-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, W0dqLP+dfo7PpeBlIQYY5BtM2Gj0mZSDjQwRA0rof56+KIZU4Gj2odWR7iioE1Tf Yxxk3F1rsgWYJ0SsLN17EA== 0000950130-96-003163.txt : 19960814 0000950130-96-003163.hdr.sgml : 19960814 ACCESSION NUMBER: 0000950130-96-003163 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHAMPION INTERNATIONAL CORP CENTRAL INDEX KEY: 0000019150 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 131427390 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03053 FILM NUMBER: 96610773 BUSINESS ADDRESS: STREET 1: ONE CHAMPION PLAZA CITY: STAMFORD STATE: CT ZIP: 06921 BUSINESS PHONE: 2033587000 FORMER COMPANY: FORMER CONFORMED NAME: UNITED STATES PLYWOOD CHAMPION PAPERS IN DATE OF NAME CHANGE: 19720821 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 -------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to -------------------------------------- Commission File Number 1-3053 -------------------------------------- Champion International Corporation - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) New York 13-1427390 - ------------------------------------------------ ---------------------- State or other jurisdiction of incorporation (I.R.S. Employer or organization Identification No.) One Champion Plaza, Stamford, Connecticut 06921 ------------------------------------------------- (Address of principal executive offices) (Zip Code) 203-358-7000 ------------------------------------------------ (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No -------- -------- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at July 31, 1996 - ---------------------------------------- -------------------------------- Common stock, $.50 par value 95,525,550 PART I. FINANCIAL INFORMATION Item 1. Financial Statements. CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF INCOME (unaudited) (in thousands, except per share)
Six Months Ended Three Months Ended --------------------------- --------------------------- June 30, June 30, --------------------------- --------------------------- 1996 1995 1996 1995 -------- -------- -------- -------- Net Sales $ 2,977,766 $ 3,390,456 $ 1,444,584 $ 1,756,432 Costs and Expenses Cost of products sold 2,546,870 2,587,970 1,286,417 1,311,009 Selling, general and administrative expenses 188,286 194,832 91,271 98,173 Interest and debt expenses 108,178 114,528 53,219 54,811 Other (income) expense - net (Note 2) (19,856) (31,253) (8,688) (11,477) ------------ ----------- ----------- ----------- Total costs and expenses 2,823,478 2,866,077 1,422,219 1,452,516 Income Before Income Taxes 154,288 524,379 22,365 303,916 Income Taxes 55,087 205,621 6,813 116,383 ------------ ----------- ----------- ----------- Net Income $ 99,201 $ 318,758 $ 15,552 $ 187,533 ============ =========== =========== =========== Dividends on Preference Stock --- 13,258 --- 6,320 ============ =========== =========== =========== Net Income Applicable to Common Stock $ 99,201 $ 305,500 $ 15,552 $ 181,213 ============ =========== =========== =========== Average Number of Common Shares Outstanding 95,508 93,536 95,511 93,686 ============ =========== =========== =========== Earnings Per Common Share (Exhibit 11): Primary $ 1.04 $ 3.27 $ 0.16 $ 1.93 ============ =========== =========== =========== Fully Diluted $ 1.04 $ 3.04 $ 0.16 $ 1.79 ============ =========== =========== =========== Cash dividends declared $ .10 $ .10 $ .05 $ .05 ============ =========== =========== ===========
The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. -2- CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (in thousands of dollars)
June 30, December 31, 1996 1995 ASSETS: (unaudited) -------------- ------------- Current Assets: Cash and cash equivalents $ 322,130 $ 317,069 Short-term investments 53,391 98,275 Receivables - net 560,214 641,291 Inventories 424,467 484,001 Prepaid expenses 41,618 24,841 Deferred income taxes 74,054 75,329 ------------- ------------ Total Current Assets 1,475,874 1,640,806 ------------- ------------ Timber and timberlands, at cost - less cost of timber harvested 2,199,796 2,007,685 ------------- ------------ Property, plant and equipment, at cost 9,001,044 8,850,519 Less - Accumulated Depreciation (3,491,412) (3,335,945) ------------- ------------ 5,509,632 5,514,574 ------------- ------------ Other assets and deferred charges 474,776 380,237 ------------- ------------ Total Assets $ 9,660,078 $ 9,543,302 ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY: Current Liabilities: Current installments of long-term debt $ 154,660 $ 77,760 Short-term bank borrowings 134,864 150,067 Accounts payable and accrued liabilities 676,935 726,206 Income taxes 5,090 125,840 ------------- ------------ Total Current Liabilities 971,549 1,079,873 ------------- ------------ Long-term debt 2,862,365 2,828,509 ------------- ------------ Other liabilities 674,227 664,010 ------------- ------------ Deferred income taxes 1,313,179 1,218,978 ------------- ------------ Minority interest in subsidiaries (Note 4) 112,613 105,241 ------------- ------------ Shareholders' Equity: Capital Shares: Common (110,289,679 and 110,230,379 shares issued at June 30, 1996 and December 31, 1995, respectively) 55,145 55,115 Capital Surplus 1,650,608 1,653,456 Retained Earnings 2,707,659 2,618,033 ------------- ------------ 4,413,412 4,326,604 ------------- ------------ Treasury shares, at cost (657,864) (650,049) Cumulative translation adjustment (29,403) (29,864) ------------- ------------ Total Shareholders' Equity 3,726,145 3,646,691 ------------- ------------ Total Liabilities and Shareholders' Equit $ 9,660,078 $ 9,543,302 ============= ============ The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. -3-
CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED CASH FLOWS (unaudited) (in thousands of dollars)
Six Months Ended ------------------------------------ June 30, ------------------------------------ 1996 1995 ------------ ------------ Cash flows from operating activities: Net income $ 99,201 $ 318,758 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 200,838 193,926 Cost of timber harvested 42,800 37,798 Net gain on sale of assets (3,894) (36,167) (Increase) decrease in receivables 82,043 (110,429) (Increase) decrease in inventories (5,600) 11,872 (Increase) decrease in prepaid expenses (16,742) (16,903) Increase (decrease) in accounts payable and accrued liabilities (64,028) (7,905) Increase (decrease) in income taxes (120,458) 45,765 Increase (decrease) in other liabilities (18,653) 7,684 Increase (decrease) in deferred income taxes 15,273 64,136 All other - net 1,430 53,445 ------------- ------------- Net cash provided by operating activities 212,210 561,980 ------------- ------------- Cash flows from investing activities: Expenditures for property, plant and equipment (185,778) (154,089) Timber and timberlands expenditures (60,677) (119,970) Acquisition of timber subsidiary (Note 3) (71,990) --- Proceeds from redemption of investments 44,884 --- Proceeds from sales of property, plant and equipment and timber and timberlands 17,805 182,886 All other - net 3,982 (11,489) ------------- ------------- Net cash used in investing activities (251,774) (102,662) ------------- ------------- Cash flows from financing activities: Proceeds from issuance of long-term debt 508,899 276,851 Payments of current installments of long-term debt and long-term debt (449,474) (80,095) Cash dividends paid (9,579) (22,596) Payments to acquire treasury stock (7,815) (492,729) All other - net 2,594 23,911 ------------- ------------- Net cash provided by (used in) financing activities 44,625 (294,658) ------------- ------------- Increase in cash and cash equivalents 5,061 164,660 Cash and Cash Equivalents: Beginning of period 317,069 90,948 ------------- ------------- End of period $ 322,130 $ 255,608 ============= ============= Supplemental cash flow disclosures: Cash paid during the period for: Interest (net of capitalized amounts) $ 102,593 $ 120,043 Income taxes (net of refunds) 153,116 91,168
