchange Commission in December 2001, the following information is provided regarding critical accounting policies that are important to the Consolidated Financial Statements and that entail, to a significant extent, the use of estimates, assumptions and the application of management's judgment.
General
The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the related disclosure of contingent liabilities. On an on-going basis, the Company evaluates its estimates, including those related to sales allowances, bad debts, inventories, valuation of long- lived assets, income taxes, restructuring, pensions and other employee benefit programs, and contingencies and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
The Company believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its consolidated financial statements.
Sales Allowances
The Company provides for the estimated costs of sales allowances at the time such costs can be reasonably estimated. The Company is focused on manufacturing the highest quality electronic materials and other products possible and employs stringent manufacturing process controls and works with raw material suppliers who have dedicated themselves to complying with the Company's specifications and technical requirements. However, if the quality of the Company's products declined, the Company may incur higher sales allowances.
Bad Debt
The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. If the financial condition of the Company's customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.
Inventory
The Company writes down its inventory for estimated obsolescence or unmarketability based upon the age of the inventory and assumptions about future demand for the Company's products and market conditions. If actual demand or market conditions are less favorable than those projected by management, additional inventory write-downs may be required.
Valuation of Long-lived Assets
The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Important factors that could trigger an impairment review include, but are not limited to, significant negative industry or economic trends and significant changes in the use of the Company's assets or strategy of the overall business.
Income Taxes
Carrying value of the Company's net deferred tax assets assumes that the Company will be able to generate sufficient future taxable income in certain tax jurisdictions, based on estimates and assumptions. If these estimates and assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets resulting in additional income tax expense in the Company's consolidated statement of operations. Management evaluates the realizability of the deferred tax assets quarterly and assesses the need for additional valuation allowances quarterly.
Restructuring
During the fiscal year ended March 3, 2002, the Company recorded significant reserves in connection with the restructuring relating to the sale of Nelco Technology, Inc., the closure of a related support facility and the realignment of Dielektra, GmbH. These reserves include estimates pertaining to employee separation costs and the settlements of contractual obligations resulting from the Company's actions. Although the Company does not anticipate significant changes, the actual costs incurred by the Company may differ from these estimates.
Contingencies and Litigation
The Company is subject to a small number of proceedings, lawsuits and other claims related to environmental, employment, product and other matters. The Company is required to assess the likelihood of any adverse judgments or outcomes in these matters as well as potential ranges of probable losses. A determination of the amount of reserves required, if any, for these contingencies is made after careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in approach such as a change in settlement strategy in dealing with these matters.
Pension and Other Employee Benefit Programs
The Company's subsidiary in Germany has significant pension costs that are developed from actuarial valuations. Inherent in these valuations are key assumptions including discount rates and wage inflation rates. The Company is required to consider current market conditions, including changes in interest rates and wage costs, in selecting these assumptions. Changes in the related pension costs may occur in the future in addition to changes resulting from fluctuations in the Company's related headcount due to changes in the assumptions.
The Company's obligations for workers' compensation claims and employee-health care benefits are effectively self-insured. The Company uses an insurance company administrator to process all such claims and benefits. The Company accrues its workers' compensation liability based upon the claim reserves established by the third-party administrator and historical experience. The Company's employee health insurance benefit liability is based on its historical claims experience.
The Company and certain of its subsidiaries have a non- contributory profit sharing retirement plan covering their regular full-time employees. In addition, the Company's subsidiaries have various bonus and incentive compensation programs, most of which are determined at management's discretion.
The Company's reserves associated with these self-insured liabilities and benefit programs are reviewed by management for adequacy at the end of each reporting period.
Factors that May Affect Future Results.
Certain portions of this Report which do not relate to historical financial information may be deemed to constitute forward-looking statements that are subject to various factors which could cause actual results to differ materially from Park's expectations or from results which might be projected, forecast, estimated or budgeted by the Company in forward- looking statements. Such factors include, but are not limited to, general conditions in the electronics industry, the Company's competitive position, the status of the Company's relationships with its customers, economic conditions in international markets, the cost and availability of utilities, and the various factors set forth under the caption "Factors That May Affect Future Results" after Item 7 of Park's Annual Report on Form 10-K for the fiscal year ended March 3, 2002.
