SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED July 6, 1997
[ ] 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 1-2451
NATIONAL PRESTO INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0494170
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3925 NORTH HASTINGS WAY
EAU CLAIRE, WISCONSIN 54703-3703
(Address of principal executive offices) (Zip Code)
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(Registrant's telephone number, including area code) 715-839-2121
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_____
There were 7,354,291 shares of the Issuer's Common Stock outstanding as of the close of the period covered by this report.
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 6, 1997 and December 31, 1996
(Unaudited)
(Dollars in thousands)
ASSETS
CURRENT ASSETS: 1997 1996
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Cash and cash equivalents $ 76,678 $ 91,878
Marketable securities 143,776 136,159
Accounts receivable, net 8,128 21,826
Inventories:
Finished goods $ 10,713 $ 8,470
Work in process 2,634 1,744
Raw materials 5,332 6,661
Supplies 1,096 19,775 945 17,820
-------- --------
Prepaid expenses 947 888
-------- --------
Total current assets 249,304 268,571
PROPERTY, PLANT AND EQUIPMENT: 18,943 17,256
Less allowance for depreciation 10,857 8,086 9,911 7,345
-------- --------
OTHER ASSETS 9,469 9,469
-------- --------
$266,859 $285,385
======== ========
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The accompanying notes are an integral part of the financial statements.
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 6, 1997 and December 31, 1996
(Unaudited)
(Dollars in thousands)
LIABILITIES
CURRENT LIABILITIES: 1997 1996
------------------------------------------------------------------------------------------------
Accounts payable $ 7,627 $ 13,262
Federal and state income taxes 1,703 4,887
Accrued liabilities 20,123 20,387
-------- --------
Total current liabilities 29,453 38,536
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Common stock, $1 par value:
Authorized: 12,000,000 shares
Issued: 7,440,518 shares $ 7,441 $ 7,441
Paid-in capital 916 $ 903
Retained earnings 231,327 $240,815
-------- --------
239,684 $249,159
Treasury stock, at cost 2,278 $ 2,310
-------- --------
Total stockholders' equity 237,406 246,849
-------- --------
$266,859 $285,385
======== ========
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The accompanying notes are an integral part of the financial statements.
NATIONAL PRESTO INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
Three Months and Six Months ended July 6, 1997 and June 30, 1996
(Unaudited)
(In thousands except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------- ----------------------
1997 1996 1997 1996
-------- -------- -------- --------
Net sales $ 16,870 $ 16,970 $ 34,817 $ 34,079
Cost of sales 11,938 12,632 25,954 26,104
-------- -------- -------- --------
Gross profit 4,932 4,338 8,863 7,975
Selling and general expenses 4,199 3,880 8,431 8,154
-------- -------- -------- --------
Operating profit (loss) 733 458 432 (179)
Other income, principally interest 2,233 1,992 4,788 4,049
Other, principally litgation judgments / settlements -- -- 550 476
-------- -------- -------- --------
Earnings before provision for income taxes 2,966 2,450 5,770 4,346
Provision for income taxes 326 214 552 180
-------- -------- -------- --------
Net earnings $ 2,640 $ 2,236 $ 5,218 $ 4,166
======== ======== ======== ========
Weighted average common and common
equivalent shares outstanding 7,359 7,355 7,359 7,355
======== ======== ======== ========
Net earnings per common share $ 0.36 $ 0.31 $ 0.71 $ 0.57
======== ======== ======== ========
Cash dividends declared and paid per common share $ -- $ -- $ 2.00 $ 2.00
======== ======== ======== ========
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The accompanying notes are an integral part of the financial statements.
NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months ended July 6, 1997 and June 30, 1996
(Unaudited)
(Dollars in thousands)
1997 1996
-------- --------
Cash flows from operating activities:
Net earnings $ 5,218 $ 4,166
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Provision for depreciation 957 852
Stock compensation expense 49 22
Changes in:
Accounts receivable 13,698 19,591
Inventories (1,955) (1,997)
Prepaid expenses (59) 646
Accounts payable and accrued liabilities (5,899) (6,829)
Federal and state income taxes (3,184) (4,671)
-------- --------
Net cash provided by operating activities 8,825 11,780
-------- --------
Cash flows from investing activities:
Marketable securities purchased (29,861) (42,414)
Marketable securities - maturities and sales 22,244 41,459
Acquisition of property, plant and equipment (1,700) (1,964)
Other 2 7
-------- --------
Net cash used in investing activities (9,315) (2,912)
-------- --------
Cash flows from financing activities:
Dividends paid (14,706) (14,701)
Other (4) 39
-------- --------
Net cash used in financing activities (14,710) (14,662)
-------- --------
Net decrease in cash and cash equivalents (15,200) (5,794)
Cash and cash equivalents at beginning of period 91,878 91,448
-------- --------
Cash and cash equivalents at end of period $ 76,678 85,654
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The accompanying notes are an integral part of the financial statements.
NATIONAL PRESTO INDUSTRIES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE A - EARNINGS PER SHARE
Earnings per share are computed using the weighted average common shares outstanding during each period.
NOTE B - NEW ACCOUNTING PRONOUNCEMENT
The FASB has issued Statement of Financial Accounting Standards No. 128, EARNINGS PER SHARE, which is effective for financial statements issued after December 15, 1997. Early adoption of the new standard is not permitted. The new standard eliminates primary and fully diluted earnings per share and requires presentation of basic and diluted earnings per share together with disclosure of how the per share amounts were computed. The adoption of this new standard is not expected to have a material impact on the disclosure of earnings per share in the financial statements.
The foregoing information for the periods ended July 6, 1997, and June 30, 1996, is unaudited; however, in the opinion of management of the Registrant, it reflects all the adjustments, which were of a normal recurring nature, necessary for a fair statement of the results for the interim periods. The condensed consolidated balance sheet as of December 31, 1996, is summarized from audited consolidated financial statements, but does not include all the disclosures contained therein and should be read in conjunction with the 1996 Annual Report. Interim results for the period are not indicative of those for the year.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Comparison Second Quarter 1997 and 1996
Net sales decreased $100,000 from $16,970,000 to $16,870,000.
Gross margins as a percentage of sales increased from 26% to 29%, primarily as a result of more favorable manufacturing variances.
The Company accrues unexpended advertising costs budgeted for the year against each quarter's sales. Major advertising commitments are incurred in advance of the expenditures, and the timing of sales through dealers and distributors to the ultimate customer does not permit specific identification of the customers' purchase to the actual time an advertisement appears. Advertising charges included in selling expense in each quarter represent that percentage of the annual advertising budget associated with that quarter's shipments. Revisions to this budget result in periodic changes to the accrued liability for committed advertising expenditures.
Both other income, principally interest and net earnings increased from the 1996 level primarily as a result of a higher rate of return on a higher level of invested funds.
Earnings before provision for income taxes increased $516,000 from $2,450,000 to $2,966,000. The provision for income taxes increased from $214,000 to $326,000 and the effective income tax rate increased from 9% to 11%, as a result of increased earnings subject to tax. Net earnings increased $404,000 from $2,236,000 to $2,640,000, or 18%.
The Company maintains adequate liquidity for all of its anticipated capital requirements. As of quarter-end, there were no material capital commitments outstanding.
Comparison of the First Six Months 1997 and 1996
Net sales increased by $738,000 from $34,079,000 to $34,817,000, primarily due to a higher volume.
Gross margins as a percentage of sales increased from 23% to 26%, primarily as a result of more favorable manufacturing variances offset in part by a less favorable product mix.
The accrual for unexpended advertising costs discussed in the Second Quarter comparison also applies to the first six months.
Both other income, principally interest and net earnings increased from the 1996 level primarily as a result of a higher rate of return on a higher level of invested funds.
Both years were favorably impacted by litigation judgments / settlements of a non-recurring nature.
Earnings before provision for income taxes increased $1,424,000 from $4,346,000 to $5,770,000. The provision for income taxes increased from $180,000 to $552,000 and the effective income tax rate increased from 4% to 10%, as a result of increased earnings subject to tax. Net earnings increased $1,052,000 from $4,166,000 to $5,218,000, or 25%.
PART II - OTHER INFORMATION
Item 4. Submission of matters to a vote of security holders
On May 20, 1997, the Registrant held its Annual Meeting of Stockholders at which time the nominees proposed by the Board were re-elected to three year terms. The results of the vote on the Board of Directors election was as follows:
Against Abstentions
or and Broker
Nominee For Withheld non-votes
------- --- -------- ---------
Melvin S. Cohen 6,374,533 57,304 76,670
MaryJo Cohen 6,412,283 18,754 76,670
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 3 (i) - Restated Articles of Incorporation
(ii) - By-Laws
Exhibit 9 - Voting Trust Agreement
Exhibit 10.1 - 1988 Stock Option Plan
Exhibit 10.2 - Form of Incentive Stock Option Agreement under
1988 Stock Option Plan
Exhibit 11 - Statement Re computation of per share earnings
Exhibit 27 - Financial Data Schedule
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(b) Reports on Form 8-K:
None
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.
NATIONAL PRESTO INDUSTRIES, INC.
Date: August 8, 1997 /S/ M. J. COHEN
M. J. Cohen, President
(Principal operating officer)
Date: August 8, 1997 /S/ R. F. LIEBLE
R. F. Lieble, Treasurer
(Principal accounting officer)
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Exhibit
Number Exhibit Description
------ -------------------
+ 3 (i) Restated Articles of Incorporation
+ 3 (ii) By-Laws
+ 9 Voting Trust Agreement
+ 10.1 * 1988 Stock Option Plan
+ 10.2 * Form of Incentive Stock Option Agreement under
1988 Stock Option Plan
+ 11 Statement Re computation of per share earnings
+ 27 Financial Data Schedule
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+ Filed with this report
* Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14 (C) of Form 10-K
EXHIBIT 3 (i)
RESTATED ARTICLES OF INCORPORATION
of
NATIONAL PRESTO INDUSTRIES, INC.
The following Restated Articles of Incorporation duly adopted pursuant to the authority and provisions of Chapter 180 of the Wisconsin Statutes supersede and take the place of the existing articles of incorporation and amendments thereto:
ARTICLE 1. The name of the corporation shall be National Presto Industries, Inc.
ARTICLE 2. The period of existence shall be perpetual.