The accompanying Notes to Consolidated Financial Statements are an integral part of this statement. -4- CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) June 30, 1996 Note 1 The unaudited information furnished in this report reflects all adjustments which are, in the opinion of management, necessary to present fairly a statement of the results for the interim periods reported. All such adjustments made were of normal recurring nature. Note 2. Other income (expense) - net for the three months and six months ended June 30, 1995 includes gains of $39 million and $89 million, respectively, from the sales of certain operations in Canada and charges of $32 million and $68 million, respectively, primarily for the writedown of certain U.S. paper and wood products assets. Note 3. During the first quarter of 1996 the company acquired Lake Superior Land Company for $76 million, before netting $4 million of cash owned by Lake Superior Land Company, as well as an outstanding $44 million mortgage loan. The acquisition was accounted for as a purchase. Liabilities recorded in connection with the acquistion, including purchase accounting adjustments, were the $44 million mortgage loan, $68 million deferred taxes payable and $13 million of other liabilities. Note 4. On July 3, 1996, Weldwood of Canada Limited acquired all of its publicly-held shares for approximately (U.S.) $190 million and became a wholly-owned subsidiary of Champion. -5- CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES Item 2. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations. -------------- Results of Operations - --------------------- Overall Quarterly Results The company reported net income in the second quarter of 1996 of $16 million or $.16 per share, compared to last year's second quarter net income of $188 million or $1.79 per share, fully diluted, and last quarter's net income of $84 million or $.88 per share. Significant Income Statement Line Item Changes Net sales of $1.44 billion declined from $1.76 billion a year ago and $1.53 billion last quarter. Gross profit on sales was $158 million, compared to $445 million last year and $273 million last quarter. Pre-tax income of $22 million declined from $304 million a year ago and $132 million last quarter. The declines in net sales, gross profit and pre-tax income from last year were due primarily to lower prices for uncoated and coated free sheet papers, market pulp and plywood and, to a lesser extent, lower shipments for all coated paper grades, plywood and lumber. The declines from last quarter were due principally to lower prices for all of the company's major pulp and paper grades. The aggregate cost of products sold decreased somewhat from last year and increased somewhat from last quarter mainly due to changes in pulp and paper shipments as discussed below. Selling, general and administrative expenses were down from both last year and last quarter due mainly to the impact of stock price fluctuations on the value of stock appreciation rights. The income tax provision for the second quarter of 1996 reflected an effective tax rate lower than last year and last quarter mainly as the result of an increase in the proportion of income derived from Brazilian operations and a corresponding decrease from North American operations. Year-to-Date Results For the first six months, the company reported net income of $99 million or $1.04 per share, compared to net income of $319 million or $3.04 per share, fully diluted, a year ago. Paper Segment For the company's paper segment, second quarter operating income was $ 44 million. This compared to income of $344 million a year ago and $167 million last quarter. Total paper, packaging and pulp shipments were 1,522,000 tons in the second quarter, compared to 1,528,000 tons a year ago and 1,386,000 tons last quarter. The operating loss for the domestic printing and writing papers business represented a significant decline from the operating income of a year ago and last quarter principally due to lower prices for uncoated and coated free sheet papers. The average price for domestic uncoated free sheet papers, the principal product of the printing and writing papers business, was $706 per ton in the second quarter of this year, -6- compared to $984 per ton last year and $815 per ton last quarter. The average price for coated free sheet papers was $1,149 this quarter, compared to $1,202 a year ago and $1,228 last quarter. Shipments of all printing and writing grades were 521,000 tons, compared to 530,000 tons last year and 492,000 tons last quarter. A price increase for most grades of uncoated free sheet papers was implemented late in the second quarter of 1996. Prices for coated free sheet papers continued to decline early in the third quarter. Operating income at the Brazilian subsidiary, Champion Papel e Celulose Ltda., declined from the year-ago quarter and last quarter primarily due to lower prices for both domestic and export uncoated free sheet papers. The overall average price for uncoated free sheet papers was $813 per ton in the second quarter of this year, compared to $1,047 per ton last year and $961 per ton last quarter. Prices for domestic uncoated free sheet papers continued to decline into the third quarter, while export prices improved somewhat. Uncoated free sheet papers shipments of 98,000 tons were approximately even with last year and last quarter. For the first six months of 1996, approximately 37.4% of the company's consolidated pre-tax income was attributable to the Brazilian subsidiary. Earnings for the publication papers business declined from a year ago principally due to lower prices for coated free sheet papers, as well as lower shipments for all grades. Earnings declined from last quarter mainly due to lower prices for all grades. The average price for coated groundwood papers was $1,003 per ton this quarter and last year, compared to $1,107 per ton last quarter. Prices for coated free sheet papers declined from last year and last quarter, while prices for uncoated groundwood papers were approximately even with last year and down from last quarter. Shipments of all publication grades of 284,000 tons declined from 330,000 tons last year and were approximately even with last quarter. Prices for all publication grades continued to decline early in the third quarter. The operating loss for the company's U.S. and Canadian market pulp operations represented a substantial decline from the operating income of last year and last quarter. Weak demand for pulp, reflecting short order backlogs for most grades of paper, as well as pulp capacity additions in Indonesia in late 1995, resulted in a price decline from last year and last quarter for all pulp grades. The average price for Canadian softwood pulp was $362 per ton in the second quarter of this year, compared to $683 per ton last year and $500 per ton last quarter. Average prices for northern hardwood and southern pulp grades also decreased from last year and last quarter. Shipments of all pulp grades of 267,000 tons increased from 208,000 tons last year and 174,000 tons last quarter due to improved demand late in the second quarter. As a result, inventory levels of all grades of pulp decreased substantially in the second quarter. A price increase for northern hardwood and southern pulp grades was effective June 1. A price increase for all grades was implemented effective July 1. Earnings for the newsprint business declined from last year primarily due to lower shipments of specialty and directory grades and higher costs resulting from scheduled maintenance outages. Earnings declined from last quarter principally due to lower prices. Average newsprint prices (including freight) of $600 per ton in the second quarter of 1996 compared to $604 per ton last year and $681 per ton last quarter. Shipments of 236,000 short tons of newsprint, specialty and directory grades were approximately even with last year and increased from 208,000 tons last quarter. Newsprint prices continued to decline early in the third quarter. Break-even results for the packaging business represented a decline from the operating income of a year ago and last quarter. The decline from last year was mainly due to lower prices for kraft paper and linerboard and reduced shipments of linerboard. The decline from last quarter was primarily due to lower prices for linerboard and reduced shipments of kraft paper and linerboard. Shipments of 116,000 tons declined from 126,000 tons last year and 128,000 tons last quarter. -7- Wood Products Segment The company's wood products segment, which includes the wood-related operations