Item 3. Quantitative and Qualitative Disclosure About Market Risk
The Company's market risk exposure at September 1, 2002 is consistent with, and not greater than, the types of market risk and amount of exposures presented in the Annual Report on Form 10-K for the fiscal year ended March 3, 2002.
Item 4. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures. The Company's Chief Executive officer and Senior Vice President, Finance and Principal Financial Officer have evaluated the effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d- 14(c) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, the Company's disclosure controls and procedures are effective in alerting them, on a timely basis, to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic filings under the Exchange Act.
(b) Changes in Internal Controls. Since the Evaluation Date, there have not been any significant changes in the Company's internal controls or in other factors that could significantly affect such controls.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
In May 1998, the Company and its Nelco Technology, Inc. ("NTI") subsidiary in Arizona filed a complaint against Delco Electronics Corporation and the Delphi Automotive Systems unit of General Motors Corp. in the United States District Court for the District of Arizona. The complaint alleged, among other things, that Delco breached its contract to purchase semi- finished multilayer printed circuit boards from NTI and that Delphi interfered with NTI's contract with Delco, that Delco breached the covenant of good faith and fair dealing implied in the contract, that Delco engaged in negligent misrepresentation and that Delco fraudulently induced NTI to enter into the contract. The Company and NTI sought substantial compensatory and punitive damages.
On November 29, 2000, after a five day trial in Phoenix, Arizona, a jury awarded damages to NTI in the amount of $32,280,000, and on December 12, 2000 the judge in the United States District Court entered judgment for NTI on its claim of breach of the implied covenant of good faith and fair dealing with damages in the amount of $32,280,000. Both parties filed motions for post-judgment relief and a new trial, all of which the judge denied, and both parties have appealed the decision to the United States Court of Appeals for the Ninth Circuit in San Francisco. The appeal has been fully briefed and the parties await oral argument, which the Ninth Circuit has not yet scheduled.
Park announced in March 1998 that it had been informed by Delco Electronics that Delco planned to close its printed circuit board fabrication plant and exit the printed circuit board manufacturing business. After the plant closure, Delco purchased all of its printed circuit boards from outside suppliers and Delco was no longer a customer of the Company's. As a result, the Company's sales to Delco declined significantly during the three-month period ended May 31, 1998, were negligible during the three-month period ended August 30, 1998, have been nil since that time. During the Company's 1999 fiscal year first quarter and during its 1998 fiscal year and for several years prior thereto, more than 10% of the Company's total worldwide sales were to Delco Electronics Corporation; and the Company had been Delco's principal supplier of semi- finished multilayer printed circuit board materials for more than ten years. These materials were used by Delco to produce finished multilayer printed circuit boards. See "Factors That May Affect Future Results" after Item 2 of Part I of this Report.
In the first quarter of the fiscal year ended March 3, 2002, the Company sold the assets and business of NTI and recorded non-recurring, pre-tax charges of approximately $15.7 million in its 2002 fiscal year first quarter ended May 27, 2001 in connection with the sale of NTI and the closure of a related support facility also located in Arizona. See Note 4 of the Notes to Condensed Consolidated Financial Statements in Item 2 of this Report.
Item 4. Submission of Matters to a Vote of Security Holders.
At the Annual Meeting of Shareholders held on July 17, 2002:
(a) the persons elected as directors of the Company and the voting for such persons were as follows:
Authority
Name Votes For Withheld
---- -------- --------
Mark S. Ain 16,282,071 1,168,029
Anthony Chiesa 16,226,611 1,223,489
Lloyd Frank 16,229,021 1,221,079
Brian E. Shore 14,456,206 2,993,894
Jerry Shore 16,337,504 1,112,596
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(b) the Company's 2002 Stock Option Plan was approved by the Shareholders. There were 13,456,451 votes for the Plan, 3,617,713 votes against, and 375,931 abstentions.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
10.01. 2002 Stock Option Plan of the Company. (This exhibit is a management contract or compensatory plan or arrangement.)
99.01. Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.02. Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2202.