ARTICLE 3. The purpose for which this corporation is organized is to engage in any lawful activity within the purposes for which corporations may be organized under the Wisconsin Business Corporation Law, Chapter 180 of the Wisconsin Statutes.
ARTICLE 4. The aggregate number of shares which the corporation shall have authority to issue is 12,000,000 shares consisting of one class only, designated as "Common Stock", of the par value of $1.00 per share.
ARTICLE 5. No holder of common or of any other class of stock of the corporation shall be entitled as a matter of right to subscribe for, purchase, or receive any part of any issue of any stock of the corporation of any class, either at present authorized or of any future increase or creation, including without limitation, any securities convertible into stock of any class.
ARTICLE 6. (A) The number of directors which shall constitute the whole Board of Directors of the corporation shall be six (6). The Board of Directors shall be divided into three classes with two directors in each class and the term of office of one class expiring each year. At the annual meeting of stockholders in 1976, directors of the first class shall be elected to hold office for a term expiring at the next succeeding annual meeting, directors of the second class shall be elected to hold office for a term expiring at the second succeeding annual meeting and directors of the third class shall be elected to hold office for a term expiring at the third succeeding annual meeting. Thereafter, each class of directors shall be elected for a term ending on the third annual meeting following the annual meeting at which such class of directors was elected. During the intervals between annual meetings of stockholders, any vacancy occurring in the Board of Directors caused by resignation, removal, death or other incapacity shall be filled by a majority of the directors then in office, whether or not a quorum. Each director chosen to fill a vacancy shall hold office for the unexpired term in respect of which such vacancy occurred. Each director shall serve until his successor shall have been duly elected and qualified, unless he shall resign, die, become incapacitated or shall otherwise be removed.
(B) Four (4) directors shall constitute a quorum for the transaction of business, and if at any meeting of the Board of Directors there shall be less than a quorum of four (4), a majority of those present may adjourn the meeting from time to time. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number be required by law or by the Articles of Incorporation.
(C) No director of the corporation shall be removed from his office as a director by vote or other action of stockholders or otherwise unless the director to be removed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal or unless the director to be removed has been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation by a court of competent jurisdiction and such adjudication is no longer subject to direct appeal.
(D) In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
(i) to make, alter or repeal the bylaws of the corporation,
(ii) to authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation,
(iii) to set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created, and
(iv) by resolution passed by a majority of the whole board, to designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in the resolution or in the bylaws of the corporation, shall have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the bylaws of the corporation or as may be determined from time to time by resolution adopted by the Board of Directors.
ARTICLE 7. The address of the registered office at the time of adoption of these restated articles is 3925 North Hastings Way, Eau Claire, Wisconsin 54701.
ARTICLE 8. The name of the registered agent at such address at the time of adoption of these restated articles is M. M. Whelihan.
ARTICLE 9. (A) Except as set forth in paragraph (B) of this Article, the affirmative vote or consent of the holders of not less than seventy-five percent (75%) of the outstanding shares of stock of this corporation (the "Corporation") entitled to vote shall be required:
(i) to adopt any agreement for, or to approve, the merger or consolidation of the Corporation or any subsidiary (as hereinafter defined) with or into any other person (as hereinafter defined),
(ii) to authorize any sale, lease, transfer, exchange, mortgage, pledge or other disposition to any other person of all or substantially all of the assets of the Corporation or any subsidiary,
or
(iii) to authorize the issuance or transfer by the Corporation or any subsidiary of any voting securities of the Corporation or any subsidiary in exchange or payment for the securities or assets of any other person, if such authorization is otherwise required by law or by any agreement between the Corporation and any national securities exchange or by any other agreement to which the Corporation or any subsidiary is a party, if, in any such case, as of the record date for the determination of stockholders entitled to notice thereof and to vote thereon or consent thereto, such other person is, or at any time within the preceding twelve months has been, directly or indirectly through any affiliate, the beneficial owner of five percent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors. If such other person is not, and has not been, a five percent (5%) beneficial owner, the provisions of this paragraph (A) shall not apply, and the provisions of Wisconsin Law shall apply.
(B) The provisions of paragraph (A) of this Article shall not apply, and the provisions of Wisconsin law shall apply to (i) any transaction described therein if the Board of Directors by resolution shall have approved a memorandum of understanding with such other person setting forth the principal terms of such transaction and such transaction is substantially consistent therewith, provided that a majority of those members of the Board of Directors voting in favor of such resolution were duly elected and acting members of the Board of Directors prior to the time such other person became the beneficial owner of five percent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors) or (ii) any transaction described therein if such other person is a corporation of which a majority of the outstanding shares of all classes of stock entitled to vote in elections of directors is owned of record or beneficially by the Corporation or its subsidiaries.
(C) The affirmative vote or consent of the holders of not less than seventy-five percent (75%) of the outstanding shares of stock of the Corporation entitled to vote shall be required for the adoption of any plan for the dissolution of the Corporation if the Board of Directors shall not have, by resolution, recommended to the stockholders the adoption of such plan for dissolution of the Corporation. If the Board of Directors shall have so recommended to the stockholders such plan for dissolution of the Corporation, the provisions of Wisconsin law shall apply.
(D) For purposes of this Article;
(i) a "subsidiary is any corporation more than forty-nine percent (49%) of the voting securities of which are owned, directly or indirectly, by the Corporation;
(ii) a "person" is any individual, corporation or other entity; and
(iii) an "affiliate" of a specified person is any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with the specified person.
(F) The Board of Directors shall have the power and duty to determine, for purposes of this Article, on the basis of information known to such Board,
(i) whether any person referred to in paragraph (A) of this Article owns beneficially five percent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors; and
(ii) whether a proposed transaction is substantially consistent with any memorandum of understanding of the character referred to in paragraph (B) of this Article.
Any such determination shall be conclusive and binding for all purposes of this Article.
ARTICLE 10. The provisions set forth in Articles 6 and 9 above, and in this Article 10 may not be repealed or amended in any respect unless such repeal or amendment is approved by the affirmative vote of the holders of not less than seventy-five percent (75%) of the outstanding shares of stock of this corporation entitled to vote.
ARTICLE 11: (A) In the event that any person (Acquiring Person) (i) who is the beneficial owner, directly or indirectly, of more than fifty percent of the outstanding common stock of the Corporation becomes the beneficial owner, directly or indirectly, of any additional shares of common stock pursuant to a tender offer or (ii) becomes the beneficial owner, directly or indirectly, of more than fifty percent of the outstanding common stock of the Corporation and any of such shares were acquired pursuant to a tender offer, each holder of shares of common stock of the Corporation other than the Acquiring Person or a transferee of the Acquiring Person, shall have the right until and including the sixtieth day following the date the notice to holders of shares of common stock of the Corporation referred to in subparagraph C hereof is mailed to have the shares of common stock of the Corporation held by such holder redeemed by the Corporation at the Redemption Price determined as provided in subparagraph E herein, and each holder of securities convertible into shares of common stock of the Corporation or of options, warrants, or rights exercisable to acquire shares of common stock of the Corporation prior to such sixtieth day, other than the Acquiring Person or a transferee of the Acquiring Person, shall have the right simultaneously with the conversion of such securities or exercise of such options, warrants, or rights to have the shares of common stock of the Corporation to be received thereupon by such holder redeemed by the Corporation at the
Redemption Price; provided that no holder of shares of common stock of the Corporation shall have any right to have such shares of common stock of the Corporation redeemed by the Corporation pursuant to this Article 11 if the Corporation acting through a Non-Affiliated majority of its Board of Directors shall within ten days following the announcement or publication of such tender offer or following any amendment to such tender offer recommends to the holders of shares of common stock of the Corporation that such tender offer be accepted by the holders of the shares of common stock of the Corporation.
(B) For purposes of this Article 11:
(1) The term "person" shall include an individual, a corporation, partnership, trust or other entity. When two or more persons act as a partnership, limited partnership, syndicate, or other group for the purpose of acquiring shares of common stock of the Corporation, such partnership, syndicate or group shall be deemed a "person".
(2) The term "Non-Affiliated majority of the Board of Directors" shall mean a majority of those members of the Board of Directors of the Corporation who were duly elected and acting members of the Board of Directors prior to the time such Acquiring Person acquired the status of an Acquiring Person.
(3) For the purpose of determining whether a person is an Acquiring Person, such person shall be deemed to beneficially own (i) all shares of common stock of the Corporation with respect to which such person has the capability to control or influence the voting power in respect thereof and (ii) all shares of common stock of the Corporation which such person has the immediate or future right to acquire, directly or indirectly, pursuant to agreements, through the exercise of options, warrants or rights or through the conversion of convertible securities or otherwise; and all shares of common stock of the Corporation which such person has the right to acquire in such manner shall be deemed to be outstanding shares, but shares of common stock of the Corporation which any other person has the right to acquire in such manner shall not be deemed to be outstanding shares.
(4) The acquisition of shares of common stock of the Corporation by the Corporation or by any person controlled by the Corporation shall not engender the right to have shares of common stock of the Corporation redeemed pursuant to this Article 11.
(5) The right to have shares of common stock of the Corporation redeemed pursuant to this Article 11 shall attach to such shares and shall not be personal to the holder thereof.
(6) The term "tender offer" shall mean an offer to acquire or an acquisition of shares of common stock of the Corporation pursuant to a request or invitation for tenders or an offer to purchase such shares for cash, securities or any other consideration.
(7) The term market purchases" shall mean the acquisition of shares of common stock of the Corporation from holders of such shares in privately negotiated transactions or in transactions effected through a broker or dealer.
(8) Subject to the provisions of B (3) hereof, "outstanding shares" shall mean shares of common stock of the Corporation which at the time in question have been issued by the Corporation and not reacquired and held or retired by it or held by any subsidiary of the Corporation.
(9) Any matters related to the foregoing definitions or interpretations of the provisions of this Article 11 shall be conclusively determined by a Non-Affiliated majority of the Board of Directors of the Corporation.