of the company's Canadian subsidiary, Weldwood of Canada Limited, reported second quarter income from operations of $29 million, up from $28 million a year ago and $19 million last quarter. The improvement from last quarter was principally due to a 20% increase in lumber prices and lower purchased wood costs. Compared to last year, plywood prices were 20% lower, lumber prices were approximately the same and purchased wood costs were lower. Total wood products shipments declined from last year and last quarter due to the closure of various wood products facilities. West coast timber stumpage prices declined from both last year and last quarter. Foreign Operations The company's major foreign operations, which are discussed above under their respective business segment headings, are in Canada and Brazil. Net sales to unaffiliated customers by the company's foreign subsidiaries for the first six months of 1996 were (U.S.) $389 million, accounting for 13% of consolidated net sales of the company. Pre-tax income of the foreign subsidiaries for the first six months of 1996 was (U.S.) $77.8 million, accounting for 50.4% of the consolidated pre-tax income of the company. Net income (after minority interest) of the foreign subsidiaries for the first six months of 1996 was (U.S.) $52.2 million, accounting for 52.6% of consolidated net income of the company. Labor Contracts A new five-year labor contract was ratified in June at the Pensacola, Florida, paper mill. Financial Condition - ------------------- The company's current ratio was 1.5 to 1 at June 30, 1996 as compared to 1.6 to 1 at March 31, 1996 and 1.5 to 1 at year-end 1995. Total debt to total capitalization was 38% at June 30, 1996, March 31, 1996 and year-end 1995. Significant Balance Sheet Line Item Changes Short-term investments declined by $45 million from December 31, 1995 to partially fund the income tax payments and the reduction in accounts payable and accrued liabilities discussed below. Receivables decreased by $81 million mainly due to substantial price decreases for all of the company's major pulp and paper grades. Inventories decreased by $60 million, primarily as a result of reclassifying $58 million of maintenance parts as other assets. Timber and timberlands - net increased by $192 million principally due to the acquisition of Lake Superior Land Company in the first quarter of 1996. Other assets and deferred charges increased by $95 million reflecting the reclassification of maintenance parts from inventory, an increase in the company's pension contributions and the acquisition of real estate land as part of the purchase of Lake Superior Land Company. Accounts payable and accrued liabilities decreased by $49 million mainly due to the timing of payments. Income taxes payable decreased by $121 million due to payments made in the first half of 1996 for U.S. and foreign income taxes. The deferred income tax liability increased by $94 million, which included $69 million recorded in connection with the Lake Superior Land Company acquisition. For a discussion of changes in long-term debt (including current installments) and cash and cash equivalents, see below. -8- Cash Flows Statement - General In the first six months of 1996, the company's net cash provided by operating activities and asset sales was not sufficient to meet the requirements of its investing activities (principally capital expenditures and the acquisition of Lake Superior Land Company) and its financing activities (principally debt payments, cash dividends and the purchase of shares of the company's common stock). The difference was financed through borrowings. In the first six months, net borrowings generated cash proceeds of $59 million; long-term debt (including current installments) increased by $111 million, including a $44 million mortgage loan of Lake Superior Land Company which was outstanding at the time of its acquisition. Cash and cash equivalents increased by $5 million in the first six months to a total of $322 million, $282 million of which was held by the company's Canadian and Brazilian subsidiaries. In the first six months of 1995, the company's net cash provided by operating activities and asset sales exceeded the requirements of its investing activities (principally capital expenditures). The approximate excess, together with net borrowings, was used to pay dividends, purchase shares of the company's common stock and increase cash and cash equivalents. Net borrowings generated cash proceeds of $197 million, while cash and cash equivalents increased by $165 million in the first six months of 1995. Cash Flows Statement - Operating Activities For the first six months, net cash provided by operating activities of $212 million declined from $562 million a year ago. The decrease was due primarily to lower earnings, higher income tax payments and lower accounts payable and accrued liabilities, partially offset by a decrease in receivables. Cash Flows Statement - Investing Activities For the first six months, net cash used in investing activities of $252 million increased from $103 million a year ago. The increase was due mainly to the acquisition of Lake Superior Land Company for $76 million (as well as a $44 million mortgage loan which was outstanding at the time of its acquisition), and a decline in net proceeds from asset sales attributable to the sale of certain operations in Canada last year. On June 13, 1996, the company sold the lumber mill at Klickitat, Washington, to Klickitat Valley Sawmills, Inc. The facility, with an annual capacity of 85 million board feet, had been permanently closed on November 6, 1994. The company's Brazilian subsidiary is currently negotiating the possible purchase of Amapa Florestal e Celulose (AMCEL), a Brazilian company that owns approximately 430,000 acres of land and a chip mill in the State of Amapa, Brazil. Cash Flows Statement - Financing Activities Net cash provided by financing activities of $45 million compared to net cash used in financing activities of $295 million a year ago. The change reflects several factors, principally the purchase of shares of common stock by the company last year. At June 30, 1996, the company had $93 million of U.S. commercial paper outstanding, all of which is classified as long-term debt, up from $31 million at March 31, 1996 and $58 million at year-end 1995. At December 31, 1995, the company had $40 million of notes outstanding under its U.S. bank lines of credit. At June 30, 1996 and March 31, 1996, no notes were outstanding under these lines of credit. -9- Domestically, at June 30, 1996, $93 million of the company's unused bank lines of credit of $1,250 million supported the classification of commercial paper as long-term debt. At June 30, 1996, Weldwood had unused bank lines of credit of $183 million. On July 3, 1996, Weldwood of Canada Limited acquired all of its publicly-held shares for approximately (U.S.) $190 million and became a wholly-owned subsidiary of the company. Prior to the acquisition, approximately 16% of Weldwood's shares were held by the public. The annual principal payment requirements under the terms of all long-term agreements for the period from July 1 through December 31, 1996 are $25 million and for the years 1997 through 2000 are $230 million, $330 million, $298 million and $205 million, respectively. The Environment - --------------- Environmental Legal Proceedings There is incorporated by reference herein the information under Item 1. Legal Proceedings in Part II of this report. -10- PART II. OTHER INFORMATION CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES Item 1. Legal Proceedings. - --------------------------- As most recently reported in the company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1996, on November 9, 1992, an action was brought against the company in the Circuit Court for Baldwin County, Alabama, on behalf of a class consisting of all persons who own land along Perdido Bay in Florida and Alabama. The action originally sought $500 million in compensatory and punitive damages for personal injury, intentional infliction of emotional distress and diminution in property value allegedly resulting from the purported discharge of hazardous substances, including dioxin, from the company's Pensacola, Florida mill into Eleven Mile Creek, which flows