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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Michigan
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|
38-0819050
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(State or other jurisdiction of
incorporation or organization)
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(IRS employer identification number)
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901 44th Street SE
Grand Rapids, Michigan
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49508
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class A Common Stock
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New York Stock Exchange
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Page No.
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Part I
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Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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||
Item 3.
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||
Item 4.
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||
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Part II
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Item 5.
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||
Item 6.
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||
Item 7.
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||
Item 7A.
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||
Item 8.
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||
Item 9.
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||
Item 9A.
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||
Item 9B.
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||
Part III
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Item 10.
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||
Item 11.
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||
Item 12.
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||
Item 13.
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||
Item 14.
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||
Part IV
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Item 15.
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||
Item 16.
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||
Item 1.
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Business:
|
•
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Steelcase Health
, which is focused on creating healthcare environments that enable empathy, empowerment and connection for patients, care partners and providers engaged in the healthcare experience.
|
•
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Steelcase Education,
which is focused on helping schools, colleges and universities create the most effective, rewarding and inspiring "active learning" environments to meet the evolving needs of students and educators.
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Item 1A.
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Risk Factors:
|
•
|
translating our research regarding the world of work into innovative solutions which address market and user needs,
|
•
|
growing our market share with existing customers and new customers,
|
•
|
continuing our expansion into adjacent markets such as healthcare clinical spaces, classrooms, libraries and other educational settings and smaller companies,
|
•
|
expanding our product categories to include additional architecture and technology product offerings,
|
•
|
growing our market share in markets such as China, India and central, eastern and southern Europe, the Middle East and Africa,
|
•
|
investing in acquisitions and new business ventures and
|
•
|
developing new alliances and additional channels of distribution.
|
•
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differing business practices, cultural factors and regulatory requirements,
|
•
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political, social and economic instability, natural disasters, security concerns, including terrorist activity, armed conflict and civil or military unrest and global health issues and
|
•
|
intellectual property protection challenges.
|
•
|
fluctuations in the pricing, availability and quality of raw materials,
|
•
|
the financial solvency of our suppliers and their supply chains,
|
•
|
changes in international trade agreements or tariffs,
|
•
|
disruptions caused by labor activities and
|
•
|
damage and loss of production from accidents, natural disasters and other causes.
|
Item 1B.
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Unresolved Staff Comments:
|
Item 2.
|
Properties:
|
Segment/Category Primarily Supported
|
Number of Principal
Locations
|
Owned
|
Leased
|
||||||
Americas
|
12
|
|
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5
|
|
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7
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|
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EMEA
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5
|
|
|
4
|
|
|
1
|
|
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Other
|
4
|
|
|
2
|
|
|
2
|
|
|
Total
|
21
|
|
|
11
|
|
|
10
|
|
|
Item 3.
|
Legal Proceedings:
|
Item 4.
|
Mine Safety Disclosures:
|
Name
|
Age
|
Position
|
Guillaume M. Alvarez
|
58
|
Senior Vice President, EMEA
|
Sara E. Armbruster
|
47
|
Vice President, Strategy, Research and Digital Transformation
|
Ulrich H. E. Gwinner
|
54
|
President, Asia Pacific
|
James P. Keane
|
58
|
President and Chief Executive Officer, Director
|
Robert G. Krestakos
|
56
|
Vice President, Global Operations
|
James N. Ludwig
|
54
|
Vice President, Global Design and Product Engineering
|
Mark T. Mossing
|
60
|
Corporate Controller and Chief Accounting Officer
|
Lizbeth S. O’Shaughnessy
|
56
|
Senior Vice President, Chief Administrative Officer, General Counsel and Secretary
|
Eddy F. Schmitt
|
46
|
Senior Vice President, Americas
|
Allan W. Smith, Jr.
|
50
|
Vice President, Global Marketing
|
David C. Sylvester
|
53
|
Senior Vice President, Chief Financial Officer
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities:
|
Class A Common Stock
Per Share Price Range
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||||
2018
|
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
17.90
|
|
|
$
|
18.15
|
|
|
$
|
15.90
|
|
|
$
|
15.90
|
|
|
Low
|
$
|
15.45
|
|
|
$
|
12.50
|
|
|
$
|
12.80
|
|
|
$
|
13.48
|
|
|
2017
|
|
|
|
|
|
|
|
|
||||||||
High
|
$
|
15.89
|
|
|
$
|
16.36
|
|
|
$
|
16.35
|
|
|
$
|
18.14
|
|
|
Low
|
$
|
12.47
|
|
|
$
|
13.06
|
|
|
$
|
12.67
|
|
|
$
|
15.35
|
|
|
Period
|
(a)
Total Number of
Shares Purchased
|
(b)
Average Price
Paid per Share
|
(c)
Total Number of
Shares Purchased as
Part of Publicly
Announced Plans
or Programs (1)
|
(d)
Approximate Dollar
Value of Shares
that May Yet be
Purchased
Under the Plans
or Programs (1)
|
||||||
11/25/2017 - 12/29/2017
|
1,868
|
|
$
|
13.95
|
|
—
|
|
$
|
99.2
|
|
12/30/2017 - 01/26/2018
|
12,616
|
|
$
|
15.44
|
|
—
|
|
$
|
99.2
|
|
01/27/2018 - 02/23/2018
|
2,218
|
|
$
|
13.90
|
|
—
|
|
$
|
99.2
|
|
Total
|
16,702
|
|
(2)
|
—
|
|
|
|
(1)
|
In January 2016, the Board of Directors approved a share repurchase program permitting the repurchase of up to $150 of shares of our common stock. This program has no specific expiration date.
|
(2)
|
All of these shares were repurchased to satisfy participants’ tax withholding obligations upon the vesting of restricted stock unit grants, pursuant to the terms of our Incentive Compensation Plan.
|
Item 6.
|
Selected Financial Data:
|
|
Year Ended
|
|||||||||||||||||||
Financial Highlights
|
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
February 27,
2015 |
February 28,
2014 |
|||||||||||||||
Operating Results:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
3,055.5
|
|
|
$
|
3,032.4
|
|
|
$
|
3,060.0
|
|
|
$
|
3,059.7
|
|
|
$
|
2,988.9
|
|
|
Gross profit
|
1,006.1
|
|
|
1,010.4
|
|
|
971.2
|
|
|
916.0
|
|
|
945.2
|
|
|
|||||
Operating income
|
156.0
|
|
|
200.2
|
|
|
174.6
|
|
|
144.9
|
|
|
165.9
|
|
|
|||||
Income before income tax expense
|
161.5
|
|
|
196.3
|
|
|
174.8
|
|
|
137.0
|
|
|
147.2
|
|
|
|||||
Net income
|
80.7
|
|
|
124.6
|
|
|
170.3
|
|
|
86.1
|
|
|
87.7
|
|
|
|||||
Supplemental Operating Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Effective tax rate
|
50.0
|
%
|
|
36.5
|
%
|
|
2.6
|
%
|
|
37.2
|
%
|
|
40.4
|
%
|
|
|||||
Restructuring costs
|
$
|
—
|
|
|
$
|
(5.1
|
)
|
|
$
|
(19.9
|
)
|
|
$
|
(40.6
|
)
|
|
$
|
(6.6
|
)
|
|
Capital expenditures
|
(87.9
|
)
|
|
(61.1
|
)
|
|
(93.4
|
)
|
|
(97.5
|
)
|
|
(86.8
|
)
|
|
|||||
Share Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings per common share
|
$
|
0.68
|
|
|
$
|
1.03
|
|
|
$
|
1.37
|
|
|
$
|
0.69
|
|
|
$
|
0.70
|
|
|
Diluted earnings per common share
|
$
|
0.68
|
|
|
$
|
1.03
|
|
|
$
|
1.36
|
|
|
$
|
0.68
|
|
|
$
|
0.69
|
|
|
Weighted average shares outstanding - basic
|
119.2
|
|
|
120.7
|
|
|
124.3
|
|
|
124.4
|
|
|
126.0
|
|
|
|||||
Weighted average shares outstanding - diluted
|
119.4
|
|
|
121.2
|
|
|
125.3
|
|
|
126.0
|
|
|
127.3
|
|
|
|||||
Dividends paid per common share
|
$
|
0.51
|
|
|
$
|
0.48
|
|
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
$
|
0.40
|
|
|
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
283.1
|
|
|
$
|
197.1
|
|
|
$
|
181.9
|
|
|
$
|
176.5
|
|
|
$
|
201.8
|
|
|
Short-term investments
|
—
|
|
|
73.4
|
|
|
84.1
|
|
|
68.3
|
|
|
119.5
|
|
|
|||||
COLI
|
172.2
|
|
|
168.8
|
|
|
160.4
|
|
|
159.5
|
|
|
154.3
|
|
|
|||||
Working capital (1)
|
299.2
|
|
|
295.8
|
|
|
266.4
|
|
|
264.9
|
|
|
295.3
|
|
|
|||||
Total assets
|
1,859.2
|
|
|
1,792.0
|
|
|
1,808.6
|
|
|
1,719.6
|
|
|
1,724.0
|
|
|
|||||
Total debt
|
295.0
|
|
|
297.4
|
|
|
299.1
|
|
|
282.1
|
|
|
284.3
|
|
|
|||||
Total liabilities
|
1,045.9
|
|
|
1,025.5
|
|
|
1,071.7
|
|
|
1,055.8
|
|
|
1,046.9
|
|
|
|||||
Total shareholders’ equity
|
813.3
|
|
|
766.5
|
|
|
736.9
|
|
|
663.8
|
|
|
677.1
|
|
|
|||||
Statement of Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided by (used in):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
227.0
|
|
|
$
|
170.7
|
|
|
$
|
186.4
|
|
|
$
|
84.2
|
|
|
$
|
178.8
|
|
|
Investing activities
|
(47.5
|
)
|
|
(48.4
|
)
|
|
(87.8
|
)
|
|
(14.3
|
)
|
|
(25.2
|
)
|
|
|||||
Financing activities
|
(97.5
|
)
|
|
(105.9
|
)
|
|
(90.1
|
)
|
|
(89.8
|
)
|
|
(101.6
|
)
|
|
(1)
|
Working capital equals current assets minus current liabilities, as presented in the Consolidated Balance Sheets.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
|
Statement of Operations Data—
Consolidated
|
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
|
February 24,
2017 |
|
February 26,
2016 |
|
||||||||||||||||
Revenue
|
$
|
3,055.5
|
|
|
100.0
|
%
|
|
$
|
3,032.4
|
|
|
100.0
|
%
|
|
$
|
3,060.0
|
|
|
100.0
|
%
|
|
Cost of sales
|
2,049.4
|
|
|
67.1
|
|
|
2,017.8
|
|
|
66.5
|
|
|
2,075.5
|
|
|
67.8
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
4.2
|
|
|
0.2
|
|
|
13.3
|
|
|
0.5
|
|
|
|||
Gross profit
|
1,006.1
|
|
|
32.9
|
|
|
1,010.4
|
|
|
33.3
|
|
|
971.2
|
|
|
31.7
|
|
|
|||
Operating expenses
|
850.1
|
|
|
27.8
|
|
|
809.3
|
|
|
26.7
|
|
|
790.0
|
|
|
25.8
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|
6.6
|
|
|
0.2
|
|
|
|||
Operating income
|
156.0
|
|
|
5.1
|
|
|
200.2
|
|
|
6.6
|
|
|
174.6
|
|
|
5.7
|
|
|
|||
Interest expense
|
(17.5
|
)
|
|
(0.6
|
)
|
|
(17.2
|
)
|
|
(0.5
|
)
|
|
(17.6
|
)
|
|
(0.6
|
)
|
|
|||
Investment income
|
1.5
|
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|
1.5
|
|
|
0.1
|
|
|
|||
Other income, net
|
21.5
|
|
|
0.8
|
|
|
11.9
|
|
|
0.4
|
|
|
16.3
|
|
|
0.5
|
|
|
|||
Income before income tax expense
|
161.5
|
|
|
5.3
|
|
|
196.3
|
|
|
6.5
|
|
|
174.8
|
|
|
5.7
|
|
|
|||
Income tax expense
|
80.8
|
|
|
2.7
|
|
|
71.7
|
|
|
2.4
|
|
|
4.5
|
|
|
0.1
|
|
|
|||
Net income
|
$
|
80.7
|
|
|
2.6
|
%
|
|
$
|
124.6
|
|
|
4.1
|
%
|
|
$
|
170.3
|
|
|
5.6
|
%
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
$
|
0.68
|
|
|
|
|
$
|
1.03
|
|
|
|
|
$
|
1.37
|
|
|
|
|
|||
Diluted
|
$
|
0.68
|
|
|
|
|
$
|
1.03
|
|
|
|
|
$
|
1.36
|
|
|
|
|
Organic Revenue Growth (Decline)—Consolidated
|
Year Ended
|
|||||||
February 23,
2018 |
February 24,
2017 |
|||||||
Prior year revenue
|
$
|
3,032.4
|
|
|
$
|
3,060.0
|
|
|
Divestitures
|
(12.5
|
)
|
|
—
|
|
|
||
Acquisition
|
4.5
|
|
|
5.1
|
|
|
||
Currency translation effects*
|
28.1
|
|
|
(12.5
|
)
|
|
||
Prior year revenue, adjusted
|
3,052.5
|
|
|
3,052.6
|
|
|
||
Current year revenue
|
3,055.5
|
|
|
3,032.4
|
|
|
||
Organic growth (decline) $
|
$
|
3.0
|
|
|
$
|
(20.2
|
)
|
|
Organic growth (decline) %
|
—
|
%
|
|
(1
|
)%
|
|
Reconciliation of Operating Income to
Adjusted Operating Income
|
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
|
February 24,
2017 |
|
February 26,
2016 |
|
||||||||||||||||
Operating income
|
$
|
156.0
|
|
|
5.1
|
%
|
|
$
|
200.2
|
|
|
6.6
|
%
|
|
$
|
174.6
|
|
|
5.7
|
%
|
|
Add: restructuring costs
|
—
|
|
|
—
|
|
|
5.1
|
|
|
0.2
|
|
|
19.9
|
|
|
0.7
|
|
|
|||
Adjusted operating income
|
$
|
156.0
|
|
|
5.1
|
%
|
|
$
|
205.3
|
|
|
6.8
|
%
|
|
$
|
194.5
|
|
|
6.4
|
%
|
|
Interest Expense, Investment Income and Other Income, Net
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Interest expense
|
$
|
(17.5
|
)
|
|
$
|
(17.2
|
)
|
|
$
|
(17.6
|
)
|
|
Investment income
|
1.5
|
|
|
1.4
|
|
|
1.5
|
|
|
|||
Other income (expense), net:
|
|
|
|
|
|
|
||||||
Equity in income of unconsolidated affiliates
|
12.8
|
|
|
9.7
|
|
|
13.4
|
|
|
|||
Foreign exchange gain (loss)
|
(4.8
|
)
|
|
3.4
|
|
|
(4.0
|
)
|
|
|||
Miscellaneous, net
|
13.5
|
|
|
(1.2
|
)
|
|
6.9
|
|
|
|||
Total other income, net
|
21.5
|
|
|
11.9
|
|
|
16.3
|
|
|
|||
Total interest expense, investment income and other income, net
|
$
|
5.5
|
|
|
$
|
(3.9
|
)
|
|
$
|
0.2
|
|
|
Statement of Operations Data—
Americas
|
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Revenue
|
$
|
2,193.8
|
|
|
100.0
|
%
|
|
$
|
2,231.9
|
|
|
100.0
|
%
|
|
$
|
2,256.0
|
|
|
100.0
|
%
|
|
Cost of sales
|
1,449.9
|
|
|
66.1
|
|
|
1,453.4
|
|
|
65.1
|
|
|
1,473.6
|
|
|
65.3
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
2.6
|
|
|
0.1
|
|
|
2.4
|
|
|
0.1
|
|
|
|||
Gross profit
|
743.9
|
|
|
33.9
|
|
|
775.9
|
|
|
34.8
|
|
|
780.0
|
|
|
34.6
|
|
|
|||
Operating expenses
|
556.9
|
|
|
25.4
|
|
|
530.7
|
|
|
23.8
|
|
|
517.7
|
|
|
23.0
|
|
|
|||
Restructuring costs (benefits)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.9
|
)
|
|
(0.1
|
)
|
|
|||
Operating income
|
$
|
187.0
|
|
|
8.5
|
%
|
|
$
|
245.2
|
|
|
11.0
|
%
|
|
$
|
265.2
|
|
|
11.7
|
%
|
|
Organic Revenue Decline—Americas
|
Year Ended
|
|||||||
February 23,
2018 |
February 24,
2017 |
|||||||
Prior year revenue
|
$
|
2,231.9
|
|
|
$
|
2,256.0
|
|
|
Divestiture
|
(8.3
|
)
|
|
—
|
|
|
||
Acquisition
|
4.5
|
|
|
5.1
|
|
|
||
Currency translation effects*
|
2.0
|
|
|
(0.9
|
)
|
|
||
Prior year revenue, adjusted
|
2,230.1
|
|
|
2,260.2
|
|
|
||
Current year revenue
|
2,193.8
|
|
|
2,231.9
|
|
|
||
Organic decline $
|
$
|
(36.3
|
)
|
|
$
|
(28.3
|
)
|
|
Organic decline %
|
(2
|
)%
|
|
(1
|
)%
|
|
Reconciliation of Operating Income to
Adjusted Operating Income—Americas |
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Operating income
|
$
|
187.0
|
|
|
8.5
|
%
|
|
$
|
245.2
|
|
|
11.0
|
%
|
|
$
|
265.2
|
|
|
11.7
|
%
|
|
Add: restructuring costs
|
—
|
|
|
—
|
|
|
2.6
|
|
|
0.1
|
|
|
(0.5
|
)
|
|
—
|
|
|
|||
Adjusted operating income
|
$
|
187.0
|
|
|
8.5
|
%
|
|
$
|
247.8
|
|
|
11.1
|
%
|
|
$
|
264.7
|
|
|
11.7
|
%
|
|
•
|
approximately $10 of higher commodity costs,
|
•
|
higher investments in support of product development and manufacturing agility,
|
•
|
unfavorable shifts in business mix,
|
•
|
$3.4 of charges associated with a defined benefit plan annuitization in Q1 2018,
|
•
|
approximately $17 of benefits associated with ongoing cost reduction efforts,
|
•
|
favorability related to improvements in negotiated customer pricing, and
|
•
|
approximately $5 of lower warranty costs compared to the prior year.