(C) (1) Not later than twenty days following the date on which the Corporation receives credible notice that any person has become an Acquiring Person and a Non-Affiliated majority of the Board of Directors determines the redemption price to be paid pursuant hereto, the Corporation shall give written notice, by first class mail, postage prepaid, at the addresses shown on the records of the Corporation, to each holder of record of shares of common stock of the Corporation as of a date not more than seven days prior to the date of the mailing pursuant to this subparagraph C and shall advise each such holder of the right to have shares redeemed, the redemption price and the procedures for such redemption. In the event that the Corporation fails to give notice as required by this subparagraph C, any holder entitled to receive such notice may within twenty days thereafter serve written demand upon the Corporation to give such notice. If within twenty days after the receipt of written demand the Corporation fails to give the required notice, such holder may at the expense and on behalf of the Corporation take such reasonable action as may be appropriate to give notice or to cause notice to be given pursuant to this subparagraph C.
(2) In the event shares of common stock of the Corporation are subject
to redemption in accordance with this Article 11, the Directors of the
Corporation shall designate a Redemption Agent, which shall be a corporation or
association (i) organized and doing business under the laws of the United States
or any State, (ii) subject to supervision or examination by Federal or State
authority, (iii) having combined capital and surplus of at least $5,000,000 and
(iv) having the power to exercise corporate trust powers.
(3) For a period of sixty days from the date of mailing of the notice to holders of shares of common stock of the Corporation referred to in this subparagraph C, holders of shares of common stock of the Corporation and other persons entitled to have shares of common stock of the Corporation redeemed pursuant to this Article 11 may, at their option, deposit certificates representing all or less than all shares of common stock of the Corporation held of record by them with the Redemption Agent together with written notice that the holder elects to have such shares redeemed pursuant to this Article 11. Redemption shall be deemed to have been effected at the close of business on the day such certificates are deposited in proper form with the Redemption Agent.
(4) The Corporation shall promptly, upon giving of the notice required pursuant to subsection (1) above, deposit in trust with the Redemption Agent cash in an amount equal to the aggregate Redemption Price of all of the shares of common stock of the Corporation entitled to Redemption, such cash to be held by the Redemption Agent for purposes of redemption hereunder.
(5) As soon as practicable after receipt by the Redemption Agent of the cash deposit by the Corporation referred to in this subparagraph C, the Redemption Agent shall issue its checks payable to the order of the persons entitled to receive the Redemption Price of the shares of common stock of the Corporation in respect of which such cash deposit was made. Any remaining amounts shall be returned to the Corporation upon expiration of the maximum period during which redemptions might be effected pursuant to this Article 11.
(D) All shares of common stock of the Corporation with respect to which redemption has been effected pursuant to this Article 1I shall thereupon be deemed retired.
(E) (1) The Redemption Price shall be the amount payable by the Corporation in respect of each share of common stock of the Corporation with respect to which redemption has been demanded pursuant to this Article 11 and shall be the greater amount determined on either of the following bases, but in no event shall the Redemption Price be less than the amount of stockholders' equity in respect of each outstanding share of common stock of the Corporation as determined in accordance with generally accepted accounting principles and as reflected in any published report by the Corporation as at the fiscal quarter ending immediately preceding the notice to stockholders referred to in subparagraph C hereof:
(a) The highest price per share, including any commission paid to brokers or dealers for solicitation or whatever, (i) at which shares of common stock of the Corporation held by the Acquiring Person were acquired pursuant to a tender offer regardless of when such tender offer was made or (ii) at which such shares were acquired pursuant to any market purchase or otherwise within eighteen months prior to the notice to holders of shares of common stock of the Corporation referred to in subparagraph C hereof. For purposes of this subsection (a), if the consideration paid in any such
acquisition of shares of common stock of the Corporation consisted, in whole or in part, of consideration other than cash, the Board of Directors of the Corporation shall take such action, as in its judgment it deems appropriate, to establish the cash value of such consideration, but such valuation shall not be less than the cash value, if any, ascribed to such consideration by the Acquiring Person.
(b) The highest sale price per share of common stock of the Corporation for any trading day during the eighteen months prior to the notice to holders of shares of common stock of the Corporation referred in subparagraph C hereof. For purposes of this subsection (b), the sale price for any trading day shall be the highest sale price per share of common stock of the Corporation traded on the New York Stock Exchange or other national securities exchange or, if the shares are not then traded on a national securities exchange, the mean of the closing bid and asked price per share.
(2) The determinations to be made pursuant to this subparagraph E shall be made by a Non-Affiliated majority of the Board of Directors not later than the date of the notice to holders of shares of common stock of the Corporation referred to in subparagraph C hereof. In making such determination the Non-Affiliated majority of the Board of Directors may engage such persons, including investment banking firms and the independent accountants, who have reported on the most recent financial statements of the Corporation, and utilize employees and agents of the Corporation, who will, in the judgment of the Non-Affiliated majority of the Board of Directors, be of assistance to the Non-Affiliated majority of the Board of Directors.
(3) The determinations to be made pursuant to this subparagraph E, when made by the Non-Affiliated majority of the Board of Directors acting in good faith on the basis of such information and assistance as was then reasonably available for such purpose, shall be conclusive and binding upon the Corporation and its stockholders, including any person referred to in subparagraph A hereof.
(F) The Corporation may from time to time, pursuant to authorization by the Board of Directors and without action or approval by the stockholders, purchase or otherwise acquire shares of any class, bonds, debentures, notes, scrip, warrants, obligations evidences of indebtedness, or other securities of the Corporation in such manner, upon such terms, in such amounts and from such funds as the Board of Directors shall determine to the fullest extent permitted by Wisconsin law.
(G) The provisions set forth in this Article 11 may not be repealed or amended in any respect unless such repeal or amendment is approved by the affirmative vote of the holders of not less than seventy-five percent (75%) of the outstanding shares of stock of this Corporation entitled to vote.
EXHIBIT 3 (ii)
BY-LAWS OF
NATIONAL PRESTO INDUSTRIES, INC.
oOo
ARTICLE I.
OFFICES
The corporation may have such offices, either within or without the State of Wisconsin, as the business of the corporation may require from time to time.
The address of the registered office of the corporation required by the Wisconsin Business Corporation Law may be changed from time to time by the Board of Directors.
ARTICLE II.
STOCKHOLDERS
Section 2.01 Annual Meeting. The annual meeting of the stockholders shall be held on the third Tuesday in the month of May in each year, at the hour of two o'clock P.M., or, on such other date during the month of May and at such other hour as may be set by resolution of the Board of Directors, for the purpose of electing directors and for the transaction of such other business as may come before the meeting. If the day fixed for the annual meeting or any adjournments thereof shall be a legal holiday in the State of Wisconsin, such meeting shall be held on the next succeeding business day. If the election of directors shall not be held on the day designated for any annual meeting of the stockholders, or at any adjournment thereof, the Board of Directors shall cause the election to be held at a special meeting of the stockholders as soon thereafter as conveniently may be.
Section 2.02 Special Meetings. Special meetings of the stockholders, for any purpose or purposes unless otherwise prescribed by statute, may be called by the Chairman or President or by the Board of Directors.
Section 2.03 Place of Meeting. Annual and special meetings of the stockholders may be held at such place, within or without the State of Wisconsin, as may be specified by the Chairman or President or Board of Directors, or in the absence of such specification, as designated by the Secretary in the notice of the meeting. If no such designation is made, the place of the meeting shall be the registered office of the corporation in the State of Wisconsin, but any meeting may be adjourned to reconvene at any place designated by vote of a majority of the shares represented thereat.
Section 2.04 Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than ten
(10) days before the date of the meeting, (unless a longer period is required by
law), either personally or by mail, by or at the direction of the Chairman or
President, or the Secretary, or the persons calling the meeting, to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder at his address as it appears on the stock record
books of the corporation, with postage thereon prepaid.
Section 2.05 Closing of Transfer Books or Fixing of Record Date. For the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or stockholders entitled to receive payment of any dividend, or in order to make a determination of stockholders for any other proper purpose, the Board of Directors of the corporation may provide that the stock transfer books shall be closed for a stated period but not to exceed in any case, fifty (50) days. If the stock transfer books shall be closed for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such books shall be closed for at least ten (10) days immediately preceding such meeting. In lieu of closing the stock transfer books, the Board of Directors may fix in advance a date as the record date for any such determination of stockholders, such date in any case to be not more than fifty (50) days and, in case of a meeting of stockholders, not less than ten (10) days prior to the date on which the particular action, requiring such determination of stockholders, is to be taken. If the stock transfer books are not closed and no record date is fixed for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders, or stockholders entitled to receive payment of a dividend, the close of business on the date on which notice of the meeting is mailed or on the date on which the resolution of the Board of Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of stockholders. When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall be applied to any adjournment thereof except where the determination has been made through the closing of the stock transfer books and the stated period of closing has expired.
Section 2.06 Voting Lists. The officer or agent having charge of the stock transfer books for shares of the corporation shall, before each meeting of stockholders, make a complete list of the stockholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, with the address of and the number of shares held by each, which list shall be produced and kept open at the time and place of the meeting and shall be subject to the inspection of any stockholder during the whole time of the meeting for the purposes of the meeting. The original stock transfer books shall be prima facie evidence as to which stockholders may be entitled to examine such list, or transfer
books, or to vote at any meeting of stockholders. Failure to comply with the requirements of this section shall not affect the validity of any action taken at such meeting.
Section 2.07 Quorum. Except as otherwise provided by law or the Articles of Incorporation, a majority of the outstanding shares of the corporation entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders, and a majority of votes cast at any meeting at which a quorum is present shall be decisive of any motion or election. Though less than a quorum of the outstanding shares are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified.
Section 2.08 Proxies. At all meetings of stockholders, a stockholder entitled to vote may vote by proxy appointed in writing by the stockholder or his duly authorized attorney in fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after eleven (11) months from the date of its execution, unless otherwise provided in the proxy.
Section 2.09 Voting of Shares. Each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of the stockholders.
Section 2.10 Voting of Shares by Certain Holders. Shares standing in the name of another corporation may be voted by the President of such corporation, or any other officer or proxy appointed by such President, in the absence of express notice to this corporation, given in writing to the Secretary, of the designation of some other person by the Board of Directors or the By-Laws of such other corporation.
Shares held by an administrator, executor, guardian, conservator, trustee in bankruptcy, receiver or assignee for creditors may be voted by him, either in person or by proxy, without a transfer of such shares into his names provided that there is filed with the Secretary before or at the time of the meeting, proper evidence of his incumbency and the number of shares held. Shares standing in the name of a fiduciary may be voted by him, either in person or by proxy.
A stockholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, and thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the corporation shall not be voted directly or indirectly, at any meeting, and shall not be counted in determining the total number of outstanding shares entitled to vote at any given time, but shares of its own stock held by it in fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares at any given time.
Section 2.11 Informal Action by Stockholders. Any action required by the Articles of Incorporation or By-Laws or any provisions of law to be taken at meeting of the stockholders, or any other action which may be taken at meeting of the stockholders, may be taken without a meeting if a consent in writing, setting forth the action so taken shall be signed by all of the stockholders entitled to vote with respect to the subject matter thereof.
Section 2.12 Waiver of Notice by Shareholders. Whenever any notice whatever is required to be given to any stockholder of the corporation under the Articles of Incorporation or By-Laws or any provision of law, a waiver thereof in writing, signed at any time, whether before or after the time of meeting, by the stockholder entitled to such notice, shall be deemed equivalent to the giving of such notice; provided that such waiver in respect to any matter of which notice is required under any provisions of Chapter 180, Wisconsin Statutes, shall contain the same information as would have been required to be included in such notice, except the time and place of meeting.
ARTICLE III.
BOARD CF DIRECTORS
Section 3.01 General Powers. The business and affairs of the corporation shall be managed by its Board of Directors.
Section 3.02 Number, Tenure and Qualifications. The number and classification of directors of the corporation shall be as provided in the Articles of Incorporation. A director may resign at any time by filing his written resignation with the Secretary of the corporation. Directors need not be residents of the State of Wisconsin.
Section 3.03 Regular Meetings. A regular annual meeting of the Board of Directors shall be held without other notice than this By-Law immediately after, and at the same place as, the annual meeting of stockholders and each adjourned session thereof. The Board of Directors may provide by resolution, the time and place, either within or without the State of Wisconsin, for the holding of additional regular meetings.
Section 3.04 Special Meetings. Special meetings of the Board of Directors may be called by or at the request of the Chairman or President of the corporation, and shall be called by the Secretary on a written request of any two directors. The persons authorized to call special meetings of the Board of Directors may fix any place, within or without the State of Wisconsin as the place for holding any special meeting of the Board of Directors called by them.
Section 3.05 Notice. Notice of all regular and special meetings of the Board of Directors, other than the regular annual meeting of the Board of Directors, shall be given to each director by telephoning such notice to a director personally, or by written notice delivered personally at least 24 hours previously thereto or by mailing or telegraphing such notice to a director at his business address at least 48 hours previously thereto. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage thereon prepaid. If notice be given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Whenever any notice whatever is required to be given to any director of the corporation under the provisions of these By-Laws or under the provisions of the Articles of Incorporation or under the provisions of any statute, a waiver thereof in writing, signed at any time, whether before or after the time of meeting, by the director entitled to such notice, shall be deemed equivalent to the giving of such notice. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting and objects thereat to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
Section 3.06 Quorum. Except as otherwise provided by law or by these By-Laws, a majority of the number of directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but though less than such quorum is present at a meetings a majority of the directors present may adjourn the meeting from time to time without further notice.
Section 3.07 Manner of Acting. The act of the majority of directors present at a meeting at which a quorum is present shall be the act of the Board of Directors, unless the act of a greater number is required by these By-Laws or by Law.
Section 3.08 Vacancies. Any vacancy occurring in the Board of Directors, including a vacancy created by an increase in the number of directors, may be filled until the next succeeding annual election by the affirmative vote of a majority of the directors then in office, though less than a quorum of the Board of Directors.
Section 3.09 Presumption of Assent. A director of the corporation who is present at a meeting of the Board of Directors or a committee thereof at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation immediately after the adjournment of the meeting. Such right to dissent shall not apply to a director who voted in favor of such action.
Section 3.10 Informal Action by Directors. Any action required or permitted by the Articles of Incorporation or By-Laws or any provision of law to be taken by the Board of Directors by a meeting or by resolution may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors then in office.
Section 3.11 Executive Committee. The Board of Directors may, at any time, elect an Executive Committee from among its own members, consisting of not less than three (3) directors, which committee shall have and exercise the powers of the Board of Directors when not in session, except action in respect of dividends to stockholders, election or removal of officers, filling of vacancies in the Board of Directors or Executive Committee and such other matters as the Board may expressly withhold from the jurisdiction of the Executive Committee. The rules governing the activities and the manner of exercise of the authority of the Executive Committee shall be such as may from time to time be prescribed by the Board of Directors. Unless otherwise ordered by the Board, a majority of the members of the Executive Committee shall constitute a quorum. Members of the Executive Committee shall serve as such at the pleasure of the Board of Directors.
Section 3.12 Committees of Directors. The Board of Directors by resolution adopted by the affirmative vote of a majority of the number of directors then in office may designate one or more committees in addition to the Executive Committee, each such committee to consist of three or more directors elected by the Board of Directors, which to the extent provided in said resolution as initially adopted and as thereafter supplemented or amended by further resolution adopted by a like vote, shall have and may exercise when the Board of Directors is not in session, the powers of the Board of Directors in the management of the business and affairs of the corporation, except action in respect to dividends to stockholders, election or removal of officers or the filling of vacancies in the Board of Directors or committees. Each such committee shall fix its own rules governing the conduct of its activities and shall make such reports to the Board of Directors of its activities as the Board of Directors may request. Members of all such committees shall serve as such at the pleasure of the Board of Directors.
ARTICLE IV.
OFFICERS
Section 4.01 Number. The officers of the corporation shall be chosen by the Directors, and shall consist of a Chairman of the Board (if one is elected by the Board), a President, one or more Vice Presidents, a Secretary, a Treasurer and such Assistant Secretaries and Assistant Treasurers and such other officers land agents as the Board of Directors from time to time shall elect or appoint. Any two offices, except those of President And Vice President, may be held by one person.
Section 4.02 Election and Term of Office. At each annual meeting of the Board of Directors or at any special meeting of the Board of Directors called for such purpose, the Board shall elect, from within or without its number, a President, Vice President, Secretary, Treasurer and such other officers as it may deem advisable. Such officers shall hold office until the next annual meeting of the Directors or until their successors are elected and qualified.
Section 4.03 Chairman of the Board. The Chairman of the Board, if one is elected, shall preside at all meetings of the stockholders and directors, if so designated by the Board of Directors shall be chief policy officer and shall have such other duties as may be prescribed from time to time by the Board of Directors. The Chairman shall be an ex officio members of all committees and shall have the powers and duties of supervision and management usually vested in the office of Chairman of the Board of a corporation. The Chairman may execute and deliver, in the name of the corporation, any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation.
Section 4.04 President. The President shall be the chief operating officer of the corporation. In the absence of the Chairman of the Board, he shall preside at all meetings of stockholders and directors; he shall be responsible for general and active management of the business of the corporation; and he shall see that all orders and resolutions of the Board are carried into effect. He also may execute and deliver, in the name of the corporation, any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the corporation. The President shall have powers and duties of supervision and management usually vested in the office of the President of a corporation.
Section 4.05 Vice President. There shall be one or more Vice Presidents, as designated and with duties and titles assigned by the Board of Directors. Any Vice President may, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors shall prescribe.
Section 4.06 Secretary. The Secretary shall attend all meetings of stockholders and record all votes and minutes of all proceedings in a book to be kept for that purpose and shall maintain the record of meetings and actions of the Board of Directors and any committees. The Secretary shall perform such other duties and execute such other documents as may be prescribed by the Board of Directors or the President under whose supervision he shall be. Any Assistant Secretary may, in the absence or disability of the Secretary, perform such other duties as the Board of Directors shall prescribe.
Section 4.07 Treasurer. The Treasurer shall have the custody of the corporate funds and securities; and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation, and shall deposit all monies and other valuable effects in the name and into the credit of the corporation in such depositories, and may select banks, trust companies, or other depositories subject to approval by the Board of Directors. He may disburse the funds of the corporation as may be ordered by the Board, taking proper vouchers for such disbursements, and shall render to the President and directors at the regular meetings of the Board, or whenever they may require it, an account of all his transactions as Treasurer and of the financial conditions of the corporation. Any Assistant Treasurer, in the absence or disability of the Treasurer, may perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors shall prescribe.
Section 4.08 Vacancies. If the office of any officer or an agent becomes vacant by reason of his death, resignation, retirement, disqualification, removal from office or otherwise, the directors then in office may choose a successor who shall hold the office for the unexpired term of which such vacancy occurred.
Section 4.09 Honorary Officers. In recognition of services provided to the corporation, the Board may establish positions as honorary officers and designate any duties or rights associated therewith.
Section 4.10 Delegation of Duties. In case of the absence of any officer of the corporation, or for any other reason that the Board may deem sufficient, the Board may delegate for the time being the powers and duties, or any of them of such officer to any other officer or to any directors.
Section 4.11 Removal. Any officer or agent elected or appointed by the Board of Directors may be removed by the affirmative vote of a majority of the whole Board of Directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment shall not of itself create contract rights.
Section 4.12 Salaries. The salaries of the principal officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary by reason of the fact that he is also a director of the corporation.
ARTICLE V.
CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.01 Contracts. The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation, and such authorization may be general or confined to specific instances.
Section 5.02 Loans. No loans shall be contracted on behalf of the corporation and no evidence of indebtedness shall be issued in its name unless authorized by or under the authority of a resolution of the Board of Directors. Such authorization may be general or confined to specific instances.
Section 5.03 Checks, Drafts, etc. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation, shall be signed by such officer or officers, agent or agents of the corporation and in such manner as shall from time to time be determined by or under the authority of resolution of the Board of Directors.
Section 5.04 Deposits. All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as may be selected by or under the authority of a resolution of the Board of Directors.
ARTICLE VI.
