For the Quarterly Period Ended
February 1, 2009 |
Commission File Number
1-3822 |
New Jersey
State of Incorporation |
21-0419870
I.R.S. Employer Identification No. |
Large accelerated filer þ | Accelerated filer o |
Non-accelerated filer o (Do not check if a smaller reporting company) |
Smaller reporting company o |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
(millions, except per share amounts)
Three Months Ended
Six Months Ended
February 1,
January 27,
February 1,
January 27,
2009
2008
2009
2008
$
2,122
$
2,218
$
4,372
$
4,403
1,285
1,329
2,664
2,622
315
319
622
615
138
141
278
282
27
25
56
52
2
4
(2
)
4
1,767
1,818
3,618
3,575
355
400
754
828
25
42
57
84
330
358
697
744
101
98
208
216
229
260
489
528
4
14
4
16
$
233
$
274
$
493
$
544
$
.65
$
.69
$
1.37
$
1.40
.01
.04
.01
.04
$
.66
$
.73
$
1.38
$
1.44
$
.25
$
.22
$
.50
$
.44
355
377
356
378
$
.63
$
.67
$
1.34
$
1.36
.01
.04
.01
.04
$
.64
$
.71
$
1.35
$
1.41
362
386
364
387
(millions, except per share amounts)
February 1,
August 3,
2009
2008
$
80
$
81
658
570
751
829
149
172
41
1,638
1,693
1,760
1,939
1,646
1,998
543
605
324
211
28
$
5,911
$
6,474
$
754
$
982
504
655
499
655
90
81
18
9
21
1,865
2,403
1,957
1,633
1,052
1,119
1
4,874
5,156
20
20
303
337
8,221
7,909
(6,972
)
(6,812
)
(535
)
(136
)
1,037
1,318
$
5,911
$
6,474
(millions)
Six Months Ended
February 1,
January 27,
2009
2008
$
493
$
544
44
39
(13
)
133
138
53
21
24
37
(144
)
(241
)
23
3
22
18
(169
)
(50
)
(4
)
(38
)
(47
)
(4
)
(10
)
(12
)
418
442
(98
)
(90
)
2
38
(2
)
2
(62
)
(86
)
47
60
300
(40
)
(300
)
(171
)
(162
)
(295
)
(203
)
69
19
17
4
(4
)
(337
)
(322
)
(20
)
8
(1
)
42
81
71
(18
)
$
80
$
95
(millions, except per share amounts)
Earnings
Accumulated
Capital Stock
Additional
Retained
Other
Total
Issued
In Treasury
Paid-in
in the
Comprehensive
Shareowners
Shares
Amount
Shares
Amount
Capital
Business
Income (Loss)
Equity
542
$
20
(163
)
$
(6,015
)
$
331
$
7,082
$
(123
)
$
1,295
544
544
71
71
8
8
3
3
82
82
626
(6
)
(6
)
(169
)
(169
)
(6
)
(203
)
(203
)
2
46
6
52
542
$
20
(167
)
$
(6,172
)
$
337
$
7,451
$
(41
)
$
1,595
542
$
20
(186
)
$
(6,812
)
$
337
$
7,909
$
(136
)
$
1,318
493
493
(409
)
(409
)
(13
)
(13
)
23
23
(399
)
(399
)
94
(181
)
(181
)
(9
)
(295
)
(295
)
4
135
(34
)
101
542
$
20
(191
)
$
(6,972
)
$
303
$
8,221
$
(535
)
$
1,037
(dollars in millions, except per share amounts)
(a)
Basis of Presentation / Accounting Policies
The financial statements reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the results of operations, financial position, and cash
flows for the indicated periods. All such adjustments are of a normal recurring nature.
The accounting policies used in preparing these financial statements are consistent with
those applied in the Annual Report on Form 10-K for the year ended August 3, 2008, except
for the adoption of Statement of Financial Accounting Standards (SFAS) No. 157 Fair Value
Measurements and SFAS No. 159 The Fair Value Option for Financial Assets and Liabilities
Including an amendment of FASB Statement No. 115. See Notes (c) and (n) for additional
information. Certain reclassifications were made to the prior year amounts to conform with
the current year presentation. The results for the period are not necessarily indicative of
the results to be expected for other interim periods or the full year. There were 53 weeks
in 2008. There will be 52 weeks in 2009.
(b)
Divestitures
Discontinued Operations
On March 18, 2008, the company completed the sale of its Godiva Chocolatier business for
$850. The purchase price was subject to certain post-closing adjustments, which resulted in
an additional $20 of proceeds. The company has reflected the results of this business as
discontinued operations in the 2008 consolidated statements of earnings. The company used
approximately $600 of the net proceeds to purchase company stock.
The company recognized a $4 tax benefit in Earnings from discontinued operations during the
three-month period ended February 1, 2009. The benefit was a result of an adjustment to the
tax liability associated with the sale of the Godiva Chocolatier business.
Results of discontinued operations were as follows:
Three Months Ended
Six Months Ended
February 1,
January 27,
February 1,
January 27,
2009
2008
2009
2008
$
$
189
$
$
303
$
$
33
$
$
36
(14
)
(15
)
(9
)
(9
)
4
4
4
4
$
4
$
14
$
4
$
16
Other Divestitures
In the third quarter of 2008, the company entered into an agreement to sell certain
Australian salty snack food brands and assets. The transaction, which was completed on May
12, 2008, included the following salty snack brands:
Cheezels
,
Thins
,
Tasty Jacks
,
French
Fries
, and
Kettle Chips
, certain other assets and the assumption of liabilities. Proceeds
of the sale were nominal. The business had annual net sales of approximately $150. In
connection with this transaction, the company recognized a pre-tax loss of $120 ($64 after
tax or $.17 per share) in 2008. See also Note (l). The terms of the agreement require the
company to provide a loan facility to the buyer of AUD $10, or approximately USD $6. The
facility can be drawn down in AUD $5 increments, six months and nine months after the
closing date. In November 2008, the buyer borrowed AUD $5 under the facility. Borrowings
under the facility are to be repaid five years after the closing date. The company will
also provide transition services for approximately one year.
In July 2008, the company entered into an agreement to sell its sauce and mayonnaise
business comprised of products sold under the
Lesieur
brand in France. The sale was
completed on September 29, 2008 and resulted in $36 of proceeds. The purchase price was
subject to working capital and other post-closing adjustments, which resulted in an
additional $6 of proceeds. The business had annual net sales of approximately $70. The
assets and liabilities of this business were reflected as assets and liabilities held for
sale in the consolidated balance sheet as of August 3, 2008 and are comprised of the
following:
$
32
8
1
$
41
$
13
15
$
28
$
18
3
$
21
$
1
$
1
(c)
Recent Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No. 157 Fair
Value Measurements, which provides guidance for using fair value to measure assets and
liabilities. SFAS No. 157 establishes a definition of fair value, provides a
framework for measuring fair value and expands the disclosure requirements about fair value
measurements. This standard does not require any new fair value measurements but rather
applies to all other accounting pronouncements that require or permit fair value
measurements. In February 2008, FASB Staff Position (FSP) No. FAS 157-2 was issued, which
delayed by a year the effective date for certain nonfinancial assets and liabilities. The
company adopted SFAS No. 157 for financial assets and liabilities in the first quarter of
fiscal 2009. The adoption did not have a material impact on the consolidated financial
statements. See Note (n) for additional information. The company is currently evaluating
the impact of SFAS No. 157 as it relates to nonfinancial assets and liabilities.
In February 2007, the FASB issued SFAS No. 159 The Fair Value Option for Financial Assets
and Liabilities Including an amendment of FASB Statement No. 115. SFAS No. 159 allows
companies to choose, at specific election dates, to measure eligible financial assets and
liabilities at fair value that are not otherwise required to be measured at fair value. If
a company elects the fair value option for an eligible item, changes in that items fair
value in subsequent reporting periods must be recognized in current earnings. The company
adopted SFAS No. 159 at the beginning of fiscal 2009. The company elected not to adopt the fair value option under SFAS No. 159 for eligible financial assets and liabilities.
In December 2007, the FASB issued SFAS No. 141 (revised 2007) Business Combinations, which
establishes the principles and requirements for how an acquirer recognizes the assets
acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the
acquisition date. This Statement applies to business combinations for which the acquisition
date is after the beginning of the first annual reporting period beginning after December
15, 2008. Earlier adoption is not permitted. The company is currently evaluating the
impact of SFAS No. 141 as revised.