(b) No reports on Form 8-K have been filed during the fiscal quarter ended September 1, 2002.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
/s/Brian E. Shore
Date: October 14, 2002 -----------------------------
Brian E. Shore
President and
Chief Executive Officer
/s/Murray O. Stamer
Date: October 14, 2002 ----------------------------
Murray O. Stamer
Senior Vice President, Finance
Principal Financial Officer
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CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Brian E. Shore, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Park Electrochemical Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: October 14, 2002 /s/Brian E. Shore Brian E. Shore President and Chief Executive Officer |
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Murray O. Stamer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Park Electrochemical Corp.;
2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a- 14 and 15d-14) for the registrant and we have:
(a) designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to
the filing date of this quarterly report (the "Evaluation
Date"); and
(c) presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures
based on our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
(b) any fraud, whether or not material, that involves
management or other employees who have a significant role in
the registrant's internal controls; and
6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: October 14, 2002 /s/Murray O. Stamer Murray O. Stamer Senior Vice President, Finance Principal Financial Officer |
EXHIBIT INDEX
Exhibit No. Name Page
----------- ---- ----
10.01 2002 Stock option Plan of the
Company. (This exhibit is a
management contract or compensatory
plan or arrangement)............
99.01. Certification of Chief Executive
Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of
2002...................
99.02. Certification of Principal Financial
Officer pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of
2002...................
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PARK ELECTROCHEMICAL CORP.
2002 STOCK OPTION PLAN
1. Purpose of the Plan. This Plan (herein called the "Plan") is designed to promote shareholder value by providing appropriate incentives to key employees, including officers and directors of PARK ELECTROCHEMICAL CORP., a New York corporation (the "Company"), and its subsidiaries, and to offer an additional inducement in obtaining the services of key personnel and directors. The Plan provides for the grant of (i) incentive stock options ("Incentive Stock Options"), as contemplated by Section 422 of the Internal Revenue Code of 1986, as now in effect or later amended (the "Code"), which options shall be subject to the tax treatment described in Section 421 of the Code, and (ii) non-qualified stock options ("Non-Qualified Stock Options").
2. Stock Subject to the Plan. Options may be granted under the Plan to purchase in the aggregate not more than 900,000 shares of Common Stock, par value $.10 per share, of the Company ("Common Stock"), which shares may, in the discretion of the Board of Directors, consist either in whole or in part of authorized but unissued shares of Common Stock or shares of Common Stock held in the treasury of the Company. Subject to the provisions of Paragraph 7, any shares subject to an option which for any reason expires or is terminated unexercised as to such shares shall again become available for option under the Plan.
3. Administration of the Plan. The Plan shall be
administered by the Board of Directors of the Company or
such committee as the Board of Directors may establish or
designate from time to time (the "Committee"). The Committee
shall be composed of one or more members each of whom shall,
unless otherwise determined by the Board of Directors, be
(i) "non-employee directors", within the meaning of Rule 16b-
3 (or any successor rule) of the rules and regulations of
the Securities and Exchange Commission promulgated under the
Securities Exchange Act of 1934, as amended, and (ii)
"outside directors", within the meaning of Section 162(m) of
the Code and the rules and regulations of the Internal
Revenue Service promulgated thereunder. The Committee shall
be appointed by, and shall serve at the pleasure of, the
Board of Directors. A majority of the members of the
Committee shall constitute a quorum, and the acts of a
majority of the members of the Committee present at any
meeting at which a quorum is present, and any acts approved
in writing by all of the members without a meeting, shall be
the acts of the Committee. If the Board of Directors does
not establish a Committee to administer the Plan, all
references herein to the Committee shall be deemed to be
references to the Board of Directors; and references in the
Plan to determinations or actions of the Committee shall be
deemed to include determinations and actions by the Board of
Directors as well as the Committee.
Subject to the express provisions of the Plan, the Committee shall have the authority, in its discretion, to determine the individuals to receive options, the times when they shall receive them, the number of shares to be subject to each option (except that no grants of options may be made "in tandem", i.e., where an exercise of one option, in whole or in part, automatically results in the lapse of termination of another option, in whole or in part), whether and to what extent options shall be designated Incentive Stock Options or Non-Qualified Stock Options, the amount of any required federal income tax or other withholding amount, the term of each option, the date each option shall become exercisable, whether an option shall be exercisable in whole, in part or in installments, and if in installments, the number of shares subject to each installment, the date each installment shall become exercisable and the term of each installment, to accelerate the date of exercise of any installment, to modify the terms of any option that has been granted, to make any adjustments necessary or desirable as a result of the granting of options to eligible individuals located outside the United States, to determine the terms and conditions of each option and to prescribe the form of the agreements evidencing options made under the Plan. The Committee is authorized to interpret the Plan and the options granted under the Plan and the agreements evidencing such options, to establish, amend and rescind any rules and regulations relating to the Plan, and to make any other determinations which it deems necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any option or any agreement evidencing an option in the manner and to the extent the Committee deems necessary or desirable to carry it into effect. Any decision of the Committee in the interpretation and administration of the Plan, as described herein, shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. The Committee may act only by a majority of its members in office, except that the members thereof may authorize any one or more of their members or any officer of the Company to execute and deliver documents or to take any other action on behalf of the Committee with respect to options granted or to be granted to Plan participants. No member of the Committee and no officer of the Company shall be liable for anything done or omitted to be done by him, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for his own willful misconduct or as expressly provided by statute.