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 6.01 Certificate for Shares. Certificates representing shares of the corporation shall be in such form as shall be determined by the Board of Directors. Such certificates shall be signed by the Chairman, President or a Vice President and by the Secretary or an Assistant Secretary; and may be sealed with the seal of the corporation (which may be a facsimile) and countersigned and registered in such manner, if any, as the Board of Directors may prescribe. Whenever any certificate is countersigned by a transfer agent or registered by a registrar, other than the corporation itself or an employee of the corporation, the signatures of the Chairman, President, Vice President, Secretary or Assistant Secretary upon such certificate may be facsimiles. In case any officer who has signed or whose facsimile signature has been placed upon such certificate ceases to be such officer before such certificate is issued, it may be issued with the same effect, as if he were such officer at the date of its issue. All certificates for shares shall be consecutively numbered or otherwise identified. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the corporation. All certificates surrendered to the corporation for transfer shall be canceled and no certificates shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of a lost, destroyed or mutilated certificate a new one may be issued therefor upon such terms of indemnity t the corporation as these By-Laws may prescribe.
Section 6.02 Transfer of Shares. Transfer of shares of the corporation shall be made only on the stock transfer books of the corporation by the holder of record thereof or by his legal representative, who shall furnish proper evidence of authority to transfer, or by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation, and on surrender for cancellation of the certificate for such shares. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes.
Section 6.03 Stock Regulations. The Board of Directors shall have the power and authority to make all such further rules and regulations not inconsistent with the statutes of the State of Wisconsin as they may deem expedient concerning the issue, transfer and registration of certificates representing shares of the corporation.
Section 6.04 Lost or Destroyed Certificates. In case any stockholder shall present to the Secretary evidence satisfactory to the Chairman, President, or Vice President and Secretary or Assistant Secretary that a certificate representing shares of this corporation has been lost or destroyed, the officers of the corporation shall issue a replacement certificate for such shares, which certificate shall be marked as a replacement, provided, as a condition, that the stockholder receiving such replacement certificate furnishes a bond in form satisfactory to the Chairman, President or Vice President and Secretary or Assistant Secretary to return the original certificate to the corporation for cancellation in case the same be found or discovered, and to hold harmless the corporation, its transfer agents and its registrars, of and from any loss, damage, costs or expense from or on account of, or in connection with the issuance of such replacement certificate.
ARTICLE VII.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 7.01 The corporation shall and does by adoption of these By-Laws indemnify such persons for such expenses and liabilities in such manner, under such circumstances and to the full extent as permitted by the laws of the State of Wisconsin as now enacted or hereafter amended.
ARTICLE VIII.
SEAL
Section 8.01 The Board of Directors shall provide corporate seal which shall be circular in form and shall have inscribed thereon the words "NATIONAL PRESTO INDUSTRIES, INC., CORPORATE SEAL".
ARTICLE IX
AMENDMENT
Section 9.01 These By-Laws may be altered, amended or repealed at any regular or special meeting of the stockholders of the corporation by an affirmative vote of the holders of a majority of the outstanding shares of the corporation entitled to vote, or at any regular or special meeting of the Board of Directors by an affirmative vote of a majority of the number of directors then in office.
EXHIBIT 9
VOTING TRUST AGREEMENT
THIS AGREEMENT, made and entered into as of the 4th day of December, 1989, by and between the persons listed on the signature page(s) hereof as Participating Shareholders (hereinafter referred to as the "Participating Shareholders"), who own or hold in trust shares of the voting common stock of National Presto Industries, Inc. in the amounts set forth opposite their respective names on the signature page(s) hereof,
and
Maryjo Cohen, as Voting Trustee,
W I T N E SS E T H :
WHEREAS, National Presto Industries, Inc. (the "Company") is a corporation duly organized and existing under the laws of the State of Wisconsin, and the Participating Shareholders own an aggregate of approximately twenty-three percent (23%) of the presently issued and outstanding voting common stock of the Company; and
WHEREAS, the Participating Shareholders feel it to be in their best interests or in the best interests of those they represent to have the voting rights associated with their stock in the Company exercised as a unit in all matters concerning the management of the Company's business, its affairs and major corporate transactions so as to best protect their interests or the interest of those they represent in the operation of the Company;
NOW, THEREFORE, in the interests of stabilizing and enhancing the voting power of the shares possessed or held by the Participating Shareholders on behalf of themselves or those who they represent, and in consideration of the mutual covenants hereinafter contained and other good and valuable consideration, the receipt and sufficiency whereof are hereby acknowledged, it is agreed, by and between the parties hereto, as follows:
1. Promptly following the execution of this Agreement, each Participating Shareholder shall transfer and deliver unto the Voting Trustee stock certificates representing shares of the Company owned by him/her/it in the number of shares set opposite his/her/its name subscribed below. Promptly thereafter, the Voting Trustee shall issue and deliver to each Participating Shareholder a voting trust certificate in the form attached hereto as Exhibit A (the "Voting Trust Certificate"). All shares of the Company shall be retained by the Voting Trustee.
2. By accepting issuance of a Voting Trust Certificate, each Participating Shareholder covenants that he/she/it will transfer and deliver to the Voting Trustee such additional shares of the voting stock of the Company as he/she/it may at any time hereafter in any manner acquire or receive and will accept, in lieu thereof, Voting Trust Certificates to be issued by the Voting Trustee, according to the terms of this Agreement.
3. During the time that this Agreement is in force, the Voting Trustee shall possess legal title to the stock deposited with the Trustee and shall exercise all rights of every nature with respect to all such shares, including the right to vote in person or by proxy; provided, however, that the Voting Trustee shall instruct the Company to pay all cash dividends on the stock held by the Voting Trustee directly to the record holders of the Voting Trust Certificates or to their designated assigns, in accordance with a written assignment, a copy of which has been supplied to the Voting Trustee, in proportion to their respective interests. If the Voting Trustee receives any voting stock of the Company as a dividend upon the shares of stock held by the Voting Trustee hereunder, the Voting Trustee shall hold such stock dividends subject to this Agreement and shall issue Voting Trust Certificates representing such shares to the record holders of the Voting Trust Certificates, in proportion to their respective interests. If any dividend on the Company's stock is paid other than in money or in voting stock of the Company, the Voting Trustee shall distribute such dividend, in kind, among the record holders of the Voting Trust Certificates, in proportion to their respective interests, subject to subsection 5(d) below.
4. This Agreement shall continue in full force and effect until the expiration of twenty (20) years from the date hereof; provided, however, that this Agreement may be terminated any time prior thereto by the Voting Trustee, if he/she finds, in his/her sole and absolute discretion, that it is in the best interests of all Participating Shareholders to do so. In addition, this Agreement may be terminated at any time by the unanimous written consent of all the record holders of Voting Trust Certificates. Upon the expiration or termination of this Agreement and upon the surrender of the Voting Trust Certificates then outstanding, the Voting Trustee shall deliver the shares of the voting common stock of the Company then held by the Voting Trustee to the record holders of the Voting Trust Certificates, in proportion to their respective interests in such stock.
5. The Voting Trustee hereby accepts this trust appointment and assumes the duties herein created upon the following terms and conditions:
(a) The Voting Trustee shall be protected in any action taken by him/her in reliance upon any notice, resolution, vote, request, consent, certificate, affidavit, written statement, stock certificate, bond, note, coupon, waiver, or other paper or document believed by him/her to be genuine and to have been signed by the proper parties.
(b) The Voting Trustee shall not be liable for the exercise of any discretion or power hereunder or for mistakes or errors of judgment or otherwise, in connection with this trust, unless the Voting Trustee has acted in a fraudulent or willfully improper manner.
(c) The Participating Shareholders shall indemnify and hold harmless the Voting Trustee if the Voting Trustee is made or threatened to be made a party to a proceeding by reason of his/her former or present status as Voting Trustee against judgments, penalties, fines, settlements and reasonable expenses, including attorneys' fees and disbursements, incurred by the Voting Trustee in connection with the proceeding.
(d) The Voting Trustee shall not be entitled to receive compensation for the time and effort he/she devotes to his/her duties as Voting Trustee.
(e) The Voting Trustee is authorized and empowered to construe this Agreement, and his/her construction of the same, made in good faith, shall be final, conclusive and binding upon all holders of the Voting Trust Certificates and all other parties interested.
6. The Voting Trustee may be removed at any time by the unanimous written consent of all record holders of Voting Trust Certificates, said removal to be effective immediately upon the execution of the document showing unanimous written consent. In addition, the Voting Trustee shall have the right to resign at any time by delivering a written resignation to each holder of Voting Trust Certificates. The Voting Trustee's resignation shall be effective when his/her successor's appointment becomes effective.
7. A Voting Common-Trustee or Successor Voting Trustee may be appointed in the following manner:
(a) The Voting Trustee (including any Successor Voting Trustee) shall have the power to appoint any person or persons to act as a Voting Co-Trustee with himself/herself and/ or as a Successor Voting Trustee to himself/herself, and to set the rules governing the succession of such Voting Trustees. To appoint a Common-Trustee or a Successor Trustee, the Voting Trustee shall deliver a writing, which refers specifically to this Voting Trust Agreement and which is signed and dated, to the desired appointee, and the appointee shall accept his appointment in writing, also signed and dated. Such an appointment may be made at any time, whether prior or subsequent to the Voting Trustee's resignation, and the Voting Trustee may designate a Successor Voting Trustee in his/her Will, if the other requirements of this Paragraph 7 are satisfied. An appointment may be revoked by the Voting Trustee in a writing, signed and dated, at any time prior to the effective date of the appointment. Prior to such effective date, a subsequent appointment automatically revokes a prior appointment to the extent the two appointments are inconsistent, but the death of the Voting Trustee does not revoke an appointment of a Successor Voting Trustee made by the Voting Trustee during his/her lifetime.
(b) The appointment of a Common-Trustee shall become effective upon delivery to each then-existing holder of Voting Trust Certificates of copies of the writings that constitute the appointment and its acceptance. The appointment of a Successor Trustee shall become effective upon the later of: (i) delivery to each then-existing holder of Voting Trust Certificates of copies of the writings that constitute the appointment and its acceptance, (ii) the delivery of the written resignation of the prior Voting Trustee, in accordance with Paragraph 6 above; or (iii) the delivery to each then-existing holder of Voting Trust Certificates of a copy of the Voting Trustee's death certificate.
(c) If a Voting Trustee becomes unable or unwilling to serve and has not named a Voting Common-Trustee or a Successor Voting Trustee within thirty (30) days thereafter, (i) the remaining Voting Common-Trustee, if any may serve alone, or (ii) if said Trustee is the sole Voting Trustee, the holders of the Voting Trust Certificates may appoint a successor by written consent of two-thirds or more of the voting power of the Voting Trust Certificates.