In December 2007, the FASB issued SFAS No. 160 Noncontrolling Interests in Consolidated
Financial Statements an Amendment of ARB No. 51. SFAS No. 160 establishes accounting and
reporting standards for the noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be recorded as
equity in the consolidated financial statements. This Statement also requires that
consolidated net income shall be adjusted to include the net income attributed to the
noncontrolling interest. Disclosure on the face of the income statement of the amounts of
consolidated net income attributable to the parent and to the noncontrolling interest is
required. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008.
Earlier adoption is not permitted. The company is currently evaluating the impact of SFAS
No. 160.
In March 2008, the FASB issued SFAS No. 161 Disclosures about Derivative Instruments and
Hedging Activities an amendment of FASB Statement No. 133, which enhances the disclosure
requirements for derivative instruments and hedging activities. Entities are required to
provide enhanced disclosures about (a) the location and amounts of derivative instruments in
an entitys financial statements, (b) how derivative instruments and related hedged items
are accounted for under Statement 133 and its related interpretations, and (c) how
derivative instruments and related hedged items affect an entitys financial position,
financial performance, and cash flows. The guidance in SFAS No. 161 is effective for
financial statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. This Statement encourages, but does not
require, comparative disclosures for earlier periods at initial adoption. The company is
currently evaluating the impact of SFAS No. 161.
In May 2008, the FASB issued SFAS No. 162 The Hierarchy of Generally Accepted Accounting
Principles. SFAS No. 162 identifies the sources of accounting principles and the framework
for selecting the principles to be used in the preparation of financial statements of
nongovernmental entities that are presented in conformity with generally accepted accounting
principles (GAAP) in the United States (the GAAP hierarchy). This Statement is effective 60
days following the SECs approval of the Public Company Accounting Oversight Board
amendments to AU Section 411,
The Meaning of
Present Fairly in Conformity With Generally
Accepted Accounting Principles. The company is currently evaluating the impact of SFAS No.
162.
In June 2008, the FASB issued FSP Emerging Issues Task Force (EITF) 03-6-1 Determining
Whether Instruments Granted in Share-Based Payment Transactions Are Participating
Securities. FSP EITF 03-6-1 provides that unvested share-based payment awards that contain
non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are
participating securities and shall be included in the computation of earnings per share
pursuant to the two-class method. FSP EITF 03-6-1 is effective for fiscal years beginning
after December 15, 2008, and interim periods within those years. Upon adoption, a company
is required to retrospectively adjust its earnings per share data (including any amounts
related to interim periods, summaries of earnings and selected financial data) to conform
with the provisions of FSP EITF 03-6-1. The company is currently evaluating the impact of
FSP EITF 03-6-1.
In December 2008, the FASB issued FSP FAS 132(R)-1 Employers Disclosures about
Postretirement Benefit Plan Assets, which provides additional guidance on employers
disclosures about the plan assets of defined benefit pension or other postretirement plans.
The disclosures required by FSP FAS 132(R)-1 include a description of how investment
allocation decisions are made, major categories of plan assets, valuation techniques used to
measure the fair value of plan assets, the impact of measurements using significant
unobservable inputs and concentrations of risk within plan assets. The disclosures about
plan assets required by this FSP shall be provided for fiscal years ending after December
15, 2009. The company is currently evaluating the impact of FSP FAS 132(R)-1.
(d)
Stock-based Compensation
The company provides compensation benefits by issuing unrestricted stock, restricted stock
and restricted stock units (including EPS performance restricted stock/units and total
shareowner return (TSR) performance restricted stock/units). In previous fiscal years, the
company also issued stock options and stock appreciation rights to provide compensation
benefits.
Total pre-tax stock-based compensation recognized in Earnings from continuing operations was
$19 for the three-month periods ended February 1, 2009 and January 27, 2008. Tax related
benefits of $7 were also recognized for the three-month periods ended February 1, 2009 and
January 27, 2008. Total pre-tax stock-based compensation recognized in Earnings from
continuing operations was $44 and $37 for the six-month periods ended February 1, 2009 and
January 27, 2008, respectively. Tax related benefits of $16 and $14 were also recognized
for the six-month periods ended February 1, 2009 and January 27, 2008, respectively.
Stock-based compensation associated with discontinued operations was $1
after tax for the three-month and six-month periods ended January 27, 2008. Cash received
from the exercise of stock options was $69 and $19 for the six-month periods ended February
1, 2009 and January 27, 2008, respectively, and is reflected in cash flows from financing
activities in the Consolidated Statements of Cash Flows.
The following table summarizes stock option activity as of February 1, 2009:
Weighted-Average
Aggregate
Weighted-Average
Remaining
Intrinsic
(options in thousands)
Options
Exercise Price
Contractual Life
Value
20,705
$
27.42
(2,597
)
$
26.86
(77
)
$
47.60
18,031
$
27.41
3.8
$
61
18,031
$
27.41
3.8
$
61
The total intrinsic value of options exercised during the six-month periods ended February
1, 2009, and January 27, 2008 was $30 and $8, respectively. As of February 1, 2009,
compensation related to stock options was fully expensed. The company measured the fair
value of stock options using the Black-Scholes option pricing model.
The following table summarizes time-lapse restricted stock/units and EPS performance
restricted stock/units as of February 1, 2009:
Weighted-Average
Grant-Date
(restricted stock/units in thousands)
Shares/Units
Fair Value
2,331
$
34.30
1,154
$
39.79
(1,028
)
$
34.15
(83
)
$
36.64
2,374
$
36.94
The fair value of time-lapse restricted stock/units and EPS performance restricted
stock/units is determined based on the number of shares granted and the quoted price of the
companys stock at the date of grant. Time-lapse restricted stock/units granted in fiscal
2005 are expensed on a graded-vesting basis. Time-lapse restricted stock/units granted in
fiscal 2006 to fiscal 2009 are expensed on a straight-line basis over the vesting period,
except for awards issued to retirement-eligible participants, which are expensed on an
accelerated
basis. EPS restricted stock/units are expensed on a graded-vesting basis, except for awards
issued to retirement-eligible participants, which are expensed on an accelerated basis.
As of February 1, 2009, total remaining unearned compensation related to nonvested
time-lapse restricted stock/units and EPS performance restricted stock/units was $56, which
will be amortized over the weighted-average remaining service period of 1.9 years. The fair
value of restricted stock/units vested during the six-month periods ended February 1, 2009
and January 27, 2008 was $39 and $34, respectively. The weighted-average grant-date fair
value of the restricted stock/units granted during the six-month period ended January 27,
2008 was $36.90.
The following table summarizes TSR performance restricted stock/units as of February 1,
2009:
Weighted-Average
Grant-Date
(restricted stock/units in thousands)
Shares/Units
Fair Value
3,549
$
30.09
1,158
$
47.20
(1,184
)
$
29.01
(97
)
$
35.89
3,426
$
36.08
The fair value of TSR performance restricted stock/units is estimated at the grant date
using a Monte Carlo simulation. Expense is recognized on a straight-line basis over the
service period. As of February 1, 2009, total remaining unearned compensation related to
TSR performance restricted stock/units was $71, which will be amortized over the
weighted-average remaining service period of 2.2 years. During the six-month period ended
February 1, 2009, recipients of TSR performance restricted stock/units earned 125% of their
initial grants based upon the companys total shareowner return ranking in a performance
peer group during a three-year period ended July 31, 2008. As a result, approximately
280,000 additional shares were awarded. The total fair value of TSR performance restricted
stock/units vested during the six-month period ended February 1, 2009 was $57. The
grant-date fair value of TSR performance restricted stock/units granted during the six-month
period ended January 27, 2008 was $34.64.
(e)
Goodwill and Intangible Assets
The following table sets forth balance sheet information for intangible assets, excluding
goodwill, subject to amortization and intangible assets not subject to amortization:
February 1, 2009
August 3, 2008
Carrying
Accumulated
Carrying
Accumulated
Amount
Amortization
Amount
Amortization
$
11
$
(7
)
$
12
$
(7
)
$
539
$
600
1
Amortization related to these assets was less than $1 for the six-month periods
ended February 1, 2009 and January 27, 2008. The estimated aggregated amortization expense
for each of the five succeeding fiscal years is less than $1 per year. Asset useful lives
range from ten to twenty years.
Changes in the carrying amount for goodwill for the period ended February 1, 2009 are as
follows:
U.S. Soup,
International
North
Sauces and
Baking and
Soup, Sauces
America
Beverages
Snacking
and Beverages
Foodservice
Total
$
434
$
744
$
674
$
146
$
1,998
(232
)
(120
)
(352
)
$
434
$
512
$
554
$
146
$
1,646
(f)
Comprehensive Income
Total comprehensive income comprises net earnings, net foreign currency translation
adjustments, adjustments to net unrealized gains (losses) on cash-flow hedges and
adjustments to net unamortized pension and postretirement benefits.