into Perdido Bay. However, in February 1994, the plaintiffs reduced their demand to not more than $50,000 for each class member, and in June 1994, the personal injury claims were dismissed. On May 3, 1996, the court approved a settlement of the action providing for a payment of $5 million by the company. The time has expired for any appeal of the court's approval of the settlement and, accordingly, the settlement is final. As most recently reported in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, in February 1994, the company received a notice of violation from the Texas Natural Resources Conservation Commission alleging unauthorized air emissions from the company's Sheldon, Texas mill. The notice of violation alleged several violations, certain of which have been resolved without penalty. In June 1996, the company agreed to settle the remaining violations for $470,400. Item 4. Submission of Matters to a Vote of Security Holders. - ------------------------------------------------------------- (a) The Annual Meeting of Shareholders of the company was held on May 16, 1996. (b) N/A (c) (i) Five nominees were elected to the Board of Directors at the 1996 Annual Meeting. Lawrence A. Bossidy - 80,523,438 votes were cast in favor of his election and 1,245,361 votes were withheld. Robert A. Charpie - 80,515,471 votes were cast in favor of his election and 1,253,328 votes were withheld. Alice F. Emerson - 80,503,001 votes were cast in favor of her election and 1,265,798 votes were withheld. -11- Allan E. Gotlieb - 80,514,214 votes were cast in favor of his election and 1,254,585 votes were withheld. Kenwood C. Nichols - 80,525,673 votes were cast in favor of his election and 1,243,126 votes were withheld. (ii) The shareholders approved the appointment of Arthur Andersen LLP as the company's auditors for 1996. There were 81,542,645 votes cast in favor of the proposal, 95,306 votes cast against the proposal and 130,848 abstentions. (d) N/A Item 6. Exhibits and Reports on Form 8-K. - ------------------------------------------ (a) See exhibit index following the signature page. (b) The company filed a Current Report on Form 8-K dated June 4, 1996 reporting the issuance of a press release announcing (a) the election of Richard E. Olson as Chairman and Chief Executive Officer and Kenwood C. Nichols as Vice Chairman and Executive Officer effective October 1, 1996 and (b) the election of Richard E. Olson as a member of the Board of Directors of the company effective June 4, 1996. -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the undersigned on behalf of the registrant as duly authorized officers thereof and in their capacities as the chief accounting officers of the registrant. Champion International Corporation ------------------------------------- (Registrant) Date: August 13, 1996 John M. Nimons - -------------------------------- ------------------------------------- (Signature) John M. Nimons Vice President and Controller Date: August 13, 1996 Kenwood C. Nichols - -------------------------------- ------------------------------------- (Signature) Kenwood C. Nichols Vice Chairman -13- EXHIBIT INDEX Each exhibit is listed according to the number assigned to it in the Exhibit Table of Item 601 of Regulation S-K. 3.1 - By-Laws of the company. 10.1 - Amendment dated as of July 17, 1996 to Champion International Corporation Nonqualified Supplemental Savings Plan. 10.2 - Second amendment dated as of July 17, 1996 to Champion International Corporation Executive Life Insurance Plan. 11 - Calculation of Primary Earnings Per Common Share and Fully Diluted Earnings per Common Share (unaudited). 27 - Financial Data Schedule (unaudited). -14- EX-3.1 2 BY-LAWS OF THE COMPANY EXHIBIT 3.1 BY-LAWS Champion International Corporation (As amended to and including June 4, 1996) Index To By-Laws Article I. Meetings of Shareholders 1 Section 1. Annual Meetings Section 2. Special Meetings Section 3. Place of Meetings Section 4. Notice of Meetings Section 5. Quorum Section 6. Voting Section 7. List of Shareholders Section 8. Inspectors of Election Section 9. Advance Notice of Shareholder Nominations of Directors Section 10. Advance Notice of Shareholder Proposed Business at Annual Meeting Article II. Board of Directors 4 Section 1. Number, Election and Term of Office Section 2. Vacancies Section 3. Duties and Powers; Committees Section 4. Annual and Regular Meetings; Notices Section 5. Special Meetings; Notice Section 6. Chairman Section 7. Quorum Section 8. Manner of Acting Section 9. Resignation Section 10. Removal Section 11. Compensation of Certain Directors Section 12. Participation in Meeting by Telephone or Similar Equipment Article III. Officers 6 Section 1. Number, Qualification, Election and Term of Office Section 2. Resignation Section 3. Removal Section 4. Vacancies Section 5. Chief Executive Officer Section 6. Chairman of the Board Section 7. President Section 8. Vice Presidents Section 9. Secretary Section 10. Treasurer Section 11. Other Officers Section 12. Salaries Section 13. Sureties and Bonds Article IV. Shares of Stocks 8 Section 1. Certificates Representing Shares Section 2. Lost or Destroyed Certificates Section 3. Holders of Record Section 4. Regulations Section 5. Fixing of Record Date Article V. Dividends 9 Article VI. Right to Inspect Books 9 Article VII. Execution of Instruments 9 Section 1. Execution of Instruments Section 2. Proxies Article VIII. Fiscal Year 10 Article IX. Corporate Seal 10 Article X. Offices 10 Section 1. Office of the Corporation Section 2. Other Offices Article XI. Amendments 10 Article XII. Interpretation 10 By-Laws of Champion International Corporation (As amended to and including June 4, 1996) Article I. Meetings of Shareholders Section 1. Annual Meetings: The annual meeting of the shareholders of the Corporation for the election of directors and for the transaction of such other business as may come before the meeting shall be held on the third Thursday in May of each year, if not a legal holiday, or, if a legal holiday, then on the next succeeding day not a legal holiday or in all events on such other day, not a legal holiday, as may be fixed by the Board of Directors. Section 2. Special Meetings: Special meetings of the shareholders or of the holders of a particular class or series of stock may be called at any time by the Chairman of the Board or the President, and shall be called by the Chairman of the Board or the President or the Secretary at the written request of a majority of the Board of Directors. Section 3. Place of Meetings: All meetings of shareholders shall be held at the principal office of the Corporation in the City of Stamford, State of Connecticut, or at such other places as the Board of Directors may select, or as shall be specified in the respective notices or waivers of notices of such meetings. Section 4. Notice of Meetings: (a) Written notice of each meeting of shareholders, whether annual or special, stating the purpose for which the meeting is called and the place, date and hour of the meeting shall be served either personally or by mail, not less than ten nor more than fifty days before the meeting, upon each shareholder of record entitled to vote at such meeting. If mailed, such notice shall be directed to each such shareholder at his address as it appears on the stock books of the Corporation, unless he shall have previously filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other address. (b) Notice of any meeting need not be given to any shareholder who submits a signed waiver of notice, in person or by proxy, before or after the meeting, or who attends a meeting in person or by proxy, without protesting prior to the conclusion of the meeting the lack of notice thereof. Section 5. Quorum: (a) At all meetings of shareholders of the Corporation there shall be necessary and sufficient to constitute a quorum for the transaction of any business the presence in person or by proxy of shareholders holding of record shares having in the aggregate a majority of the total number of votes of all shares of the Corporation then issued and outstanding and entitled to vote on such business at such meeting. (b) In the absence of a quorum at any annual or special meeting of shareholders, the shareholders present in person or by proxy and entitled to vote thereat