Any Voting Common-Trustee or Successor Voting Trustee shall have all powers granted to a Voting Trustee by this Agreement and shall be embraced within the term "Voting Trustee" whenever used herein.
8. Upon the transfer of a Voting Trust Certificate and upon the
surrender of said Voting Trust Certificate, properly endorsed by the registered
holder thereof according to the rules established for that purpose by the Voting
Trustee, the Voting Trustee shall transfer said Voting Trust Certificate on
his/her books and records. Subject to assignment of dividends as provided in
Section 3 above, the Voting Trustee may treat the holders of record of the
Voting Trust Certificates as the owners of the Voting Trust Certificates for all
purposes and shall not be affected by any notice to the contrary.
Every transferee of a Voting Trust Certificate issued hereunder shall, by the acceptance of such Voting Trust Certificate, become a party hereto, as though an original party hereto, and shall be embraced within the term "Participating Shareholders" or similar terminology whenever used herein.
The transfer books for Voting Trust Certificates may be closed by the Voting Trustee at any time prior to any payments or distributions, or the Voting Trustee, in his/her discretion, in lieu of closing the transfer books, may fix a date as the day as of which the holders of Voting Trust Certificates shall be determined.
9. Upon any dissolution or total or partial liquidation of the Company, whether voluntary or involuntary, the Voting Trustee shall receive the assets to which the holders of the Voting Trust Certificates are entitled and shall distribute such assets among the record holders of the Voting Trust Certificates in proportion to their interests, as shown by the books of the Voting Trustee at the close of business on the day on which such assets are received.
10. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their respective heirs, devisees, personal representatives, successors and assigns.
11. It is the intention of the parties that the laws of the State of Wisconsin, without regard to choice of law rules, shall govern the validity of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of the day and year first above written.
Number of Shares of
Voting Common Stock
Transferred by Shareholder Shareholders
-------------------------- ------------
555,695 EDITH PHILLIPS 1984 TRUST
By /s/ Edith Phillips, its Trustee
486,520 EILEEN COHEN 1985 TRUST
By /s/ Eileen Cohen, its Trustee
38,610 MELVIN S. COHEN 1984 TRUST
By /s/ Melvin S. Cohen, its Trustee
48,712 ALYSSA ALPINE TRUST
By /s/ its Trustee
45,200 ALYSSA ALPINE TRUST NO. 2
By /s/ its Trustee
6,254 AMY R. COHEN TRUST
By /s/ its Trustee
17,120 1983 COHEN FAMILY TRUST
By /s/ its Trustee
19,605 AMY R. COHEN TRUST NO. 40
By /s/ its Trustee
125,684 AMY R. COHEN
23,864 MARYJO COHEN TRUST NO. 41
By /s/ its Trustee
|
48,728 AMY R. ALPINE TRUST UNDER THE
WILL OF L.E. PHILLIPS
By /s/ its Trustee
89,850 MARYJO COHEN TRUST UNDER THE
WILL OF L.E. PHILLIPS
By /s/ its Trustee
163,822 MARYJO COHEN
/s/
---------
1,669,664
=========
|
EXHIBIT 10.1
Appendix A
NATIONAL PRESTO INDUSTRIES, INC.
1988 STOCK OPTION PLAN
PART I
PURPOSES; DEFINITIONS; SHAREHOLDER APPROVAL:
RESERVATION OF SHARES; AND PARTICIPATION IN PLAN
ARTICLE I
Purposes
1.1 Purposes of Plan. The purpose of this National Presto Industries Inc. 1988 Stock Option Plan (the Plan") is to provide incentives to selected key employees of the Company and/or its Subsidiaries who contribute and are expected to contribute materially to the success of the Company and its Subsidiaries to provide a means of rewarding outstanding performance, and to enhance the interest of such key employees in the Company's continued success and progress by providing them a proprietary interest in the Company. Further, this Plan is designed to enhance the Company's ability to maintain a competitive position in attracting and retaining qualified key personnel necessary for the continued success and progress of the Company.
ARTICLE II
Definitions
2.1 Certain terms used herein shall have the meaning below stated subject to the provisions of Section 7.1.
"Board or "Board of Directors means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986 as amended.
"Committee" means the committee appointed by the Board to administer this plan pursuant to Article VII or, if no Committee is appointed by the Board, means the Board.
"Common Stock" means, subject to the provisions of Section 9.3, the presently authorized common stock of the Company, par value $1.00 per share.
"Company" means National Presto Industries Inc., a Wisconsin corporation.
"Disability" means (Subject to Section 6.2) a physical or mental impairment of sufficient severity such that an Employee is permanently unable to continue his employment with the Company as determined by the Committee.
"Employee" means an employee (including an officer) of the Company or of a Subsidiary of the Company.
"Fair Market Value" means the closing price at which the Common Stock of the Company shall have been sold regular way on the New York Stock Exchange on the date as of which such value is being determined or, if no sales occurred on such day, then on the next preceding day on which there were such sales or, if at any time the Common Stock shall not be listed on the New York Stock Exchange, the fair market value as determined by the Committee on the basis of available prices for such Common Stock or in such manner as may be authorized by applicable regulations under the Code.
"Incentive Stock Option" means an option to purchase Common Stock, granted by the Company to a Key Employee pursuant to Section 5.1, which is intended to meet the requirements of Section 422A of the Code and which is designated at the time of the award an Incentive Stock Option.
"Key Employee" means an Employee selected to participate in this Plan pursuant to the terms hereof.
"Non-Statutory Option" means an option to purchase Common Stock, granted by the Company to a Key Employee pursuant to Section 5 1, which is not an Incentive Stock Option.
"Option" means an Incentive Stock Option or a Non-Statutory Option
"Plan" means the Company's 1988 Stock Option Plan, as set forth herein and as from time to amended.
"Subsidiary" means a subsidiary or parent corporation, as defined in
Section 425(e) and (f) of the Code, with respect to the Company.
ARTICLE III
Shareholder Approval; Reservation of Shares
3.1 Shareholder Approval. This Plan shall be subject to approval by the affirmative vote of the holders of a majority of the Company's Common Stock present or represented and entitled to vote thereon at a meeting of shareholders, which approval must be obtained no later than November 22, 1989.
3.2 Shares Reserved Under Plan. Subject to adjustment under the provisions of Section 9. 3 hereof, the maximum number of shares of Common Stock which may be issued and sold under this Plan is 100,000 shares. Such shares may either authorized and unissued shares or shares issued and thereafter acquired by the Company Shares issued pursuant to this Plan shall be subject to all applicable provisions of the Articles of Incorporation and Bylaws of the Company in existence at the time of issuance of such shares and at all times thereafter. If Options granted under this Plan shall terminate or cease to be exercisable by reason of expiration, surrender for cancellation or otherwise without having been wholly exercised, new Options may be granted under this Plan covering the number of shares to which such termination or cessation relates. At no time may the sum of the maximum number of shares issuable under outstanding Options granted under this Plan and the number of shares previously issued under Options granted under this Plan exceed the maximum number of shares that may be issued and sold under this Plan, as above stated.
ARTICLE IV
Participation in Plan
4.1 Eligibility to Receive Options. Options under this Plan may be granted only to officers and other Key Employees of the Company or a Subsidiary on the date the Option is granted. A member of the Board of Directors who is not also an Employee of the Company or of a Subsidiary shall not be eligible to receive an Option.
4.2 Participation Not Guarantee of Employment. Nothing in this Plan or in the instrument evidencing the grant of an Option shall in any manner be construed to limit in any way the right of the Company or a Subsidiary to terminate a Key Employee's employment at any time without regard to the effect of such termination on any rights such Key Employee would otherwise have under this Plan, or give any right to such a Key Employee to remain employed by the Company or a Subsidiary thereof in any particular position or at any particular rate of compensation.
PART II
OPTIONS; TERMINATION OF EMPLOYMENT AND DEATH
ARTICLE V
Options
5.1 Grants of Options.
(a) Grant. Committee may grant Incentive Stock options and/or Non-Statutory Options to Key Employees. All options under this Plan shall be granted within ten years of November 23, 1988, the date on which this Plan was adopted by the Board of Directors subject to approval of the Plan by shareholders.
(b) Option Price. The purchase price per share of Common Stock under each Incentive Stock Option and Non-Statutory Option shall be determined by the Committee but shall be not less than 100% of the Fair Market Value per share of such Common Stock on the date the Option is granted The purchase price per share may be subject to adjustment in accordance with the provisions of Section 9.3 hereof.
(c) Option Agreements. Options shall be evidenced by option agreements in such form and containing such terms and conditions as the Committee shall approve, which terms and conditions need not be the same for all Option.
(d) Options Nontransferable. An Option granted under this Plan shall by its terms be nontransferable by the Key Employee otherwise than by will or the laws of descent and distribution, and, during the lifetime of the Key Employee, shall be exercisable only by such Employee. No transfer of an Option by a Key Employee by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the will and/or such other evidence as the Committee may determine necessary to establish the validity of the transfer.
(e) Substitution and Cancellation. The Committee, in its sole discretion, may grant to an Employee who has been granted an Option under this Plan, in exchange for the surrender and cancellation of such Option, a new Option having a purchase price lower (or higher) than the purchase price provided in the Option so surrendered and canceled and containing such other terms as the Committee may de m appropriate, subject to Section 5. l (b) and such other limitations or restrictions with respect to an Incentive Stock Option as may be imposed by the Code.