Total comprehensive income for the three-month periods ended February 1, 2009 and January
27, 2008, was $206 and $265, respectively. Total comprehensive income for the six-month
periods ended February 1, 2009 and January 27, 2008, was $94 and $626, respectively.
The components of Accumulated other comprehensive loss consisted of the following:
February 1,
August 3,
2009
2008
$
(168
)
$
241
(8
)
5
(355
)
(376
)
(4
)
(6
)
$
(535
)
$
(136
)
1
Includes a tax expense of $1 as of February 1, 2009 and $10 as of August 3,
2008.
2
Includes a tax benefit of $6 as of February 1, 2009 and a tax expense of $3 as
of August 3, 2008.
3
Includes a tax benefit of $196 as of February 1, 2009 and $205 as of August 3,
2008.
(g)
Earnings Per Share
For the periods presented in the Statements of Earnings, the calculations of basic EPS and
EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution
include the incremental effect of stock options and restricted stock programs, except when
such effect would be antidilutive. Stock options to purchase 1.6 million and 1 million
shares of capital stock for the three-month and six-month periods ended February 1, 2009,
respectively, and stock options to purchase 1 million shares of capital stock for both the
three-month and six-month periods ended January 27, 2008 were not included in the
calculation of diluted earnings per share because the exercise price of the stock options
exceeded the average market price of the capital stock and therefore, the effect would be
antidilutive.
(h)
Segment Information
Campbell Soup Company, together with its consolidated subsidiaries, is a global manufacturer
and marketer of high-quality, branded convenience food products. The company manages and
reports the results of operations in the following segments: U.S. Soup, Sauces and
Beverages, Baking and Snacking, International Soup, Sauces and Beverages, and North America
Foodservice.
The U.S. Soup, Sauces and Beverages segment includes the following retail businesses:
Campbells
condensed and ready-to-serve soups;
Swanson
broth, stocks and canned poultry;
Prego
pasta sauce;
Pace
Mexican sauce;
Campbells
canned pasta, gravies, and beans;
V8
juice
and juice drinks;
Campbells
tomato juice; and
Wolfgang Puck
soups, stocks, and broths.
The Baking and Snacking segment includes the following businesses:
Pepperidge Farm
cookies,
crackers, bakery and frozen products in U.S. retail;
Arnotts
biscuits in Australia and Asia
Pacific; and
Arnotts
salty snacks in Australia.
The International Soup, Sauces and Beverages segment includes the soup, sauce and beverage
businesses outside of the United States, including Europe, Latin America, the Asia Pacific
region, as well as the emerging markets of Russia and China, and the retail business in
Canada.
The North America Foodservice segment represents the distribution of products such as soup,
specialty entrees, beverage products, other prepared foods and Pepperidge Farm products
through various food service channels in the United States and Canada.
Accounting policies for measuring segment assets and earnings before interest and taxes are
substantially consistent with those described in the companys 2008 Annual Report on Form
10-K. The company evaluates segment performance before interest and taxes. Beginning in
fiscal 2009, unrealized gains and losses on commodity hedging activities are excluded from
segment operating earnings and are recorded in Corporate expenses as these open positions
represent hedges of future purchases. Upon closing of the contracts, the realized gain or
loss is transferred to segment operating earnings, which allows the segments to reflect the
economic effects of the hedge without exposure to quarterly volatility of unrealized gains
and losses. In prior periods, unrealized gains and losses on commodity hedging activities
were not material. North America Foodservice products are principally produced by the
tangible assets of the companys other segments, except for refrigerated soups, which are
produced in a separate facility, and certain other products, which are produced under
contract manufacturing agreements. Accordingly, with the exception of a refrigerated soup
facility, plant assets are not allocated to the North America Foodservice operations.
Depreciation, however, is allocated to North America Foodservice based on production hours.
Three Months Ended
Six Months Ended
Earnings
Earnings
Before Interest
Before Interest
Net Sales
and Taxes
2
Net Sales
and Taxes
2
$
1,128
$
270
$
2,326
$
584
440
53
949
136
391
50
771
88
163
10
326
21
(28
)
(75
)
$
2,122
$
355
$
4,372
$
754
Three Months Ended
Six Months Ended
Earnings
Earnings
Before Interest
Before Interest
Net Sales
and Taxes
Net Sales
and Taxes
$
1,093
$
286
$
2,190
$
595
491
68
1,023
140
458
61
848
112
176
20
342
44
(35
)
(63
)
$
2,218
$
400
$
4,403
$
828
1
Represents unallocated corporate expenses. The six-month period ended
February 1, 2009 includes unrealized losses on commodity hedges of $26.
2
Earnings before interest and taxes by segment include restructuring related
costs of $6 in North America Foodservice and $2 in Baking and Snacking for the
three-month period ended February 1, 2009. Earnings before interest and taxes by
segment include restructuring related costs of $13 in North America Foodservice and $2
in Baking and Snacking for the six-month period ended February 1, 2009. See Note (l)
for additional information on restructuring charges.
(i)
Inventories
February 1, 2009
August 3, 2008
$
279
$
313
472
516
$
751
$
829
(j)
Taxes on Earnings
The company adopted the provisions of the FASB Interpretation No. 48 (FIN 48) Accounting
for Uncertainty in Income Taxes an interpretation of FASB Statement No. 109 as of July
30, 2007 (the beginning of fiscal 2008). Upon adoption, the company recognized a
cumulative-effect adjustment of $6 as an increase in the liability for unrecognized tax
benefits, including interest and penalties, and a reduction in retained earnings.
During the three-month period ended November 2, 2008, the balance of unrecognized tax
benefits, including interest and penalties, and tax expense were reduced by $12 following
the finalization of U.S. federal and state tax audits. Fiscal 2007 and thereafter remain
open to U.S. federal audits.
In the three-month period ended January 27, 2008, the company finalized a favorable state
tax agreement that resulted in a $13 benefit.
(k)
Accounting for Derivative Instruments
The company utilizes certain derivative financial instruments to enhance its ability to
manage risk including interest rate, foreign currency, commodity and certain equity-linked
deferred compensation exposures that exist as part of ongoing business operations. A
description of the companys use of derivative instruments is included in the Annual Report
on Form 10-K for the year ended August 3, 2008.
Interest Rate Swaps
The notional amount of outstanding fair-value interest rate swaps at February 1, 2009
totaled $500 with a maximum maturity date of October 2013. The fair value of such
instruments was a gain of $43 as of February 1, 2009.
In June 2008, the company entered into two forward starting interest rate swap contracts
with a combined notional value of $200 to hedge an anticipated debt offering in fiscal 2009.
These swaps were settled as of November 2, 2008, at a loss of $13. In January 2009, the
company issued $300 ten-year 4.50% notes. The loss on the swap contracts will be amortized
over the life of the debt as additional interest expense.
Foreign Currency Contracts
The fair value of foreign exchange forward and cross-currency swap contracts accounted for
as cash-flow hedges was a gain of $11 at February 1, 2009. The notional amount was $314 at
February 1, 2009.
(l)
Restructuring Charges
On April 28, 2008, the company announced a series of initiatives to improve operational
efficiency and long-term profitability, including selling certain salty snack food brands
and assets in Australia, closing certain production facilities in Australia and Canada, and
streamlining the companys management structure. As a result of these initiatives, in 2008,
the company recorded a restructuring charge of $175 ($102 after tax or $.27 per share). The
charge consisted of a net loss of $120 ($64 after tax) on the sale of certain Australian
salty snack food brands and assets, $45 ($31 after tax) of employee severance and benefit
costs, including the estimated impact of curtailment and other pension charges, and $10 ($7
after tax) of property, plant and equipment impairment charges. In addition, approximately
$7 ($5 after tax or $.01 per share) of costs related to these initiatives were recorded in
Cost of products sold, primarily representing accelerated depreciation on property, plant
and equipment. The aggregate after-tax impact of restructuring charges and related costs in
2008 was $107, or $.28 per share. In the first and second quarters of 2009, the company
recorded approximately $15 ($10 after tax or $.03 per share) of costs related to these
initiatives in Cost of products sold. Approximately $13 of the costs represented
accelerated depreciation on property, plant and equipment and approximately $2 related to
other exit costs. The company expects to incur additional pre-tax costs of approximately
$23,
consisting of the following: approximately $13 in employee severance and benefit
costs, including the estimated impact of curtailment and other pension charges;
approximately $4 in accelerated depreciation of property, plant and equipment; and
approximately $6 in other exit costs. Of the aggregate $220 of pre-tax costs for the total
program, the company expects approximately $50 will be cash expenditures, the majority of
which will be spent in 2009.