|
Statement of Operations Data—EMEA
|
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Revenue
|
$
|
524.2
|
|
|
100.0
|
%
|
|
$
|
503.9
|
|
|
100.0
|
%
|
|
$
|
520.6
|
|
|
100.0
|
%
|
|
Cost of sales
|
381.9
|
|
|
72.9
|
|
|
370.7
|
|
|
73.6
|
|
|
416.3
|
|
|
80.0
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
1.6
|
|
|
0.3
|
|
|
10.9
|
|
|
2.1
|
|
|
|||
Gross profit
|
142.3
|
|
|
27.1
|
|
|
131.6
|
|
|
26.1
|
|
|
93.4
|
|
|
17.9
|
|
|
|||
Operating expenses
|
156.3
|
|
|
29.8
|
|
|
151.6
|
|
|
30.1
|
|
|
148.2
|
|
|
28.5
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
0.9
|
|
|
0.1
|
|
|
9.5
|
|
|
1.8
|
|
|
|||
Operating loss
|
$
|
(14.0
|
)
|
|
(2.7
|
)%
|
|
$
|
(20.9
|
)
|
|
(4.1
|
)%
|
|
$
|
(64.3
|
)
|
|
(12.4
|
)%
|
|
Organic Revenue (Decline)—EMEA
|
Year Ended
|
|||||||
February 23,
2018 |
February 24,
2017 |
|||||||
Prior year revenue
|
$
|
503.9
|
|
|
$
|
520.6
|
|
|
Divestitures
|
(4.2
|
)
|
|
—
|
|
|
||
Currency translation effects*
|
22.7
|
|
|
(9.0
|
)
|
|
||
Prior year revenue, adjusted
|
522.4
|
|
|
511.6
|
|
|
||
Current year revenue
|
524.2
|
|
|
503.9
|
|
|
||
Organic growth (decline) $
|
$
|
1.8
|
|
|
$
|
(7.7
|
)
|
|
Organic growth (decline) %
|
—
|
%
|
|
(2
|
)%
|
|
Reconciliation of Operating Loss to
Adjusted Operating Loss—EMEA |
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Operating loss
|
$
|
(14.0
|
)
|
|
(2.7
|
)%
|
|
$
|
(20.9
|
)
|
|
(4.1
|
)%
|
|
$
|
(64.3
|
)
|
|
(12.4
|
)%
|
|
Add: restructuring costs
|
—
|
|
|
—
|
|
|
2.5
|
|
|
0.4
|
|
|
20.4
|
|
|
3.9
|
|
|
|||
Adjusted operating loss
|
$
|
(14.0
|
)
|
|
(2.7
|
)%
|
|
$
|
(18.4
|
)
|
|
(3.7
|
)%
|
|
$
|
(43.9
|
)
|
|
(8.5
|
)%
|
|
Statement of Operations Data—Other
|
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Revenue
|
$
|
337.5
|
|
|
100.0
|
%
|
|
$
|
296.6
|
|
|
100.0
|
%
|
|
$
|
283.4
|
|
|
100.0
|
%
|
|
Cost of sales
|
217.6
|
|
|
64.5
|
|
|
193.7
|
|
|
65.3
|
|
|
185.6
|
|
|
65.5
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Gross profit
|
119.9
|
|
|
35.5
|
|
|
102.9
|
|
|
34.7
|
|
|
97.8
|
|
|
34.5
|
|
|
|||
Operating expenses
|
101.5
|
|
|
30.1
|
|
|
89.9
|
|
|
30.3
|
|
|
86.6
|
|
|
30.5
|
|
|
|||
Restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Operating income
|
$
|
18.4
|
|
|
5.4
|
%
|
|
$
|
13.0
|
|
|
4.4
|
%
|
|
$
|
11.2
|
|
|
4.0
|
%
|
|
Organic Revenue Growth—Other
|
Year Ended
|
|||||||
February 23,
2018 |
February 24,
2017 |
|||||||
Prior year revenue
|
$
|
296.6
|
|
|
$
|
283.4
|
|
|
Currency translation effects*
|
3.4
|
|
|
(2.6
|
)
|
|
||
Prior year revenue, adjusted
|
300.0
|
|
|
280.8
|
|
|
||
Current year revenue
|
337.5
|
|
|
296.6
|
|
|
||
Organic growth $
|
$
|
37.5
|
|
|
$
|
15.8
|
|
|
Organic growth %
|
13
|
%
|
|
6
|
%
|
|
Reconciliation of Operating Income to
Adjusted Operating Income—Other |
Year Ended
|
||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Operating income
|
$
|
18.4
|
|
|
5.4
|
%
|
|
$
|
13.0
|
|
|
4.4
|
%
|
|
$
|
11.2
|
|
|
4.0
|
%
|
|
Add: restructuring costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Adjusted operating income
|
$
|
18.4
|
|
|
5.4
|
%
|
|
$
|
13.0
|
|
|
4.4
|
%
|
|
$
|
11.2
|
|
|
4.0
|
%
|
|
Statement of Operations Data—Corporate
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Operating expenses
|
$
|
35.4
|
|
|
$
|
37.1
|
|
|
$
|
37.5
|
|
|
Liquidity Sources
|
February 23,
2018 |
February 24,
2017 |
||||||
Cash and cash equivalents
|
$
|
283.1
|
|
|
$
|
197.1
|
|
|
Short-term investments
|
—
|
|
|
73.4
|
|
|
||
Company-owned life insurance
|
172.2
|
|
|
168.8
|
|
|
||
Availability under credit facilities
|
152.2
|
|
|
150.3
|
|
|
||
Total liquidity
|
$
|
607.5
|
|
|
$
|
589.6
|
|
|
Cash Flow Data
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Net cash flow provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
$
|
227.0
|
|
|
$
|
170.7
|
|
|
$
|
186.4
|
|
|
Investing activities
|
(47.5
|
)
|
|
(48.4
|
)
|
|
(87.8
|
)
|
|
|||
Financing activities
|
(97.5
|
)
|
|
(105.9
|
)
|
|
(90.1
|
)
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
4.0
|
|
|
(1.2
|
)
|
|
(3.1
|
)
|
|
|||
Net increase in cash and cash equivalents
|
86.0
|
|
|
15.2
|
|
|
5.4
|
|
|
|||
Cash and cash equivalents, beginning of period
|
197.1
|
|
|
181.9
|
|
|
176.5
|
|
|
|||
Cash and cash equivalents, end of period
|
$
|
283.1
|
|
|
$
|
197.1
|
|
|
$
|
181.9
|
|
|
Cash Flow Data—Operating Activities
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Net income
|
$
|
80.7
|
|
|
$
|
124.6
|
|
|
$
|
170.3
|
|
|
Depreciation and amortization
|
65.9
|
|
|
60.3
|
|
|
65.7
|
|
|
|||
Gains related to sales of investments in unconsolidated affiliates
|
(14.4
|
)
|
|
—
|
|
|
(8.5
|
)
|
|
|||
Deferred income taxes
|
52.9
|
|
|
26.8
|
|
|
(68.3
|
)
|
|
|||
Non-cash stock compensation
|
19.1
|
|
|
19.8
|
|
|
21.0
|
|
|
|||
Equity in income of unconsolidated affiliates
|
(12.8
|
)
|
|
(9.7
|
)
|
|
(13.4
|
)
|
|
|||
Dividends received from unconsolidated affiliates
|
10.3
|
|
|
9.9
|
|
|
12.4
|
|
|
|||
Other
|
(9.5
|
)
|
|
(8.8
|
)
|
|
(2.5
|
)
|
|
|||
Changes in accounts receivable, inventories and accounts payable
|
9.3
|
|
|
16.3
|
|
|
3.4
|
|
|
|||
Assets related to derivative instruments
|
1.4
|
|
|
(1.8
|
)
|
|
22.3
|
|
|
|||
VAT recoverable
|
7.6
|
|
|
17.0
|
|
|
(28.9
|
)
|
|
|||
Long-term income taxes receivable
|
18.7
|
|
|
(18.5
|
)
|
|
—
|
|
|
|||
Changes in employee compensation liabilities
|
(13.8
|
)
|
|
(8.8
|
)
|
|
20.4
|
|
|
|||
Changes in other operating assets and liabilities
|
11.6
|
|
|
(56.4
|
)
|
|
(7.5
|
)
|
|
|||
Net cash provided by operating activities
|
$
|
227.0
|
|
|
$
|
170.7
|
|
|
$
|
186.4
|
|
|
Cash Flow Data—Investing Activities
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Capital expenditures
|
$
|
(87.9
|
)
|
|
$
|
(61.1
|
)
|
|
$
|
(93.4
|
)
|
|
Purchases of investments
|
(52.1
|
)
|
|
(112.6
|
)
|
|
(105.7
|
)
|
|
|||
Liquidations of investments
|
125.6
|
|
|
126.6
|
|
|
95.1
|
|
|
|||
Proceeds related to sales of investments in unconsolidated affiliates
|
19.0
|
|
|
—
|
|
|
18.0
|
|
|
|||
Acquisitions, net of cash acquired
|
(68.3
|
)
|
|
(4.0
|
)
|
|
(6.9
|
)
|
|
|||
Other
|
16.2
|
|
|
2.7
|
|
|
5.1
|
|
|
|||
Net cash used in investing activities
|
$
|
(47.5
|
)
|
|
$
|
(48.4
|
)
|
|
$
|
(87.8
|
)
|
|
Cash Flow Data—Financing Activities
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Dividends paid
|
$
|
(61.0
|
)
|
|
$
|
(58.5
|
)
|
|
$
|
(57.0
|
)
|
|
Common stock repurchases
|
(33.8
|
)
|
|
(48.4
|
)
|
|
(56.4
|
)
|
|
|||
Excess tax benefit from vesting of stock awards
|
—
|
|
|
3.3
|
|
|
7.0
|
|
|
|||
Net borrowings and repayments of debt
|
(2.7
|
)
|
|
(2.3
|
)
|
|
16.3
|
|
|
|||
Net cash used in financing activities
|
$
|
(97.5
|
)
|
|
$
|
(105.9
|
)
|
|
$
|
(90.1
|
)
|
|
Contractual Obligations
|
Payments Due by Period
|
|||||||||||||||||||
Total
|
Less than
1 Year
|
1-3
Years
|
3-5
Years
|
After 5
Years
|
||||||||||||||||
Long-term debt and short-term borrowings
|
$
|
295.0
|
|
|
$
|
2.8
|
|
|
$
|
254.4
|
|
|
$
|
5.2
|
|
|
$
|
32.6
|
|
|
Estimated interest on debt obligations
|
53.8
|
|
|
17.2
|
|
|
34.2
|
|
|
2.0
|
|
|
0.4
|
|
|
|||||
Operating leases
|
207.1
|
|
|
48.5
|
|
|
72.5
|
|
|
47.3
|
|
|
38.8
|
|
|
|||||
Committed capital expenditures
|
15.4
|
|
|
15.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Purchase obligations
|
64.0
|
|
|
44.8
|
|
|
18.3
|
|
|
0.9
|
|
|
—
|
|
|
|||||
Other liabilities
|
1.4
|
|
|
1.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Employee benefit and compensation obligations
|
248.6
|
|
|
114.0
|
|
|
31.6
|
|
|
21.0
|
|
|
82.0
|
|
|
|||||
Total
|
$
|
885.3
|
|
|
$
|
244.1
|
|
|
$
|
411.0
|
|
|
$
|
76.4
|
|
|
$
|
153.8
|
|
|
Liquidity Facilities
|
February 23,
2018 |
||
Global committed bank facility
|
$
|
125.0
|
|
Various uncommitted lines
|
27.2
|
|
|
Total credit lines available
|
152.2
|
|
|
Less: borrowings outstanding
|
—
|
|
|
Available capacity
|
$
|
152.2
|
|
Reportable Segment
|
Goodwill
|
Other Intangible
Assets, Net
|
||||||
Americas
|
$
|
119.7
|
|
|
$
|
41.6
|
|
|
EMEA
|
—
|
|
|
0.1
|
|
|
||
Other category
|
18.5
|
|
|
3.9
|
|
|
||
Total
|
$
|
138.2
|
|
|
$
|
45.6
|
|
|
Reportable Segment
|
Enterprise Value
Available in Excess
of Goodwill
|
||
Americas
|
$
|
1,199.9
|
|
Other category
|
50.6
|
|
Reportable Segment
|
Enterprise Value
Available in Excess
of Goodwill
|
||
Americas
|
$
|
1,034.8
|
|
Other category
|
42.6
|
|
|
Defined Benefit
Pension Plans
|
Post-Retirement
Plans
|
||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 23,
2018 |
February 24,
2017 |
|||||||||||||
Fair value of plan assets
|
$
|
33.1
|
|
|
$
|
46.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Benefit plan obligations
|
80.1
|
|
|
96.8
|
|
|
43.4
|
|
|
46.0
|
|
|
||||
Funded status
|
$
|
(47.0
|
)
|
|
$
|
(50.1
|
)
|
|
$
|
(43.4
|
)
|
|
$
|
(46.0
|
)
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk:
|
Item 8.
|
Financial Statements and Supplementary Data:
|
/s/ Deloitte & Touche LLP
|
|
|
|
Grand Rapids, Michigan
|
|
April 10, 2018
|
|
/s/ Deloitte & Touche LLP
|
|
|
|
Grand Rapids, Michigan
|
|
April 10, 2018
|
|
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Revenue
|
$
|
3,055.5
|
|
|
$
|
3,032.4
|
|
|
$
|
3,060.0
|
|
|
Cost of sales
|
2,049.4
|
|
|
2,017.8
|
|
|
2,075.5
|
|
|
|||
Restructuring costs
|
—
|
|
|
4.2
|
|
|
13.3
|
|
|
|||
Gross profit
|
1,006.1
|
|
|
1,010.4
|
|
|
971.2
|
|
|
|||
Operating expenses
|
850.1
|
|
|
809.3
|
|
|
790.0
|
|
|
|||
Restructuring costs
|
—
|
|
|
0.9
|
|
|
6.6
|
|
|
|||
Operating income
|
156.0
|
|
|
200.2
|
|
|
174.6
|
|
|
|||
Interest expense
|
(17.5
|
)
|
|
(17.2
|
)
|
|
(17.6
|
)
|
|
|||
Investment income
|
1.5
|
|
|
1.4
|
|
|
1.5
|
|
|
|||
Other income, net
|
21.5
|
|
|
11.9
|
|
|
16.3
|
|
|
|||
Income before income tax expense
|
161.5
|
|
|
196.3
|
|
|
174.8
|
|
|
|||
Income tax expense
|
80.8
|
|
|
71.7
|
|
|
4.5
|
|
|
|||
Net income
|
$
|
80.7
|
|
|
$
|
124.6
|
|
|
$
|
170.3
|
|
|
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.68
|
|
|
$
|
1.03
|
|
|
$
|
1.37
|
|
|
Diluted
|
$
|
0.68
|
|
|
$
|
1.03
|
|
|
$
|
1.36
|
|
|
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Net income
|
$
|
80.7
|
|
|
$
|
124.6
|
|
|
$
|
170.3
|
|
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), gross:
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments
|
—
|
|
|
(1.4
|
)
|
|
(0.2
|
)
|
|
|||
Pension and other post-retirement liability adjustments
|
1.1
|
|
|
4.7
|
|
|
2.6
|
|
|
|||
Foreign currency translation adjustments
|
38.6
|
|
|
(12.4
|
)
|
|
(12.2
|
)
|
|
|||
Total other comprehensive income (loss), gross
|
39.7
|
|
|
(9.1
|
)
|
|
(9.8
|
)
|
|
|||
|
|
|
|
|
|
|
|
|
|
|||
Other comprehensive income (loss), tax (expense) benefit:
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments
|
—
|
|
|
0.5
|
|
|
—
|
|
|
|||
Pension and other post-retirement liability adjustments
|
0.6
|
|
|
(2.4
|
)
|
|
(0.4
|
)
|
|
|||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Total other comprehensive income (loss), tax (expense) benefit
|
0.6
|
|
|
(1.9
|
)
|
|
(0.4
|
)
|
|
|||
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net:
|
|
|
|
|
|
|
||||||
Unrealized gain (loss) on investments
|
—
|
|
|
(0.9
|
)
|
|
(0.2
|
)
|
|
|||
Pension and other post-retirement liability adjustments
|
1.7
|
|
|
2.3
|
|
|
2.2
|
|
|
|||
Foreign currency translation adjustments
|
38.6
|
|
|
(12.4
|
)
|
|
(12.2
|
)
|
|
|||
Total other comprehensive income (loss), net
|
40.3
|
|
|
(11.0
|
)
|
|
(10.2
|
)
|
|
|||
Comprehensive income
|
$
|
121.0
|
|
|
$
|
113.6
|
|
|
$
|
160.1
|
|
|
|
February 23,
2018 |
February 24,
2017 |
||||||
ASSETS
|
||||||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
$
|
283.1
|
|
|
$
|
197.1
|
|
|
Short-term investments
|
—
|
|
|
73.4
|
|
|
||
Accounts receivable, net of allowances of $11.1 and $11.2
|
300.3
|
|
|
307.6
|
|
|
||
Inventories
|
184.6
|
|
|
163.1
|
|
|
||
Prepaid expenses
|
19.2
|
|
|
19.1
|
|
|
||
Assets held for sale
|
13.4
|
|
|
—
|
|
|
||
Other current assets
|
53.3
|
|
|
58.9
|
|
|
||
Total current assets
|
853.9
|
|
|
819.2
|
|
|
||
Property, plant and equipment, net of accumulated depreciation of $998.1 and $959.6
|
435.1
|
|
|
408.1
|
|
|
||
Company-owned life insurance ("COLI")
|
172.2
|
|
|
168.8
|
|
|
||
Deferred income taxes
|
135.4
|
|
|
179.6
|
|
|
||
Goodwill
|
138.2
|
|
|
106.7
|
|
|
||
Other intangible assets, net of accumulated amortization of $44.6 and $43.2
|
45.6
|
|
|
16.8
|
|
|
||
Investments in unconsolidated affiliates
|
48.4
|
|
|
50.5
|
|
|
||
Other assets
|
30.4
|
|
|
42.3
|
|
|
||
Total assets
|
$
|
1,859.2
|
|
|
$
|
1,792.0
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|||||||
Current liabilities:
|
|
|
|
|
||||
Accounts payable
|
$
|
223.1
|
|
|
$
|
216.8
|
|
|
Short-term borrowings and current portion of long-term debt
|
2.8
|
|
|
2.8
|
|
|
||
Accrued expenses:
|
|
|
|
|
||||
Employee compensation
|
145.0
|
|
|
154.3
|
|
|
||
Employee benefit plan obligations
|
39.2
|
|
|
35.0
|
|
|
||
Accrued promotions
|
25.5
|
|
|
19.0
|
|
|
||
Customer deposits
|
28.2
|
|
|
15.9
|
|
|
||
Product warranties
|
18.1
|
|
|
20.4
|
|
|
||
Other
|
72.8
|
|
|
59.2
|
|
|
||
Total current liabilities
|
554.7
|
|
|
523.4
|
|
|
||
Long-term liabilities:
|
|
|
|
|
||||
Long-term debt less current maturities
|
292.2
|
|
|
294.6
|
|
|
||
Employee benefit plan obligations
|
130.8
|
|
|
134.3
|
|
|
||
Other long-term liabilities
|
68.2
|
|
|
73.2
|
|
|
||
Total long-term liabilities
|
491.2
|
|
|
502.1
|
|
|
||
Total liabilities
|
1,045.9
|
|
|
1,025.5
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
||||
Preferred stock-no par value; 50,000,000 shares authorized, none issued and outstanding
|
—
|
|
|
—
|
|
|
||
Class A common stock-no par value; 475,000,000 shares authorized, 85,728,770 and 85,975,298 issued and outstanding
|
—
|
|
|
—
|
|
|
||
Class B common stock-no par value, convertible into Class A common stock on a one-for-one basis; 475,000,000 shares authorized, 30,428,673 and 31,348,049 issued and outstanding
|
—
|
|
|
—
|
|
|
||
Additional paid-in capital
|
4.6
|
|
|
—
|
|
|
||
Accumulated other comprehensive loss
|
(10.3
|
)
|
|
(50.6
|
)
|
|
||
Retained earnings
|
819.0
|
|
|
817.1
|
|
|
||
Total shareholders’ equity
|
813.3
|
|
|
766.5
|
|
|
||
Total liabilities and shareholders’ equity
|
$
|
1,859.2
|
|
|
$
|
1,792.0
|
|
|
|
Common
Shares
Outstanding
|
Class A
Common
Stock
|
Class B
Common
Stock
|
Additional
Paid-in
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Retained
Earnings
|
Total
Shareholders’
Equity
|
|||||||||||||||||||||
February 27, 2015
|
|
121,468,547
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
(29.4
|
)
|
|
$
|
688.2
|
|
|
$
|
663.8
|
|
|
Common stock issuance
|
|
39,052
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
0.7
|
|
|
||||||||||
Common stock repurchases
|
|
(3,737,573
|
)
|
|
|
|
|
|
|
(31.4
|
)
|
|
|
|
(25.0
|
)
|
|
(56.4
|
)
|
|
||||||||
Tax effect of exercise of stock awards
|
|
|
|
|
|
|
|
7.0
|
|
|
|
|
|
|
7.0
|
|
|
|||||||||||
Performance units issued as common stock
|
|
1,026,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restricted stock units issued as common stock
|
|
574,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Performance units and restricted stock units expense
|
|
|
|
|
|
|
|
20.3
|
|
|
|
|
|
|
20.3
|
|
|
|||||||||||
Other repurchases related to stock vested not yet issued
|
|
|
|
|
|
|
|
(1.6
|
)
|
|
|
|
|
|
(1.6
|
)
|
|
|||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
(10.2
|
)
|
|
|
|
(10.2
|
)
|
|
|||||||||||
Dividends paid ($0.45 per share)
|
|
|
|
|
|
|
|
|
|
|
|
(57.0
|
)
|
|
(57.0
|
)
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
170.3
|
|
|
170.3
|
|
|
|||||||||||
February 26, 2016
|
|
119,370,766
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(39.6
|
)
|
|
$
|
776.5
|
|
|
$
|
736.9
|
|
|
Common stock issuance
|
|
48,045
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
0.7
|
|
|
|||||||||
Common stock repurchases
|
|
(3,507,238
|
)
|
|
|
|
|
|
|
(22.9
|
)
|
|
|
|
(25.5
|
)
|
|
(48.4
|
)
|
|
||||||||
Tax effect of exercise of stock awards
|
|
|
|
|
|
|
|
3.3
|
|
|
|
|
|
|
3.3
|
|
|
|||||||||||
Performance units issued as common stock
|
|
469,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Restricted stock units issued as common stock
|
|
942,542
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performance units and restricted stock units expense
|
|
|
|
|
|
|
|
19.1
|
|
|
|
|
|
|
19.1
|
|
|
|||||||||||
Other repurchases related to stock vested not yet issued
|
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
(0.2
|
)
|
|
|||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
(11.0
|
)
|
|
|
|
(11.0
|
)
|
|
|||||||||||
Dividends paid ($0.48 per share)
|
|
|
|
|
|
|
|
|
|
|
|
(58.5
|
)
|
|
(58.5
|
)
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
124.6
|
|
|
124.6
|
|
|
|||||||||||
February 24, 2017
|
|
117,323,347
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(50.6
|
)
|
|
$
|
817.1
|
|
|
$
|
766.5
|
|
|
Common stock issuance
|
|
50,445
|
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
0.7
|
|
|
|||||||||
Common stock repurchases
|
|
(2,410,671
|
)
|
|
|
|
|
|
|
(16.0
|
)
|
|
|
|
(17.8
|
)
|
|
(33.8
|
)
|
|
||||||||
Performance units issued as common stock
|
|
346,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Restricted stock units issued as common stock
|
|
847,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Performance units and restricted stock units expense
|
|
|
|
|
|
|
|
18.4
|
|
|
|
|
|
|
18.4
|
|
|
|||||||||||
Other repurchases related to stock vested not yet issued
|
|
|
|
|
|
|
|
1.5
|
|
|
|
|
|
|
1.5
|
|
|
|||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
40.3
|
|
|
|
|
|
40.3
|
|
|
|||||||||
Dividends paid ($0.51 per share)
|
|
|
|
|
|
|
|
|
|
|
|
(61.0
|
)
|
|
(61.0
|
)
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
80.7
|
|
|
80.7
|
|
|
|||||||||||
February 23, 2018
|
|
116,157,443
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4.6
|
|
|
$
|
(10.3
|
)
|
|
$
|
819.0
|
|
|
$
|
813.3
|
|
|
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
OPERATING ACTIVITIES
|
|
|
|
|
|
|
||||||
Net income
|
$
|
80.7
|
|
|
$
|
124.6
|
|
|
$
|
170.3
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
65.9
|
|
|
60.3
|
|
|
65.7
|
|
|
|||
Gains related to sales of investments in unconsolidated affiliates
|
(14.4
|
)
|
|
—
|
|
|
(8.5
|
)
|
|
|||
Deferred income taxes
|
52.9
|
|
|
26.8
|
|
|
(68.3
|
)
|
|
|||
Non-cash stock compensation
|
19.1
|
|
|
19.8
|
|
|
21.0
|
|
|
|||
Equity in income of unconsolidated affiliates
|
(12.8
|
)
|
|
(9.7
|
)
|
|
(13.4
|
)
|
|
|||
Dividends received from unconsolidated affiliates
|
10.3
|
|
|
9.9
|
|
|
12.4
|
|
|
|||
Other
|
(9.5
|
)
|
|
(8.8
|
)
|
|
(2.5
|
)
|
|
|||
Changes in operating assets and liabilities, net of acquisition
|
|
|
|
|
|
|
||||||
Accounts receivable
|
18.5
|
|
|
11.9
|
|
|
0.7
|
|
|
|||
Inventories
|
(8.5
|
)
|
|
(5.1
|
)
|
|
6.8
|
|
|
|||
Assets related to derivative instruments
|
1.4
|
|
|
(1.8
|
)
|
|
22.3
|
|
|
|||
VAT recoverable
|
7.6
|
|
|
17.0
|
|
|
(28.9
|
)
|
|
|||
Long-term income taxes receivable
|
18.7
|
|
|
(18.5
|
)
|
|
—
|
|
|
|||
Other assets
|
(4.5
|
)
|
|
(19.6
|
)
|
|
2.9
|
|
|
|||
Accounts payable
|
(0.7
|
)
|
|
9.5
|
|
|
(4.1
|
)
|
|
|||
Employee compensation liabilities
|
(13.8
|
)
|
|
(8.8
|
)
|
|
20.4
|
|
|
|||
Accrued expenses and other liabilities
|
16.1
|
|
|
(36.8
|
)
|
|
(10.4
|
)
|
|
|||
Net cash provided by operating activities
|
227.0
|
|
|
170.7
|
|
|
186.4
|
|
|
|||
INVESTING ACTIVITIES
|
|
|
|
|
|
|
||||||
Capital expenditures
|
(87.9
|
)
|
|
(61.1
|
)
|
|
(93.4
|
)
|
|
|||
Purchases of investments
|
(52.1
|
)
|
|
(112.6
|
)
|
|
(105.7
|
)
|
|
|||
Liquidations of investments
|
125.6
|
|
|
126.6
|
|
|
95.1
|
|
|
|||
Proceeds related to sales of investments in unconsolidated affiliates
|
19.0
|
|
|
—
|
|
|
18.0
|
|
|
|||
Acquisitions, net of cash acquired
|
(68.3
|
)
|
|
(4.0
|
)
|
|
(6.9
|
)
|
|
|||
Other
|
16.2
|
|
|
2.7
|
|
|
5.1
|
|
|
|||
Net cash used in investing activities
|
(47.5
|
)
|
|
(48.4
|
)
|
|
(87.8
|
)
|
|
|||
FINANCING ACTIVITIES
|
|
|
|
|
|
|
||||||
Dividends paid
|
(61.0
|
)
|
|
(58.5
|
)
|
|
(57.0
|
)
|
|
|||
Common stock repurchases
|
(33.8
|
)
|
|
(48.4
|
)
|
|
(56.4
|
)
|
|
|||
Excess tax benefit from vesting of stock awards
|
—
|
|
|
3.3
|
|
|
7.0
|
|
|
|||
Borrowings of long-term debt and lines of credit, net of issuance costs
|
—
|
|
|
—
|
|
|
51.1
|
|
|
|||
Repayment of long-term debt and lines of credit
|
(2.7
|
)
|
|
(2.3
|
)
|
|
(34.8
|
)
|
|
|||
Net cash used in financing activities
|
(97.5
|
)
|
|
(105.9
|
)
|
|
(90.1
|
)
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
4.0
|
|
|
(1.2
|
)
|
|
(3.1
|
)
|
|
|||
Net increase in cash and cash equivalents
|
86.0
|
|
|
15.2
|
|
|
5.4
|
|
|
|||
Cash and cash equivalents, beginning of period
|
197.1
|
|
|
181.9
|
|
|
176.5
|
|
|
|||
Cash and cash equivalents, end of period
|
$
|
283.1
|
|
|
$
|
197.1
|
|
|
$
|
181.9
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
||||||
Income taxes paid, net of refunds received
|
$
|
4.8
|
|
|
$
|
67.7
|
|
|
$
|
57.0
|
|
|
Interest paid, net of amounts capitalized
|
$
|
17.0
|
|
|
$
|
17.0
|
|
|
$
|
17.1
|
|
|
1.