Notwithstanding anything in the Plan to the contrary, without the prior approval of the Company's shareholders, options granted under the Plan may not be repriced by lowering the exercise price thereof, or by cancellation of outstanding options with subsequent replacement, or regrant of options with lower exercise prices.
4. Eligibility. The Committee may, consistent with the
purposes of the Plan, grant options from time to time within
ten (10) years from the date of adoption of the Plan by the
Board of Directors of the Company, to (i) key employees,
including officers and directors who are employees, of the
Company or any of its present or future subsidiary
corporations ("Subsidiaries"), (ii) directors of the Company
who are not employees of the Company or any of its
Subsidiaries and (iii) consultants rendering services to the
Company or any of its Subsidiaries, covering such number of
shares of Common Stock as the Committee may determine and
subject to such terms and conditions as the Committee shall
from time to time determine in its sole discretion, subject
to the terms and provisions of the Plan. The aggregate fair
market value (determined at the time the stock option is
granted) of the shares with respect to which Incentive Stock
Options may be granted under this Plan and any other
incentive stock options satisfying the requirements of
Section 422 of the Code granted under any other plan of the
company or any of its subsidiaries (as defined in Section
424(f) of the Code) or of its parent (as defined in Section
424(e) of the Code) which are exercisable for the first time
by any particular optionee during any calendar year shall
not exceed $100,000. In addition, no Incentive Stock Option
may be granted under the Plan if such grant, together with
any other applicable grant of Incentive Stock Options under
the Plan and any other incentive stock options satisfying
the requirements of the Code granted under any other plan of
the Company or any of its subsidiaries (as defined in
Section 424(f) of the Code) or of its parent (as defined in
Section 424(e) of the Code), would exceed any other
applicable maximum established under the Code for incentive
stock options. Individuals, including those who have been
granted options under the Company's 1964 and 1968 Qualified
Stock Option Plans, 1974 Amended Stock Option Plan, 1982
Amended and Restated Stock Option Plan and 1992 Stock Option
Plan, as amended, may receive more than one option under the
Plan. If an option granted under the Plan exceeds the
foregoing limitations, such option shall be deemed a Non-
Qualified Stock option to the extent it exceeds such
limitations. Commencing in the Company's fiscal year ending
March 2, 2003, no Participant may, in any such fiscal year,
receive Options relating to Shares which in the aggregate
exceed the greater of (i) 50% of the total number of Shares
granted pursuant to the Plan in any such year or (ii)
100,000 Shares.
5. Option Price. The purchase price of the Common Stock
under each option shall be determined by the Committee, but
shall in no event be less than the fair market value of the
Common Stock at the time of grant; provided, however, that
if at the time an Incentive Stock Option is granted, the
individual owns stock possessing more than 10% of the total
combined voting power of all classes of the capital stock of
the Company, of its present and future subsidiaries (as
defined in Section 424(f) of the Code) or of a parent (as
defined in Section 424(e) of the Code), the purchase price
shall not be less than 110% of the fair market value of the
Common Stock at the time of grant. Such fair market value
shall be taken by the Committee as the reported closing
price of the Common Stock on the New York Stock Exchange
(or, if the Common Stock is not then listed on the New York
Stock Exchange, on such other securities exchange on which
the Common Stock may then be listed), on the date preceding
the date the option is granted, or if there is no sale of
the Common Stock on that date, then on the last previous day
on which such sale was reported, provided that, if the
foregoing clause is inapplicable, fair market value shall be
determined by the Committee and provided that, with respect
to Incentive Stock Options, if such method is inconsistent
with any regulations applicable to such options adopted by
the Treasury Department, then the fair market value shall be
determined by the Committee consistent with such
regulations. For the purposes of this Plan, an individual
shall be deemed to own shares which he may purchase under
outstanding options and shares attributed to him under
Section 424(d) of the Code or any comparable provision
thereafter enacted.