Recognized
Remaining
Total
Change in
as of
Costs to be
Program
Estimate
1
February 1, 2009
Recognized
$
62
$
(4
)
$
(45
)
$
13
158
(4
)
(150
)
4
10
(2
)
(2
)
6
$
230
$
(10
)
$
(197
)
$
23
1
Primarily due to foreign currency translation.
Foreign
Accrued
Currency
Accrued
Balance at
2009
Cash
Translation
Balance at
August 3, 2008
Charge
Payments
Adjustment
February 1, 2009
$
37
(12
)
(8
)
$
17
13
2
$
37
$
15
$
17
U.S. Soup,
International
North
Sauces and
Baking and
Soup, Sauces
America
Beverages
Snacking
and Beverages
Foodservice
Total
$
$
14
$
9
$
22
$
45
131
19
150
1
1
2
$
$
146
$
9
$
42
$
197
The company expects to incur additional pre-tax costs of approximately $23 by segment as
follows: Baking and Snacking $3 and North America Foodservice $20. The total pre-tax
costs of $220 expected to be incurred by segment is as follows: Baking and Snacking $149,
International Soup, Sauces and Beverages $9 and North America Foodservice $62.
(m)
Pension and Postretirement Medical Benefits
The company sponsors certain defined benefit plans and postretirement medical benefit plans
for employees. Components of benefit expense were as follows:
Pension
Postretirement
February 1,
January 27,
February 1,
January 27,
Three Months Ended
2009
2008
2009
2008
$
12
$
12
$
1
$
1
30
30
6
6
(41
)
(42
)
1
5
4
2
4
$
6
$
11
$
7
$
7
Pension
Postretirement
February 1,
January 27,
February 1,
January 27,
Six Months Ended
2009
2008
2009
2008
$
23
$
24
$
2
$
2
61
59
11
11
(82
)
(84
)
1
1
9
10
2
4
$
12
$
16
$
13
$
13
(n)
Fair Value Measurements
In the first quarter of fiscal 2009, the company adopted SFAS No. 157 Fair Value
Measurements for financial assets and liabilities. This standard defines fair value,
provides guidance for measuring fair value and requires certain disclosures. This standard
does not require any new fair value measurements, but rather applies to all other accounting
pronouncements that require or permit fair value measurements.
SFAS No. 157 establishes a fair value hierarchy that prioritizes the inputs to valuation
techniques used to measure fair value into three broad levels. The three levels are as
follows:
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical
assets or liabilities in active markets.
Level 2: Inputs other than quoted prices included in Level 1 that are observable
for the asset or liability through corroboration with observable market data.
Level 3: Unobservable inputs that reflect the reporting entitys own assumptions.
The adoption of SFAS No. 157 did not have a material impact on the consolidated financial
statements.
Fair Value
Fair Value Measurements at 2/1/09
as of
Using Fair Value Hierarchy
2/1/09
Level 1
Level 2
Level 3
$
43
$
$
43
$
8
8
99
99
1
1
$
151
$
$
151
$
$
35
$
35
$
$
2
2
13
13
148
74
74
$
198
$
109
$
89
$
1
Based on LIBOR swap rates.
2
Based on observable market transactions of spot currency rates and forward rates.
3
Based on observable local benchmarks for currency and interest rates.
4
Based on quoted futures exchanges.
5
Based on LIBOR and equity index swap rates.
6
Based on the fair value of the participants investments.
(o)
Supplemental Cash Flow Information
Other cash used in operating activities for the six-month periods is comprised of the
following:
February 1, 2009
January 27, 2008
$
(19
)
$
(17
)
9
5
$
(10
)
$
(12
)
(p)
Share Repurchase Programs
In June 2008, the companys Board of Directors authorized the purchase of up to $1,200 of
company stock through fiscal 2011. This program began in fiscal 2009. In addition to this
publicly announced program, the company repurchases shares to offset the impact of dilution
from shares issued under the companys stock compensation plans.
During the six-month period ended February 1, 2009, the company repurchased 9 million shares
at a cost of $295. Of this amount, $197 were repurchased pursuant to the companys June
2008 publicly announced share repurchase program. Approximately $1,003 remains available
under this program as of February 1, 2009.
During the six-month period ended January 27, 2008, the company repurchased 6 million shares
at a cost of $203. The majority of these shares were repurchased pursuant to the companys
November 2005 publicly announced share repurchase program, which was completed during the
third quarter of fiscal 2008.
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
In the second quarter of fiscal 2009, the company recorded pre-tax restructuring
related costs of $8 million ($5 million after tax or $.01 per share) associated with
the previously announced initiatives to improve operational efficiency and long-term
profitability. In
the six-months ended February 1, 2009, the company recorded pre-tax restructuring
related costs of $15 million ($10 million after tax or $.03 per share). See Note (l)
to the Consolidated Financial Statements and Restructuring Charges for additional
information;
In the second quarter of 2008, the company recognized a non-cash tax benefit of $13
million ($.03 per share) from the favorable resolution of a state tax contingency in the
United States;
In the second quarter of fiscal 2009, the company recorded a $4 million tax benefit
($.01 per share) related to the sale of the Godiva Chocolatier business; and
In the second quarter of 2008, the company recognized costs of $9 million ($5 after tax
or $.01 per share) associated with the sale of the Godiva Chocolatier business.
Three Months Ended
2009
2008
(millions, except per share
amounts)
Earnings
Impact
EPS
Impact
Earnings
Impact
EPS
Impact
$
229
$
0.63
$
260
$
0.67
$
4
$
0.01
$
14
$
0.04
$
233
$
0.64
$
274
$
0.71
$
5
$
0.01
$
$
(13
)
(0.03
)
$
(4
)
$
(0.01
)
$
$
5
0.01
$
1
$
0.01
$
8
$
(0.02
)
1
The sum of the individual per share amounts does not equal due to rounding.
Six Months Ended
2009
2008
(millions, except per share
amounts)
Earnings
Impact
EPS
Impact
Earnings
Impact
EPS
Impact
$
489
$
1.34
$
528
$
1.36
$
4
$
0.01
$
16
$
0.04
$
493
$
1.35
$
544
$
1.41
$
10
$
0.03
$
$
16
0.04
(13
)
(0.03
)
$
(4
)
$
(0.01
)
$
$
5
0.01
$
22
$
0.06
$
(8
)
$
(0.02
)
1
The sum of the individual per share amounts does not equal due to rounding.
(millions)
2009
2008
% Change
$
1,128
$
1,093
3
%
440
491
(10
)
391
458
(15
)
163
176
(7
)
$
2,122
$
2,218
(4
)%
International
U.S. Soup,
Baking
Soup,
North
Sauces and
and
Sauces and
America
Beverages
Snacking
Beverages
Foodservice
Total
(3
)%
(1
)%
(5
)%
(9
)%
(3
)%
10
9
5
6
9
(4
)
(2
)
1
(1
)
(3
)
(8
)
(13
)
(3
)
(5
)
(8
)
(3
)
(2
)
3
%
(10
)%
(15
)%
(7
)%
(4
)%
1
Represents revenue reductions from trade promotion and consumer coupon redemption
programs.
(millions)
2009
1
2008
% Change
$
270
$
286
(6
)%
53
68
(22
)
50
61
(18
)
10
20
(50
)
383
435
(12
)
(28
)
(35
)
$
355
$
400
(11
)%
1
Operating earnings by segment include restructuring related costs of $2 million in
Baking and Snacking and $6 million in North America Foodservice. See Note (l) for additional
information on restructuring charges.
(millions)
2009
2008
% Change
$
2,326
$
2,190
6
%
949
1,023
(7
)
771
848
(9
)
326
342
(5
)
$
4,372
$
4,403
(1
)%
International
U.S. Soup,
Baking
Soup,
North
Sauces and
and
Sauces and
America
Beverages
Snacking
Beverages
Foodservice
Total
%
(1
)%
(2
)%
(8
)%
(1
)%
9
9
4
6
8
(3
)
(2
)
(1
)
(1
)
(3
)
(5
)
(8
)
(2
)
(3
)
(8
)
(2
)
(2
)
6
%
(7
)%
(9
)%
(5
)%
(1
)%
1
Represents revenue reductions from trade promotion and consumer coupon redemption
programs.