|
NATURE OF OPERATIONS
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
Net Reserve for Estimated Domestic Workers' Compensation Claims
|
Year Ended
|
|||||||
February 23, 2018
|
February 24, 2017
|
|||||||
Assets:
|
|
|
|
|
||||
Long-term -
Other assets
|
$
|
4.4
|
|
|
$
|
4.0
|
|
|
Liabilities:
|
|
|
|
|
||||
Current -
Accrued expenses - other
|
3.0
|
|
|
2.4
|
|
|
||
Long-term -
Other long-term liabilities
|
12.9
|
|
|
13.9
|
|
|
||
|
15.9
|
|
|
16.3
|
|
|
||
Net reserve
|
$
|
11.5
|
|
|
$
|
12.3
|
|
|
Net Reserve for Estimated Product Liability Claims
|
Year Ended
|
|||||||
February 23, 2018
|
February 24, 2017
|
|||||||
Assets:
|
|
|
|
|
||||
Long-term -
Other long-term assets
|
$
|
2.7
|
|
|
$
|
2.4
|
|
|
Liabilities:
|
|
|
|
|
||||
Current -
Accrued expenses - other
|
1.3
|
|
|
1.4
|
|
|
||
Long-term -
Other long-term liabilities
|
6.7
|
|
|
7.3
|
|
|
||
|
8.0
|
|
|
8.7
|
|
|
||
Net reserve
|
$
|
5.3
|
|
|
$
|
6.3
|
|
|
Roll-Forward of Accrued
Liability for Product Warranties |
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Balance as of beginning of period
|
$
|
41.3
|
|
|
$
|
42.1
|
|
|
$
|
39.4
|
|
|
Accruals related to product warranties, recalls and retrofits
|
10.6
|
|
|
19.5
|
|
|
18.1
|
|
|
|||
Reductions for settlements
|
(15.8
|
)
|
|
(20.1
|
)
|
|
(16.0
|
)
|
|
|||
Currency translation adjustments
|
0.7
|
|
|
(0.2
|
)
|
|
0.6
|
|
|
|||
Balance as of end of period
|
$
|
36.8
|
|
|
$
|
41.3
|
|
|
$
|
42.1
|
|
|
Environmental Contingencies
|
Year Ended
|
|||||||
February 23, 2018
|
February 24, 2017
|
|||||||
Current:
|
|
|
|
|
||||
Accrued expenses - other
|
$
|
0.7
|
|
|
$
|
0.6
|
|
|
Long-Term:
|
|
|
|
|
||||
Other long-term liabilities
|
2.5
|
|
|
3.3
|
|
|
||
Total environmental contingencies (discounted)
|
$
|
3.2
|
|
|
$
|
3.9
|
|
|
Consolidated Balance Sheets
|
February 23,
2018 |
February 24,
2017 |
||||||
Other current assets
|
$
|
2.1
|
|
|
$
|
3.5
|
|
|
Accrued expenses
|
(1.4
|
)
|
|
(0.9
|
)
|
|
||
Total net fair value of derivative instruments (1)
|
$
|
0.7
|
|
|
$
|
2.6
|
|
|
(1)
|
The notional amounts of the outstanding foreign exchange forward contracts were
$95.7
as of
February 23, 2018
and
$101.2
as of
February 24, 2017
.
|
Gain (Loss) Recognized in Consolidated Statements of Income
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Cost of sales
|
$
|
2.8
|
|
|
$
|
(1.1
|
)
|
|
$
|
(0.8
|
)
|
|
Operating expenses
|
0.6
|
|
|
0.8
|
|
|
(0.8
|
)
|
|
|||
Other income, net
|
(4.8
|
)
|
|
1.2
|
|
|
3.0
|
|
|
|||
Total net gain (loss)
|
$
|
(1.4
|
)
|
|
$
|
0.9
|
|
|
$
|
1.4
|
|
|
3.
|
NEW ACCOUNTING STANDARDS
|
4.
|
EARNINGS PER SHARE
|
Computation of Earnings per Share
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Net income
|
$
|
80.7
|
|
|
$
|
124.6
|
|
|
$
|
170.3
|
|
|
Adjustment for earnings attributable to participating securities
|
(1.5
|
)
|
|
(2.4
|
)
|
|
(3.4
|
)
|
|
|||
Net income used in calculating earnings per share
|
$
|
79.2
|
|
|
$
|
122.2
|
|
|
$
|
166.9
|
|
|
Weighted-average common shares outstanding including participating securities (in millions)
|
119.2
|
|
|
120.7
|
|
|
124.3
|
|
|
|||
Adjustment for participating securities (in millions)
|
(2.3
|
)
|
|
(2.3
|
)
|
|
(2.5
|
)
|
|
|||
Shares used in calculating basic earnings per share (in millions)
|
116.9
|
|
|
118.4
|
|
|
121.8
|
|
|
|||
Effect of dilutive stock-based compensation (in millions)
|
0.2
|
|
|
0.5
|
|
|
1.0
|
|
|
|||
Shares used in calculating diluted earnings per share (in millions)
|
117.1
|
|
|
118.9
|
|
|
122.8
|
|
|
|||
Earnings per share:
|
|
|
|
|
|
|
||||||
Basic
|
$
|
0.68
|
|
|
$
|
1.03
|
|
|
$
|
1.37
|
|
|
Diluted
|
$
|
0.68
|
|
|
$
|
1.03
|
|
|
$
|
1.36
|
|
|
Total common shares outstanding at period end (in millions)
|
116.2
|
|
|
117.3
|
|
|
119.4
|
|
|
|||
Anti-dilutive performance units excluded from the computation of diluted earnings per share (in millions)
|
0.5
|
|
|
0.3
|
|
|
—
|
|
|
5.
|
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
|
|
Unrealized gain (loss) on investments
|
Pension and other post-retirement liability adjustments
|
Foreign currency translation adjustments
|
Total
|
||||||||||||
Balance as of February 26, 2016
|
$
|
0.6
|
|
|
$
|
10.7
|
|
|
$
|
(50.9
|
)
|
|
$
|
(39.6
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
(0.5
|
)
|
|
6.8
|
|
|
(12.4
|
)
|
|
(6.1
|
)
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
(0.4
|
)
|
|
(4.5
|
)
|
|
—
|
|
|
(4.9
|
)
|
|
||||
Net other comprehensive income (loss) during period
|
(0.9
|
)
|
|
2.3
|
|
|
(12.4
|
)
|
|
(11.0
|
)
|
|
||||
Balance as of February 24, 2017
|
$
|
(0.3
|
)
|
|
$
|
13.0
|
|
|
$
|
(63.3
|
)
|
|
$
|
(50.6
|
)
|
|
Other comprehensive income (loss) before reclassifications
|
—
|
|
|
3.0
|
|
|
38.6
|
|
|
41.6
|
|
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
|
||||
Net other comprehensive income (loss) during period
|
—
|
|
|
1.7
|
|
|
38.6
|
|
|
40.3
|
|
|
||||
Balance as of February 23, 2018
|
$
|
(0.3
|
)
|
|
$
|
14.7
|
|
|
$
|
(24.7
|
)
|
|
$
|
(10.3
|
)
|
|
Detail of Accumulated Other Comprehensive
Income (Loss) Components |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss)
|
Affected Line in the Consolidated Statements of Income
|
||||||||
Year Ended
|
||||||||||
February 23,
2018 |
February 24,
2017 |
|||||||||
Unrealized gains on investments
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
Other income, net
|
|
|
—
|
|
|
0.1
|
|
|
Income tax expense
|
|
||
|
—
|
|
|
(0.4
|
)
|
|
Net income
|
|
||
Amortization of pension and other post-retirement liability adjustments
|
|
|
|
|
|
|
||||
Actuarial losses (gains)
|
(1.7
|
)
|
|
(0.2
|
)
|
|
Cost of sales
|
|
||
Actuarial losses (gains)
|
(1.5
|
)
|
|
0.1
|
|
|
Operating expenses
|
|
||
Prior service cost (credit)
|
(3.2
|
)
|
|
(4.0
|
)
|
|
Cost of sales
|
|
||
Prior service cost (credit)
|
(3.9
|
)
|
|
(4.8
|
)
|
|
Operating expenses
|
|
||
Settlements - Actuarial losses (gains)
|
3.9
|
|
|
0.9
|
|
|
Cost of sales
|
|
||
Settlements - Actuarial losses (gains)
|
3.2
|
|
|
—
|
|
|
Operating expenses
|
|
||
|
1.9
|
|
|
3.5
|
|
|
Income tax expense
|
|
||
|
(1.3
|
)
|
|
(4.5
|
)
|
|
Net income
|
|
||
Total reclassifications
|
$
|
(1.3
|
)
|
|
$
|
(4.9
|
)
|
|
|
|
6.
|
FAIR VALUE
|
Fair Value of Financial Instruments
|
February 23, 2018
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
283.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
283.1
|
|
|
Restricted cash
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
||||
Foreign exchange forward contracts
|
—
|
|
|
2.1
|
|
|
—
|
|
|
2.1
|
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
3.5
|
|
|
3.5
|
|
|
||||
|
$
|
285.6
|
|
|
$
|
2.1
|
|
|
$
|
3.5
|
|
|
$
|
291.2
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
$
|
—
|
|
|
$
|
(1.4
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||
Fair Value of Financial Instruments
|
February 24, 2017
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
197.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197.1
|
|
|
Restricted cash
|
2.5
|
|
|
—
|
|
|
—
|
|
|
2.5
|
|
|
||||
Managed investment portfolio and other investments
|
|
|
|
|
|
|
|
|
||||||||
Corporate debt securities
|
—
|
|
|
33.6
|
|
|
—
|
|
|
33.6
|
|
|
||||
U.S. agency debt securities
|
—
|
|
|
18.6
|
|
|
—
|
|
|
18.6
|
|
|
||||
Municipal debt securities
|
—
|
|
|
15.1
|
|
|
—
|
|
|
15.1
|
|
|
||||
Asset-backed securities
|
—
|
|
|
3.7
|
|
|
—
|
|
|
3.7
|
|
|
||||
U.S. government debt securities
|
2.4
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
||||
Foreign exchange forward contracts
|
—
|
|
|
3.5
|
|
|
—
|
|
|
3.5
|
|
|
||||
Auction rate securities
|
—
|
|
|
—
|
|
|
3.5
|
|
|
3.5
|
|
|
||||
|
$
|
202.0
|
|
|
$
|
74.5
|
|
|
$
|
3.5
|
|
|
$
|
280.0
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Foreign exchange forward contracts
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
$
|
—
|
|
|
$
|
(0.9
|
)
|
|
Roll-forward of Fair Value Using Level 3 Inputs
|
Auction Rate
Securities
|
|||
Balance as of February 26, 2016
|
$
|
4.4
|
|
|
Unrealized loss on investments
|
(0.9
|
)
|
|
|
Balance as of February 24, 2017
|
$
|
3.5
|
|
|
Unrealized loss on investments
|
—
|
|
|
|
Balance as of February 23, 2018
|
$
|
3.5
|
|
|
7.
|
INVENTORIES
|
Inventories
|
February 23,
2018 |
February 24,
2017 |
||||||
Raw materials and work-in-process
|
$
|
98.3
|
|
|
$
|
79.6
|
|
|
Finished goods
|
105.3
|
|
|
101.7
|
|
|
||
|
203.6
|
|
|
181.3
|
|
|
||
Revaluation to LIFO
|
19.0
|
|
|
18.2
|
|
|
||
|
$
|
184.6
|
|
|
$
|
163.1
|
|
|
8.
|
PROPERTY, PLANT AND EQUIPMENT
|
Property, Plant and Equipment
|
Estimated
Useful Lives
(Years)
|
February 23,
2018 |
February 24,
2017 |
|||||||
Land
|
|
|
$
|
36.3
|
|
|
$
|
31.7
|
|
|
Machinery and equipment
|
3 – 15
|
|
719.2
|
|
|
703.8
|
|
|
||
Buildings and improvements
|
10 – 40
|
|
396.7
|
|
|
383.4
|
|
|
||
Capitalized software
|
3 – 10
|
|
112.3
|
|
|
104.5
|
|
|
||
Furniture and fixtures
|
5 – 8
|
|
58.9
|
|
|
55.9
|
|
|
||
Leasehold improvements
|
3 – 15
|
|
74.9
|
|
|
59.0
|
|
|
||
Construction in progress
|
|
|
34.9
|
|
|
29.4
|
|
|
||
|
|
|
1,433.2
|
|
|
1,367.7
|
|
|
||
Accumulated depreciation
|
|
|
(998.1
|
)
|
|
(959.6
|
)
|
|
||
|
|
|
$
|
435.1
|
|
|
$
|
408.1
|
|
|
9.
|
COMPANY-OWNED LIFE INSURANCE
|
Type
|
Ability to Choose
Investments |
Net Return
|
Target Asset Allocation as of February 23, 2018
|
Net Cash Surrender Value
|
|||||||
February 23,
2018 |
February 24,
2017 |
||||||||||
Whole life
COLI policies
|
No ability
|
A rate of return set periodically by the
insurance companies |
Not applicable
|
$
|
124.3
|
|
|
$
|
125.6
|
|
|
Variable life
COLI policies
|
Can allocate across a set of choices provided by the insurance companies
|
Fluctuates depending on performance of underlying investments
|
30% fixed income; 70% equity
|
47.9
|
|
|
43.2
|
|
|
||
|
|
|
|
$
|
172.2
|
|
|
$
|
168.8
|
|
|
10.
|
GOODWILL & OTHER INTANGIBLE ASSETS
|
Goodwill
|
Americas
|
EMEA
|
Other
|
Total
|
||||||||||||
Balance as of February 26, 2016
|
$
|
87.9
|
|
|
$
|
—
|
|
|
$
|
18.5
|
|
|
$
|
106.4
|
|
|
Currency translation adjustments
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
||||
Goodwill
|
89.9
|
|
|
265.0
|
|
|
116.5
|
|
|
471.4
|
|
|
||||
Accumulated impairment losses
|
(1.7
|
)
|
|
(265.0
|
)
|
|
(98.0
|
)
|
|
(364.7
|
)
|
|
||||
Balance as of February 24, 2017
|
$
|
88.2
|
|
|
$
|
—
|
|
|
$
|
18.5
|
|
|
$
|
106.7
|
|
|
Acquisitions (1)
|
31.2
|
|
|
—
|
|
|
—
|
|
|
31.2
|
|
|
||||
Currency translation adjustments
|
0.3
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
||||
Goodwill
|
121.4
|
|
|
265.0
|
|
|
116.5
|
|
|
502.9
|
|
|
||||
Accumulated impairment losses
|
(1.7
|
)
|
|
(265.0
|
)
|
|
(98.0
|
)
|
|
(364.7
|
)
|
|
||||
Balance as of February 23, 2018
|
$
|
119.7
|
|
|
$
|
—
|
|
|
$
|
18.5
|
|
|
$
|
138.2
|
|
|
(1)
|
In 2018, we acquired AMQ Solutions and certain assets of Tricom Vision Limited resulting in a goodwill addition in the Americas segment. See Note
18
for additional information.
|
Other Intangible Assets
|
February 23, 2018
|
February 24, 2017
|
|||||||||||||||||||||||||
Weighted
Average Useful Life (Years) |
Gross
|
Accumulated
Amortization |
Net
|
Gross
|
Accumulated
Amortization |
Net
|
|||||||||||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Proprietary technology
|
8.3
|
|
|
$
|
26.8
|
|
|
$
|
23.4
|
|
|
$
|
3.4
|
|
|
$
|
26.8
|
|
|
$
|
23.0
|
|
|
$
|
3.8
|
|
|
Trademarks (1)
|
9.9
|
|
|
11.2
|
|
|
9.9
|
|
|
1.3
|
|
|
9.0
|
|
|
9.0
|
|
|
—
|
|
|
||||||
Non-compete agreements
|
6.2
|
|
|
1.2
|
|
|
1.2
|
|
|
—
|
|
|
1.6
|
|
|
1.6
|
|
|
—
|
|
|
||||||
Dealer relationships (1)
|
11.0
|
|
|
25.5
|
|
|
0.4
|
|
|
25.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Other (1)
|
5.0
|
|
|
12.7
|
|
|
9.7
|
|
|
3.0
|
|
|
9.8
|
|
|
9.6
|
|
|
0.2
|
|
|
||||||
|
|
|
77.4
|
|
|
44.6
|
|
|
32.8
|
|
|
47.2
|
|
|
43.2
|
|
|
4.0
|
|
|
|||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Trademarks and other
|
n/a
|
|
|
12.8
|
|
|
—
|
|
|
12.8
|
|
|
12.8
|
|
|
—
|
|
|
12.8
|
|
|
||||||
|
|
|
$
|
90.2
|
|
|
$
|
44.6
|
|
|
$
|
45.6
|
|
|
$
|
60.0
|
|
|
$
|
43.2
|
|
|
$
|
16.8
|
|
|
(1)
|
In 2018, we acquired AMQ Solutions and certain assets of Tricom Vision Limited resulting in additional intangible assets in the Americas segment. See Note
18
for additional information.
|
Fiscal Year Ending in February
|
Amount
|
||
2019
|
3.6
|
|
|
2020
|
3.4
|
|
|
2021
|
3.4
|
|
|
2022
|
3.4
|
|
|
2023
|
3.3
|
|
|
|
$
|
17.1
|
|
11.
|
INVESTMENTS IN UNCONSOLIDATED AFFILIATES
|
Investments in unconsolidated affiliates
|
February 23, 2018
|
February 24, 2017
|
||||||||||
Investment
Balance |
Ownership
Interest |
Investment
Balance |
Ownership
Interest |
|||||||||
Equity method investments
|
|
|
|
|
|
|
|
|
||||
Dealer relationships
|
$
|
26.0
|
|
|
25%-40%
|
|
$
|
25.2
|
|
|
20%-40%
|
|
Manufacturing joint ventures
|
9.4
|
|
|
49%
|
|
8.7
|
|
|
49%
|
|
||
IDEO and other
|
6.1
|
|
|
5%-28%
|
|
9.9
|
|
|
10%-35%
|
|
||
|
41.5
|
|
|
|
|
43.8
|
|
|
|
|
||
Cost method investments
|
|
|
|
|
|
|
|
|
||||
Dealer relationship
|
5.8
|
|
|
Less than 10%
|
|
5.8
|
|
|
Less than 10%
|
|
||
Other
|
1.1
|
|
|
Less than 10%
|
|
0.9
|
|
|
Less than 10%
|
|
||
|
6.9
|
|
|
|
|
6.7
|
|
|
|
|
||
Total investments in unconsolidated affiliates
|
$
|
48.4
|
|
|
|
|
$
|
50.5
|
|
|
|
|
Equity in earnings of unconsolidated affiliates
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Dealer relationships
|
$
|
8.5
|
|
|
$
|
8.0
|
|
|
$
|
6.9
|
|
|
Manufacturing joint ventures
|
3.3
|
|
|
1.1
|
|
|
4.8
|
|
|
|||
IDEO and other
|
1.0
|
|
|
0.6
|
|
|
1.7
|
|
|
|||
Total equity in earnings of unconsolidated affiliates
|
$
|
12.8
|
|
|
$
|
9.7
|
|
|
$
|
13.4
|
|
|
Consolidated Balance Sheets
|
February 23,
2018 |
February 24,
2017 |
||||||
Total current assets
|
$
|
225.0
|
|
|
$
|
177.3
|
|
|
Total non-current assets
|
56.3
|
|
|
37.9
|
|
|
||
Total assets
|
$
|
281.3
|
|
|
$
|
215.2
|
|
|
Total current liabilities
|
$
|
146.9
|
|
|
$
|
98.6
|
|
|
Total long-term liabilities
|
8.7
|
|
|
9.9
|
|
|
||
Total liabilities
|
$
|
155.6
|
|
|
$
|
108.5
|
|
|
Statements of Income
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Revenue
|
$
|
708.9
|
|
|
$
|
649.1
|
|
|
$
|
635.1
|
|
|
Gross profit
|
214.7
|
|
|
182.2
|
|
|
182.1
|
|
|
|||
Income before income tax expense
|
54.6
|
|
|
40.8
|
|
|
43.5
|
|
|
|||
Net income
|
45.3
|
|
|
36.9
|
|
|
40.4
|
|
|
Supplemental Information
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Dividends received from unconsolidated affiliates
|
$
|
10.3
|
|
|
$
|
9.9
|
|
|
$
|
12.5
|
|
|
Sales to unconsolidated affiliates
|
254.7
|
|
|
270.0
|
|
|
273.3
|
|
|
|||
Amount due from unconsolidated affiliates
|
12.1
|
|
|
10.6
|
|
|
10.6
|
|
|
12.