6. Term of Option. The term of each Incentive Stock Option granted pursuant to the Plan shall be for a period not exceeding ten (10) years from the date of granting thereof; provided, however, that if, at the time an Incentive Stock Option is granted, the individual to whom such option is granted owns stock possessing more than 10% of the total combined voting power of all classes of the capital stock of the Company, of any of its present or future subsidiaries (as defined in Section 424(f) of the Code) or of a parent (as defined in Section 424(e) of the Code), the term of the Incentive Stock Option granted to such individual shall be for a period not exceeding five (5) years from the date of grant thereof. The term of each Non- Qualified Stock Option granted pursuant to the Plan shall be for a period not exceeding ten (10) years and one (1) month from the date of grant thereof. Options shall be subject to earlier termination as hereinafter provided.
7. Exercise or Surrender of Option. (a) General. An option (or any part or installment thereof) shall be exercised by giving written notice to the Company at its principal office (at the time of adoption of this Plan, located at 5 Dakota Drive, Lake Success, New York 11042), identifying the option being exercised, specifying the number of shares as to which such option is being exercised and accompanied by payment in full of the aggregate purchase price therefor either (i) in cash (including check, bank draft or money order, or wire or other transfer of funds, or advice of credit to the Company) or (ii) at the discretion of the Committee, in shares of Common Stock with a fair market value equal to the purchase price or a combination of cash and shares of Common Stock which in the aggregate are equal in value to such purchase price, plus any required federal income tax or other withholding amount. Certificates representing the shares purchased shall be issued as promptly as practicable thereafter, and, at the discretion of the Committee, such certificates may be issued in the name of the optionee and another person jointly with the right of survivorship. The holder of an option shall not have the right of a shareholder with respect to the shares covered by his option until the date of issuance of a stock certificate to him or her for such shares. In no case may a fraction of a share be purchased or issued under the Plan.
(b) Surrender. (1) General Rule. The Committee acting in its absolute discretion may incorporate a provision in the terms of an option to allow a holder of an option granted under this Plan to surrender his or her option in whole or in part in lieu of the exercise in whole or in part of that option on any date that:
(a) the fair market value of the Common Stock subject to such option (determined in accordance with Paragraph 5) exceeds the option price (determined pursuant to Paragraph 5) for such Common Stock; and
(b) the option to purchase such Common Stock is otherwise exercisable.
(2) Procedure. The surrender of an option in whole or in part shall be effected by the delivery of the Stock Option Contract provided for in Paragraph 10 to the Committee or to its delegate together with a statement signed by the holder of an option granted under this Plan which specifies the number of shares of Common Stock as to which the holder of an option granted under this Plan surrenders his or her option and how he or she desires payment be made for such Common Shares surrendered in accordance with this Paragraph.
(3) Payment. In exchange for his or her option surrendered in accordance with this Paragraph a holder of an option granted under this Plan shall receive a payment in cash or in Common Stock, or in a combination of cash and Common Stock, equal in amount on the date such surrender is effected to the excess of the fair market value determined in accordance with Paragraph 5 of the Shares surrendered in accordance with this Paragraph on such date over the option price determined pursuant to Paragraph 5 for the Shares surrendered in accordance with this Paragraph (reduced by any applicable federal income tax or other withholding amount). The Committee acting in its absolute discretion may approve or disapprove the request for payment by the holder of an option granted under this Plan in whole or in part in cash and may cause such payment to be made in cash or in such combination of cash and Common Stock as the Committee deems appropriate. A request for payment only in Common Stock shall be approved and made in Common Stock to the extent payment can be made in whole shares of Common Stock and, at the Committee's discretion, in cash in lieu of any fractional share of Common Stock.