or, if no shareholders entitled to vote are present in person or by proxy, any officer authorized to preside at or to act as secretary of such meeting, may adjourn the meeting to a time and place determined by majority vote of the shareholders present in person or by proxy, or by such officer, as the case may be. At any such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called if a quorum had been present. Section 6. Voting: (a) Whenever any corporate action, other than the election of directors, is to be taken by vote of the shareholders, it shall be authorized by the majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon. (b) At each meeting of shareholders each holder of record of shares of stock of the Corporation entitled to vote shall be entitled to vote the shares of such stock held by him and registered in his name on the books of the Corporation at the time of such meeting unless, pursuant to the provisions of Section 5 of Article IV of these by-laws, a date shall have been fixed as a record date for the determination of the shareholders entitled to vote. (c) Each shareholder entitled to vote may vote by proxy, provided, however, that the instrument authorizing such proxy to act shall have been executed in writing by the shareholder himself, or by his attorney thereunto duly authorized in writing. No proxy shall be valid after the expiration of eleven months from the date of its execution unless the person executing it shall have specified therein the length of time it is to continue in force. Section 7. List of Shareholders: It shall be the duty of the Secretary to prepare or have prepared before each meeting of shareholders a complete list of the shareholders entitled to vote thereat. Such list shall be produced at such meeting upon the request thereat or prior thereto of any shareholder. Section 8. Inspectors of Election: Unless the Board of Directors shall have made such appointment prior to such meeting, at each meeting of the shareholders the chairman of the meeting may, and at the request of any shareholder entitled to vote thereat shall, appoint one or more persons, who need not be share- holders, to act as inspectors of election at such meeting. The inspectors so appointed, before entering on the discharge of their duties, shall take and subscribe an oath or affirmation faithfully to execute the duties of inspectors at such meeting with strict impartiality and according to the best of their ability. Section 9. Advance Notice of Shareholder Nominations of Directors: Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of shareholders by or at the direction of the Board of Directors, by the Committee on Board Affairs or by any person appointed by the Board of Directors or by any shareholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Section 9. Such nominations by a shareholder shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder's notice shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days nor more than 90 days prior to the meeting; provided, however, that in the event that the meeting is not to be held on the date set forth in Section 1 and less than 75 days' notice of prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the 15th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such shareholder's notice to the Secretary shall set forth (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Rule 14a under the Securities Exchange Act of 1934, as amended; and (b) as to the shareholder giving the notice (i) the name and record address of the shareholder and (ii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the shareholder. The Corporation may require any pro- posed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the proce- dures set forth herein. The Chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the foregoing procedure and, if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded. Section 10. Advance Notice of Shareholder Proposed Business at Annual Meetings: At an annual meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, otherwise properly brought before the meeting by or at the direction of the Board of Directors, or otherwise properly brought before the meeting by a shareholder. In addition to any other applicable requirements, for business to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than 60 days prior to the meeting; provided, however, that in the event that the meeting is not to be held on the date set forth in Section 1 and less than 75 days' notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the 15th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting, (ii) the name and record address of the shareholder proposing such business, (iii) the class and number of shares of the Corporation which are beneficially owned by the shareholder, and (iv) any material interest of the shareholder in such business. Notwithstanding anything in the by-laws to the contrary, no business shall be conducted at the annual meeting except in accordance with the procedures set forth in this Section 10, provided, however, that nothing in this Section 10 shall be deemed to preclude discussion by any shareholder of any business properly brought before the annual meeting in accordance with said procedure. The Chairman of an annual meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 10 and, if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. Article II. Board of Directors Section 1. Number, Election and Term of Office: (a) The number of directors, exclusive of directors who may be elected pursuant to paragraph (b) of this Section 1, shall not be less than nine nor more than twenty; the exact number shall be fixed from time to time by resolution of the Board of Directors adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies. Directors shall be divided into three classes with the class expiring at succeeding annual meetings of share- holders. All classes shall be as nearly equal in number as possible, and no class shall include less than three directors. At each annual meeting, directors to replace those whose terms expire at such annual meeting shall be elected, each such director to hold office until the third succeeding annual meeting and until his successor is elected and qualified, or until his death, resignation or removal. Terms of office of directors are further subject to the provisions of paragraph (d) of this Section 1. Any newly created directorships, or any decrease in directorships, shall be apportioned among the three classes of directors as to make all classes as nearly equal in number as possible. When the number of directors is increased by the Board of Directors any newly created directorships may be filled by a majority vote of the directors then in office even though less than a quorum. There shall be no classification of the additional directors until the next annual meeting of shareholders. No decrease by the Board of Directors of the number of directors shall shorten the term of office of any incumbent director. (b) In the event that the Preference Stock of the Corporation shall be entitled at any annual meeting of shareholders to vote separately as a single class to elect two directors pursuant to the Certificate of Incorporation, the number of directors to be elected at such annual meeting shall be increased by two, after any reduction and reclassification of directors which may be made prior to or effective at such annual meeting by the Board of Directors pursuant to paragraph (a) of this Section 1. The directors to be so elected by said Preference Stock shall not be classified. Each director so elected by said Preference Stock shall hold office until the annual meeting of shareholders next succeeding his election and until his successor, if any, is elected by said Preference Stock and qualified, or until his death, resignation or removal. (c) Except as otherwise provided herein, the members of the Board of Directors of the Corporation shall be elected by a plurality of the votes cast at a meeting of share- holders by the holders of shares entitled to vote in the election. (d) Except as the Board of Directors may otherwise provide from time to time, no person shall be eligible to serve as a director after the annual meeting of share- holders immediately following his seventieth birthday. Section 2. Vacancies: Any vacancy in the Board of Directors, occurring by reason of the death, resigna- tion, disqualification, removal for cause or inability to act of any director, shall be filled by a majority vote of the remaining directors though less than a quorum. Any director elected by the Board of Directors to fill such a vacancy shall hold office until the annual meeting of shareholders next succeeding his election and until his successor is elected and qualified, or until his death, resignation or removal. Section 3. Duties and Powers; Committees: (a) The business of the Corporation shall be managed under the direction of the Board of Directors. The Board of Directors may exercise all powers of the Corporation except as herein, in the Certificate of Incorporation or by statute expressly conferred upon or reserved to the shareholders. (b) The Board of Directors may, by resolution adopted by a majority of the total number of directors which the Corporation would have if there were no vacancies, designate from its number the members of an Audit Committee, a Board Affairs Committee, a Compensation and Stock Option Committee, a Pension Funding and Investment Committee and one or more other committees, each of which shall consist of three or more directors, and each of which shall have such authority and powers as may from time to time be delegated to it by resolution adopted in the same manner. Section 4. Annual and Regular Meetings; Notices: (a) A regular annual meeting of the Board of Directors shall be held as promptly as practicable following the annual meeting of the shareholders at the place of such annual meeting of shareholders, or at such other place or time as the Board of Directors may determine. (b) The Board of Directors from time to time may provide by resolution for the holding of other regular meetings of the Board of Directors and may fix the time and place thereof. (c) Notice of any regular meeting of the Board of Directors shall not be required to be given; provided, however, that in case the Board of Directors shall fix or change the time or place of any regular meeting, notice of such action shall be directed to the residence or usual place of business of each director who shall not have been present at the meeting at which such action was taken, unless such notice shall be waived in the manner set forth in paragraph (c) of Section 5 of this Article II. Such notice may be given by first class mail if mailed at least five days before the day of the meeting or may be given by courier, telex or telephone, facsimile or any other method of telecommunication at least 48 hours before the time of the meeting. Section 5. Special Meetings; Notice: (a) Special meetings of the Board of Directors shall be held whenever called by the Chairman of the Board or by the President or by any two or more directors at such time and place as may be specified in the respective notices or waivers of notice thereof. (b) Notice of such special meeting shall specify the purpose of the meeting, and shall be directed to each director at his residence or usual place of business. Such notice may be given by first class mail if mailed at least five days before the day of the meeting or may be given by courier, telex or telephone, facsimile or any other method of telecommunication at least 48 hours before the time of the meeting. (c) Notice of any special meeting shall not be required to be given to any director who shall attend such meeting in person without protesting, prior thereto or at its commence- ment, the lack of notice to him, or to any director who shall waive notice of such meeting in writing or by telex, facsimile or any other method of telecommunication whether before or after the time of such meeting. Notice of any adjourned meeting need not be given. Section 6. Chairman: At all meetings of the Board of Directors the Chairman of the Board or, in his absence, the President or, in the absence of both of them, a chairman chosen by the directors present shall preside. Section 7. Quorum: (a) At all meetings of the Board of Directors the presence of a majority of the total number of directors which the Corporation would have if there were no vacancies shall be necessary and sufficient to constitute a quorum for the transaction of business. (b) A majority of the directors present at the time and place of any regular or special meeting, although less than a quorum, may adjourn the same from time to time without further notice until a quorum shall be present. Section 8. Manner of Acting: (a) At all meetings of the Board of Directors each director present shall have one vote. (b) Except as otherwise provided herein, the vote of a majority of the directors present at the time of the vote, if a quorum is present at such time, shall be the act of the Board of Directors. Section 9. Resignation: Any director may resign at any time by giving written notice to the Board of Directors, the Chairman of the Board, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, and the acceptance of such resignation shall not be necessary to make it effective. Section 10. Removal: Any director may be removed with or without cause at any time by the vote of the holders of the respective class or classes of stock by which such director was elected, given at a special meeting of the shareholders of such class or classes called for the purpose. Section 11. Compensation of Certain Directors: Directors who are not officers or employees of the Corporation may receive such compensation for their services, and allowances for expenses, as the Board of Directors may fix from time to time. Section 12. Participation in Meeting by Telephone or Similar Equipment: Any one or more members of the Board of Directors or any committee thereof may participate in a meeting of the Board of Directors or such committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting. Article III. Officers Section 1. Number, Qualification, Election and Term of Office: (a) The officers of the Corporation shall be a Chairman of the Board of Directors and\or a President (one of whom shall be designated Chief Executive Officer), and one or more Vice Presidents, a Secretary, a Treasurer and such other officers as the Board of Directors may from time to time determine. The Chairman of the Board and the President shall each be and remain a director of the Corporation during the term of his office. Any two offices, except the offices of President and Secretary, may be held by the same person. (b) Each officer of the Corporation shall be elected by the Board of Directors and shall hold office until the annual meeting of the Board of Directors next succeeding his election and until his successor shall have been elected and qualified or until his death, resignation or removal. Section 2. Resignation: Any officer may resign at any time by giving written notice of such resignation to the Board of Directors, the Chairman of the Board, the President or the Secretary of the Corporation. Unless otherwise specified in such written notice, such resignation shall take effect upon receipt thereof by the Board of Directors or by such officer, and the acceptance of such resignation shall not be necessary to make it effective. Section 3. Removal: Any officer may be removed, either for or without cause, and a successor elected, by the Board of Directors. Section 4. Vacancies: A vacancy in any office, occurring by reason of death, resignation, inability to act, disqualification, removal or any other cause, may be filled for the unexpired portion of the term by the Board of Directors. Section 5. Chief Executive Officer: The Chief Executive Officer shall serve as general manager of the property, business and affairs of the Corporation, its subsidiaries, affiliates and divisions, and shall report directly to the Board of Directors, with all other officers and personnel reporting directly or indirectly to him. Section 6. Chairman of the Board: The Chairman of the Board shall preside at meetings of the shareholders and at meetings of the Board of Directors, and shall have such other powers and shall discharge such other duties as are generally incident to the office of Chairman of the Board or as may be assigned to him from time to time by the Board of Directors. If the Chairman of the Board is not the Chief Executive