|
SHORT-TERM BORROWINGS AND LONG-TERM DEBT
|
Debt Obligations
|
Interest Rate Range as of February 23, 2018
|
Fiscal Year
Maturity Range |
February 23,
2018 |
February 24,
2017 |
||||||||
U.S. dollar obligations:
|
|
|
|
|
|
|
|
|
||||
Senior notes (1)
|
6.375%
|
|
2021
|
|
$
|
249.1
|
|
|
$
|
248.8
|
|
|
Revolving credit facilities (2)(4)
|
|
|
2022
|
|
—
|
|
|
—
|
|
|
||
Notes payable (3)
|
2.8%
|
|
2024
|
|
45.4
|
|
|
48.0
|
|
|
||
|
|
|
|
|
294.5
|
|
|
296.8
|
|
|
||
Foreign currency obligations:
|
|
|
|
|
|
|
|
|
||||
Revolving credit facilities (4)
|
|
|
|
|
—
|
|
|
—
|
|
|
||
Notes payable
|
6.0% - 9.0%
|
|
|
|
0.3
|
|
|
0.3
|
|
|
||
Capitalized lease obligations
|
1.4%
|
|
2020
|
|
0.2
|
|
|
0.3
|
|
|
||
Total short-term borrowings and long-term debt
|
|
|
|
|
295.0
|
|
|
297.4
|
|
|
||
Short-term borrowings and current portion of long-term debt (5)
|
|
|
|
|
2.8
|
|
|
2.8
|
|
|
||
Long-term debt
|
|
|
|
|
$
|
292.2
|
|
|
$
|
294.6
|
|
|
(1)
|
We have
$250
of unsecured unsubordinated senior notes, due in February 2021 (“2021 Notes”). The 2021 Notes were issued at
99.953%
of par value. The bond discount of
$0.1
and direct debt issuance costs of
$3.0
were deferred and are being amortized over the life of the 2021 Notes. Although the coupon rate of the 2021 Notes is
6.375%
, the effective interest rate is
6.6%
after taking into account the impact of the direct debt issuance costs, a deferred loss on interest rate locks related to the debt issuance and the bond discount. The 2021 Notes rank equally with all of our other unsecured unsubordinated indebtedness, and they contain no financial covenants. We may redeem some or all of the 2021 Notes at any time. The redemption price would equal the greater of (1) the principal amount of the notes being redeemed; or (2) the present value of the remaining scheduled payments of principal and interest discounted to the redemption date on a semi-annual basis at the comparable U.S. Treasury rate plus 45 basis points; plus, in both cases, accrued and unpaid interest. If the notes are redeemed within 3 months of maturity, the redemption price would be equal to the principal amount of the notes being redeemed plus accrued and unpaid interest. Amortization expense related to the direct debt issuance costs and bond discount on the 2021 Notes was
$0.3
in
2018
,
2017
and
2016
.
|
(2)
|
We have a
$125
global committed five-year bank facility which has an interest rate of LIBOR plus an applicable margin and is set to expire in September 2021. As of
February 23, 2018
and
February 24, 2017
, there were no borrowings outstanding under the facility, our availability was not limited, and we were in compliance with all covenants under the facility.
|
(3)
|
We have a
$45.4
note payable with an original amount of
$50.0
at a floating interest rate based on
30-day LIBOR
plus
1.20%
. The loan has a term of
seven years
and requires fixed monthly principal payments of
$0.2
on a 20-year amortization schedule with a
$32
balloon payment due in
2024
. The loan is secured by two corporate aircraft, contains no financial covenants and is not cross-defaulted to our other debt facilities.
|
(4)
|
We have unsecured uncommitted short-term credit facilities of up to
$2.6
of U.S. dollar obligations and up to
$24.6
of foreign currency obligations with various financial institutions available for working capital purposes as of
February 23, 2018
. Interest rates are variable and determined at the time of borrowing. These credit facilities have no stated expiration date but may be changed or canceled by the banks at any time. There were no borrowings on these facilities as of
February 23, 2018
and
February 24, 2017
.
|
(5)
|
The weighted-average interest rate for short-term borrowings and the current portion of long-term debt was
2.8%
as of
February 23, 2018
and
1.8%
as of
February 24, 2017
.
|
Fiscal Year Ending in February
|
Amount
|
|||
2019
|
$
|
2.8
|
|
|
2020
|
2.7
|
|
|
|
2021
|
251.7
|
|
|
|
2022
|
2.6
|
|
|
|
2023
|
2.6
|
|
|
|
Thereafter
|
32.6
|
|
|
|
|
$
|
295.0
|
|
|
•
|
the greatest of the prime rate, the Federal fund effective rate plus 0.5%, and the Eurocurrency rate for a one month interest period plus 1%, plus the applicable margin as set forth in the credit agreement; or
|
•
|
the Eurocurrency rate plus the applicable margin as set forth in the credit agreement.
|
•
|
A maximum leverage ratio covenant, which is measured by the ratio of (x) indebtedness (as determined under the credit agreement) less unrestricted cash (as determined under the credit agreement) to (y) trailing four quarter Adjusted EBITDA (as determined under the credit agreement) and is required to be no greater than 3:1. (In the context of certain permitted acquisitions, we have a one-time ability, subject to certain conditions, to increase the maximum ratio to 3.25 to 1.0 for four consecutive quarters).
|
•
|
A minimum interest coverage ratio covenant, which is measured by the ratio of (y) trailing four quarter Adjusted EBITDA (as determined under the credit agreement) to (z) trailing four quarter interest expense and is required to be no less than 3.5:1.
|
13.
|
EMPLOYEE BENEFIT PLAN OBLIGATIONS
|
Employee Benefit Plan Obligations (net)
|
February 23,
2018 |
February 24,
2017 |
||||||
Defined contribution retirement plans
|
$
|
23.9
|
|
|
$
|
23.8
|
|
|
Post-retirement medical benefits
|
43.4
|
|
|
46.0
|
|
|
||
Defined benefit pension plans
|
47.0
|
|
|
50.1
|
|
|
||
Deferred compensation plans and agreements
|
55.2
|
|
|
49.2
|
|
|
||
|
$
|
169.5
|
|
|
$
|
169.1
|
|
|
|
|
|
|
|
||||
Employee benefit plan assets
|
|
|
|
|
||||
Short-term asset
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Long-term asset
|
0.5
|
|
|
—
|
|
|
||
|
$
|
0.5
|
|
|
$
|
0.2
|
|
|
|
|
|
|
|
||||
Employee benefit plan obligations
|
|
|
|
|
||||
Current portion
|
$
|
39.2
|
|
|
$
|
35.0
|
|
|
Long-term portion
|
130.8
|
|
|
134.3
|
|
|
||
|
$
|
170.0
|
|
|
$
|
169.3
|
|
|
Defined Benefit Pension
Plan Obligations |
February 23, 2018
|
February 24, 2017
|
||||||||||||||||||
Qualified Plans
|
Non-qualified
Supplemental Retirement Plans |
Qualified Plans
|
Non-qualified
Supplemental Retirement Plans |
|||||||||||||||||
Foreign
|
Domestic
|
Foreign
|
||||||||||||||||||
Plan assets
|
$
|
33.1
|
|
|
$
|
—
|
|
|
$
|
7.9
|
|
|
$
|
38.8
|
|
|
$
|
—
|
|
|
Projected benefit plan obligations
|
47.5
|
|
|
32.6
|
|
|
7.9
|
|
|
55.1
|
|
|
33.8
|
|
|
|||||
Funded status
|
$
|
(14.4
|
)
|
|
$
|
(32.6
|
)
|
|
$
|
—
|
|
|
$
|
(16.3
|
)
|
|
$
|
(33.8
|
)
|
|
Short-term asset
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
Long-term asset
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||
Current liability
|
(0.1
|
)
|
|
(3.8
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
(3.5
|
)
|
|
|||||
Long-term liability
|
(14.8
|
)
|
|
(28.8
|
)
|
|
—
|
|
|
(16.4
|
)
|
|
(30.3
|
)
|
|
|||||
Total benefit plan obligations
|
$
|
(14.4
|
)
|
|
$
|
(32.6
|
)
|
|
$
|
—
|
|
|
$
|
(16.3
|
)
|
|
$
|
(33.8
|
)
|
|
Accumulated benefit obligation
|
$
|
42.5
|
|
|
$
|
32.4
|
|
|
$
|
7.9
|
|
|
$
|
51.0
|
|
|
$
|
33.5
|
|
|
|
Defined Benefit
Pension Plans |
Post-Retirement
Plans |
||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 23,
2018 |
February 24,
2017 |
|||||||||||||
Change in plan assets:
|
|
|
|
|
|
|
|
|
||||||||
Fair value of plan assets, beginning of year
|
$
|
46.7
|
|
|
$
|
47.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Actual return on plan assets
|
2.4
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
||||
Employer contributions
|
4.5
|
|
|
6.0
|
|
|
3.4
|
|
|
5.2
|
|
|
||||
Plan participants’ contributions
|
—
|
|
|
—
|
|
|
1.9
|
|
|
2.3
|
|
|
||||
Estimated Medicare subsidies received
|
—
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
|
||||
Expenses
|
(0.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
—
|
|
|
||||
Currency changes
|
3.6
|
|
|
(2.7
|
)
|
|
—
|
|
|
—
|
|
|
||||
Benefits paid
|
(23.9
|
)
|
|
(8.4
|
)
|
|
(5.4
|
)
|
|
(7.6
|
)
|
|
||||
Fair value of plan assets, end of year
|
33.1
|
|
|
46.7
|
|
|
—
|
|
|
—
|
|
|
Amounts recognized on the Consolidated Balance Sheets:
|
|
|
|
|
|
|
|
|
||||||||
Short-term asset
|
$
|
—
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Long-term asset
|
0.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||
Current liability
|
(3.9
|
)
|
|
(3.6
|
)
|
|
(3.5
|
)
|
|
(3.9
|
)
|
|
||||
Long-term liability
|
(43.6
|
)
|
|
(46.7
|
)
|
|
(39.9
|
)
|
|
(42.1
|
)
|
|
||||
Net amount recognized
|
$
|
(47.0
|
)
|
|
$
|
(50.1
|
)
|
|
$
|
(43.4
|
)
|
|
$
|
(46.0
|
)
|
|
Amounts recognized in accumulated other comprehensive income—pretax:
|
|
|
|
|
|
|
|
|
||||||||
Actuarial loss (gain)
|
$
|
12.7
|
|
|
$
|
23.4
|
|
|
$
|
(26.0
|
)
|
|
$
|
(28.4
|
)
|
|
Prior service credit
|
(0.5
|
)
|
|
(0.7
|
)
|
|
(2.3
|
)
|
|
(9.3
|
)
|
|
||||
Total amounts recognized in accumulated other comprehensive income—pretax
|
$
|
12.2
|
|
|
$
|
22.7
|
|
|
$
|
(28.3
|
)
|
|
$
|
(37.7
|
)
|
|
Estimated amounts to be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year:
|
|
|
|
|
|
|
|
|
||||||||
Actuarial loss (gain)
|
$
|
0.3
|
|
|
$
|
7.6
|
|
|
$
|
(3.8
|
)
|
|
$
|
(3.7
|
)
|
|
Prior service credit
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(2.3
|
)
|
|
(7.0
|
)
|
|
||||
Total amounts recognized in accumulated other comprehensive income—pretax
|
$
|
0.1
|
|
|
$
|
7.4
|
|
|
$
|
(6.1
|
)
|
|
$
|
(10.7
|
)
|
|
|
Pension Plans
|
Post-Retirement Plans
|
||||||||||||||||||||||
Year Ended
|
Year Ended
|
|||||||||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||||||||
Components of expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Service cost
|
$
|
2.7
|
|
|
$
|
2.8
|
|
|
$
|
3.1
|
|
|
$
|
0.2
|
|
|
$
|
0.5
|
|
|
$
|
0.7
|
|
|
Interest cost
|
2.1
|
|
|
3.1
|
|
|
3.0
|
|
|
1.7
|
|
|
2.8
|
|
|
2.6
|
|
|
||||||
Amortization of net loss (gain)
|
0.5
|
|
|
0.7
|
|
|
0.9
|
|
|
(3.7
|
)
|
|
(0.8
|
)
|
|
0.1
|
|
|
||||||
Amortization of prior year service credit
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(7.0
|
)
|
|
(8.6
|
)
|
|
(9.0
|
)
|
|
||||||
Expected return on plan assets
|
(1.4
|
)
|
|
(1.9
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Settlement
|
7.1
|
|
|
0.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Net expense (credit) recognized in Consolidated Statements of Income
|
10.8
|
|
|
5.4
|
|
|
4.3
|
|
|
(8.8
|
)
|
|
(6.1
|
)
|
|
(5.6
|
)
|
|
Other changes in plan assets and benefit obligations recognized in other comprehensive income (pre-tax):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net actuarial loss (gain)
|
(4.3
|
)
|
|
6.9
|
|
|
(2.4
|
)
|
|
(1.2
|
)
|
|
(18.3
|
)
|
|
(7.0
|
)
|
|
||||||
Amortization of gain (loss)
|
(0.5
|
)
|
|
(1.7
|
)
|
|
(0.9
|
)
|
|
3.7
|
|
|
0.8
|
|
|
(0.1
|
)
|
|
||||||
Amortization of prior year service credit
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
7.0
|
|
|
8.6
|
|
|
9.0
|
|
|
||||||
Losses recognized as part of the curtailment / settlement
|
(7.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||
Total recognized in other comprehensive income
|
(11.9
|
)
|
|
5.4
|
|
|
(3.1
|
)
|
|
9.5
|
|
|
(8.9
|
)
|
|
1.9
|
|
|
||||||
Total recognized in net periodic benefit cost and other comprehensive income (pre-tax)
|
$
|
(1.1
|
)
|
|
$
|
10.8
|
|
|
$
|
1.2
|
|
|
$
|
0.7
|
|
|
$
|
(15.0
|
)
|
|
$
|
(3.7
|
)
|
|
Pension and Other Post-Retirement Accumulated Other Comprehensive Income (Loss) Changes
|
Before Tax
Amount
|
Tax (Expense)
Benefit
|
Net of
Tax Amount
|
|||||||||
Balance as of February 26, 2016
|
$
|
10.3
|
|
|
$
|
0.4
|
|
|
$
|
10.7
|
|
|
Amortization of prior service cost (credit) included in net periodic pension cost
|
(8.7
|
)
|
|
3.4
|
|
|
(5.3
|
)
|
|
|||
Net prior service (cost) credit during period
|
(8.7
|
)
|
|
3.4
|
|
|
(5.3
|
)
|
|
|||
Net actuarial gain (loss) arising during period
|
11.4
|
|
|
(5.4
|
)
|
|
6.0
|
|
|
|||
Amortization of net actuarial (gain) loss included in net periodic pension cost
|
0.8
|
|
|
(0.2
|
)
|
|
0.6
|
|
|
|||
Net actuarial gain (loss) during period
|
12.2
|
|
|
(5.6
|
)
|
|
6.6
|
|
|
|||
Foreign currency translation adjustments
|
1.2
|
|
|
(0.2
|
)
|
|
1.0
|
|
|
|||
Current period change
|
4.7
|
|
|
(2.4
|
)
|
|
2.3
|
|
|
|||
Balance as of February 24, 2017
|
$
|
15.0
|
|
|
$
|
(2.0
|
)
|
|
$
|
13.0
|
|
|
Amortization of prior service cost (credit) included in net periodic pension cost
|
(7.1
|
)
|
|
2.9
|
|
|
(4.2
|
)
|
|
|||
Net prior service (cost) credit during period
|
(7.1
|
)
|
|
2.9
|
|
|
(4.2
|
)
|
|
|||
Net actuarial gain (loss) arising during period
|
5.5
|
|
|
(1.5
|
)
|
|
4.0
|
|
|
|||
Amortization of net actuarial (gain) loss included in net periodic pension cost
|
(3.2
|
)
|
|
1.4
|
|
|
(1.8
|
)
|
|
|||
Gains (losses) recognized as a part of the settlement
|
7.1
|
|
|
(2.4
|
)
|
|
4.7
|
|
|
|||
Net actuarial gain (loss) during period
|
9.4
|
|
|
(2.5
|
)
|
|
6.9
|
|
|
|||
Foreign currency translation adjustments
|
(1.2
|
)
|
|
0.2
|
|
|
(1.0
|
)
|
|
|||
Current period change
|
1.1
|
|
|
0.6
|
|
|
1.7
|
|
|
|||
Balance as of February 23, 2018
|
$
|
16.1
|
|
|
$
|
(1.4
|
)
|
|
$
|
14.7
|
|
|
Weighted-Average
Assumptions |
Pension Plans
|
Post-Retirement Plans
|
||||||||||||||||
Year Ended
|
Year Ended
|
|||||||||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
|||||||||||||
Weighted-average assumptions used to determine benefit obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
2.90
|
%
|
|
2.90
|
%
|
|
3.30
|
%
|
|
3.97
|
%
|
|
3.86
|
%
|
|
4.34
|
%
|
|
Rate of salary progression
|
3.60
|
%
|
|
2.70
|
%
|
|
2.30
|
%
|
|
|
|
|
|
|
|
|||
Weighted-average assumptions used to determine net periodic benefit cost:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Discount rate
|
2.80
|
%
|
|
3.60
|
%
|
|
3.70
|
%
|
|
3.84
|
%
|
|
4.29
|
%
|
|
3.72
|
%
|
|
Expected return on plan assets
|
4.80
|
%
|
|
4.30
|
%
|
|
4.20
|
%
|
|
|
|
|
|
|
|
|||
Rate of salary progression
|
3.50
|
%
|
|
2.80
|
%
|
|
2.80
|
%
|
|
|
|
|
|
|
|
Health Cost Trend Sensitivity
|
One percentage
point increase |
One percentage
point decrease |
||||||
Effect on total of service and interest cost components
|
$
|
—
|
|
|
$
|
—
|
|
|
Effect on post-retirement benefit obligation
|
$
|
0.2
|
|
|
$
|
(0.2
|
)
|
|
Asset Category
|
February 23, 2018
|
February 24, 2017
|
||||||||||
Actual
Allocations |
Target
Allocations |
Actual
Allocations |
Target
Allocations |
|||||||||
Equity securities
|
78
|
%
|
|
91
|
%
|
|
50
|
%
|
|
54
|
%
|
|
Debt securities
|
17
|
|
|
8
|
|
|
29
|
|
|
27
|
|
|
Real estate
|
4
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
Other (1)
|
1
|
|
|
1
|
|
|
19
|
|
|
19
|
|
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
(1)
|
Represents guaranteed insurance contracts, money market funds and cash.
|
Fair Value of Pension Plan Assets
|
February 23, 2018
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
International
|
—
|
|
|
25.8
|
|
|
—
|
|
|
25.8
|
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Bond funds
|
—
|
|
|
5.5
|
|
|
—
|
|
|
5.5
|
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
Guaranteed insurance contracts (1)
|
—
|
|
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
||||
Property and property funds
|
—
|
|
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
||||
|
$
|
0.2
|
|
|
$
|
32.5
|
|
|
$
|
0.4
|
|
|
$
|
33.1
|
|
|
Fair Value of Pension Plan Assets
|
February 24, 2017
|
|||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$
|
6.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6.3
|
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
||||||||
International
|
—
|
|
|
23.4
|
|
|
—
|
|
|
23.4
|
|
|
||||
Fixed income securities:
|
|
|
|
|
|
|
|
|
||||||||
Bond funds
|
—
|
|
|
13.6
|
|
|
—
|
|
|
13.6
|
|
|
||||
Other investments:
|
|
|
|
|
|
|
|
|
||||||||
Guaranteed insurance contracts (1)
|
—
|
|
|
—
|
|
|
0.7
|
|
|
0.7
|
|
|
||||
Group annuity contract (2)
|
—
|
|
|
—
|
|
|
1.9
|
|
|
1.9
|
|
|
||||
Property funds
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
||||
|
$
|
7.1
|
|
|
$
|
37.0
|
|
|
$
|
2.6
|
|
|
$
|
46.7
|
|
|
(1)
|
Guaranteed insurance contracts are valued at book value, which approximates fair value, and are calculated using the prior year balance plus or minus investment returns and changes in cash flows.
|
(2)
|
Group annuity contracts were valued utilizing a discounted cash flow model. The term “cash flow” refers to the future principal and interest payments we expected to receive on a given asset in the general account. The model projected future cash flows separately for each investment period and each category of investment.
|
Roll-forward of Fair Value Using Level 3 Inputs
|
Group
Annuity Contract |
Guaranteed
Insurance Contracts |
||||||
Balance as of February 26, 2016
|
$
|
2.0
|
|
|
$
|
1.0
|
|
|
Unrealized return on plan assets, including changes in foreign exchange rates
|
0.1
|
|
|
—
|
|
|
||
Purchases, sales, and other, net
|
(0.2
|
)
|
|
(0.3
|
)
|
|
||
Balance as of Februa
ry 24, 2017
|
$
|
1.9
|
|
|
$
|
0.7
|
|
|
Unrealized return on plan assets, including changes in foreign exchange rates
|
—
|
|
|
0.1
|
|
|
||
Purchases, sales, and other, net
|
(1.9
|
)
|
|
(0.4
|
)
|
|
||
Balance as of Februa
ry 23, 2018
|
$
|
—
|
|
|
$
|
0.4
|
|
|
Fiscal Year Ending in February
|
Pension Plans
|
Post-retirement Plans
|
|||||||
2019
|
$
|
5.0
|
|
|
$
|
3.6
|
|
|
|
2020
|
4.4
|
|
|
3.6
|
|
|
|||
2021
|
3.7
|
|
|
3.5
|
|
|
|||
2022
|
3.7
|
|
|
3.5
|
|
|
|||
2023
|
4.5
|
|
|
3.5
|
|
|
|||
2024 - 2028
|
25.6
|
|
|
16.1
|
|
|
•
|
Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.