5.2 Exercise of Options.
(a) Term of Options; Vesting; and Exercise. The term of each Option granted under this Plan shall not exceed ten (10) years from the date of grant. An Option granted under this Plan shall become 100% vested at the earliest of the following times if the Optionee is an Employee at such time: (i) the Employee's normal retirement date pursuant to the retirement plan of the Company or its Subsidiary applicable to the Optionee, (ii) the Employee's death or Disability, or (iii) nine years from the date of grant. Each Option shall vest and become exercisable in installments to the extent of 10% of the number of shares originally covered thereby on the date of grant and each of the first nine anniversaries of the date of the grant of the Option, if the Optionee is an Employee on such anniversary. In its sole discretion, the Committee may accelerate the exercisability and vesting of any Option at any time. Unless otherwise determined by the Committee at the time of grant or thereafter, the portion of each Option which becomes vested must be exercised within one (1) year after the date on which such portion vests or such portion shall be forfeited and the Option as to such shares so forfeited shall terminate
(b) Payment on Exercise. No shares of Common Stock shall be issued on the exercise of an Option unless paid for in full at the time of purchase as provided in the next sentence. Payment for shares of Common Stock purchased upon the exercise of an Option shall be made in cash or, with the consent of the Committee, in whole or in part in shares of Common Stock valued at the then Fair Market Value thereof Stock certificates for the shares of Common Stock so paid for will be issued and delivered to the person entitled thereto only at the Company's office in Eau Claire, Wisconsin. No Key Employee shall have any rights as a shareholder with respect to any share of Common Stock covered by an Option unless and until such Employee shall have become the holder of record of such share and, except at otherwise permitted in Section 9 3 hereof, no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property or distributions or other rights) in respect of such share for which the record date is prior to the date on which such Employee shall have become the holder of record thereof
(c) Dissolution, Liquidation, Etc. If at any time after an Option has become exercisable and prior to its exercise and expiration, a voluntary dissolution, liquidation (other than a liquidation into another corporation which agrees to continue this Plan) or winding up of the affairs of the Company shall be proposed, the Company shall cause notice in writing to be mailed to each person holding an Option under this Plan, which notice shall be mailed not less than twenty days prior to the closing of the transfer books of the Company or the record date for determination of the holders of Common Stock of the Company entitled to participate in such dissolution, liquidation or winding up, as the case may be, to the end that during such notice period the holder of any Option, to the extent that the same is then exercisable by such holder, may, subject to the terms of Article V hereof, purchase Common Stock in accordance with the terms of the Option and be entitled, in respect of the number of shares so purchased, to all the rights of the
other holders of Common Stock of the Company with respect to such proposed dissolution, liquidation or winding up of the affairs of the Company. Each Option at the time outstanding and all rights thereunder shall terminate at the close of business on the twentieth day after mailing of such notice to the holder of such Option or on the record date for determination of holders of Common Stock entitled to participate in such dissolution, liquidation or winding up, whichever date is later.
5.3 Incentive Stock Options.
(a) Annual Limitation. In no event shall any employee be granted an
Incentive Stock Option under this Plan or any other plan of the Company or any
Subsidiary if such option would, during the calendar year in which the option
first becomes exercisable when combined with other Incentive Stock options which
first become exercisable in such calendar year, entitle such optionee to
purchase shares of Common Stock or shares of any subsidiary having an aggregate
fair market value (determined as of the time such option or options were
granted) in excess of $100,000. The provisions of this Section 5.3(a) shall not
apply to any Incentive Stock Option granted under any other plan of the Company
prior to January 1, 1987 In the event an option granted hereunder is designated
an Incentive Stock Option and exceeds the limitations set forth in this Section
5.3 (a) whether at the time of grant or thereafter, such option shall be an
Incentive Stock option only to the extent permitted hereby and the balance
thereof shall be a non-statutory option for the purposes of this Plan.
(b) Incentive Stock Option Granted to Ten Percent Shareholders. No Incentive Stock Option shall be granted to any Key Employee who owns, directly or indirectly pursuant to Section 425(d) of the Code, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary, unless at the time such Incentive Stock Option is granted, the price of the Incentive Stock Option is at least 110% of the Fair Market Value of the Common Stock subject to the Incentive Stock Option and such Incentive Stock Option, by its terms, is not exercisable after the expiration of five (5) years from the date such Incentive Stock Option is granted.
(c) Notice. Each Key Employee shall give prompt notice to the Company of any disposition of shares acquired upon exercise of an Incentive Stock option if such disposition occurs within either two years after the date of grant or one year after the date of transfer of such shares to the Key Employee upon the of such Incentive Stock Option.
(d) Consent. To the extent appropriate to avoid a "modification" or other event described in Section 425(h) of the Code, a Key Employees right under an Incentive Stock Option (including the rights to pay the exercise price in Common Stock) shall be set forth in the option Agreement at the date of grant.
ARTICLE VI
Termination of Employment
6.1 Termination of Employment. Unless earlier terminated in accordance with its terms, an Option shall terminate 30 days after any termination of the Key Employee's employment with the Company or a Subsidiary, or 60 days after the death, disability or retirement at or after normal retirement age under the Company's pension plan of the Key Employee.
6.2 Employment. For all purposes of this Plan, and any Option granted
hereunder, "employment" shall be defined in accordance with the provisions of
Section 1. 421-7(h) of the Income Tax Regulations (or any successor regulations)
PART III
ADMINISTRATION , AMENDMENT AND TERMINATION
OF PLAN; MISCELLANEOUS
ARTICLE VII
Administration of Plan
7.1 The Committee. This Plan shall be administered by a Committee
(which shall be the Board unless the Board appoints a committee pursuant hereto)
of three or more persons, all of whom shall be members of the Board and shall be
appointed by, and serve at the pleasure of, the Board. No person shall serve as
a member of the Committee if such person is eligible, or had been eligible at
any time within one year prior to appointment as a member, for selection as a
person to whom stock may be allocated or to whom Options may be granted under
this Plan or any other plan of the Company or any of its affiliates entitling
the participants therein to acquire stock or stock options of the issuer or any
of its affiliates. A majority of the Committee shall constitute a quorum thereof
and the actions of a majority of the Committee at the meeting at which quorum is
present, or actions unanimously approved in writing by all members of the
Committee shall be the actions of the Committee. Vacancies occurring on the
Committee shall be filled by the Board. The Committee shall have full and final
authority to interpret this Plan and the agreements evidencing Options granted
hereunder (which agreements need not be identical), to prescribe, amend and
rescind rules and regulations, if any, relating to this Plan and to make all
determinations necessary or advisable for the administration of this Plan. The
Committee's determination in all matters referred to herein shall be conclusive
and binding for all purposes and upon all persons including, but without
limitation, the Company, the shareholders of the Company, the Committee and each
of the members thereof, and Employees of the Company, and their respective
successors in interest.
7.2 Liability of Committee. No member of the Committee shall be liable for anything done or omitted to be done by such member or by any other member of the Committee in connection with this Plan, except for the willful misconduct or gross negligence of such member. The Committee shall have power to engage outside consultants, auditors or other professional help to assist in the fulfillment of the Committee's duties under this Plan at the Company's expense.
7.3 Determinations of the Committee. In making its determinations concerning the Key Employees who shall receive Options, as well as the number of shares to be covered thereby and time or times at which they shall be granted, the Committee shall take into account the nature of the services rendered by the respective Key Employees, their past, present, and potential contribution to the Company's success and such other factors as the Committee may deem relevant The Committee shall also determine the form of option agreements to be issued under this Plan and the terms and conditions to be included therein, provided such terms and conditions are not inconsistent with the terms of this Plan. The Committee may, in its discretion or in accordance with a direction from the Board, waive any provisions of any option agreement, provided such waiver is not inconsistent with the terms of this Plan as then in effect.
ARTICLE VIII
Amendment and Termination of Plan
8.1 Amendment of Plan
(a) Generally. The Plan may be amended at any time and from time to time by the Board of Directors of the Company but no amendment which (1) increases the aggregate number of shares of Common Stock which may be issued and sold under this Plan, (ii) decreases the minimum option price provided in this Plan, (iii) extends the period during which Options may be granted under this Plan, or (iv) changes the class of Key Employees eligible to receive Options, shall be effective unless and until the same is approved by the affirmative vote, in person or by proxy, of the holders of a majority of the holders of Common Stock of the Company present and entitled to vote at a meeting held to take such action at which a quorum is present. No termination or amendment of this Plan, without the consent of the holder of any Option than existing, may terminate such holder's Option or materially and adversely affect such holder's rights thereunder.
(b) Amendments Relating to Incentive Stock Options. To the extent applicable, this Plan is intended to permit the issuance of Incentive Stock Options in accordance with the provisions of Section 422A of the Code. The Plan may be modified or amended at any time, both prospectively and retroactively, and in such manner as to affect Incentive Stock Options previously granted (after taking into account Section 425(h) of the Code, relating to "modifications," etc.), if such amendment or modification is necessary for this Plan and the Incentive Stock Options granted hereunder to qualify under said provisions of the Code.
8.2 Termination. The Board of Directors of the Company may at any time terminate this Plan as of any date specified in a resolution adopted by the Board. If not earlier terminated, this Plan shall terminate on the tenth anniversary of the effective date of the Plan. No Options may be granted after this Plan has terminated. After this Plan shall terminate, the function of the Committee will be limited to supervising the administration of Options previously granted.
ARTICLE IX
Miscellaneous Provisions
9.1 Restrictions Upon Grant of Options. The listing upon the New York Stock Exchange or the registration or qualification under any Federal or State law of any shares of Common Stock to be granted pursuant to this Plan (whether to permit the grant of Options or the resale or other disposition of any such shares of Common Stock by or on behalf of the Employees receiving such shares) may be necessary or desirable and, in any such event, delivery of the certificates for such shares of Common Stock shall, if the Board of Directors, in its sole discretion, shall determine, not be made until such listing, registration or qualification shall have been completed. In such connection, the Company agrees that it will use its best efforts to effect any listing on the new York Stock Exchange of the shares of Common Stock subject to Options granted under this Plan; provided, however, that the Company shall not be required to use its best efforts to effect any registration or qualification of such shares or the Options under the Securities Act of 1933 ("1933 Act") or any state securities laws.
9.2 Restrictions Upon Resale of Unregistered Stock. If the shares of Common Stock that have been transferred to a Key Employee pursuant to the terms of this Plan are not registered under the 1933 Act, pursuant to an effective registration statement, such Key Employee, if the Committee shall deem it advisable, may be required to represent and agree in writing (I) that any shares of Common Stock acquired by such Key Employee pursuant to this Plan will not be sold except pursuant to an effective registration statement under the 1933 Act and (ii) that such Key Employee is acquiring such shares of Common Stock for such Employee's own account and not with a view to the distribution thereof.