8. Termination of Employment. Unless otherwise provided in connection with the grant of any particular option or in the applicable Stock Option Contract, upon the termination of employment or service as a director or consultant of any optionee all options held by such optionee that have not previously become exercisable shall terminate on the date of such termination. Unless otherwise provided in connection with the grant of any particular option or in the applicable Stock Option Contact, any option holder whose employment or whose service as a director or consultant has terminated for any reason other than death may exercise his option, to the extent exercisable upon the effective date of such termination, at any time within three (3) months after the date of termination, but in no event after the expiration of the term of the option, provided, however, that if his employment or service as a director or consultant shall be terminated either (i) for Cause (as defined below), or (ii) without the consent of the Company, said option shall (to the extent not previously exercised) terminate immediately. Options granted under the Plan shall not be affected by any change of employment so long as the holder continues to be an employee of the Company or of any of the Subsidiaries or of a corporation or its parent or subsidiary issuing or assuming a stock option in a transaction to which Section 424(a) of the Code applies. Notwithstanding the foregoing, any holder of an option whose employment or service as a director or consultant has terminated by reason of disability (as defined in Section 22(e)(3) of the Code) may exercise his option to the extent exercisable upon the effective date of such termination, at any time within one (1) year after the date of termination, but in no event after the expiration of the term of the option. In connection with the termination of employment or service as a director or consultant of any particular holder of an option, the Committee may, in its discretion, determine to permit a longer period than that specified in this Paragraph or the applicable Stock Option Contract for the exercise of all or any part of such option after such termination or to permit such option to be exercisable in whole or in part with respect to the shares as to which such option would not otherwise be exercisable at the time of such termination.
For the purpose of the Plan, an employment relationship shall be deemed to exist between an individual and a corporation if, at the time of the determination, the individual was an employee of such corporation for purposes of Section 422(a) of the Code. As a result, an individual on military leave, sick leave or other bona fide leave of absence shall continue to be considered an employee for purposes of the Plan during such leave if the period of the leave does not exceed 90 days, or, if longer, so long as the individual's right to re-employment with the Company or any of its subsidiaries is guaranteed either by statute or by contract. If the period of leave exceeds 90 days and the individual's right to re-employment is not guaranteed by statute or by contract, the employment relationship shall be deemed to have terminated on the 91st day of such leave.
Nothing in the Plan or in any option granted under the Plan shall confer on any person any right to continue in the employ or as a consultant of the Company or any of its subsidiaries, or as a director of the Company, or interfere in any way with any right of the Company or any of its subsidiaries to terminate such relationship at any time for any reason whatsoever without liability to the Company or any of its subsidiaries.
"Cause", in connection with the termination of an
optionee, shall mean (i) "cause," as such term (or any
similar term, such as "with cause") is defined in any
employment, consulting or other applicable agreement for
services between the Company or any of its subsidiaries and
such optionee, or (ii) in the absence of such an agreement,
"cause," as such term is defined in the Contract executed by
the Company and such optionee pursuant to Paragraph 10, or
(iii) in the absence of both of the foregoing, (A)
indictment of such optionee for any illegal conduct, (B)
failure of such optionee to adequately perform any of the
optionee's duties and responsibilities in any capacity held
with the Company or any of its subsidiaries (other than any
such failure resulting solely from such optionee's physical
or mental incapacity), (C) the commission of any act or
failure to act by such optionee that involves moral
turpitude, dishonesty, theft, destruction of property,
fraud, embezzlement or unethical business conduct, or that
is otherwise injurious to the Company or any of its
subsidiaries or any other affiliate of the Company (or its
or their respective employees), whether financially or
otherwise, (D) any violation by such optionee of any Company
rule or policy, or (E) any violation by such optionee of the
requirements of such Contract, any other contract or
agreement between the Company or any of its subsidiaries and
such optionee or the Plan (as in effect from time to time);
in each case, with respect to subsections (A) through (E),
as determined by the Board of Directors or the Committee.
9. Death of an Employee. If an option holder dies while he is employed by the Company or any of the Subsidiaries or serving as a director or consultant of the Company, or within three months after termination of his employment or service as a director or consultant (unless such termination was either (i) for cause, or (ii) without the consent of the Company), unless otherwise provided in connection with the grant of such option or in the applicable Stock Option Contract, the option may be exercised, to the extent exercisable on the date of his or her death, by his or her executor, administrator or other person at the time entitled by law to his rights under the option, at any time within six (6) months after death, but in no event after the expiration of the term of the option. In connection with the death of any particular holder of an option, the Committee may, in its discretion, determine to permit a longer period than that specified in this Paragraph or the applicable Stock Option Contract for the exercise of such option after such death or to permit such option to be exercisable in whole or in part with respect to the shares as to which option would not otherwise be exercisable at the time of such death.