Officer, he shall have such additional powers and duties as may be assigned to him from time to time by the Chief Executive Officer. Section 7. President: The President shall have such powers and shall discharge such duties as are generally incident to the office of President or as may be assigned to him from time to time by the Board of Directors. In the absence of the Chairman of the Board, the President shall preside at meetings of the shareholders and at meetings of the Board of Directors. If the President is not the Chief Executive Officer, he shall have such additional powers and duties as may be assigned to him from time to time by the Chief Executive Officer. Section 8. Vice Presidents: The Vice Presidents shall have such powers and shall discharge such duties as are generally incident to the office of Vice President. Each Vice President shall have such other powers and discharge such other duties as may be assigned to him from time to time by the Board of Directors, the Chairman of the Board or the President. Section 9. Secretary: The Secretary shall record the minutes of the meetings of the shareholders and of the Board of Directors in books to be kept for that purpose, and shall perform like duties for committees appointed by the Board of Directors when required. He shall give, or cause to be given, all notices required pursuant to these by-laws. He shall have custody of the corporate seal and shall have authority to affix the same to all instruments executed and delivered on behalf of the Corporation, and he shall have authority to attest the corporate seal when so affixed. He shall have charge of the shareholder records, which may be kept by a transfer agent or agents under his direction. The Secretary shall have such other powers and discharge such other duties as are generally incident to the office of Secretary or as may be assigned to him from time to time by the Board of Directors, the Chairman of the Board or the President. If there shall be one or more Assistant Secretaries, each shall, in the absence of the Secretary, or at his request, have his powers and discharge his duties. Section 10. Treasurer: The Treasurer shall have custody of all funds and securities of the Corporation, shall keep full and accurate accounts of receipts and disbursements in books to be kept for the purpose and shall deposit all money and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated in a manner authorized by the Board of Directors. He shall borrow, invest and disburse funds on behalf of the Corporation as may be authorized by the Board of Directors and shall render periodic accounts of his transactions as Treasurer. The Treasurer shall have such other powers and shall discharge such other duties as are generally incident to the office of Treasurer or as may be assigned to him from time to time by the Board of Directors, the Chairman of the Board or the President. If there shall be one or more Assistant Treasurers, each shall, in the absence of the Treasurer, or at his request, have his powers and discharge his duties. Section 11. Other Officers: Each other officer shall have such powers and discharge such duties as prescribed by law, or assigned to him from time to time by the Board of Directors or by the Chairman of the Board or the President of the Corporation. Section 12. Salaries: No officer shall be prevented from receiving a salary or any other compen- sation by reason of the fact that he is also a director of the Corporation. Section 13. Sureties and Bonds: In case the Board of Directors shall so require, any officer or agent of the Corporation shall execute to the Corpora- tion a bond in such sum and with such surety or sureties as the Board of Directors may direct, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence and for the accounting for all property, funds or securities of the Corporation which may come into his hands. Article IV. Shares of Stock Section 1. Certificates Representing Shares: The shares of the Corporation shall be represented by certificates or shall be uncertificated shares. Certificates shall be signed by the Chairman of the Board or the President or a Vice President and the Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer, and may be sealed with the seal of the Corporation or a facsimile thereof. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar acting on behalf of the Corporation. In case any officer who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer at the date of issue. Section 2. Lost or Destroyed Certificates: The holder of any shares of stock of the Corporation represented by a certificate shall immediately notify the Corporation and its registrar and transfer agent of the loss or destruction of such certificate. The Corporation may issue a new certificate in the place of any certificate theretofore issued by it alleged to have been lost or destroyed and the Board of Directors may require the owner of the lost or destroyed certificate, or his legal representatives, to give the Corporation a bond in such sum as the Board of Directors, or any person delegated by it, may direct and with such surety or sureties as may be satisfactory to the Board of Directors, or any person delegated by it, to indemnify the Corporation against any claim that may be made against it and/or its transfer agent and/or registrar on account of the alleged loss or destruction of any such certificate. A new certificate may be issued without requiring any bond when, in the judgment of the Board of Directors, it is proper to do so. Section 3. Holders of Record: The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the absolute owner thereof for all purposes and, accordingly, shall not be bound to recognize any legal, equitable or other claim to, or interest in such share or shares on the part of any other person whether or not it or they shall have express or other notice thereof. Section 4. Regulations: The Board of Directors may make such rules and regulations as it may deem expedient, including the appointment of co- transfer agents and co-registrars in or outside of the State of New York, concerning the issuance, transfer and registration of shares of stock of the Corporation either represented by certifi- cates or uncertificated, and may require all certificates representing any class of stock to bear the signature or signatures of a transfer agent and/or registrar appointed for such class of stock. Section 5. Fixing of Record Date: The Board of Directors may fix a day (i) not more than fifty days nor less than ten days prior to the day of holding any meeting of shareholders or (ii) not more than fifty days prior to the last day on which the consent or dissent of share- holders may be expressed for any purpose without a meeting, or the day fixed for the payment of any dividend or the distribu- tion of any subscription or other rights or interests, or the day on which any other action is to be taken, as a record date for the determination of the shareholders who are entitled to notice of and to vote at such meeting or any adjournment thereof, or whose consent or dissent is required or may be expressed for any purpose, or who are entitled to receive such dividends or rights or interests or whose identity is to be determined for the purposes of any such other action. Article V. Dividends Dividends may be declared and paid out of any funds available therefor as often, in such amounts and at such time or times as the Board of Directors may determine. Article VI. Right to Inspect Books The Board of Directors is authorized from time to time to determine whether and to what extent, at what time and place, and under what conditions and regulations, the books and accounts of the Corporation or any of them shall be open to the inspection of any shareholder. Article VII. Execution of Instruments Section 1. Execution of Instruments: Any drafts, bills of exchange, acceptances, bonds, endorsements, notes or other obliga- tions or evidences of indebtedness of the Corporation, and all deeds, mortgages, indentures, bills of sale, conveyances, endorsements, assignments, transfers, stock powers or other instruments of transfer, contracts, agreements, dividend or other orders, powers of attorney, waivers, con- sents, returns, reports, certificates, demands, notices or documents, and