(millions)
2009
1
2008
% Change
$
584
$
595
(2
)%
136
140
(3
)
88
112
(21
)
21
44
(52
)
829
891
(7
)
(75
)
(63
)
$
754
$
828
(9
)%
1
Operating earnings by segment include restructuring related costs of $2 million in
Baking and Snacking and $13 million in North America Foodservice and unrealized losses on commodity
hedges of $26 million in Corporate. See Note (l) for additional information on restructuring
charges.
Three Months Ended
Six Months Ended
(millions)
February 1, 2009
January 27, 2008
February 1, 2009
January 27, 2008
$
$
189
$
$
303
$
$
33
$
$
36
(14
)
(15
)
(9
)
(9
)
4
4
4
4
$
4
$
14
$
4
$
16
the impact of strong competitive response to the companys efforts to leverage its brand
power with product innovation, promotional programs and new advertising, and of changes in
consumer demand for the companys products;
the risks in the marketplace associated with trade and consumer acceptance of product
improvements, shelving initiatives and new product introductions;
the companys ability to achieve sales and earnings guidance, which are based on
assumptions about sales volume, product mix, the development and success of new products,
the impact of marketing and pricing actions and product costs;
the companys ability to realize projected cost savings and benefits, including those
contemplated by restructuring programs and other cost-savings initiatives;
the companys ability to successfully manage changes to its business processes,
including selling, distribution, product capacity, information management systems and the
integration of acquisitions;
the increased significance of certain of the companys key trade customers;
the impact of inventory management practices by the companys trade customers;
the impact of fluctuations in the supply and inflation in energy, raw and packaging
materials cost;
the risks associated with portfolio changes and completion of acquisitions and
divestitures;
the uncertainties of litigation described from time to time in the companys Securities
and Exchange Commission filings;
the impact of changes in currency exchange rates, tax rates, interest rates, debt and
equity markets, inflation rates, economic conditions and other external factors; and
the impact of unforeseen business disruptions in one or more of the companys markets
due to political instability, civil disobedience, armed hostilities, natural disasters or
other calamities.
a.
Evaluation of Disclosure Controls and Procedures
The company, under the supervision and with the participation of its management, including
the President and Chief Executive Officer and the Senior Vice President Chief Financial
Officer and Chief Administrative Officer, has evaluated the effectiveness of the companys
disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended (the Exchange Act)) as of February
1, 2009 (the Evaluation Date). Based on such evaluation, the President and Chief
Executive Officer and the Senior Vice President Chief Financial Officer and Chief
Administrative Officer have concluded that, as of the Evaluation Date, the companys
disclosure controls and procedures are effective.
b.
Changes in Internal Controls
During the quarter ended February 1, 2009, as part of the previously announced North
American SAP enterprise-resource planning system implementation, the company implemented SAP
software at its Downers Grove, Illinois Pepperidge Farm facility. In conjunction with this
SAP implementation, the company modified the design, operation and documentation of its
internal control over financial reporting. Specifically, the company modified controls in
the business processes impacted by the new system, such as user access security, system
reporting and authorization and reconciliation procedures. There were no other changes in
the companys internal control over financial reporting that materially affected, or were
reasonably likely to materially affect, such internal control over financial reporting.
43
44
45
46
47
48
Approximate
Dollar Value of
Total Number of
Shares that May
Total
Shares Purchased
Yet Be Purchased
Number
Average
as Part of Publicly
Under the Plans
of Shares
Price Paid
Announced Plans
or Programs
Period
Purchased
(1)
Per Share
(2)
or Programs
(3)
($ in millions)
(3)
672,663
(4)
$
37.37
(4)
422,100
$
1,102
3,723,357
(5)
$
29.43
(5)
2,342,340
$
1,033
1,571,373
(6)
$
29.64
(6)
1,016,400
$
1,003
5,967,393
$
30.38
3,780,840
$
1,003
(1)
Includes (i) 2,147,187 shares repurchased in open-market transactions to offset
the dilutive impact to existing shareowners of issuances under the companys stock
compensation plans, and (ii) 39,366 shares owned and tendered by employees to satisfy tax
withholding obligations on the vesting of restricted shares. Unless otherwise indicated,
shares owned and tendered by employees to satisfy tax withholding obligations were purchased
at the closing price of the companys shares on the date of vesting.
(2)
Average price paid per share is calculated on a settlement basis and excludes
commission.
(3)
During the second quarter of fiscal 2009, the company had one publicly announced
share repurchase program. Under this program, which was announced on June 30, 2008, the
companys Board of Directors authorized the purchase of up to $1.2 billion of company stock
through the end of fiscal 2011. In addition to the publicly announced share repurchase
program, the company will continue to purchase shares, under separate authorization, as part
of its practice of buying back shares sufficient to offset shares issued under incentive
compensation plans.
(4)
Includes (i) 247,927 shares repurchased in open-market transactions at an average
price of $37.37 to offset the dilutive impact to existing shareowners of issuances under the
companys stock compensation plans, and (ii) 2,636 shares owned and tendered by employees at
an average price per share of $38.09 to satisfy tax withholding requirements on the vesting
of restricted shares.
(5)
Includes (i) 1,375,660 shares repurchased in open-market transactions at an
average price of $29.43 to offset the dilutive impact to existing shareowners of issuances
under the companys stock compensation plans, and (ii) 5,357 shares owned and tendered by
employees at an average price per share of $30.77 to satisfy tax withholding requirements on
the vesting of restricted shares.
(6)
Includes (i) 523,600 shares repurchased in open-market transactions at an average
price of $29.63 to offset the dilutive impact to existing shareowners of issuances under the
companys stock compensation plans, and (ii) 31,373 shares owned and tendered by employees
at an average price per share of $30.15 to satisfy tax withholding requirements on the
vesting of restricted shares.
a.
The companys Annual Meeting of Shareowners was held on November 20, 2008.
b.
The matters voted upon and the results of the vote are as follows:
Number of Shares
Name
For
Withheld
317,799,806
4,434,348
320,088,232
2,145,922
318,929,033
3,305,121
317,831,651
4,402,503
318,900,327
3,333,827
321,037,147
1,197,007
318,887,167
3,346,987
320,967,981
1,266,173
320,941,572
1,292,582
320,216,589
2,017,565
320,138,192
2,095,962
318,783,913
3,450,241
320,348,661
1,885,493
318,033,662
4,200,492
Broker Non-
For
Against
Abstentions
Votes
318,414,532
3,630,438
189,184
0
Broker Non-
For
Against
Abstentions
Votes
273,673,246
21,430,406
439,809
26,690,693
Broker Non-
For
Against
Abstentions
Votes
287,441,180
7,669,910
432,371
26,690,693
Campbell Soup Company By-Laws, effective as of November 20, 2008, were filed with the SEC
with a Form 8-K (SEC file number 1-3822) on October 8, 2008, and are incorporated herein by reference.
Campbell Soup Company Mid-Career Hire Pension Plan, as amended and restated effective
January 1, 2009.
Campbell Soup Company Deferred Compensation Plan II, effective January 1, 2009.
Campbell Soup Company Supplemental Employees Retirement Plan, as amended and restated
effective January 1, 2009.
Campbell Soup Company Severance Pay Plan for Salaried Employees, as amended and restated
effective January 1, 2009.
Certification of Douglas R. Conant pursuant to Rule 13a-14(a).
Certification of B. Craig Owens pursuant to Rule 13a-14(a).
Certification of Douglas R. Conant pursuant to 18 U.S.C. Section 1350.
Certification of B. Craig Owens pursuant to 18 U.S.C. Section 1350.
CAMPBELL SOUP COMPANY
Date: March 11, 2009
By:
/s/ B. Craig Owens
B. Craig Owens
Senior Vice President
Chief Financial Officer and
Chief Administrative Officer
By:
/s/ Ellen Oran Kaden
Ellen Oran Kaden
Senior Vice President
Law and Government Affairs
Campbell Soup Company By-Laws,
effective as of November 20, 2008, were filed with the SEC with a
Form 8-K (SEC file number 1-3822) on October 8, 2008, and are
incorporated herein by reference.
Campbell Soup Company Mid-Career Hire Pension Plan, as amended and restated effective
January 1, 2009.
Campbell Soup Company Deferred Compensation Plan II, effective January 1, 2009.
Campbell Soup Company Supplemental Employees Retirement Plan, as amended and restated
effective January 1, 2009.