|
•
|
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.
|
•
|
If a participating employer chooses to stop participating in a multi-employer plan or otherwise has participation in the plan drop below certain levels, that employer may be required to pay the plan an amount based on the underfunded status of the plan, referred to as a withdrawal liability.
|
Pension Fund
|
EIN - Pension Plan Number
|
Plan Month / Day End Date
|
Pension Protection Act Zone Status (1)
|
FIP/RP Status Pending / Implemented (2)
|
Contributions
|
Surcharges Imposed or Amortization Provisions
|
|||
2017
|
2016
|
2018
|
2017
|
2016
|
|||||
Central States, Southeast and Southwest Areas Pension Fund
|
366044243-001
|
12/31
|
Red
|
Red
|
Implemented
|
$0.2
|
$0.3
|
$0.3
|
No
|
(1)
|
The most recent Pension Protection Act Zone Status available in
2017
and
2016
relates to the plan's two most recent fiscal year-ends. The zone status is based on information received from the plan certified by the plan’s actuary. Among other factors, red zone status plans are generally less than 65 percent funded and are considered in critical status.
|
(2)
|
The FIP/RP Status Pending/Implemented column indicates plans for which a financial improvement plan or a rehabilitation plan is either pending or has been implemented by the trustees of the plan.
|
Pension Fund
|
Total Collective Bargaining Agreements
|
Expiration Date (1)
|
% of Associates Under Collective Bargaining Agreement
|
Over 5% Contribution in 2018
|
Central States, Southeast and Southwest Areas Pension Fund
|
1
|
3/31/2018
|
0.1%
|
No
|
(1)
|
The renewal for the collective bargaining agreement is currently in the negotiation process. In the absence of a renewal agreement, the Central States, Southeast and Southwest Areas Pension Fund will continue to operate under the expired agreement and bill the required rates.
|
14.
|
CAPITAL STRUCTURE
|
Share repurchases
|
Year ended
|
|||||||||||||
February 23,
2018 |
February 24,
2017 |
|||||||||||||
Total number of shares
|
Price Paid
|
Total number of shares
|
Price Paid
|
|||||||||||
Class A Common Stock
|
2.4
|
|
|
$
|
33.8
|
|
|
3.5
|
|
|
$
|
48.4
|
|
|
Class B Common Stock
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
15.
|
INCOME TAXES
|
•
|
reduced the U.S. federal corporate income tax rate from 35% to 21%,
|
•
|
implemented a one-time tax on the deemed repatriation of undistributed non-U.S. subsidiary earnings and generally eliminated the U.S. federal corporate income taxes on dividends from foreign subsidiaries,
|
•
|
included global intangible low-taxed income ("GILTI") provisions, which impose a tax on foreign income in excess of a deemed return on tangible assets of foreign corporations, and
|
•
|
included base-erosion and anti-abuse tax ("BEAT") provisions, which eliminate the deduction of certain base-erosion payments made to related foreign corporations, and imposed a minimum tax if greater than regular tax.
|
1)
|
record an estimated provisional amount if the impact of the change can be reasonably estimated, or
|
2)
|
continue to apply the accounting guidance that was in effect immediately prior to the Tax Act if the impact of the change cannot be reasonably estimated.
|
•
|
We recorded a charge of
$23.9
due to the remeasurement of our deferred taxes. While we were able to make a reasonable estimate of the impact of the reduction in the corporate tax rate, the final impact may be affected by other elements related to the Tax Act including, but not limited to, our calculation of deemed repatriation of deferred foreign income and the state tax effect of adjustments made to federal temporary differences.
|
•
|
We recorded a charge of
$4.0
due to the net tax on deemed repatriation of net undistributed earnings of our non-U.S. subsidiaries. In order to finalize the impact of the tax on deemed repatriation, we must determine the amount of earnings of certain foreign subsidiaries as well as the amount of non-U.S. income taxes paid on these earnings. In Q4 2018, we were able to make reasonable estimates of these amounts; however, we are continuing to gather information to more precisely calculate the tax on deemed repatriation.
|
Provision for Income Taxes—Expense
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Current income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
$
|
15.0
|
|
|
$
|
18.4
|
|
|
$
|
47.7
|
|
|
State and local
|
0.8
|
|
|
9.5
|
|
|
12.5
|
|
|
|||
Foreign
|
12.1
|
|
|
17.0
|
|
|
12.6
|
|
|
|||
|
27.9
|
|
|
44.9
|
|
|
72.8
|
|
|
|||
Deferred income taxes:
|
|
|
|
|
|
|
||||||
Federal
|
37.9
|
|
|
21.4
|
|
|
(12.7
|
)
|
|
|||
State and local
|
7.0
|
|
|
1.2
|
|
|
(3.3
|
)
|
|
|||
Foreign
|
8.0
|
|
|
4.2
|
|
|
(52.3
|
)
|
|
|||
|
52.9
|
|
|
26.8
|
|
|
(68.3
|
)
|
|
|||
Income tax expense
|
$
|
80.8
|
|
|
$
|
71.7
|
|
|
$
|
4.5
|
|
|
Source of Income Before Income Tax Expense
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Domestic
|
$
|
120.2
|
|
|
$
|
136.0
|
|
|
$
|
114.9
|
|
|
Foreign
|
41.3
|
|
|
60.3
|
|
|
59.9
|
|
|
|||
|
$
|
161.5
|
|
|
$
|
196.3
|
|
|
$
|
174.8
|
|
|
Income Tax Provision Reconciliation
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Tax expense at the U.S. federal statutory rate
|
$
|
53.2
|
|
|
$
|
68.7
|
|
|
$
|
61.2
|
|
|
Impact of the Tax Act (1)
|
27.9
|
|
|
—
|
|
|
—
|
|
|
|||
State and local income taxes, net of federal
|
6.7
|
|
|
6.5
|
|
|
6.7
|
|
|
|||
Valuation allowance provisions and adjustments (2)
|
0.4
|
|
|
(2.2
|
)
|
|
(59.9
|
)
|
|
|||
Foreign investment tax credits (3)
|
(1.6
|
)
|
|
—
|
|
|
(1.5
|
)
|
|
|||
COLI income (4)
|
(3.4
|
)
|
|
(3.3
|
)
|
|
(0.7
|
)
|
|
|||
Foreign operations, less applicable foreign tax credits (5)
|
1.4
|
|
|
(2.0
|
)
|
|
(1.6
|
)
|
|
|||
Impact of change to non-U.S. federal statutory tax rates (6)
|
4.0
|
|
|
9.3
|
|
|
(0.1
|
)
|
|
|||
Research tax credit
|
(2.3
|
)
|
|
(1.8
|
)
|
|
(1.9
|
)
|
|
|||
Tax reserve adjustments (7)
|
(0.2
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
|||
Other
|
(5.3
|
)
|
|
1.8
|
|
|
2.3
|
|
|
|||
Total income tax expense recognized
|
$
|
80.8
|
|
|
$
|
71.7
|
|
|
$
|
4.5
|
|
|
(1)
|
We remeasured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which are generally 21%. Those items that reversed in 2018 were remeasured using a tax rate of
32.9%
. We have recorded a provisional decrease of
$23.9
with respect to the Tax Act in 2018. As required by the Tax Act, we have recorded a provisional tax liability of
$4.0
related to the U.S. federal income
|
(2)
|
The valuation allowance provisions were based on current year activity, and the valuation allowance adjustments were based on various factors, which are further detailed below. In Q4 2015, we implemented changes in EMEA to align our tax structure with the management of our globally integrated business. Our U.S. parent company became the principal in a contract manufacturing model with Steelcase European subsidiaries. In Q4 2016, we reached the conclusion that there was sufficient positive evidence, including acceptance of our new tax structure by the U.S. Internal Revenue Service, sustained profitability in our French subsidiaries and other factors, which caused us to reverse valuation allowances of
$56.0
recorded against net deferred tax assets in France.
|
(3)
|
Investment tax credits were granted by the Czech Republic for investments in qualifying manufacturing equipment.
|
(4)
|
The increase in the cash surrender value of COLI policies, net of normal insurance expenses, plus death benefit gains are non-taxable.
|
(5)
|
The foreign operations, less applicable foreign tax credits, amounts include the rate differential between local statutory rates and the U.S. rate on foreign operations.
|
(6)
|
Reductions to the French corporate tax rate resulted in the revaluation of certain deferred tax assets of our French tax group, causing increases to income tax expense of
$4.0
and
$7.9
in 2018 and 2017, respectively. During 2017, reductions to the United Kingdom corporate tax rate increased tax expense by
$1.5
.
|
(7)
|
Adjustments in 2017 related to a French income tax audit that was settled in 2017
.
|
Deferred Income Taxes
|
February 23,
2018 |
February 24,
2017 |
||||||
Deferred income tax assets:
|
|
|
|
|
||||
Employee benefit plan obligations and deferred compensation
|
$
|
55.8
|
|
|
$
|
108.8
|
|
|
Foreign and domestic net operating loss carryforwards
|
55.8
|
|
|
57.0
|
|
|
||
Reserves and accruals
|
18.9
|
|
|
29.8
|
|
|
||
Tax credit carryforwards
|
31.8
|
|
|
17.4
|
|
|
||
Other, net
|
16.1
|
|
|
21.2
|
|
|
||
Total deferred income tax assets
|
178.4
|
|
|
234.2
|
|
|
||
Valuation allowances
|
(9.5
|
)
|
|
(7.9
|
)
|
|
||
Net deferred income tax assets
|
168.9
|
|
|
226.3
|
|
|
||
Deferred income tax liabilities:
|
|
|
|
|
||||
Property, plant and equipment
|
28.4
|
|
|
40.9
|
|
|
||
Intangible assets
|
3.4
|
|
|
3.6
|
|
|
||
Prepaid expenses
|
1.7
|
|
|
3.1
|
|
|
||
Total deferred income tax liabilities
|
33.5
|
|
|
47.6
|
|
|
||
Net deferred income taxes
|
$
|
135.4
|
|
|
$
|
178.7
|
|
|
Net deferred income taxes is comprised of the following components:
|
|
|
|
|
||||
Deferred income tax assets—non-current
|
135.4
|
|
|
179.6
|
|
|
||
Deferred income tax liabilities—non-current
|
—
|
|
|
(0.9
|
)
|
|
•
|
the nature, frequency and severity of cumulative losses in recent years,
|
•
|
the predictability of future income,
|
•
|
prudent and feasible tax planning strategies that could be implemented to protect the loss of the deferred tax assets and
|
•
|
the effect of reversing taxable temporary differences.
|
Income Taxes
|
February 23,
2018 |
February 24,
2017 |
||||||
Other current assets:
|
|
|
|
|
||||
Income taxes receivable
|
$
|
19.7
|
|
|
$
|
19.0
|
|
|
Other long-term assets:
|
|
|
|
|
||||
Income taxes receivable
|
$
|
—
|
|
|
$
|
18.5
|
|
|
Accrued expenses:
|
|
|
|
|
||||
Income taxes payable
|
$
|
8.6
|
|
|
$
|
6.4
|
|
|
Fiscal Year Ending February
|
Net Operating Loss
Carryforwards (Gross) |
Net Operating Loss
Carryforwards (Tax Effected) |
Tax Credit
Carryforwards |
|||||||||||||||||||||||||||||
Federal
|
State
|
International
|
Federal
|
State
|
International
|
Total
|
||||||||||||||||||||||||||
2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
|
$
|
0.6
|
|
|
$
|
—
|
|
|
2023-2038
|
—
|
|
|
17.0
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|
31.8
|
|
|
||||||||
No expiration
|
—
|
|
|
—
|
|
|
217.7
|
|
|
—
|
|
|
—
|
|
|
53.3
|
|
|
53.3
|
|
|
—
|
|
|
||||||||
|
$
|
—
|
|
|
$
|
17.0
|
|
|
$
|
219.7
|
|
|
—
|
|
|
1.9
|
|
|
53.9
|
|
|
55.8
|
|
|
31.8
|
|
|
|||||
Valuation allowances
|
|
|
|
|
|
|
—
|
|
|
(0.5
|
)
|
|
(7.3
|
)
|
|
(7.8
|
)
|
|
(1.7
|
)
|
|
|||||||||||
Net benefit
|
|
|
|
|
|
|
$
|
—
|
|
|
$
|
1.4
|
|
|
$
|
46.6
|
|
|
$
|
48.0
|
|
|
$
|
30.1
|
|
|
Liability for Uncertain Tax Positions
|
February 23,
2018 |
February 24,
2017 |
||||||
Other long-term liabilities
|
$
|
—
|
|
|
$
|
0.2
|
|
|
Unrecognized Tax Benefits
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Balance as of beginning of period
|
$
|
2.8
|
|
|
$
|
8.6
|
|
|
$
|
8.8
|
|
|
Gross decreases—tax positions in prior period
|
(1.0
|
)
|
|
(5.3
|
)
|
|
—
|
|
|
|||
Currency translation adjustment
|
0.4
|
|
|
(0.5
|
)
|
|
(0.2
|
)
|
|
|||
Balance as of end of period
|
$
|
2.2
|
|
|
$
|
2.8
|
|
|
$
|
8.6
|
|
|
16.
|
SHARE-BASED COMPENSATION
|
•
|
if at least six months have elapsed following the award date, any performance-based conditions imposed with respect to outstanding awards shall be deemed to be fully earned and a pro rata portion of each such outstanding award granted for all outstanding performance periods shall become payable in shares of Class A Common Stock; and
|
•
|
all restrictions imposed on restricted stock units that are not performance-based shall lapse.
|
•
|
performance-based conditions imposed on outstanding awards will be deemed to be, immediately prior to the change in control, the greater of (1) the applicable performance achieved through the date of the change in control or (2) the target level of performance; and
|
•
|
all restrictions imposed on all outstanding awards of restricted stock units and performance units will lapse if either (1) the awards are assumed by an acquirer or successor and the awardee experiences a qualifying termination during the two year period following the change in control or (2) the awards are not assumed by an acquirer or successor.
|
Total Outstanding Awards
|
February 23,
2018 |
||
Performance units (1)
|
688,600
|
|
|
Restricted stock units
|
1,789,775
|
|
|
Total outstanding awards
|
2,478,375
|
|
|
(1)
|
This amount includes the maximum number of shares that may be issued under outstanding performance unit awards; however, the actual number of shares which may be issued will be determined based on the satisfaction of certain criteria, and therefore may be significantly lower.
|
|
2018 Awards
|
2017 Awards
|
2016 Awards
|
||||||
Three-year risk-free interest rate (1)
|
1.4
|
%
|
|
0.9
|
%
|
|
0.8
|
%
|
|
Expected term
|
3 years
|
|
|
3 years
|
|
|
3 years
|
|
|
Estimated volatility (2)
|
31.8
|
%
|
|
31.2
|
%
|
|
29.4
|
%
|
|
(1)
|
Based on the U.S. Government bond benchmark on the grant date.
|
(2)
|
Represents the historical price volatility of our Company’s Class A Common Stock for the three-year period preceding the grant date.
|
Grant Date Fair Value per TSR PSU
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Weighted-average grant date fair value per share of TSR PSUs granted during 2018, 2017 and 2016
|
$
|
21.76
|
|
|
$
|
16.33
|
|
|
$
|
24.15
|
|
|
Performance Units
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Expense
|
$
|
5.0
|
|
|
$
|
5.6
|
|
|
$
|
7.4
|
|
|
Tax benefit
|
1.7
|
|
|
2.0
|
|
|
2.7
|
|
|
Maximum Number of Nonvested Units
|
Total
|
Weighted-Average
Grant Date
Fair Value per Unit
|
|||||
Nonvested as of February 24, 2017
|
916,420
|
|
|
$
|
19.31
|
|
|
Granted
|
309,000
|
|
|
21.76
|
|
|
|
Vested
|
(536,820
|
)
|
|
21.42
|
|
|
|
Nonvested as of February 23, 2018
|
688,600
|
|
|
18.77
|
|
|
Grant Date Fair Value per Share
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Weighted-average grant date fair value per share of RSUs granted
|
$
|
16.51
|
|
|
$
|
14.66
|
|
|
$
|
18.82
|
|
|
Restricted Stock Units
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Expense
|
$
|
13.4
|
|
|
$
|
13.5
|
|
|
$
|
12.9
|
|
|
Tax benefit
|
4.5
|
|
|
4.9
|
|
|
4.6
|
|
|
17.
|
COMMITMENTS
|
Fiscal Year Ending in February
|
Minimum annual
rental commitments |
Minimum annual
sublease rental income |
Minimum annual
rental commitments, net |
|||||||||
2019
|
$
|
48.5
|
|
|
$
|
(3.7
|
)
|
|
$
|
44.8
|
|
|
2020
|
41.4
|
|
|
(3.7
|
)
|
|
37.7
|
|
|
|||
2021
|
31.1
|
|
|
(3.3
|
)
|
|
27.8
|
|
|
|||
2022
|
27.2
|
|
|
(3.3
|
)
|
|
23.9
|
|
|
|||
2023
|
20.1
|
|
|
(2.2
|
)
|
|
17.9
|
|
|
|||
Thereafter
|
38.8
|
|
|
(0.8
|
)
|
|
38.0
|
|
|
|||
|
$
|
207.1
|
|
|
$
|
(17.0
|
)
|
|
$
|
190.1
|
|
|
18.
|
ACQUISITIONS
|
Other Intangible Assets
|
February 23, 2018
|
||||||
Weighted
Average Useful Life (Years) |
Fair Value
|
||||||
Trademarks
|
9.0
|
|
|
$
|
1.3
|
|
|
Dealer relationships
|
11.0
|
|
|
25.5
|
|
|
|
Other
|
4.6
|
|
|
3.3
|
|
|
|
|
|
|
$
|
30.1
|
|
|
Fiscal Year Ending in February
|
Amount
|
||
2019
|
3.2
|
|
|
2020
|
3.1
|
|
|
2021
|
3.0
|
|
|
2022
|
3.0
|
|
|
2023
|
3.0
|
|
|
|
$
|
15.3
|
|
19.
|
REPORTABLE SEGMENTS
|
Operating Segment Data
|
Americas
|
EMEA
|
Other
|
Corporate
|
Consolidated
|
|||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
2,193.8
|
|
|
$
|
524.2
|
|
|
$
|
337.5
|
|
|
$
|
—
|
|
|
$
|
3,055.5
|
|
|
Operating income (loss)
|
187.0
|
|
|
(14.0
|
)
|
|
18.4
|
|
|
(35.4
|
)
|
|
156.0
|
|
|
|||||
Total assets
|
943.2
|
|
|
300.3
|
|
|
209.1
|
|
|
406.6
|
|
|
1,859.2
|
|
|
|||||
Capital expenditures
|
46.2
|
|
|
31.7
|
|
|
10.0
|
|
|
—
|
|
|
87.9
|
|
|
|||||
Depreciation & amortization
|
46.2
|
|
|
14.7
|
|
|
5.0
|
|
|
—
|
|
|
65.9
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
2,231.9
|
|
|
$
|
503.9
|
|
|
$
|
296.6
|
|
|
$
|
—
|
|
|
$
|
3,032.4
|
|
|
Operating income (loss)
|
245.2
|
|
|
(20.9
|
)
|
|
13.0
|
|
|
(37.1
|
)
|
|
200.2
|
|
|
|||||
Total assets
|
960.7
|
|
|
297.4
|
|
|
191.1
|
|
|
342.8
|
|
|
1,792.0
|
|
|
|||||
Capital expenditures
|
35.9
|
|
|
20.6
|
|
|
4.6
|
|
|
—
|
|
|
61.1
|
|
|
|||||
Depreciation & amortization
|
42.7
|
|
|
12.7
|
|
|
4.9
|
|
|
—
|
|
|
60.3
|
|
|
|||||
2016
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
2,256.0
|
|
|
$
|
520.6
|
|
|
$
|
283.4
|
|
|
$
|
—
|
|
|
$
|
3,060.0
|
|
|
Operating income (loss)
|
265.2
|
|
|
(64.3
|
)
|
|
11.2
|
|
|
(37.5
|
)
|
|
174.6
|
|
|
|||||
Total assets
|
981.1
|
|
|
332.6
|
|
|
179.9
|
|
|
315.0
|
|
|
1,808.6
|
|
|
|||||
Capital expenditures
|
71.2
|
|
|
14.7
|
|
|
7.5
|
|
|
—
|
|
|
93.4
|
|
|
|||||
Depreciation & amortization
|
48.5
|
|
|
11.7
|
|
|
5.5
|
|
|
—
|
|
|
65.7
|
|
|
Reportable Geographic Data
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Revenue:
|
|
|
|
|
|
|
||||||
United States
|
$
|
2,039.6
|
|
|
$
|
2,104.4
|
|
|
$
|
2,152.7
|
|
|
Foreign locations
|
1,015.9
|
|
|
928.0
|
|
|
907.3
|
|
|
|||
|
$
|
3,055.5
|
|
|
$
|
3,032.4
|
|
|
$
|
3,060.0
|
|
|
Long-lived assets:
|
|
|
|
|
|
|
||||||
United States
|
$
|
689.7
|
|
|
$
|
655.8
|
|
|
$
|
633.8
|
|
|
Foreign locations
|
174.3
|
|
|
130.8
|
|
|
127.8
|
|
|
|||
|
$
|
864.0
|
|
|
$
|
786.6
|
|
|
$
|
761.6
|
|
|
Product Category Data
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Systems and storage
|
$
|
1,402.0
|
|
|
$
|
1,428.2
|
|
|
$
|
1,533.4
|
|
|
Seating
|
919.2
|
|
|
917.8
|
|
|
938.9
|
|
|
|||
Other (1)
|
734.3
|
|
|
686.4
|
|
|
587.7
|
|
|
|||
Total
|
$
|
3,055.5
|
|
|
$
|
3,032.4
|
|
|
$
|
3,060.0
|
|
|
(1)
|
Other consists primarily of consolidated dealers, textiles and surface materials, worktools, architecture, technology, other uncategorized product lines and services, none of which are individually greater than 10% of consolidated revenue.
|
20.