9.3 Adjustments. In the event of any change (through recapitalization, merger, consolidation, stock dividend, split-up, combination or exchanges of shares or otherwise) in the character or amount of the Company's capital stock (or any other transaction described in Section 425(a) of the Code) after any Option is granted hereunder and prior to the exercise thereof, the Option, to the extent that it has not been exercised, shall entitle the holder to such number and kind of securities as such holder would have been entitled to had such holder actually owned the stock subject to the Option at the time of the occurrence of such change. If any such event should occur, the number of shares subject to Options which are authorized to be issued hereunder, but which have not been issued, shall be similarly adjusted. If any other event shall occur, prior to the exercise of an Option granted to a Key Employee hereunder, which shall increase or decrease the amount of capital stock outstanding and which the Committee, in its sole discretion, shall determine equitably requires an adjustment in the number of shares which the holder should be permitted to acquire, such adjustment as the Committee shall determine may be made, and when so made shall be effective and binding for all purposes of this Plan.
9.4 Withholding of Taxes. Each Key Employee who exercises an Option to purchase Common Stock shall agree to pay to the Company, or make arrangements (including withholding of shares of Common Stock purchased upon exercise of the Option at the Fair Market Value thereof) satisfactory to the Committee regarding payment of, any taxes of any kind required by law to be withheld with respect to the transfer of such Employee of such shares of Common Stock.
9.5 Use of Proceeds. The proceeds from the sale of Common Stock pursuant to Options granted under this Plan shall constitute general funds of the Company and may be used for such corporate purposes as the Company may determine.
9.6 Other Grants. Options may be granted under this Plan from time to time in substitution for stock options held by employees of other corporations who are or are about to become employees of the Company or a Subsidiary as the result of a merger or consolidation of the employing corporation with the Company or a Subsidiary, or the acquisition by the Company or a Subsidiary of the assets of the employing corporation, or the acquisition by the Company or a Subsidiary of stock of the employing corporation as the result of which it becomes a Subsidiary of the Company. The terms and conditions of the substituted Options so granted may vary from the terms and conditions set forth in Part II to such extent as the Committee may deem appropriate to conform, in whole or in part, to the provisions of the substituted stock incentives.
9.7 Other Benefits. Nothing contained herein shall prevent the Company from establishing other incentive plans in which Key Employees in the Plan may also participate. No award under this Plan shall be considered as compensation in calculating any insurance, pension or other benefit for which the recipient is eligible unless any such insurance, pension or other benefit is granted under a plan which expressly provides that compensation under this Plan (and specifying the type of such compensation) shall be considered as compensation under such plan.
EXHIBIT 10.2
NATIONAL PRESTO INDUSTRIES, INC.
INCENTIVE STOCK OPTION AGREEMENT
UNDER
1988 STOCK OPTION PLAN
Date of grant:
Name of optionee:
Total shares purchasable under this Option:
Option price:
Option expiration date:
Such option to purchase the first 250 of such shares is exercisable from _______ through _____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
Such option to purchase the next 250 of such shares is exercisable from ________ through ____________.
NATIONAL PRESTO INDUSTRIES, INC. (the "Company") hereby grants to the above Optionee (the "Optionee"), pursuant to the Company's 1988 Stock Option Plan (the "Plan") for officers and key employees of the company and any affiliates, a copy of which is appended hereto and made a part hereof, the above-described incentive stock option (the "Option") to purchase shares of Common Stock of the Company (the "Common Stock") at the price set forth above, on the terms and conditions set forth in the Plan and in this Agreement, except to the extent that any provision of this Agreement is inconsistent with the provisions of the Plan in which case the provisions of the Plan shall govern. All terms defined in the Plan are used herein as therein defined.
1. The Option shall vest and become exercisable in ten equal
installments to the extent and on the dates set forth above, if the Optionee is
an employee of the Company or any of its affiliates on such date or on such
earlier date or dates as may hereafter be designated by the Committee. The
Option shall vest and become exercisable in full at the earliest of the
following times if the Optionee is an employee of the Company or any of its
affiliates at such time: (i) the Optionee's normal retirement date pursuant to
the retirement plan of the Company or its affiliate applicable to the Optionee,
(ii) the Optionee's death or disability, or (iii) nine years from the date
hereof.
2. The Option and all rights hereunder, to the extent such rights shall not have been exercised, shall terminate and become null and void 30 days after the Optionee ceases to be an employee of the Company of any of its affiliates (whether by resignation, retirement, dismissal, or otherwise), except that, in the event the Optionee's employment is terminated as a result of disability (as defined in the Plan), death, or retirement at or after normal retirement age under the Company's pension plan, the Optionee or his legal representative shall be entitled to exercise the Option within 60 days after the date of such disability, death, or retirement, but in no event after the expiration date set forth above. Notwithstanding the foregoing, the Option may in no event be exercised by anyone to any extent in the event of a voluntary dissolution, liquidation, or winding up of the affairs of the Company, after the close of business on the later of (i) the date of the twentieth day after the mailing of written notice of such dissolution, liquidation, or winding up, and (ii) the record date for determination of holders of Common Stock entitled to participate therein.
3. The Option is exercised by delivering the attached form or such other form as hereinafter prescribed by the Committee (the "Exercise Notice"), to the office of the Secretary of the Company at Eau Claire, Wisconsin, specifying the number of shares of the Company's common stock being purchased by exercising the Option (the "Purchased Shares") and the method of payment. Each Exercise Notice shall be accompanied by payment in full of the purchase price of such shares, the amount of federal, state, and local tax which the company is required by law or believes appropriate to withhold, and the cost of any applicable state or federal
documentary tax stamps. Payment of such amounts may be made by any of the following methods as the Optionee may elect:
(a) cashier's or certified check for such amounts, or
(b) delivery to the Company with the Exercise Notice shares of the Company's Common Stock which have been held by the Optionee for at least six months having a fair market value as of the date the Company receives the Exercise Notice equal to such amounts due from the Optionee, provided that, if the Optionee is, at the time the Option is exercised, subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, the Optionee may only utilize the method of payment set forth in paragraph 3(b) during the period beginning on the third business day and ending on the twelfth business day following the release of the Company's quarterly earnings if, in each case, the Optionee would be subject to liability under said Section 16(b) by reason of exercising the Option in a manner contrary to the provisions of this proviso. The Committee may, in its sole discretion, determine any other form of payment which it will accept.
4. The Option shall, during the Optionee's lifetime, be exercisable only by him, and neither the Option nor any right hereunder shall be transferable except by will or laws of descent and distribution, or be subject to attachment, execution, or other similar process. In the event of any attempt by the Optionee to alienate, assign, pledge, hypothecate, or otherwise dispose of the Option or any right hereunder, except as provided herein, or in the event of the levy of any attachment, execution, or similar process upon the rights or interest hereby conferred, the Company may terminate this Agreement by notice to the Optionee and this Agreement and the Option shall thereupon become null and void.
5. Neither the granting of the Option nor the exercise thereof shall be construed as conferring upon the Optionee any right to continue as an officer or in the employment of the Company or any of its affiliates, or as interfering with or restricting in any way the right of such corporations to terminate such office or employment at any time.
6. Neither the Optionee nor any person entitled to exercise his rights in the event of his death or disability, shall have any of the rights of a stockholder with respect to the shares subject to the Option, except to the extent that certificates for such shares shall have been issued upon exercise of the Option as provided for herein.
7. The Company is relieved from any liability for the non-issuance or non-transfer, or any delay in the issuance or transfer of any shares of Common Stock subject to the option which results from the inability of the Company to obtain, or any delay in obtaining, from each regulatory body having jurisdiction, all requisite authority to issue or transfer shares of Common Stock of the Company in
satisfaction of the Option as counsel for the Company deems necessary for the lawful issuance or transfer of any such shares.
8. No Common Stock acquired by exercise of the Option shall be sold or otherwise disposed of in violation of any federal or state securities law or regulation.
9. The Option shall be exercised in accordance with such administrative regulations as the Committee may from time to time adopt. All decisions of the Committee, upon any question arising under the Plan or under this instrument, shall be conclusive and binding upon the Optionee and all other persons.
NATIONAL PRESTO INDUSTRIES, INC.
By /s/ James F. Bartl
Its Secretary
The foregoing terms and conditions are hereby accepted and agreed upon and
receipt of a copy of the Plan is hereby acknowledged.
|
National Presto Industries, Inc.
EXHIBIT 11
Statement Re Computation of Per Share Earnings
The following presents the computation of per share earnings reflecting the assumption that the granted shares under the 1988 Stock Option Plan will be exercised.
(IN THOUSANDS EXCEPT PER SHARE DATA)
Second Quarter First Six Months
-------------- ----------------
1997 1996 1997 1996
------- ------- ------- -------
Net Earnings (1) $ 2,640 $ 2,236 $ 5,218 $ 4,166
======= ======= ======= =======
Weighted average common shares outstanding 7,354 7,352 7,354 7,352
Common equivalent shares from the assumed
exercise of stock options 5 3 5 3
------- ------- ------- -------
Adjusted common and common equivalent
shares for computation (2) 7,359 7,355 7,359 7,355
======= ======= ======= =======
Net earnings per common and common
equivalent shares outstanding (1/2) $ 0.36 $ 0.31 $ 0.71 $ 0.57
======= ======= ======= =======
|
| ARTICLE 5 |
| THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM NATIONAL PRESTO INDUSTRIES, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
| MULTIPLIER: 1,000 |
| PERIOD TYPE | 6 MOS |
| FISCAL YEAR END | DEC 31 1997 |
| PERIOD END | JUL 06 1997 |
| CASH | 76,678 |
| SECURITIES | 143,776 |
| RECEIVABLES | 8,128 |
| ALLOWANCES | 0 |
| INVENTORY | 19,775 |
| CURRENT ASSETS | 249,304 |
| PP&E | 18,943 |
| DEPRECIATION | 10,857 |
| TOTAL ASSETS | 266,859 |
| CURRENT LIABILITIES | 29,453 |
| BONDS | 0 |
| COMMON | 7,441 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| OTHER SE | 229,965 |
| TOTAL LIABILITY AND EQUITY | 266,859 |
| SALES | 34,817 |
| TOTAL REVENUES | 34,817 |
| CGS | 25,954 |
| TOTAL COSTS | 25,954 |
| OTHER EXPENSES | 0 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 0 |
| INCOME PRETAX | 5,770 |
| INCOME TAX | 552 |
| INCOME CONTINUING | 5,218 |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 5,218 |
| EPS PRIMARY | 0.71 |
| EPS DILUTED | 0 |