Campbell Soup Company Severance Pay Plan for Salaried Employees, as amended and restated
effective January 1, 2009.
Certification of Douglas R. Conant pursuant to Rule 13a-14(a).
Certification of B. Craig Owens pursuant to Rule 13a-14(a).
Certification of Douglas R. Conant pursuant to 18 U.S.C. Section 1350.
Certification of B. Craig Owens pursuant to 18 U.S.C. Section 1350.
ARTICLE I DEFINITIONS
|
2 | |||
ARTICLE II ELIGIBILITY AND PARTICIPATION
|
5 | |||
ARTICLE III VESTING AND BENEFITS
|
6 | |||
ARTICLE IV DEATH AND DISABILITY BENEFITS
|
7 | |||
ARTICLE V CONDITIONS TO BENEFIT ENTITLEMENT
|
8 | |||
ARTICLE VI BENEFIT FORMULAS
|
9 | |||
ARTICLE VII DISTRIBUTION OF BENEFITS; BENEFICIARY
|
12 | |||
ARTICLE VIII ADMINISTRATIVE PROCEDURES
|
16 | |||
ARTICLE IX CLAIMS PROCEDURE
|
17 | |||
ARTICLE X AMENDMENT, SUSPENSION OR TERMINATION
|
20 | |||
ARTICLE XI CHANGE IN CONTROL
|
21 | |||
ARTICLE XII MISCELLANEOUS
|
25 | |||
APPENDIX A GRANDFATHERED BENEFIT FORMULAS
|
A-1 |
-i-
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
Income | ||||||
Termination | Replacement | |||||
Age | Benefit | Benefit | ||||
55 | 53% | 65% | ||||
56 | 56% | 70% | ||||
57 | 60% | 75% | ||||
58 | 63% | 80% | ||||
59 | 67% | 85% | ||||
60 | 72% | 90% | ||||
61 | 77% | 95% | ||||
62 | 82% | 100% | ||||
63 | 88% | 100% | ||||
64 | 94% | 100% | ||||
65 | 100% | 100% |
-11-
-12-
-13-
(i) | Normal Form of Benefit; or | ||
(ii) | one of the following annuity forms (the Annuity Option): |
(1) | a single life annuity; | ||
(2) | a 50% joint and survivor annuity; | ||
(3) | a 75% joint and survivor annuity; or | ||
(4) | a 100% joint and survivor annuity. |
-14-
-15-
-16-
-17-
-18-
-19-
-20-
-21-
-22-
-23-
-24-
-25-
-26-
Campbell Soup Company
|
||||
By: | /s/ Nancy A. Reardon | |||
Nancy A. Reardon | ||||
Senior Vice President Chief Human
Resources and Communications Officer |
||||
By: | /s/ John J. Furey | |||
Corporate Secretary | ||||
-27-
A-1
A-2
A-3
Article | Page | |||||
I. | Definitions | 1 | ||||
II.
|
Eligibility and Participation | 6 | ||||
III.
|
Contributions and Accounts | 6 | ||||
IV.
|
Vesting and Forfeitures | 8 | ||||
V.
|
Deferrals and Distributions | 9 | ||||
VI.
|
Administrative Procedures | 13 | ||||
VII.
|
Claims Procedure | 14 | ||||
VIII.
|
Funding | 16 | ||||
IX.
|
Amendment and Termination | 16 | ||||
X.
|
Change in Control | 17 | ||||
XI.
|
Miscellaneous | 21 | ||||
Exhibit A
|
i |
-1-
-2-
-3-
-4-
-5-
-6-
-7-
-8-
Completed Years of Service | Vested | |||
(as defined in the Savings Plan) | Percentage | |||
|
||||
1
|
20 | % | ||
2
|
40 | % | ||
3
|
60 | % | ||
4
|
80 | % | ||
5
|
100 | % |
-9-
-10-
-11-
Vested Account Balance
|
Form of Payment | |
|
||
$1 to $25,000.99
|
Lump Sum Payment | |
$25,001 to $50,000.99
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2 Annual Installments | |
$50,001 to $100,000.99
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3 Annual Installments | |
$100,001 to $200,000.99
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4 Annual Installments | |
$200,001 to $500,000.99
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5 Annual Installments | |
$500,001 and above
|
10 Annual Installments |
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-14-
-15-
-16-
-17-
-18-
-19-
-20-
-21-
-22-
Campbell Soup Company
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By: | /s/ Nancy A. Reardon | |||
Nancy A. Reardon | ||||
Senior Vice President Chief Human Resources and Communications Officer | ||||
ATTEST:
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By: | /s/ John J. Furey | |||
Corporate Secretary |
-23-
-i-
-1-
-2-
-3-
-4-
-5-
-6-
Campbell Soup Company
|
|||||||
By: | /s/ Nancy A. Reardon | ||||||
Nancy A. Reardon | |||||||
Senior Vice President Chief Human Resources
and Communications Officer |
ATTEST:
|
|||||||
By: | /s/ John J. Furey | ||||||
Corporate Secretary | |||||||
7
I. | PURPOSE |
1.1 | The purpose of the Campbell Soup Company Severance Pay Plan for Salaried Employees (the Plan) is to set forth the terms and circumstances under which U.S. Salaried Employees of the Company whose employment is terminated may be eligible for severance benefits. | ||
This Plan supersedes and replaces all prior policies or plans for Salaried Employees regarding severance benefits, except for severance policies, plans or agreements that are effective in the event of a change in control of the Company. |
II. | DEFINITIONS |
2.1 | Code means Internal Revenue Code of 1986, as amended from time to time. | ||
2.2 | Company means Campbell Soup Company and all wholly-owned U.S. subsidiaries and affiliates, unless the Chief Executive Officer of Campbell Soup Company has excluded such subsidiary or affiliate from participating in the Plan. | ||
2.3 | Compensation Limit means the indexed compensation limit set forth in section 401(a)(17) of the Internal Revenue Code, which for calendar year |
1
2009 is $245,000. |
2.4 | ERISA means the Employee Retirement Income Security Act of 1974, as amended. | ||
2.5 | Plan means the Campbell Soup Company Severance Pay Plan for Salaried Employees, as amended and restated, effective January 1, 2009. | ||
2.6 | Plan Administrator means the chief Human Resources executive of Campbell Soup Company. | ||
2.7 | Salaried Employee means an individual (a) who is employed by the Company, (b) in a regular salaried full-time or part-time position regularly scheduled to work 20 hours or more per week, and (c) who receives a regular and stated compensation other than a pension, retainer or fees for consulting services rendered. Where the terms exempt Salaried Employee or non-exempt Salaried Employee are used, exempt and non-exempt shall have the same meaning as defined under the Fair Labor Standards Act of 1938, as amended. | ||
Salaried Employee shall not include an employee who is classified as a temporary employee, or who is paid on an hourly basis, or who is a member of a bargaining unit, or whose employment by the Company is covered by a written employment contract. In addition, Salaried Employee shall not include individuals who are contract employees or who are retained as independent contractors, or persons who the Company does not consider to be employees or other similarly situated individuals regardless of whether the individual is a common law employee of the Company. Notwithstanding anything herein to the contrary, the term Salaried Employee shall not include any person who is not so recorded on the payroll records of the Company, including any such person who is subsequently reclassified by a court of law or a regulatory body as a common law employee of such Company. | |||
2.8 | Termination Date means the last day of active employment, which is the date normally at the end of the notice period, if any. | ||
2.9 | Weekly Salary Rate means the Salaried Employees annual base salary at the time of termination, excluding overtime pay, bonus or incentive payments, or other allowances, divided by 52 weeks. | ||
2.10 | Years of Service means the total number of years of continuous employment rendered as a regular employee of the Company and all its wholly-owned subsidiaries and affiliates since the employees most recent date of hire. Years of Service shall be full years; in the final year of |
2
employment, service of six full months or more will be counted as one year. |
In addition to service with the Company, continuous years of employment with an enterprise, the assets or stock of which is acquired by the Company, shall be counted as years of service with the Company, unless Campbell Soup Company excludes such prior service with the acquired enterprise. |
III. | ELIGIBILITY FOR SEVERANCE PAY |
3.1 | Eligible Terminations . |
(a) | General . A Salaried Employee whose separation from employment by the Company due to one of the following events shall be eligible for severance pay: (1) economic or organizational changes resulting in job elimination or consolidation or (2) reduction in work force; provided in all instances such Salaried Employee executes a release of claims as set forth in Article VI herein. | ||
(b) | Specific Events . If any part, unit or function of the Company is divested, outsourced, closed, or relocated to a different geographical area, the determination of which shall be within the Companys sole discretion, Salaried Employees working in such part, unit or function of the Company who are terminated by the Company as a direct result of the divestiture, outsourcing, closing or relocation shall be eligible for severance pay; provided such Salaried Employee executes a release of claims as set forth in Article VI herein. Eligibility for severance pay will be forfeited if a Salaried Employee resigns voluntarily prior to the termination date selected by the Company. | ||
(c) | Exceptions . Notwithstanding anything in the Plan to the contrary, a Salaried Employee who experiences an otherwise eligible termination will not be provided with severance pay if such Salaried Employee: (1) continues employment with or is hired by the buyer, the Company or the third party outsourcing firm in accordance with the terms of the applicable purchase and sales agreement, in the case of a buyer, or the terms of the applicable outsourcing contract, in the case of a third party outsourcing firm; or (2) is offered, but elects not to accept, a position of employment with the buyer, the Company or the third party outsourcing firm, in the same geographical area at the same or substantially equivalent salary level (the determination of which shall be in the Companys sole discretion), except as the Company |
3
may determine otherwise. |
In addition, a Salaried Employee whose resignation is requested, or who is terminated by the Company for unsatisfactory job performance or other reasons as determined by the Company, shall not be eligible for severance pay under the Plan, except as the Company in its sole discretion may determine otherwise. | |||