|
RESTRUCTURING ACTIVITIES
|
Restructuring Costs
|
Year Ended
|
|||||||
February 24,
2017 |
February 26,
2016 |
|||||||
Cost of sales
|
|
|
|
|
||||
Americas
|
$
|
2.6
|
|
|
$
|
2.4
|
|
|
EMEA
|
1.6
|
|
|
10.9
|
|
|
||
Other
|
—
|
|
|
—
|
|
|
||
|
4.2
|
|
|
13.3
|
|
|
||
Operating expenses
|
|
|
|
|
||||
Americas
|
—
|
|
|
(2.9
|
)
|
|
||
EMEA
|
0.9
|
|
|
9.5
|
|
|
||
Other
|
—
|
|
|
—
|
|
|
||
|
0.9
|
|
|
6.6
|
|
|
||
|
$
|
5.1
|
|
|
$
|
19.9
|
|
|
Restructuring Reserve
|
Workforce
Reductions
|
Business Exits
and Related
Costs
|
Total
|
|||||||||
Reserve balance as of February 27, 2015
|
$
|
13.7
|
|
|
$
|
1.6
|
|
|
$
|
15.3
|
|
|
Additions
|
14.5
|
|
|
8.2
|
|
|
22.7
|
|
|
|||
Payments
|
(17.8
|
)
|
|
(8.0
|
)
|
|
(25.8
|
)
|
|
|||
Adjustments
|
(0.4
|
)
|
|
(1.0
|
)
|
|
(1.4
|
)
|
|
|||
Reserve balance as of February 26, 2016
|
$
|
10.0
|
|
|
$
|
0.8
|
|
|
$
|
10.8
|
|
|
Additions
|
0.3
|
|
|
4.8
|
|
|
5.1
|
|
|
|||
Payments
|
(5.7
|
)
|
|
(4.3
|
)
|
|
(10.0
|
)
|
|
|||
Adjustments
|
(0.3
|
)
|
|
(0.3
|
)
|
|
(0.6
|
)
|
|
|||
Reserve balance as of February 24, 2017
|
$
|
4.3
|
|
|
$
|
1.0
|
|
|
$
|
5.3
|
|
|
Payments
|
(3.3
|
)
|
|
(0.9
|
)
|
|
(4.2
|
)
|
|
|||
Adjustments
|
0.7
|
|
|
(0.1
|
)
|
|
0.6
|
|
|
|||
Reserve balance as of February 23, 2018
|
$
|
1.7
|
|
|
$
|
—
|
|
|
$
|
1.7
|
|
|
21.
|
UNAUDITED QUARTERLY RESULTS
|
Unaudited Quarterly Results
|
First
Quarter |
Second
Quarter |
Third
Quarter |
Fourth
Quarter |
Total
|
|||||||||||||||
2018
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
735.1
|
|
|
$
|
775.6
|
|
|
$
|
772.1
|
|
|
$
|
772.7
|
|
|
$
|
3,055.5
|
|
|
Gross profit
|
242.8
|
|
|
258.4
|
|
|
251.8
|
|
|
253.1
|
|
|
1,006.1
|
|
|
|||||
Operating income
|
29.9
|
|
|
54.2
|
|
|
38.5
|
|
|
33.4
|
|
|
156.0
|
|
|
|||||
Net income
|
18.1
|
|
|
36.9
|
|
|
25.7
|
|
|
—
|
|
|
80.7
|
|
|
|||||
Basic earnings per share
|
0.15
|
|
|
0.31
|
|
|
0.22
|
|
|
—
|
|
|
0.68
|
|
|
|||||
Diluted earnings per share
|
0.15
|
|
|
0.31
|
|
|
0.22
|
|
|
—
|
|
|
0.68
|
|
|
|||||
2017
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
718.8
|
|
|
$
|
758.0
|
|
|
$
|
786.5
|
|
|
$
|
769.1
|
|
|
$
|
3,032.4
|
|
|
Gross profit
|
229.8
|
|
|
263.1
|
|
|
261.9
|
|
|
255.6
|
|
|
1,010.4
|
|
|
|||||
Operating income
|
33.3
|
|
|
61.9
|
|
|
54.6
|
|
|
50.4
|
|
|
200.2
|
|
|
|||||
Net income
|
19.4
|
|
|
38.2
|
|
|
41.2
|
|
|
25.8
|
|
|
124.6
|
|
|
|||||
Basic earnings per share
|
0.16
|
|
|
0.32
|
|
|
0.34
|
|
|
0.22
|
|
|
1.03
|
|
|
|||||
Diluted earnings per share
|
0.16
|
|
|
0.31
|
|
|
0.34
|
|
|
0.21
|
|
|
1.03
|
|
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure:
|
Item 9A.
|
Controls and Procedures:
|
Item 9B.
|
Other Information:
|
Item 10.
|
Directors, Executive Officers and Corporate Governance:
|
Item 11.
|
Executive Compensation:
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters:
|
Plan Category
|
Number of securities to be issued upon exercise
of outstanding warrants and rights
|
Weighted-average
exercise price of
outstanding
warrants and rights
|
Number of securities
remaining available for
future issuance under
equity compensation
plans
(excluding securities
reflected in the
second column)
|
|||||||
Equity compensation plans approved by security holders
|
2,478,375
|
|
(1)
|
|
n/a
|
(2)
|
|
7,101,070
|
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
|
n/a
|
|
|
—
|
|
|
Total
|
2,478,375
|
|
|
|
n/a
|
|
|
7,101,070
|
|
|
(1)
|
This amount includes outstanding restricted stock units and the maximum number of shares that may be issued under outstanding performance units.
|
(2)
|
The weighted average exercise price excludes performance units and restricted stock units, as there is no exercise price associated with these awards. The only outstanding warrants or rights are performance units and restricted stock units.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence:
|
Item 14.
|
Principal Accounting Fees and Services:
|
Item 15.
|
Exhibits, Financial Statement Schedules:
|
•
|
Management’s Report on Internal Control Over Financial Reporting
|
•
|
Reports of Independent Registered Public Accounting Firm
|
•
|
Consolidated Statements of Income
for the Years Ended
February 23, 2018
,
February 24, 2017
and
February 26, 2016
|
•
|
Consolidated Statements of Comprehensive Income for the Years Ended
February 23, 2018
,
February 24, 2017
and
February 26, 2016
|
•
|
Consolidated Balance Sheets as of
February 23, 2018
and
February 24, 2017
|
•
|
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended
February 23, 2018
,
February 24, 2017
and
February 26, 2016
|
•
|
Consolidated Statements of Cash Flows for the Years Ended
February 23, 2018
,
February 24, 2017
and
February 26, 2016
|
•
|
Notes to the Consolidated Financial Statements
|
Item 16.
|
Form 10-K Summary:
|
|
STEELCASE INC.
|
|
|
|
|
|
By:
|
/s/ M
ARK
T. M
OSSING
|
|
|
Mark T. Mossing
Corporate Controller and
Chief Accounting Officer
(Duly Authorized Officer and
Principal Accounting Officer)
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ J
AMES
P. K
EANE
|
|
President and Chief Executive Officer, Director (Principal Executive Officer)
|
|
April 10, 2018
|
James P. Keane
|
|
|
|
|
|
|
|
|
|
/s/ D
AVID
C. S
YLVESTER
|
|
Senior Vice President, Chief Financial
Officer (Principal Financial Officer)
|
|
April 10, 2018
|
David C. Sylvester
|
|
|
|
|
|
|
|
|
|
/s/ M
ARK
T. M
OSSING
|
|
Corporate Controller and Chief Accounting
Officer (Principal Accounting Officer)
|
|
April 10, 2018
|
Mark T. Mossing
|
|
|
|
|
|
|
|
|
|
/s/ L
AWRENCE
J. B
LANFORD
|
|
Director
|
|
April 10, 2018
|
Lawrence J. Blanford
|
|
|
|
|
|
|
|
|
|
/s/ T
IMOTHY
C.E. B
ROWN
|
|
Director
|
|
April 10, 2018
|
Timothy C.E. Brown
|
|
|
|
|
|
|
|
|
|
/s/ C
ONNIE
K. D
UCKWORTH
|
|
Director
|
|
April 10, 2018
|
Connie K. Duckworth
|
|
|
|
|
|
|
|
|
|
/s/ D
AVID
W. J
OOS
|
|
Director
|
|
April 10, 2018
|
David W. Joos
|
|
|
|
|
|
|
|
|
|
/s/ T
ODD
P. K
ELSEY
|
|
Director
|
|
April 10, 2018
|
Todd P. Kelsey
|
|
|
|
|
|
|
|
|
|
/s/ J
ENNIFER
C. N
IEMANN
|
|
Director
|
|
April 10, 2018
|
Jennifer C. Niemann
|
|
|
|
|
|
|
|
|
|
/s/ R
OBERT
C. P
EW
III
|
|
Chair of the Board of Directors, Director
|
|
April 10, 2018
|
Robert C. Pew III
|
|
|
|
|
|
|
|
|
|
/s/ C
ATHY
D. R
OSS
|
|
Director
|
|
April 10, 2018
|
Cathy D. Ross
|
|
|
|
|
|
|
|
|
|
/s/ P
ETER
M. W
EGE
II
|
|
Director
|
|
April 10, 2018
|
Peter M. Wege II
|
|
|
|
|
|
|
|
|
|
/s/ P. C
RAIG
W
ELCH
, J
R.
|
|
Director
|
|
April 10, 2018
|
P. Craig Welch, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ K
ATE
P
EW
W
OLTERS
|
|
Director
|
|
April 10, 2018
|
Kate Pew Wolters
|
|
|
|
Allowance for Losses on Accounts Receivable
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Balance as of beginning of period
|
$
|
11.2
|
|
|
$
|
11.7
|
|
|
$
|
14.6
|
|
|
Additions:
|
|
|
|
|
|
|
||||||
Charged to costs and expenses
|
2.5
|
|
|
4.5
|
|
|
5.5
|
|
|
|||
Charged to other accounts
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
|||
Deductions (1)
|
(3.0
|
)
|
|
(5.2
|
)
|
|
(7.8
|
)
|
|
|||
Other adjustments (2)
|
0.5
|
|
|
0.2
|
|
|
(0.6
|
)
|
|
|||
Balance as of end of period
|
$
|
11.1
|
|
|
$
|
11.2
|
|
|
$
|
11.7
|
|
|
(1)
|
Primarily represents excess of accounts written off over recoveries.
|
(2)
|
Primarily represents currency translation adjustments.
|
Valuation Allowance for Deferred Income Tax Assets
|
Year Ended
|
|||||||||||
February 23,
2018 |
February 24,
2017 |
February 26,
2016 |
||||||||||
Balance as of beginning of period
|
$
|
7.9
|
|
|
$
|
10.6
|
|
|
$
|
72.7
|
|
|
Additions:
|
|
|
|
|
|
|
||||||
Charged to costs and expenses
|
1.9
|
|
|
(1.8
|
)
|
|
(58.3
|
)
|
|
|||
Charged to other accounts
|
—
|
|
|
—
|
|
|
—
|
|
|
|||
Deductions and expirations
|
(1.1
|
)
|
|
(0.4
|
)
|
|
(1.5
|
)
|
|
|||
Other adjustments (1)
|
0.8
|
|
|
(0.5
|
)
|
|
(2.3
|
)
|
|
|||
Balance as of end of period
|
$
|
9.5
|
|
|
$
|
7.9
|
|
|
$
|
10.6
|
|
|
(1)
|
Primarily represents currency translation adjustments.
|
Exhibit
No.
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
Exhibit
No.
|
|
Description
|
10.29
|
|
|
10.30
|
|
|
10.31
|
|
|
10.32
|
|
|
10.33
|
|
|
10.34
|
|
|
10.35
|
|
|
10.36
|
|
|
21.1
|
|
|
23.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Schema Document
|
101.CAL
|
|
XBRL Calculation Linkbase Document
|
101.LAB
|
|
XBRL Labels Linkbase Document
|
101.PRE
|
|
XBRL Presentation Linkbase Document
|
101.DEF
|
|
XBRL Definition Linkbase Document
|
(1)
|
Filed as Exhibit 3.1 to the Company’s Form 8-K, as filed with the Commission on July 15, 2011 (commission file number 001-13873), and incorporated herein by reference.
|
(2)
|
Filed as Exhibit No 3.2 to the Company's Form 10-K for the fiscal year ended February 28, 2014 as filed with the Commission on April 17, 2014 (commission file number 001-13873), and incorporated herein by reference.
|
(3)
|
Filed as Exhibit No. 4.1 to the Company’s Form 8-K, as filed with the Commission on August 7, 2006 (commission file number 001-13873), and incorporated herein by reference.
|
(4)
|
Filed as Exhibit No. 4.2 to the Company’s Form 8-K, as filed with the Commission on February 3, 2011 (commission file number 001-13873), and incorporated herein by reference.
|
(5)
|
Filed as Exhibit No. 4.3 to the Company’s Form 8-K, as filed with the Commission on February 3, 2011 (commission file number 001-13873), and incorporated herein by reference.
|
(6)
|
Filed as Exhibit No. 10.1 to the Company's Form 8-K, as filed with the Commission on September 28, 2016 (commission file number 001-13873), and incorporated herein by reference.
|
(7)
|
Filed as Exhibit No. 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873), and incorporated herein by reference.
|
(8)
|
Filed as Exhibit No. 10.2 to the Company's Form 8-K, as filed with the Commission on January 16, 2015 (commission file number 001-13873), and incorporated herein by reference.
|
(9)
|
Filed as Exhibit No. 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended August 28, 2015, as filed with the Commission on September 29, 2015 (commission file number 001-13873), and incorporated herein by reference.
|
(10)
|
Filed as Exhibit No. 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended August 25, 2017, as filed with the Commission on September 20, 2017 (commission file number 001-13873), and incorporated herein by reference.
|
(11)
|
Filed as Exhibit No. 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873), and incorporated herein by reference.
|
(12)
|
Filed as Exhibit No. 10.4 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2008, as filed with the Commission on January 7, 2009 (commission file number 001-13873), and incorporated herein by reference.
|
(13)
|
Filed as Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended August 24, 2012, as filed with the Commission on October 1, 2012 (commission file number 001-13873), and incorporated herein by reference.
|
(14)
|
Filed as Exhibit No. 10.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ended November 28, 2014, as filed with the Commission on December 23, 2014 (commission file number 001-13873), and incorporated herein by reference.
|
1.
|
Type of Award
: Performance Units, as permitted under Article 9 of the Plan.
|
2.
|
Target Number of Performance Units Granted under this Award (this “Target Award”)
: <<Target PSUs>>
|
3.
|
Grant Date
: <<Award Date>>
|
4.
|
Performance Measures
: Total Shareholder Return (“TSR”) during the three (3) year Performance Period, as outlined in Article 12 of the Plan. For purposes of this Target Award, TSR shall be expressed as a compound annual growth rate.
|
5.
|
Performance Period
: The Performance Period for this Target Award begins on the first day of the Company's <<Beginning Fiscal Year>> fiscal year and ends on the last day of the Company's <<Ending Fiscal Year>> fiscal year.
|
6.
|
Number of Performance Units Earned
: Except as may be provided in section 7 below, after completion of the Performance Period, the total number of Performance Units will be earned and vested based entirely on Relative TSR (as determined in section 6.A) as of the last day of the Performance Period. For purposes of this Target Award, TSR shall be expressed as a compound annual growth rate and calculated as follows:
|
TSR
|
=
|
(
|
Ending Stock Price + Dividends Paid
Beginning Stock Price
|
)
|
(1/3)
- 1
|
A.
|
Determination of Relative TSR
.
|
Relative TSR
|
Earned Performance Units
as a Percentage of Target Award
|
80
th
Percentile and above
|
200%
|
70
th
Percentile
|
167%
|
60
th
Percentile
|
133%
|
50
th
Percentile
|
100%
|
40
th
Percentile
|
75%
|
30
th
Percentile
|
50%
|
<30
th
Percentile
|
0%
|
B.
|
Total Performance Units Earned and Settlement
|
7.
|
Voting Rights, Dividend Rights and Dividend Equivalents:
|
A.
|
No Voting Rights or Dividend Rights
. You are not the owner of record of the Shares underlying your Performance Units until the Vesting Date. As such, you will have no voting rights or dividend rights on such Shares until the Vesting Date.
|
B.
|
Cash Dividend-Equivalents
. You will receive a cash payment equal to any cash dividends that the Company declares and pays with respect to the Shares underlying any earned Performance Units granted under this Award. For purposes of the foregoing, cash dividend-equivalents will be valued as of the date(s) on which the dividend(s) were declared during the Performance Period, and the Company shall pay such cash dividend-equivalents as soon as practicable following the close of the Performance Period, but in no event more than 60 days following the last day of the Performance Period.
|
C.
|
Stock Dividend-Equivalents
. You will receive additional Shares equal to any stock dividends that the Company declares and pays with respect to the Shares underlying any earned Performance Units granted under this Award. For purposes of the foregoing, stock dividend-equivalents will be valued at the Fair Market Value of the stock dividend measured at the close of the Performance Period and will be governed by Article 17 of the Plan, and the Company shall pay such stock dividend-equivalents as soon as practicable following the close of the Performance Period, but in no event more than 60 days following the last day of the Performance Period.
|
8.
|
Death, Disability or Retirement during the Performance Period
:
|
A.
|
Death or Disability
. If you die or become Disabled while an Employee after six (6) months from the Grant Date during the Performance Period, this Target Award will be deemed earned and the corresponding number of Shares vested according to the following schedule.
|
•
|
If death or Disability occurs after six (6) months from the Grant Date through the last day of the Company's <<Beginning Fiscal Year>> fiscal year, one-third of this Target Award will immediately be earned and the corresponding Shares vested.
|
•
|
If death or Disability occurs during the Company's <<Second Fiscal Year>> fiscal year, two-thirds of this Target Award will immediately be earned and the corresponding Shares vested.
|
•
|
If death or Disability occurs during the Company's <<Ending Fiscal Year>> fiscal year, all of this Target Award will immediately be earned and the corresponding Shares vested.
|
A.
|
Retirement Eligible
. In the event you become Retirement Eligible during the Performance Period, you will be treated as continuing in employment for purposes of earning and vesting in this Performance Unit Award and will be paid in accordance with section 6 of this Award Agreement. “Retirement Eligible” means your age plus years of continuous service with the Company and its Affiliates total 80 or more and “Retirement” means your employment is terminated following becoming Retirement Eligible.
|
9.
|
Forfeiture of Awards
:
|
A.
|
All unearned Performance Units will be forfeited upon a termination of your employment during the Performance Period for any reason, except as set forth in sections 8 and 10 of this Award Agreement.
|
A.
|
If you engage in any Competition (as defined in the Plan and determined by the Administrative Committee in its discretion) you will immediately and permanently forfeit the right to receive payment from this Award, including any vested portion of this Award. You must return to the Company any gain resulting from this Award at any time within the twelve-month period preceding the date you engaged in Competition with the Company. For purposes of the foregoing, you expressly and explicitly authorize the Company to issue instructions on your behalf, to any brokerage firm or third party service provider engaged by the Company to hold your Shares and other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company.
|
B.
|
For purposes of the Performance Units, your employment or service relationship will be considered terminated as of the date you are no longer actively providing services to the Company, its Affiliates or your Employer (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of the your employment agreement, if any), and unless otherwise expressly provided in this Award Agreement or determined by the Company, your right to vest in the Performance Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any). For purposes of the foregoing, the Committee shall have the exclusive discretion to determine when you are no longer actively providing services for purposes of your Performance Unit grant (including whether you may still be considered to be providing services while on a leave of absence).
|
10.
|
Change in Control
: Upon a Change in Control, this Award shall be treated in accordance with Article 16 of the Plan.
|
11.
|
Transferability:
Performance Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.
|
12.
|
Reserved.
|
13.
|
Tax Withholding:
Regardless of any action the Company or your Employer takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility
and may exceed the amount actually withheld by the Company or your Employer. You further acknowledge that the Company and your Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Performance Units, including the grant of Performance Units, the vesting of Performance Units, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends or dividend equivalents; and (b) do not commit to structure the terms of the grant or any aspect of the Performance Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or
|
14.
|
Prior to the delivery of Shares upon the vesting of your Performance Units, if your country of residence (and/or the country of employment, if different) requires withholding of Tax-Related Items, the Company shall withhold a sufficient number of whole Shares otherwise issuable upon the vesting of the Performance Units that have an aggregate Fair Market Value sufficient to pay the Tax-Related Items required to be withheld with respect to the Shares or such amount that will not cause adverse accounting consequences for the Company and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another governmental entity. The cash equivalent of the Shares withheld will be used to settle the obligation to withhold the Tax-Related Items. In the event that withholding in Shares is prohibited or problematic under applicable law or otherwise may trigger adverse consequences to the Company or your Employer, your Employer may withhold the Tax-Related Items required to be withheld with respect to the Shares in cash from your regular salary and/or wages or any other amounts payable to you.
|
15.
|
Administration
: This Award Agreement and your rights hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee or its designee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, as it determines in its sole discretion, all of which will be binding upon you.
|
16.
|
Amendment
: This Award Agreement may be amended or modified by the Committee as long as the amendment or modification does not materially adversely affect this Award. Notwithstanding anything to the contrary contained in the Plan or in this Award Agreement, to the extent that the Company determines that the Performance Units are subject to Section 409A of the Code and fail to comply with the requirements of Section 409A of the Code, the Company reserves the right to amend, restructure, terminate or replace the Performance Units in order to cause the Performance Units to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.
|
17.
|
Section 409A of the Code
:
|
18.
|
No Guarantee of Employment:
Nothing in this Award Agreement or the Plan is intended to constitute or create a contract of employment with the Company, any of its Affiliates or your Employer. Moreover, neither this Award Agreement nor the Plan shall confer upon you any right to continuation of employment with the Company or your Employer, nor shall this Award Agreement or Plan interfere in any way with the Company's right or your Employer's right to terminate your employment at any time. Furthermore, neither this Award Agreement nor the Plan is part of your employment contract with the Company or your Employer, if any. The Plan and any awards granted thereunder are managed at the discretion of the Company and/or the Committee. The terms and conditions of future awards, if any, will be determined by the Company and/or the Committee if and when such new awards are to be made.
|
19.
|
Commercial Relationship:
To the extent you are not directly employed by the Company, you expressly recognize that your participation in the Plan and the Company's grant of the Performance Units does not create an employment relationship between you and the Company. You have been granted the Performance Units as a consequence of the commercial relationship between the Company and your Employer, and your Employer is your sole employer. Based on the foregoing, (a) you expressly recognize the Plan and the benefits you may derive from participation in the Plan do not establish any rights between you and your Employer, (b) the Plan and the benefits you may derive from participation in the Plan are not part of the employment conditions and/or benefits provided by your Employer, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the Company, shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.
|
20.