10. Stock Option Contracts. Each option shall be evidenced by an appropriate Stock Option Contract which shall provide, among other things, (a) that the individual agrees that he or she will remain in the employ of the Company or the Subsidiaries or as a director or consultant of the Company, at the election of the Company, for a period of at least (i) one (1) year from the date the option is granted to him or her, or (ii) such later date to which he or she is then contractually obligated to remain in the employ of the Company, (b) that in the event of the exercise of such option, unless the shares received upon exercise shall have been registered pursuant to an effective registration statement under the Securities Act of 1933, as amended, the individual acknowledges that such shares may be "restricted securities" as defined in Rule 144 under such Act and agrees that such shares may not be sold except in compliance with applicable provisions of such Act, and (c) that in the event of any disposition of the shares of Common Stock acquired upon the exercise of an Incentive Stock Option within two (2) years from the date of grant of the option or one (1) year from the date of issuance of such shares to him or her, the individual will notify the Company thereof in writing within thirty (30) days after such disposition and will pay to the Company an amount necessary to satisfy any obligations the Company may have to withhold any taxes by reason of such disqualifying disposition. Nothing in the Plan or in any Stock Option Contract entered into pursuant hereto shall confer upon any individual any right to continue in the employ of the Company or the Subsidiaries or as a director or consultant of the Company, or interfere in any way with the right of the Company or the Subsidiaries (subject to the terms of any written employment contract) to terminate his or her employment or service as a director or consultant at any time without liability to the Company or the Subsidiaries.
11. Adjustments Upon Changes in Common Stock; Certain Other Changes. (a) Notwithstanding any other provision of the Plan, in the event of any stock dividend, recapitalization, merger, consolidation, split-up, combination or exchange of shares or the like, the aggregate number and kind of shares or other property available under the Plan, the aggregate number and kind of shares or other property subject to each outstanding option and the option prices provided therein shall be appropriately adjusted by the Board of Directors, whose determination shall be conclusive.
(b) Unless the applicable Stock Option Contract
provides otherwise, in the event of a Change of Control any
outstanding options shall become fully exercisable. For
purposes of the foregoing, Change of Control shall mean: (i)
any Person (as defined in Section 3(a)(9) of the Exchange
Act, but excluding (1) the Company, (2) a trustee or other
fiduciary holding securities under an employee benefit plan
of the Company, (3) an underwriter temporarily holding
securities pursuant to an offering of such securities, or
(4) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company) is
or becomes the "Beneficial Owner" (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of
securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired
directly from the Company) representing 30% or more of the
Company's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a Non-
control Merger (as defined in clause (iii) below); or (ii)
the following individuals cease for any reason to constitute
a majority of the number of directors then serving:
individuals who, on the effective date of this Plan,
constitute the Board of Directors of the Company and any new
director (other than a director whose initial assumption of
office is in connection with an actual or threatened
election contest, including but not limited to, a consent
solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board of
Directors or nomination for election by the Company's
stockholders was approved or recommended by a vote of at
least two-thirds of the directors then still in office who
either were directors on the effective date of this Plan or
whose appointment, election or nomination for election was
previously so approved or recommended; or (iii) there is
consummated a merger or consolidation of the Company with
any other corporation other than a merger or consolidation
(a "Non-control Merger") immediately following which the
individuals who comprise the Board immediately prior thereto
constitute at least a majority of the Board of Directors of
the Company, the entity surviving such merger or
consolidation or any parent thereof; or (iv) the
stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than a sale or disposition by the Company of all or
substantially all of the Company's assets immediately
following which the individuals who comprise the Board
immediately prior thereto constitute at least a majority of
the Board of Directors of the entity to which such assets
are sold or disposed or any parent thereof.
12. Amendments and Termination of the Plan. The Committee may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever, provided, however, that the requisite stockholder approval shall be required if and to the extent the Committee determines that such approval is appropriate or necessary for purposes of satisfying Sections 162(m) or 422 of the Code or Rule 16b-3 under the Securities Exchange Act of 1934, as amended from time to time, or other applicable law. Options may be granted under the Plan prior to the receipt of such stockholder approval, but each such grant shall be subject in its entirety to such approval and no option may be exercised, vested or otherwise satisfied prior to the receipt of such approval. No suspension, termination, revision or amendment of the Plan shall, without the consent of the holder of an existing option affected thereby, adversely affect his or her rights under such option.