Notwithstanding anything herein to the contrary, a Salaried Employee who is terminated from his/her position through Company-initiated action shall not be eligible to receive severance pay under the Plan if the Salaried Employee refuses to accept another position of employment with the Company in the same geographical area at or above such Salaried Employees current salary, except as the Company may determine otherwise. |
3.2 | Ineligible Terminations . In addition to the foregoing, Salaried Employees whose separation from employment is due to one of the following events shall not be eligible for severance pay under the Plan: (a) resignation; (b) retirement; (c) termination for cause, as determined by the Company in its sole discretion; (d) violation of a Company policy which provides that violation may result in disciplinary action including termination; (e) death; (f) disability; (g) failure to return at the end of an approved leave of absence (including medical leave of absence); (h) job abandonment; (i) termination as a result of causes beyond the control of the Company; or (j) a change in ownership of an entity, facility, or business unit of the Company or a change in control of the Company. |
IV. | NOTICE OF TERMINATION/NOTICE PAY |
4.1 | Eligible non-exempt Salaried Employees shall receive two weeks notice prior to termination. Eligible exempt Salaried Employees basis shall receive four weeks notice prior to termination. In either case, eligible Salaried Employees may, at the Companys option, receive payment in lieu of notice. Severance payments shall be in addition to such notice or payments made in lieu of notice. |
V. | SEVERANCE FORMULA |
5.1 | Calculation of Payments . All severance payments shall be calculated based upon the Salaried Employees Weekly Salary Rate. |
(a) | Non-Exempt Salaried Employee . Severance payments for an eligible non-exempt Salaried Employee shall be calculated as follows: severance pay of two weeks pay, plus one week of pay for each Year of Service through fifteen Years of Service, and |
4
two weeks of pay for each Year of Service in excess of fifteen Years of Service; provided, however, that no non-exempt Salaried Employee shall receive more than 52 weeks of severance pay regardless of the number of his or her Years of Service. | |||
(b) | Exempt Salaried Employee . Severance payments for an eligible exempt Salaried Employee shall be determined on the basis of the Salaried Employees grade level on the date of employment termination as set forth below; provided, however, that no exempt Salaried Employee shall receive more than the maximum total amount of severance pay applicable to his or her grade level regardless of the number of his or her Years of Service. |
Grade Level | Severance Formula | Maximum Total | ||
10-28
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4 weeks of pay, plus one week for each Year of Service through 15 Years of Service and two weeks for each Year of Service in excess of 15 Years of Service | 52 weeks | ||
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30-34
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8 weeks of pay, plus one week for each Year of Service through 15 Years of Service and two weeks for each Year of Service in excess of 15 Years of Service | 52 weeks | ||
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36-40
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16 weeks of pay, plus one week for each Year of Service through 15 Years of Service and two weeks for each Year of Service in excess of 15 Years of Service | 52 weeks | ||
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42-48
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52 weeks of pay, plus one week for each Year of Service through 15 Years of Service and two weeks for each Year of Service in excess of 15 Years of Service | 18 months | ||
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50 and above
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24 months | 24 months |
VI. | RELEASE OF CLAIMS |
6.1 | In order to receive severance pay or other benefits under the Plan, Salaried Employees who experience an eligible termination and become eligible for severance pay must execute a Severance Agreement and General Release satisfactory to the Company. |
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VII. | TIMING OF SEVERANCE PAY AND OTHER BENEFITS |
7.1 | Timing and Form of Payments . |
7.2 | Other Benefits . |
(a) | Ongoing Benefits . |
(1) | Pension Plan . Eligibility for pension benefits when a Salaried Employee begins to receive severance payments shall not preclude eligibility for severance payments nor may one be offset against the other. | ||
(2) | Savings and Thrift Plans . Former Salaried Employees shall not be able to make contributions to the Savings Plan or any similar Company-sponsored qualified savings plan nor be eligible for matching contributions after their Termination Date. |
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(3) | Medical and Life Insurance . Participation in the Campbell Soup Company group life insurance and medical plans will continue until the end of the severance payment period or until the recipient is eligible for benefit coverage from another employer, whichever occurs first. Deductions for continuing Company benefits will be made from the severance payments. The recipient shall be deemed to be an employee solely for the limited purpose of participation in the above-named benefit plans. |
(b) | Terminated Benefits . A Salaried Employees eligibility for and participation in Campbell Soup Companys short-term and long-term disability plans, dental benefits, salary continuation plan, business travel and accident insurance, supplemental accident insurance, and all other benefit programs cease according to the terms of the respective plans. The coordination of severance payments with benefits provided by an applicable short-term or long-term disability plan will be in accordance with the terms of such plans. Participation in future Campbell Soup Company stock option awards, restricted stock grants and any other Campbell Soup Company-sponsored long-term incentive programs shall cease upon termination of employment. The vesting of any awards granted prior to a Salaried Employees termination shall be subject to the terms and conditions of the applicable the long-term incentive program under which such award was issued. | ||
Subject to applicable state wage laws, vacation pay due at the time of termination shall be paid in installment payments on regular payroll dates, which shall be paid prior to severance payments. |
VIII. | REHIRING |
8.1 | Rehire During Severance Pay Period . If a terminated Salaried Employee is rehired by the Company during the period in which severance payments are being made, severance payments shall cease. | ||
8.2 | Rehire After Severance Pay Period . If a terminated Salaried Employee is rehired by the Company after the receipt of all severance payments due under the Plan, no repayment of previously paid severance shall be required. | ||
8.3 | Effect of Rehire Upon Future Severance Payments . Years of Service shall not be counted twice in the career of any Salaried Employee for Plan purposes if a terminated Salaried Employee is rehired by the Company after the receipt of all severance payments due under the Plan. Thus, if a |
7
Salaried Employee is rehired after receiving all severance payments due under the Plan or a predecessor plan or policy, Years of Service shall be counted from such Salaried Employees most recent date of rehire for the purposes of calculating severance pay in the event of a subsequent eligible termination of such Salaried Employee. If, however, a Salaried Employee is rehired during his or her severance pay period prior to the payment of all severance payments due under the Plan, all of his or her Years of Service shall be restored to such rehired Salaried Employee for the purposes of calculating future severance pay, if otherwise eligible under the terms of the Plan. |
IX. | ADMINISTRATION |
9.1 | Plan Administrator . The Plan Administrator has full and exclusive authority to construe, interpret, and administer, in his or her sole discretion, any and all provisions of the Plan. The Plan Administrator has full and exclusive authority to consider and decide, in his or her sole discretion, all questions (of fact or otherwise) in connection with the administration of the Plan and any claim arising under the Plan. Decisions or actions of the Plan Administrator with regard to the Plan are conclusive and binding. The Plan Administrator may maintain such procedures and records as he or she deems necessary or appropriate. The Plan Administrator may delegate his or her powers. | ||
9.2 | Claims Procedure . Generally, Salaried Employees need not file a claim to receive benefits under the Plan. |
(a) | Denial of Claim . If, however, severance benefits are denied, a written notice will be furnished to the claimant within 90 days of the date on which the claim is received by the Plan Administrator or his or her delegate, to the extent review authority has been delegated. If special circumstances require a longer period, the claimant will be notified in writing, prior to the expiration of the 90-day period, of the reasons for an extension of time; provided, however, that no extensions will be permitted beyond 90 days after the expiration of the initial 90-day period. | ||
(b) | Reasons for the Denial . A denial or partial denial of a claim will be dated and will clearly set forth: |
(1) | the specific reason or reasons for the denial; | ||
(2) | specific reference to pertinent Plan provisions on which the denial is based; | ||
(3) | a description of any additional material or information necessary for the claimant to perfect the claim and an explanation |
8
of why such material or information is necessary; and | |||
(4) | an explanation of the procedure for review of the denied or partially denied claim set forth below, including the claimants right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review. |