|
Acknowledgment of Nature of Plan and Performance Units:
In accepting the Performance Units and any Shares, you acknowledge that:
|
A.
|
The Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan and this Award Agreement;
|
B.
|
The grant of Performance Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Performance Units, or benefits in lieu of Performance Units even if Performance Units have been awarded repeatedly in the past;
|
C.
|
All decisions with respect to future awards, if any, will be at the sole discretion of the Company;
|
D.
|
The Performance Units and any Shares acquired under the Plan, and the income and value of the same, are not intended to replace any pension rights or compensation;
|
E.
|
The terms and conditions of future awards, if any, will be determined by the Company and will be reviewed and communicated to you if and when new grants are to be made;
|
F.
|
Your participation in the Plan is voluntary;
|
G.
|
The value of the Performance Units is an extraordinary item of compensation that is outside the scope of your employment contract, if any;
|
H.
|
The Performance Units and any Shares acquired under the Plan, and the income and value of the same, are not part of normal or expected compensation or wages/salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, holiday pay, long-service awards, pension or retirement benefits or payments or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services to the Company, its Affiliates or your Employer;
|
I.
|
The future value of the underlying Shares is unknown, indeterminable, and cannot be predicted with certainty;
|
J.
|
If you receive Shares, the value of such Shares acquired may increase or decrease in value;
|
K.
|
Unless otherwise provided in the Plan or by the Company in its discretion, the Performance Units and the benefits evidenced by this Award Agreement do not create any entitlement to have the Performance Units or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares;
|
L.
|
Unless otherwise agreed with the Company in writing, the Performance Units and any Shares acquired under the Plan, and the income and value of the same, are not granted as consideration for, or in connection with, the service you may provide as a director of any Subsidiary;
|
M.
|
Neither the Company, its Affiliates or your Employer shall be liable for any foreign exchange rate fluctuation between your local currency and the U.S. dollar that may affect the value of the Performance Units or of any amounts due to you pursuant to the vesting of the Performance Units or the subsequent sale of any Shares acquired upon vesting; and
|
N.
|
In consideration of the grant of the Performance Unit, no claim or entitlement to compensation or damages shall arise from termination of the Performance Unit or diminution in value of the Performance Unit or Shares acquired under the Performance Unit resulting from termination of your service with the Company and its Affiliates (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by agreeing to this Award Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim.
|
21.
|
Consent To Transfer Personal Data:
The Company and your Employer hereby notify you of the following in relation to your personal data and the collection, processing, storage, use and transfer, in electronic or other form, of such data in relation to the grant of the Performance Units and your participation in the Plan pursuant to applicable personal data protection laws. The collection, processing, storage, use and transfer, in electronic or other form, of your personal data is necessary for the Company's administration of the Plan and your participation in the Plan, and your denial and/or objection to the collection, processing, storage, use and transfer, in electronic or other form, of personal data may affect your ability to participate in the Plan. As such, you voluntarily, explicitly and unambiguously acknowledge, consent and agree (where required under applicable law) to the collection, use, processing, storage, use and transfer, in electronic or other form, of personal data as described herein.
|
22.
|
Electronic Delivery:
The Company may, in its sole discretion, decide to deliver any documents related to the Performance Units and participation in the Plan (or future Performance Units that may be granted under the Plan) by electronic means, or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
23.
|
Private Offering:
The grant of the Performance Units is not intended to be a public offering of securities in your country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local securities authorities (unless otherwise required under local law).
|
24.
|
Addendum:
Notwithstanding any provisions of this Award Agreement to the contrary, the Performance Units shall be subject to any special terms and conditions for your country of residence (and country of employment, if different) set forth in the addendum to this Award Agreement (the “Addendum”). Further, if you transfer your residence and/or employment to another country reflected in the Addendum to this Award Agreement at the time of transfer, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations or to facilitate the operation and administration of the Performance Units and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of this Award Agreement.
|
25.
|
Additional Terms and Conditions:
The Company reserves the right to impose other requirements on the Performance Units, any Shares acquired pursuant to the Performance Units and your participation in the Plan to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and regulations or to facilitate the operation and administration of the Performance Units and the Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
26.
|
Severability:
The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
27.
|
Age Discrimination Rules:
If you are
resident
and/or employed in a country that is a member of the European Union or the European Economic Area, the grant of the Performance Units and this Award Agreement are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction determines that any provision of this Award Agreement, the Addendum or the Plan are invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
|
28.
|
Insider Trading Restrictions / Market Abuse Laws:
By participating in the Plan, you acknowledge that, depending on your or your broker’s country of residence or where the Shares are listed, you may be subject to insider trading and/or market abuse laws, which may affect your ability to accept, acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., Performance Units) or rights linked to the value of Shares (e.g., phantom awards, futures) during such times as you are considered to have “inside information” regarding the Company as defined by the laws or regulations in your country. Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know”) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. You should keep in mind third parties includes fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company’s insider trading policy. You understand that you personally are responsible for ensuring compliance with any applicable restrictions and should consult your personal legal advisor for additional information.
|
29.
|
Clawback:
If the Company’s financial results are materially restated, you acknowledge and agree that the Performance Units, any Shares acquired pursuant thereto and/or any amount received with respect to any sale of such Shares shall be
|
30.
|
Governing Law:
This Award Agreement shall be governed by, and construed in accordance with, the laws of the State of Michigan without regard to any choice of law rules thereof which might apply the laws of any other jurisdiction.
For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Michigan and agree that such litigation shall be conducted only in the courts of Kent County, Michigan, or the federal courts for the Western District of Michigan, and no other courts, where this grant is made and/or to be performed.
|
31.
|
English Language:
If you are resident outside of the United States, you acknowledge and agree that it is your express intent that this Award Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Performance Units be drawn up in English. If you have received this Award Agreement, the Plan or any other documents related to the Performance Units translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
|
32.
|
Compliance with Laws:
As a condition to the grant of this Award, you agree
to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends, dividend equivalents and any proceeds derived from the sale of the Shares acquired pursuant to the
Performance Units
) if required by and in accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you also agree to take any and all actions, and consent to any and all actions taken by
the Company, your Employer and the Company's Affiliates
, as may be required to allow
the Company, your Employer and the Company's Affiliates
to comply with local laws, rules and regulations in your country of residence (and country of employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).
|
33.
|
Entire Agreement:
This Award Agreement, the Plan, the Addendum and the rules and procedures adopted by the Committee contain all of the provisions applicable to the Performance Units and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to you. The various provisions of this Award Agreement, the Addendum, the Plan, and the rules and procedures adopted by the Committee are severable, and if any provision thereof is held to be unenforceable by any court of competent jurisdiction, then such unenforceability shall not affect the enforceability of the remaining provisions thereof.
|
1.
|
Settlement in Shares:
Notwithstanding anything to the contrary in the Award Agreement, this Addendum or the Plan, the Performance Units shall be settled only in Shares (and shall not be settled in cash).
|
2.
|
Consent to Collection / Processing / Transfer of Personal Data
. The following provision shall supplement section 20 of the Award Agreement: You authorize the Company and the Company's representative to discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration of the Plan. You further authorizes the Company, any Affiliate of the Company, and the Employer, any broker or any stock plan service provider as may be selected by the Company from time to time to assist with the Plan, to disclose and discuss your participation in the Plan with their advisors. You also authorize the Company and the Employer to record such information and to keep such information in your employment file.
|
2.
|
English Language (Quebec)
: To the extent you reside in the province of Quebec, the parties to the Award Agreement acknowledge that it is their express wish that the Award Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Dans la mesure où que vous résidez dans la province de Québec, les parties à l’entente de financement reconnaissent que c’est leur volonté expresse que le contrat d’intéressement, ainsi que tous les documents, avis et procédures judiciaires exécutés, donnés ou intentés à la suite ou liés directement ou indirectement du présent règlement, être rédigées en anglais.
|
1.
|
Lapse of Restrictions:
If, for any reason, Shares are issued to you within six (6) months of the Grant Date, you agree that you will not sell or otherwise dispose of any such Shares prior to the six (6) month anniversary of the Grant Date.
|
2.
|
IMPORTANT NOTICE - WARNING:
The contents of the Award Agreement, this Addendum, the Plan, and all other materials pertaining to the Performance Units and/or the Plan have not been reviewed by any regulatory authority in Hong Kong. You are hereby advised to exercise caution in relation to the offer thereunder. If you have any doubts about any of the contents of the aforesaid materials, you should obtain independent professional advice.
|
3.
|
Wages:
The Performance Units and Shares subject to the Performance Units do not form part of your wages for the purposes of calculating any statutory or contractual payments under Hong Kong law.
|
4.
|
Nature of the Plan:
The Company specifically intends that the Plan will not be treated as an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). To the extent any court, tribunal or
|
1.
|
Type of Award
: Cash-Based Award as authorized under Article 9 of the Plan.
|
2.
|
Target Cash-Based Award under this Award (this “Target Award”)
: <<Currency>> <<Target Cash>>
|
3.
|
Award Date
: <<Award Date>>
|
4.
|
Performance Measures
: Return on invested capital (“ROIC”) during the three (3) year Performance Period, as outlined in Article 12 of the Plan. For purposes of this Award, ROIC shall be expressed as a three (3) year average calculation.
|
5.
|
Performance Period
: The Performance Period for this Award begins on the first day of the Company's <<Beginning Fiscal Year>> fiscal year and ends on the last day of the Company's <<Ending Fiscal Year>> fiscal year.
|
6.
|
Amount of Cash-Based Award Earned
: Except as may be provided in section 7 below, after completion of the Performance Period, the total amount of the Cash-Based Award earned will be based entirely on the three (3) year average ROIC (as determined in section 6.A.) as of the last day of the Performance Period. For purposes of this Award, ROIC shall be expressed as follows:
|
Three (3) Year Average ROIC
|
=
|
(
|
(
|
NOPAT (Yr1)
Average Invested Capital (Yr1)
|
)
|
+
|
(
|
NOPAT (Yr2)
Average Invested Capital (Yr2)
|
)
|
+
|
(
|
NOPAT (Yr3)
Average Invested Capital (Yr3)
|
)
|
)
|
÷ 3
|
A.
|
ROIC is a profit measure that is calculated by taking the Company's net operating profit after tax (“NOPAT”), divided by average invested capital. NOPAT represents net income plus after tax interest expense, adjusted for the deferral of a portion of restructuring or other adjustments to the extent approved by the Committee. Average invested capital represents the average shareholders' equity and average long-term debt, adjusted for other adjustments to the extent approved by the Committee.
The Cash-Based Award earned based upon three (3) year average ROIC shall be based upon the following chart:
|
ROIC
|
Earned Cash-Based Award as a Percent of Target Award
|
TBD% and above
|
200%
|
TBD%
|
100%
|
0.00%
|
0%
|
A.
|
Total Cash-Based Award Earned and Payment
|
7.
|
Death, Disability or Retirement during the Performance Period
:
|
A.
|
If you die or become Disabled while an Employee after six (6) months from the Award Date during the Performance Period, this Target Award will be deemed earned according to the following schedule.
|
•
|
If death or Disability occurs after six (6) months from the Award Date through the last day of the Company's <<Beginning Fiscal Year>> fiscal year, one-third of this Target Award will immediately be earned and paid.
|
•
|
If death or Disability occurs during the Company's <<Second Fiscal Year>>fiscal year, two-thirds of this Target Award will immediately be earned and paid.
|
•
|
If death or Disability occurs during the Company's <<Third Fiscal Year>>fiscal year, all of this Target Award will immediately be earned and paid.
|
B.
|
In the event of your Retirement during the Performance Period, you will be treated as if you continued your employment with your Employer through the end of the Performance Period and you will earn this Cash-Based Award based upon the Company's three-year average ROIC and will be paid in accordance with section 6 of this Award Agreement. “Retirement” means your employment is terminated following becoming Retirement Eligible and “Retirement Eligible” means your age plus years of continuous service with the Company and its Affiliates total 80 or more.
|
8.
|
Forfeiture of Awards:
|
A.
|
All unearned Cash-Based Awards will be forfeited upon a termination of your employment during the Performance Period for any reason, except as set forth in sections 7 and 9 of this Award Agreement.
|
B.
|
If you engage in any Competition (as defined in the Plan and determined by the Administrative Committee in its discretion) you will immediately and permanently forfeit the right to receive payment from this Award, including any earned portion of this Award. You must return to the Company any value paid resulting from this Award at any time within the twelve-month period proceeding the date you engaged in Competition with the Company.
|
9.
|
Change in Control:
Upon a Change in Control, this Award shall be treated in accordance with Article 16 of the Plan.
|
10.
|
Transferability:
The Cash-Based Award may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.
|
11.
|
Tax Withholding:
Regardless of any action the Company or your Employer takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, payment on account or other tax-related withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility and that the Company and your Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Cash-Based Awards, including the grant of Cash-Based Awards and any cash payments made by the Company in settlement of the Cash-Based Awards; and (b) do not commit to structure the terms of the grant or any aspect of the Cash-Based Award to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or your Employer (or former employer, as applicable) may be required to account for Tax-Related Items in more than one jurisdiction.
|
12.
|
Administration:
This Award Agreement and your rights hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee or its designee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, as it determines in its sole discretion, all of which will be binding upon you.
|
13.
|
Amendment
: This Award Agreement may be amended or modified by the Committee as long as the amendment or modification does not materially adversely affect this Award. Notwithstanding anything to the contrary contained in the Plan or in this Award Agreement, to the extent that the Company determines that the Cash-Based Award is subject to Section 409A of the Code and fails to comply with the requirements of Section 409A of the Code, the Company reserves the right to amend, restructure, terminate or replace the Cash-Based Award in order to cause the Cash-Based Award to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.
|
14.
|
Section 409A of the Code
: The intent of the parties is that payments and benefits under this Award Agreement comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, this Award Agreement shall be interpreted and be administered to be in compliance therewith. Any payments described in this Award Agreement or the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise.
|
15.
|
No Guarantee of Employment:
Nothing in this Award Agreement or the Plan is intended to constitute or create a contract of employment with the Company, any of its Affiliates or your Employer. Moreover, neither this Award Agreement nor the Plan shall confer upon you any right to continuation of employment with the Company or your Employer, nor shall this Award Agreement or Plan interfere in any way with the Company's right or your Employer's right to terminate your employment at any time. Furthermore, neither this Award Agreement nor the Plan is part of your employment contract with the Company or your Employer, if any. The Plan and any awards granted thereunder are managed at the discretion of the Company and/or the Committee. The terms and conditions of future awards, if any, will be determined by the Company and/or the Committee if and when such new awards are to be made.
|
16.
|
Commercial Relationship:
To the extent you are not directly employed by the Company, you expressly recognize that your participation in the Plan and the Company’s grant of the Cash-Based Award does not create an employment relationship between you and the Company. You have been granted the Cash-Based Award as a consequence of the commercial relationship between the Company and your Employer, and your Employer is your sole employer. Based on the foregoing, (a) you expressly recognize the Plan and the benefits you may derive from participation in the Plan do not establish any rights between you and your Employer, (b) the Plan and the benefits you may derive from participation in the Plan are not part of the employment conditions and/or benefits provided by your Employer, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the Company, shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.
|
17.
|
Acknowledgment of Nature of Plan and Cash-Based Awards:
In accepting the Cash-Based Award, you acknowledge that:
|
A.
|
The Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan and this Award Agreement;
|
B.
|
The grant of Cash-Based Awards is voluntary and occasional and does not create any contractual or other right to receive future grants of Cash-Based Awards, or benefits in lieu of Cash-Based Awards even if Cash-Based Awards have been awarded repeatedly in the past;
|
C.
|
All decisions with respect to future awards, if any, will be at the sole discretion of the Company;
|
D.
|
The terms and conditions of future awards, if any, will be determined by the Company and will be reviewed and communicated to you if and when new grants are to be made;
|
E.
|
Your participation in the Plan is voluntary;
|
F.
|
The value of the Cash-Based Award is an extraordinary item of compensation that is outside the scope of your employment contract, if any;
|
G.
|
Cash-Based Awards are not part of normal or expected compensation or wages/salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, end of service payments, bonuses, holiday pay, long-service awards, pension or retirement benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services to the Company, its Affiliates or your Employer;
|
H.
|
In consideration of the grant of the Cash-Based Award, no claim or entitlement to compensation or damages shall arise from termination of the Cash-Based Award or diminution in value of the Cash-Based Award or payments received under the Cash-Based Award resulting from termination of your service with the Company and its Affiliates (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by agreeing to this Award Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim.
|
18.
|
Consent To Transfer Personal Data:
The Company and your Employer hereby notify you of the following in relation to your personal data and the collection, processing, storage, use and transfer, in electronic or other form, of such data in relation to the grant of the Cash-Based Award and your participation in the Plan pursuant to applicable personal data protection laws. The collection, processing, storage, use and transfer, in electronic or other form, of your personal data is necessary for the Company’s administration of the Plan and your participation in the Plan, and your denial and/or objection to the collection, processing, storage and transfer of personal data may affect your ability to participate in the Plan. As such, you voluntarily, explicitly and unambiguously acknowledge, consent and agree (where required under applicable law) to the collection, use, processing, storage, use and transfer, in electronic or other form, of personal data as described herein.
|
19.
|
Electronic Delivery:
The Company may, in its sole discretion, decide to deliver any documents related to the Cash-Based Award and participation in the Plan (or future Cash-Based Awards that may be granted under the Plan) by electronic means, or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by Company or another third party designated by Company.
|
20.
|
Private Offering:
The grant of the Cash-Based Award is not intended to be a public offering of securities in your country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local securities authorities (unless otherwise required under local law).
|
21.
|
Addendum:
Notwithstanding any provisions of this Award Agreement to the contrary, the Cash-Based Award shall be subject to any special terms and conditions for your country of residence (and country of employment, if different) set forth in an addendum to this Agreement (an “Addendum”). Further, if you transfer your residence and/or employment to another country reflected in an Addendum to this Award Agreement at the time of transfer, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations or to facilitate the operation and administration of the Cash-Based Award and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of this Award Agreement.
|
22.
|
Additional Terms and Conditions:
The Company reserves the right to impose other requirements on the Cash-Based Award and your participation in the Plan to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local laws, rules and regulations or to facilitate the operation and administration of the Cash-Based Award and the Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
23.
|
Severability:
The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
24.
|
Age Discrimination Rules:
If you are resident and/or employed in a country that is a member of the European Union, or the European Economic Area, the grant of the Cash-Based Award and this Award Agreement are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction determines that any provision of this Award Agreement, the Addendum or the Plan are invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
|
25.
|
Clawback:
If the Company’s financial results are materially restated, you acknowledge and agree that any amount received with respect to any Cash-Based Award shall be treated in accordance with Article 19 of the Plan.
|
26.
|
Governing Law:
This Award Agreement shall be governed by, and construed in accordance with, the laws of the State of Michigan without regard to any choice of law rules thereof which might apply the laws of any other jurisdiction.
|
27.
|
English Language:
If you are resident outside of the United States, you acknowledge and agree that it is your express intent that this Award Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to this Award to be drawn up in English. If you have received this Award Agreement, the Plan or any other documents related to this Award translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
|
28.
|
Compliance with Laws:
As a condition to the grant of this Award, you agree to repatriate all payments attributable to the cash acquired under the Plan if required by and in accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you also agree to take any and all actions, and consent to any and all actions taken by the Company, your Employer and the Company's Affiliates, as may be required to allow the Company, your Employer and the Company's Affiliates to comply with local laws, rules and regulations in your country of residence (and country of employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).
|
29.
|
Entire Agreement:
This Award Agreement, the Plan, the Addendum and the rules and procedures adopted by the Committee contain all of the provisions applicable to the Cash-Based Award and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to you. The various provisions of this Award Agreement, the Addendum, the Plan, and the rules and procedures adopted by the Committee are severable, and if any provision thereof is held to be unenforceable by any court of competent jurisdiction, then such unenforceability shall not affect the enforceability of the remaining provisions thereof.
|
1.
|
Type of Award:
Restricted Stock Units, as permitted under Article 11 of the Plan.
|
2.
|
Number of Restricted Stock Units Granted under this Award:
<<Units>>
|
3.
|
Grant Date:
<<Grant Date>>
|
4.
|
Period of Restriction:
Subject to the terms of the Plan and section 5 below, the Restricted Stock Units granted under this Award Agreement will vest as follows:
|
5.
|
Vesting Upon Death, Disability, Retirement Eligibility or Termination without Cause:
|
a.
|
Death
. Your Restricted Stock Units will become fully vested if you die while an Employee after six (6) months from the Grant Date.
|
b.
|
Disability
. Your Restricted Stock Units will become fully vested if you become Disabled while an Employee after six (6) months from the Grant Date. A “Disability” or “become Disabled” means that, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, you are unable to engage in any substantial gainful activity or are receiving income replacement benefits under an accident and health plan covering employees of the Company and its Affiliates for a period of not less than three (3) months.
|
c.
|
Retirement Eligible
. Your Restricted Stock Units will become fully vested on the date you become Retirement Eligible during the Period of Restriction. The Company will then issue to you one (1) Share for each vested Restricted Stock Unit as soon as practicable following the original Vesting Date, as provided in your award summary (and not on the date you become Retirement Eligible and not on the date of Retirement), but in no event more than 60 days following the original Vesting Date. For purposes of the foregoing, “Retirement Eligible” means your age plus years of continuous service with the Company and its Affiliates total 80 or more and “Retirement” means your employment is terminated following becoming Retirement Eligible.
|
d.
|
Termination without Cause
. Your Restricted Stock Units will become fully vested if you are terminated without Cause by the Company or your Employer (a “Termination without Cause”);
provided
, that such termination of employment constitutes a “separation from service” under Section 409A of the Code.
|
e.
|
Provision of Services
. For purposes of the Restricted Stock Units, your employment or service relationship will be considered terminated as of the date you are no longer actively providing services to the Company, its Affiliates or your Employer (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of the your employment agreement, if any), and unless otherwise expressly provided in this Award Agreement or determined by the Company, your right to vest in the Restricted Stock Units under the Plan, if any, will terminate as of such date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any). For purposes of the foregoing, the Committee shall have the exclusive discretion to determine when you are no longer actively providing services for
|
6.
|
Change in Control:
Upon a Change in Control, this Award shall be treated in accordance with Article 16 of the Plan.
|
7.