13. Non-Transferability of Options. No option granted under the Plan shall be transferable otherwise than by will or the laws of descent and distribution, and options may be exercised, during the lifetime of the holder thereof, only by him or her.
14. Conditions of Exercise or Surrender. Each option shall be subject to the requirement that, if at any time the Committee shall determine, in its discretion, that the listing, registration or qualification of the shares subject to such option upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, as a condition of, or in connection with, the granting of such option or the issue or purchase of shares thereunder, no such option may be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.
15. Adjustments. In the event the outstanding shares of Common Stock shall be changed into or exchanged for any other class or series of capital stock or cash, securities or other property pursuant to a re-capitalization, reclassification, merger, consolidation, combination or similar transaction ("Transaction"), then, unless otherwise determined by the Committee, each Option shall thereafter become exercisable for the number and/or kind of capital stock, and/or the amount of cash, securities or other property so distributed, into which the shares of Common Stock subject to the Option would have been changed or exchanged had the Option been exercised in full prior to such Transaction, provided that, if the kind or amount of capital stock or cash, securities or other property received in such Transaction is not the same for each outstanding share, then the kind or amount of capital stock or cash, securities or other property for which the Option shall thereafter become exercisable shall be the kind and amount so receivable per share by a plurality of the shares of Common Stock, and provided further that, if necessary, the provisions of the Option shall be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of capital stock, cash, securities or other property thereafter issuable or deliverable upon exercise of the Option.
16. Effective Date and Term of Plan. The Plan shall become effective when adopted by the Board of Directors, but the Plan (and any grants of options made prior to shareholder approval of the Plan) shall be subject to the requisite approval of the shareholders of the Company. In the absence of such approval, such options shall be null and void. Unless earlier terminated by the Committee, the right to grant options under the Plan shall terminate on the tenth anniversary of the date of adoption of the Plan by the Board of Directors of the Company. Options outstanding at Plan termination shall remain in effect according to their terms and the provisions of the Plan.
17. Miscellaneous. (a) No Shareholder Rights. No holder of an option granted under this Plan shall have any rights as a shareholder of the Company as a result of the grant of an option to him or to her under this Plan or his or her exercise or surrender of such option pending the actual issuance of shares of Common Stock subject to such option to such holder.
(b) Withholding. The exercise or surrender of any option granted under this Plan shall constitute the holder's full and complete consent to whatever action the Committee elects to satisfy the federal and state tax withholding requirements, if any, which the Committee in its discretion deems applicable to such exercise or surrender.
18. Foreign Employees. In order to facilitate the making of any grant under this Plan, the Committee may provide for such special terms for grants to employees or other persons under this Plan who are foreign nationals or who are employed by the Company or any subsidiary of the Company outside the United States of America as the Committee may consider necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, shall include any provision that is inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the shareholders of the Company.
May 21, 2002
[10q-02-exhibit10.01]ll
Exhibit 99.01
EXHIBIT 99.01
Certification of Chief Executive Officer Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Park
Electrochemical Corp.(the "Company") for the quarterly period
ended September 1, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), Brian
E. Shore, as Chief Executive Officer of the Company, hereby
certifies, pursuant to 18 U.S.C. 1350, as adopted pursuant
to 906 of the Sarbanes-Oxley Act of 2002, that, to the best
of his knowledge:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
This certification accompanies the Report pursuant to 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of 18 of the Securities Exchange Act of 1934, as amended.
Exhibit 99.02
EXHIBIT 99.02
Certification of Principal Financial Officer Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Quarterly Report on Form 10-Q of Park
Electrochemical Corp.(the "Company") for the quarterly period
ended September 1, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), Murray
O. Stamer, as Senior Vice President, Finance and Principal
Financial Officer of the Company, hereby certifies, pursuant
to 18 U.S.C. 1350, as adopted pursuant to 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of his
knowledge:
(1) The Report fully complies with the requirements of
Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
This certification accompanies the Report pursuant to 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of 18 of the Securities Exchange Act of 1934, as amended.