(c) | Review of Denial . Upon denial of a claim, in whole or in part, a claimant or his duly authorized representative will have the right to submit a written request to the Plan Administrator for a full and fair review of the denied claim by filing a written notice of appeal with the Plan Administrator within 60 days of the receipt by the claimant of written notice of the denial of the claim. A claimant or the claimants authorized representative will have, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits and may submit issues and comments in writing. The review will take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. | ||
If the claimant fails to file a request for review within 60 days of the denial notification, the claim will be deemed abandoned and the claimant precluded from reasserting it. If the claimant does file a request for review, his request must include a description of the issues and evidence he deems relevant. Failure to raise issues or present evidence on review will preclude those issues or evidence from being presented in any subsequent proceeding or judicial review of the claim. |
(d) | Decision Upon Review . The Plan Administrator will provide a prompt written decision on review. If the claim is denied on review, the decision shall set forth: |
(1) | the specific reason or reasons for the adverse determination; | ||
(2) | specific reference to pertinent Plan provisions on which the adverse determination is based; | ||
(3) | a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits; and |
9
(4) | a statement describing any voluntary appeal procedures offered by the Plan and the claimants right to obtain the information about such procedures, as well as a statement of the claimants right to bring an action under ERISA section 502(a). |
A decision will be rendered no more than 60 days after the Plan Administrators receipt of the request for review, except that such period may be extended for an additional 60 days if the Plan Administrator determines that special circumstances (such as for a hearing) require such extension. If an extension of time is required, written notice of the extension will be furnished to the claimant before the end of the initial 60-day period. |
9.3 | Finality of Determinations; Exhaustion of Remedies . To the extent permitted by law, decisions reached under the claims procedures set forth in this Section 9.3 shall be final and binding on all parties. No legal action for benefits under the Plan shall be brought unless and until the claimant has exhausted his remedies under this Section 9.3. In any such legal action, the claimant may only present evidence and theories which the claimant presented during the claims procedure. Any claims which the claimant does not in good faith pursue through the review stage of the procedure shall be treated as having been irrevocably waived. Judicial review of a claimants denied claim shall be limited to a determination of whether the denial was an abuse of discretion based on the evidence and theories the claimant presented during the claims procedure. | ||
9.4 | Limitations Period . Any suit or legal action initiated by a claimant under the Plan must be brought by the claimant no later than one year following a final decision on the claim for benefits by the Plan Administrator. The one-year limitation on suits for benefits will apply in any forum where a claimant initiates such suit or legal action. |
X. | AMENDMENT AND TERMINATION |
10.1 | The Chief Executive Officer of Campbell Soup Company reserves the right to amend, modify, suspend, or terminate the Plan in any respect, at any time, and without notice. Such amendment may include, without limitation, discontinuing payments to Salaried Employees. The Chief Executive Officer of Campbell Soup Company may delegate his or her authority to make certain amendments to the Plan to the chief Human Resources executive of Campbell Soup Company; however, such amendment authority shall be limited to amendments that do not increase the benefits available under the Plan, unless otherwise required by law, or substantially change the form of benefits provided under the Plan. |
10
Notwithstanding the foregoing, no amendment shall have the effect of modifying or reducing severance payments that have commenced to former Salaried Employees who have been terminated before the adoption of such amendment. |
XI. | GENERAL PROVISIONS |
11.1 | Participants Rights Unsecured and Unfunded . The Plan at all times will be entirely unfunded. No assets of the Company will be segregated or earmarked to represent the liability for benefits under the Plan. The right of a Salaried Employee to receive a payment under the Plan will be an unsecured claim against the general assets of the Company. All payments under the Plan will be made from the general assets of the Company. Notwithstanding anything in this Plan, no Salaried Employee, or any other person, may acquire by reason of the Plan any right in or title to any assets, funds, or property of the Company. | ||
11.2 | No Enlargement of Employee Rights . Neither the establishment of the Plan nor any action of the Company or any other person or entity may be held or construed to confer upon any person any legal right to continue employment with the Company. In this regard, the Company expressly reserves the right to discharge any Salaried Employee, at any time, for any reason, in its sole discretion and judgment. | ||
11.3 | Non-Alienation . Except as set forth in Section 7.2(a)(3) of the Plan, no interest of any person or entity in, or right to receive a benefit or distribution under, the Plan may be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind. Nor may such interest to receive a distribution be taken, either voluntarily or involuntarily, for the satisfaction of the debts of, or other obligations or claims against such person or entity, including claims for alimony, support, separate maintenance and claims in bankruptcy proceedings. | ||
Notwithstanding the foregoing, the Company shall have the unrestricted right and power to set off against, or recover out of any severance payments, any amounts owed or which become owed, to the Company by the Salaried Employee to the extent permitted by law. | |||
11.4 | Applicable Law . The Plan will be construed and administered in accordance with the provisions of ERISA. To the extent ERISA does not apply, the Plan will be construed and administered in accordance with New Jersey law without regard to conflict of laws. | ||
11.5 | Taxes . The Company will withhold from any payments made pursuant to |
11
the Plan such amounts as may be required by federal, state, or local law, as applicable. |
11.6 | Drafting Errors . If, due to errors in drafting, any Plan provision does not accurately reflect its intended meaning, as demonstrated by consistent interpretations or other evidence of intent, or as determined solely by Campbell Soup Company, the provision will be considered ambiguous and will be interpreted by Campbell Soup Company in a fashion consistent with its intent, as determined solely by Campbell Soup Company. The Chief Executive Officer of Campbell Soup Company or his or her delegate may amend the Plan retroactively to cure any such ambiguity. | ||
11.7 | Excess Payments . If the Weekly Salary Rate, Years of Service, or any other relevant fact relating to the determination of the Plan benefit is found to have been misstated or mistaken for any reason (fact or law), the Plan benefit payable will be the Plan benefit that would have been provided on the basis of the correct information. Any excess payments due to such misstatement or mistake will be refunded to the Company or withheld by the Company from any further amounts otherwise payable under the Plan. | ||
11.8 | Impact on Other Benefits . Amounts paid under the Plan will not be included in a Salaried Employees compensation for purposes of calculating benefits under any other plan, program, or arrangement sponsored by the Company, unless such plan, program, or arrangement expressly provides that amounts paid under the Plan will be included. | ||
11.9 | Usage of Terms and Headings . Words in the masculine gender include the feminine, and vice versa, unless qualified by the context. Words used in the singular include the plural, and vice versa, unless qualified by the context. Any headings are included for ease of reference only, and are not to be construed to alter the terms of the Plan. |
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11.10 | Effective Date . The Plan is effective on January 1, 2009. |
Campbell Soup Company
|
||||
By: | /s/ Nancy A. Reardon | |||
Nancy A. Reardon | ||||
Senior Vice President -- Chief Human Resources
and Communications Officer |
||||
By: | /s/ John J. Furey | |||
Corporate Secretary | ||||
13
1. | I have reviewed this Quarterly Report on Form 10-Q of Campbell Soup Company; | |
2. | Based on my knowledge, this 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 report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ Douglas R. Conant | |||
Name: | Douglas R. Conant | |||
Title: | President and Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10-Q of Campbell Soup Company; | |
2. | Based on my knowledge, this 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 report; | |
3. | Based on my knowledge, the financial statements, and other financial information included in this 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 report; | |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; | ||
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | ||
c) | evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and |
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and | ||
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting. |
By: | /s/ B. Craig Owens | |||
Name: | B. Craig Owens | |||
Title: |
Senior Vice President
Chief Financial Officer and Chief Administrative Officer |
(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. |
By: | /s/ Douglas R. Conant | |||
Name: | Douglas R. Conant | |||
Title: | President and Chief Executive Officer |
(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. |
By: | /s/ B. Craig Owens | |||
Name: | B. Craig Owens | |||
Title: |
Senior Vice President
Chief Financial Officer and Chief Administrative Officer |
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