|
Settlement of Vested Restricted Stock Units:
Except as provided in sections 5(c), 6 and this section 7, upon the vesting of your Restricted Stock Units, the Company will issue you one (1) Share for each vested Restricted Stock Unit as soon as practicable, but in no event more than 60 days following the Vesting Date. Notwithstanding the foregoing, the Company may, in its sole discretion, settle your Restricted Stock Units in the form of Shares but require you to sell such Shares immediately or within a specified period of time following your termination of employment (in which case you hereby expressly authorize the Company to issue sales instructions to any brokerage firm and/or third party administrator engaged by the Company on your behalf).
|
8.
|
Transferability:
The Restricted Stock Units granted under the Plan are not transferable.
|
9.
|
Voting Rights, Dividend Rights and Dividend-Equivalents:
|
a.
|
No Voting Rights or Dividend Rights
. You are not the owner of record of the Shares underlying your Restricted Stock Units until the Vesting Date. As such, you will have no voting rights or dividend rights on such Shares until the Vesting Date.
|
b.
|
Cash Dividend-Equivalents
. You will receive a cash payment equal to any cash dividends that the Company declares and pays with respect to the Shares underlying your outstanding Restricted Stock Units granted under this Award. The Company shall pay such cash dividend-equivalents at such time or times as it determines in its sole discretion;
provided
, the Company shall pay any cash dividend-equivalents within the calendar year in which the cash dividend-equivalent is declared.
|
c.
|
Stock Dividend-Equivalents
. You will be entitled to be credited with dividend-equivalents in the form of Shares of the Company with respect to your outstanding Restricted Stock Units, calculated as follows: on each date that a stock dividend is paid by the Company while your Restricted Stock Units are outstanding, you will be credited with an additional number of Restricted Stock Units equal to the number of whole Shares that would have been issued with respect to your outstanding Restricted Stock Units had the Restricted Stock Units been issued as Shares. The additional Restricted Stock Units credited under this paragraph will be subject to the same terms and conditions applicable to your Restricted Stock Units originally granted under this Award Agreement, including, without limitation, for purposes of crediting of additional dividend-equivalents.
|
10.
|
Forfeiture of Awards:
|
a.
|
Your Restricted Stock Units will be forfeited if, during the Period of Restriction, you cease to be an Employee for any reason, except as set forth in sections 5 and 6 of this Award Agreement.
|
b.
|
If you engage in any Competition (as defined in the Plan and determined by the Administrative Committee in its discretion)
|
(i)
|
before the Vesting Date, you will forfeit all outstanding Restricted Stock Units granted under this Award Agreement, or
|
(ii)
|
between the Vesting Date, and the first (1st) anniversary of the Vesting Date, you must return to the Company all Shares that have been issued to you pursuant to this Award Agreement and you will forfeit all outstanding Restricted Stock Units, if any, granted under this Award Agreement. For purposes of the foregoing, you expressly and explicitly authorize the Company to issue instructions, on your behalf, to any brokerage firm and/or third party service provider engaged by the Company to hold your Shares and other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company.
|
11.
|
Tax Withholding:
Regardless of any action the Company or your Employer takes with respect to any or all income tax (including U.S. federal, state and local taxes and/or non-U.S. taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”), you acknowledge that the ultimate liability for all Tax-Related Items legally due by you is and remains your responsibility
and may exceed the amount actually withheld by the Company or your Employer. You further acknowledge that the Company and your Employer: (a) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Restricted Stock Units, including the grant of Restricted Stock Units, the vesting of Restricted Stock Units, the subsequent sale of any Shares acquired at vesting and the receipt of any dividends or dividend equivalents; and (b) do not commit to structure the terms of the grant or any aspect of the Restricted Stock Units to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the
|
12.
|
|
13.
|
Prior to the delivery of Shares upon the vesting of your
Restricted Stock Units
, if your country of residence (and/or the country of employment, if different) requires withholding of Tax-Related Items, the Company shall withhold a sufficient number of whole Shares otherwise issuable upon
the vesting
of the
Restricted Stock Units
that have an aggregate Fair Market Value sufficient to pay the Tax-Related Items required to be withheld with respect to the Shares or such amount that will not cause adverse accounting consequences for the Company and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another governmental entity. The cash equivalent of the Shares withheld will be used to settle the obligation to withhold the Tax-Related Items. In the event that withholding in Shares is prohibited or problematic under applicable law or otherwise may trigger adverse consequences to the Company or your Employer, your Employer may withhold the Tax-Related Items required to be withheld with respect to the Shares in cash from your regular salary and/or wages or any other amounts payable to you.
|
14.
|
Administration
: This Award Agreement and your rights hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee or its designee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Award Agreement, as it determines in its sole discretion, all of which will be binding upon you.
|
15.
|
Amendment:
This Award Agreement may be amended or modified by the Committee as long as the amendment or modification does not materially adversely affect this Award. Notwithstanding anything to the contrary contained in the Plan or in this Award Agreement, to the extent that the Company determines that the Restricted Stock Units are subject to Section 409A of the Code and fail to comply with the requirements of Section 409A of the Code, the Company reserves the right to amend, restructure, terminate or replace the Restricted Stock Units in order to cause the Restricted Stock Units to either not be subject to Section 409A of the Code or to comply with the applicable provisions of such section.
|
16.
|
Section 409A of the Code:
|
a.
|
The Restricted Stock Units are intended to comply with or be exempt from the requirements of Section 409A of the Code. The Plan and this Award Agreement shall be administered and interpreted in a manner consistent with this intent. If the Company determines that this Award Agreement is subject to Section 409A of the Code and that it does not comply with or is inconsistent with the applicable requirements, the Company may, in its sole discretion, and without your consent, amend this Award Agreement to cause it to comply with Section 409A of the Code or be exempt from Section 409A of the Code.
|
b.
|
Notwithstanding any provision of this Award Agreement to the contrary, in the event that any settlement or payment of the Restricted Stock Units occurs as a result of your termination of employment and the Company determines that you are a “specified employee” (within the meaning of Section 409A of the Code) subject to Section 409A of the Code at the time of your termination of employment, and provided further that such payment or settlement does not otherwise qualify for an applicable exemption from Section 409A of the Code, then no such settlement or payment shall be paid to you until the date that is the earlier to occur of: (i) your death, or (ii) six (6)
|
c.
|
Although this Award Agreement and the payments provided hereunder are intended to be exempt from or to otherwise comply with the requirements of Section 409A of the Code, the Company does not represent or warrant that this Award Agreement or the payments provided hereunder will comply with Section 409A of the Code or any other provisions of federal, state, local, or non-U.S. law. Neither the Company, its Subsidiaries, your Employer or their respective directors, officers, employees or advisers shall be liable to you (or any other individual claiming a benefit through you) for any tax, interest, or penalties you may owe as a result of compensation paid under this Award Agreement, and the Company, its Affiliates and your Employer shall have no obligation to indemnify or otherwise protect you from the obligation to pay any taxes pursuant to Section 409A of the Code.
|
17.
|
No Guarantee of Employment:
Nothing in this Award Agreement or the Plan is intended to constitute or create a contract of employment with the Company, any of its Affiliates or your Employer. Moreover, neither this Award Agreement nor the Plan shall confer upon you any right to continuation of employment with the Company or your Employer, nor shall this Award Agreement or Plan interfere in any way with the Company's right or your Employer's right to terminate your employment at any time. Furthermore, neither this Award Agreement nor the Plan is part of your employment contract with the Company or your Employer, if any. The Plan and any awards granted thereunder are managed at the discretion of the Company and/or the Committee. The terms and conditions of future awards, if any, will be determined by the Company and/or the Committee if and when such new awards are to be made.
|
18.
|
Commercial Relationship:
To the extent you are not directly employed by the Company, you expressly recognize that your participation in the Plan and the Company's grant of the Restricted Stock Units does not create an employment relationship between you and the Company. You have been granted the Restricted Stock Units as a consequence of the commercial relationship between the Company and your Employer, and your Employer is your sole employer. Based on the foregoing, (a) you expressly recognize the Plan and the benefits you may derive from participation in the Plan do not establish any rights between you and your Employer, (b) the Plan and the benefits you may derive from participation in the Plan are not part of the employment conditions and/or benefits provided by your Employer, and (c) any modifications or amendments of the Plan by the Company, or a termination of the Plan by the Company, shall not constitute a change or impairment of the terms and conditions of your employment with your Employer.
|
19.
|
Acknowledgment of Nature of Plan and Restricted Stock Units:
In accepting the Restricted Stock Units and any Shares, you acknowledge that:
|
a.
|
The Plan is established voluntarily by the Company, it is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, as provided in the Plan and this Award Agreement;
|
b.
|
The grant of Restricted Stock Units is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Restricted Stock Units, or benefits in lieu of Restricted Stock Units even if Restricted Stock Units have been awarded repeatedly in the past;
|
c.
|
All decisions with respect to future awards, if any, will be at the sole discretion of the Company;
|
d.
|
The Restricted Stock Units and any Shares acquired under the Plan, and the income and value of the same, are not intended to replace any pension rights or compensation;
|
e.
|
The terms and conditions of future awards, if any, will be determined by the Company and will be reviewed and communicated to you if and when new grants are to be made;
|
f.
|
Your participation in the Plan is voluntary;
|
g.
|
The value of the Restricted Stock Units is an extraordinary item of compensation that is outside the scope of your employment contract, if any;
|
h.
|
The Restricted Stock Units and any Shares acquired under the Plan, and the income and value of the same, are not part of normal or expected compensation or wages/salary for any purposes, including, but not limited to, calculation of any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, holiday pay, long-service awards, pension or retirement benefits or payments or welfare benefits or similar payments and in no event should be considered as compensation for, or relating in any way to, past services to the Company, its Affiliates or your Employer;
|
i.
|
The future value of the underlying Shares is unknown, indeterminable, and cannot be predicted with certainty;
|
j.
|
If you receive Shares, the value of such Shares acquired may increase or decrease in value;
|
k.
|
Unless otherwise provided in the Plan or by the Company in its discretion, the Restricted Stock Units and the benefits evidenced by this Award Agreement do not create any entitlement to have the Restricted Stock Units or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares;
|
l.
|
Unless otherwise agreed with the Company in writing, the Restricted Stock Units and any Shares acquired under the Plan, and the income and value of the same, are not granted as consideration for, or in connection with, the service you may provide as a director of any Subsidiary;
|
m.
|
Neither the Company, its Affiliates or your Employer shall be liable for any foreign exchange rate fluctuation between your local currency and the U.S. dollar that may affect the value of the Restricted Stock Units or of any amounts due to you pursuant to the vesting of the Restricted Stock Units or the subsequent sale of any Shares acquired upon vesting; and
|
n.
|
In consideration of the grant of the Restricted Stock Unit, no claim or entitlement to compensation or damages shall arise from termination of the Restricted Stock Unit or diminution in value of the Restricted Stock Unit or Shares acquired under the Restricted Stock Unit resulting from termination of your service with the Company and its Affiliates (for any reason whatsoever and whether or not in breach of local labor laws) and you irrevocably release the Company and its Affiliates from any such claim that may arise; if, notwithstanding the foregoing, any such claim is found by a court of competent jurisdiction to have arisen, then, by agreeing to this Award Agreement, you shall be deemed irrevocably to have waived your entitlement to pursue such claim.
|
20.
|
Consent To Transfer Personal Data:
The Company and your Employer hereby notify you of the following in relation to your personal data and the collection, processing, storage, use and transfer, in electronic or other form, of such data in relation to the grant of the Restricted Stock Units and your participation in the Plan pursuant to applicable personal data protection laws. The collection, processing, storage, use and transfer, in electronic or other form, of your personal data is necessary for the Company's administration of the Plan and your participation in the Plan, and your denial and/or objection to the collection, processing, storage, use and transfer, in electronic or other form, of personal data may affect your ability to participate in the Plan. As such, you voluntarily, explicitly and unambiguously acknowledge, consent and agree (where required under applicable law) to the collection, use, processing, storage, use and transfer, in electronic or other form, of personal data as described herein.
|
21.
|
Electronic Delivery:
The Company may, in its sole discretion, decide to deliver any documents related to the Restricted Stock Unit and participation in the Plan (or future Restricted Stock Units that may be granted under the Plan) by electronic means, or request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
22.
|
Private Offering:
The grant of the Restricted Stock Units is not intended to be a public offering of securities in your country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filing with the local securities authorities (unless otherwise required under local law).
|
23.
|
Addendum:
Notwithstanding any provisions of this Award Agreement to the contrary, the Restricted Stock Units shall be subject to any special terms and conditions for your country of residence (and country of employment, if different) set forth in the addendum to this Award Agreement (the “Addendum”). Further, if you transfer your residence and/or employment to another country reflected in the Addendum to this Award Agreement at the time of transfer, the special terms and conditions for such country will apply to you to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations or to facilitate the operation and administration of the Restricted Stock Units and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate your transfer). In all circumstances, any applicable Addendum shall constitute part of this Award Agreement.
|
24.
|
Additional Terms and Conditions:
The Company reserves the right to impose other requirements on the Restricted Stock Units, any Shares acquired pursuant to the Restricted Stock Units and your participation in the Plan to the extent the Company determines, in its sole discretion, that such other requirements are necessary or advisable in order to comply with local law, rules and regulations or to facilitate the operation and administration of the Restricted Stock Units and the Plan. Such requirements may include (but are not limited to) requiring you to sign any agreements or undertakings that may be necessary to accomplish the foregoing.
|
25.
|
Severability:
The provisions of this Award Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
26.
|
Age Discrimination Rules:
If you are resident and/or employed in a country that is a member of the European Union or the European Economic Area, the grant of the Restricted Stock Units and this Award Agreement are intended to comply with the age discrimination provisions of the EU Equal Treatment Framework Directive, as implemented into local law (the “Age Discrimination Rules”). To the extent that a court or tribunal of competent jurisdiction determines that any provision of this Award Agreement, the Addendum or the Plan are invalid or unenforceable, in whole or in part, under the Age Discrimination Rules, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.
|
27.
|
Insider Trading Restrictions / Market Abuse Laws:
By participating in the Plan, you acknowledge that, depending on your or your broker’s country of residence or where the Shares are listed, you may be subject to insider trading and/or market abuse laws, which may affect your ability to accept, acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., Restricted Stock Units) or rights linked to the value of Shares (e.g., phantom awards, futures) during such times as you are considered to have “inside information” regarding the Company as defined by the laws or regulations in your country. Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you placed before you possessed inside information. Furthermore, you could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know”) and (ii) “tipping” third parties or causing them otherwise to buy or
|
28.
|
Clawback:
If the Company’s financial results are materially restated, you acknowledge and agree that the Restricted Stock Units, any Shares acquired pursuant thereto and/or any amount received with respect to any sale of such Shares shall be treated in accordance with Article 19 of the Plan. For purposes of the foregoing, you expressly and explicitly authorize the Company to issue instructions, on your behalf, to any brokerage firm and/or third party administrator engaged by the Company to hold your Shares and other amounts acquired under the Plan to re-convey, transfer or otherwise return such Shares and/or other amounts to the Company upon the enforcement of Article 19 of the Plan.
|
29.
|
Governing Law:
This Award Agreement shall be governed by, and construed in accordance with, the laws of the State of Michigan without regard to any choice of law rules thereof which might apply the laws of any other jurisdiction.
For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Michigan and agree that such litigation shall be conducted only in the courts of Kent County, Michigan, or the federal courts for the Western District of Michigan, and no other courts, where this grant is made and/or to be performed.
|
30.
|
English Language:
If you are resident outside of the United States, you acknowledge and agree that it is your express intent that this Award Agreement, the Plan and all other documents, notices and legal proceedings entered into, given or instituted pursuant to the Restricted Stock Units be drawn up in English. If you have received this Award Agreement, the Plan or any other documents related to the Restricted Stock Units translated into a language other than English, and if the meaning of the translated version is different than the English version, the English version will control.
|
31.
|
Compliance with Laws:
As a condition to the grant of this Award, you agree
to repatriate all payments attributable to the Shares and/or cash acquired under the Plan (including, but not limited to, dividends, dividend equivalents and any proceeds derived from the sale of the Shares acquired pursuant to the
Restricted Stock Units
) if required by and in accordance with local foreign exchange rules and regulations in your country of residence (and country of employment, if different). In addition, you also agree to take any and all actions, and consent to any and all actions taken by
the Company, your Employer and the Company's Affiliates
, as may be required to allow
the Company, your Employer and the Company's Affiliates
to comply with local laws, rules and regulations in your country of residence (and country of employment, if different). Finally, you agree to take any and all actions as may be required to comply with your personal legal and tax obligations under local laws, rules and regulations in your country of residence (and country of employment, if different).
|
32.
|
Entire Agreement:
This Award Agreement, the Plan, the Addendum, and the rules and procedures adopted by the Committee contain all of the provisions applicable to the Restricted Stock Units and no other statements, documents or practices may modify, waive or alter such provisions unless expressly set forth in writing, signed by an authorized officer of the Company and delivered to you. The various provisions of this Award Agreement, the Addendum, the Plan, and the rules and procedures adopted by the Committee are severable, and if any provision thereof is held to be unenforceable by any court of competent jurisdiction, then such unenforceability shall not affect the enforceability of the remaining provisions thereof.
|
1.
|
Settlement in Shares:
Notwithstanding anything to the contrary in the Award Agreement, this Addendum or the Plan, the Restricted Stock Units shall be settled only in Shares (and shall not be settled in cash).
|
2.
|
Consent to Collection / Processing / Transfer of Personal Data
. The following provision shall supplement section 18 of the Award Agreement: You authorize the Company and the Company's representative to discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration of the Plan. You further authorizes the Company, any Affiliate of the Company, and the Employer, any broker or any stock plan service provider as may be selected by the Company from time to time to assist with the Plan, to disclose and discuss your participation in the Plan with their advisors. You also authorize the Company and the Employer to record such information and to keep such information in your employment file.
|
2.
|
English Language (Quebec)
: To the extent you reside in the province of Quebec, the parties to the Award Agreement acknowledge that it is their express wish that the Award Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.
Dans la mesure où que vous résidez dans la province de Québec, les parties à l’entente de financement reconnaissent que c’est leur volonté expresse que le contrat d’intéressement, ainsi que tous les documents, avis et procédures judiciaires exécutés, donnés ou intentés à la suite ou liés directement ou indirectement du présent règlement, être rédigées en anglais.
|
1.
|
Lapse of Restrictions:
If, for any reason, Shares are issued to you within six (6) months of the Grant Date, you agree that you will not sell or otherwise dispose of any such Shares prior to the six (6) month anniversary of the Grant Date.
|
2.
|
IMPORTANT NOTICE - WARNING:
The contents of the Award Agreement, this Addendum, the Plan, and all other materials pertaining to the Restricted Stock Units and/or the Plan have not been reviewed by any regulatory authority in Hong Kong. You are hereby advised to exercise caution in relation to the offer thereunder. If you have any doubts about any of the contents of the aforesaid materials, you should obtain independent professional advice.
|
3.
|
Wages:
The Restricted Stock Units and Shares subject to the Restricted Stock Units do not form part of your wages for the purposes of calculating any statutory or contractual payments under Hong Kong law.
|
4.
|
Nature of the Plan:
The Company specifically intends that the Plan will not be treated as an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance (“ORSO”). To the extent any court, tribunal or legal/regulatory body in Hong Kong determines that the Plan constitutes an occupational retirement scheme for the purposes of ORSO, the grant of the Restricted Stock Units shall be null and void.
|
1.
|
Securities Law Notice
. The grant of the Restricted Stock Units is being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (“SFA”) under which it is exempt from the prospectus and registration requirements under the SFA and the grant of the Restricted Stock Units is not made to you with a view to the Shares being subsequently offered for sale to any other party. The Plan has not been lodged or registered as a prospectus with the Monetary Authority of Singapore. You should note that the Restricted Stock Units are subject to section 257 of the SFA and you should not make (i) any subsequent sale of the Shares in Singapore, or (ii) any offer of such subsequent sale of the Shares in Singapore, unless such sale or offer is made: (a) more than six (6) months after the Award Date or (b) pursuant to the exemptions under Part XIII Division (1) Subdivision (4) (other than section 280) of the SFA.
|
1.
|
Acknowledgement of Discretionary Nature of the Plan; No Vested Rights:
By accepting the Award, you consent to participation in the Plan and acknowledge receipt of a copy of the Plan.
|
2.
|
Termination for Cause:
Notwithstanding anything to the contrary in the Plan or the Award Agreement, “Cause” shall be as defined as set forth in Article 2.6 of the Plan, regardless of whether the termination of employment is considered a fair termination (i.e., “
despido procedente
”) under Spanish legislation.
|
1.
|
Securities Law Notice
. The Restricted Stock Units are made available only to employees of the Company, a Subsidiary or Affiliate, and the offer of participation in the Plan is a private offering as to employees in Turkey. The grant of Restricted Stock Units and the issuance of Shares at vesting take place outside of Turkey.
|
1.
|
Withholding Taxes:
The following provision supplements Section 11 of the Award Agreement.
|
2.
|
Exclusion of Claim:
You acknowledge and agree that you will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from your ceasing to have rights under or to be entitled to the Restricted Stock Units, whether or not as a result of termination of employment (whether the termination is in breach of contract or otherwise), or from the loss or diminution in value of the Restricted Stock Units. Upon the grant of the Award, you shall be deemed to have waived irrevocably any such entitlement.
|
Name of Subsidiary
|
AF Steelcase S.A., a Spanish corporation
|
PolyVision NV, a Belgian limited liability company
|
PolyVision Corporation, a New York corporation
|
Red Thread Spaces LLC, a Michigan limited liability company
|
Steelcase Czech Republic s.r.o. , a Czech Republic limited liability company
|
Steelcase de Mexico, S. de R.L. de C.V., a Federal Republic of Mexico limited liability company
|
Steelcase Firmengrundstuck, a German limited liability company
|
Steelcase Financial Services Inc., a Michigan corporation
|
Steelcase Manufacturing Sdn. Bhd., a Malaysian corporation
|
Steelcase S.A., a French corporation
|
Steelcase Werndl AG, a German stock corporation
|
1)
|
I have reviewed this annual report on Form 10-K of Steelcase Inc.;
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ James P. Keane
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Name:
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James P. Keane
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Title:
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|
President and Chief Executive Officer
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1)
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I have reviewed this annual report on Form 10-K of Steelcase Inc.;
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2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4)
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5)
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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|
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/s/ David C. Sylvester
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Name:
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|
David C. Sylvester
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Title:
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|
Senior Vice President, Chief Financial Officer
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(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
/s/ James P. Keane
|
|
Name:
|
James P. Keane
|
|
Title:
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President and Chief Executive Officer
|
|
|
/s/ David C. Sylvester
|
|
Name:
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David C. Sylvester
|
|
Title:
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Senior Vice President, Chief Financial Officer
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|