other instruments of any nature may be signed, executed, verified, acknowledged and delivered by the Chairman of the Board, the President or such other officers, agents or employees of the Corporation, or any of them, as from time to time may be deter- mined by the Board of Directors, provided, however, that authority to sign, execute, verify, acknowledge and deliver any con- tracts of, or other documents and instru- ments requiring execution by, the Corpora- tion may be conferred by the Board of Directors upon any person whether or not such person be an officer of the Corporation; and provided further, that such person may delegate from time to time by instrument in writing all or any part of such authority to any other person if authorized so to do by the Board of Directors. Section 2. Proxies: Proxies to vote with respect to shares of stock of other corporations owned by or standing in the name of the Corporation and waivers of notice of meetings of the shareholders of other corporations, the stock of which is owned by or stands in the name of the Corporation, may be executed and delivered from time to time on behalf of the Corporation by the Chairman of the Board, the President, the Secretary or any other person or persons thereunto authorized by the Board of Directors. Article VIII. Fiscal Year The fiscal year of the Corporation shall begin on the 1st day of January and end on the 31st day of December in each year. Article IX. Corporate Seal The corporate seal shall be circular in form and shall bear the name of the Corporation, the words "Corporate Seal" and words and figures denoting its organization under the laws of the State of New York, and the year thereof, and otherwise shall be in such form as shall be approved from time to time by the Board of Directors. Article X. Offices Section 1. Office of the Corporation: The office of the Corporation (as defined in Section 102 of the New York Business Corporation Law) shall be in the Borough of Manhattan, City and State of New York. Section 2. Other Offices: The Corporation may establish and maintain one or more offices outside of the State of New York in such places as the Board of Directors may from time to time deem advisable. Article XI. Amendments (a) All by-laws of the Corporation shall be subject to amendment or repeal, and new by-laws may be adopted, by the vote of the shareholders at any annual or special meeting, the notice or waiver of notice of which shall have summarized or set forth in full the proposed amendment. (b) The Board of Directors shall have power, by majority vote of the total number of directors which the Corpora- tion would have if there were no vacancies, to adopt, amend and repeal from time to time by-laws of the Corporation; provided, however, that the shareholders may amend or repeal by-laws made by the Board of Directors and may from time to time limit or define the right of the Board of Directors to amend or repeal any by-law or by-laws adopted by the shareholders. Without limiting the generality of the foregoing, the provisions of paragraph (a) of Section 1 of Article II and any other provisions hereof relating to the classification of directors may be repealed by the majority vote of the total number of directors which the Corporation would have if there were no vacancies or may be amended or supplemented, by such vote, in any manner not resulting in a term of office of directors longer than that provided in said provisions. Article XII. Interpretation These by-laws are subject and subordinate to the provisions of applicable law, including without limitation the Business Corporation Law of the State of New York, and the provisions of the Certificate of Incorporation, as the same may be in effect from time to time. As used in these by-laws, the term Certificate of Incorporation shall mean the Restated Certificate of Incorporation of the Corporation and any amendments thereto. EX-10.1 3 AMEND DATED 7/17/96 (SUPP SAVINGS PLAN) EXHIBIT 10.1 FIRST AMENDMENT TO THE CHAMPION INTERNATIONAL CORPORATION NONQUALIFIED SUPPLEMENTAL SAVINGS PLAN Pursuant to Section 7.1 of the Champion International Corporation Nonqualified ----------------------------------------------- Supplemental Savings Plan (the "Plan") the Plan is hereby amended as follows: - ------------------------- Section 1.12 of the Plan is amended, effective January 1, 1996, to read as follows: "1.12. 'Executive' means any employee of an Employer who is classified as Grade 20 to 34 by the Employer (except for any employee classified as Grade 31 or 33 but not administered as Grade 20 to 34) and whose Savings Plan Earnings in any Plan Year exceed the applicable Code section 401(a)(17) Limitation, any Vice President, any other key executive who is Grade 20 or higher, and any other employee designated by the Committee as a member of the select group of management or highly compensated employees eligible for participation in the Plan." IN WITNESS WHEREOF, the undersigned, on behalf of the Pension and Employee Benefits Committee of Champion International Corporation, has executed this Amendment as evidence of its adoption at a meeting of said Committee held on April 26, 1996, and the Chief Executive Officer of Champion International Corporation has subscribed his written approval of this Amendment this 17th day of July, 1996. /s/ William C. Foster --------------------- William C. Foster Senior Associate Counsel- Human Resources /s/ Andrew C. Sigler - -------------------- Andrew C. Sigler Chief Executive Officer EX-10.2 4 SECOND AMEND DATED 7/17/96 (EXEC LIFE INS PLAN) EXHIBIT 10.2 SECOND AMENDMENT TO THE CHAMPION INTERNATIONAL CORPORATION EXECUTIVE LIFE INSURANCE PLAN #700 Pursuant to Section M of the Champion International Corporation Executive Life ------------------------------------------------------ Insurance Plan #700 (the "Plan"), the Plan is hereby amended, effective January - ------------------- 1, 1996, as follows: FIRST: Section B.4. of the Plan is amended by adding the words "earned during the Plan Year but not yet paid provided that the calculation using such earned bonuses in lieu of paid bonuses for each and every year results in greater earnings for benefit determination purposes" after the words "(except special bonus awards)" wherein they appear. SECOND: Section B.5. of the Plan is amended as follows: "5. 'Employee' means, except as provided in Section D, an employee of the Company who is a Vice President or a key executive at the compensation level of Grade 20 or higher." IN WITNESS WHEREOF, the undersigned, on behalf of the Pension and Employee Benefits Committee of Champion International Corporation, has executed this Amendment as evidence of its adoption at a meeting of said Committee held on April 26, 1996, and the Chief Executive Officer of Champion International Corporation has subscribed his written approval of this Amendment this 17th day of July, 1996. /s/ William C. Foster -------------------------- William C. Foster Senior Associate Counsel- Human Resources /s/ Andrew C. Sigler - -------------------- Andrew C. Sigler Chief Executive Officer EX-11 5 CALCULATION OF PRIMARY EARNINGS EXHIBIT 11 CHAMPION INTERNATIONAL CORPORATION AND SUBSIDIARIES Calculation of Primary Earnings (Loss) Per Common Share and Fully Diluted Earnings (Loss) Per Common Share (unaudited) (in thousands, except per share)
Six Months Ended Three Months Ended ------------------------ ------------------------ June 30, June 30, ------------------------ ------------------------ 1996 1995 1996 1995 -------- -------- -------- -------- Primary earnings (loss) per common share: Net Income (Loss) $ 99,201 $ 318,758 $ 15,552 $ 187,533 Dividends on Preference Shares --- 13,258 --- 6,320 ---------- ---------- ---------- ---------- Net Income (Loss) Applicable to Common Stock $ 99,201 $ 305,500 $ 15,552 $ 181,213 ========== ========== ========== ========== Average number of common shares outstanding 95,508 93,536 95,511 93,686 ========== ========== ========== ========== Per share $ 1.04 $ 3.27 $ 0.16 $ 1.93 ========== ========== ========== ========== Fully diluted earnings (loss) per common share: Net Income (Loss) Applicable to Common Stock $ 99,201 $ 305,500 $ 15,552 $ 181,213 Add income effect, assuming conversion of dilutive convertible securities --- 15,106 --- 6,585 ---------- ---------- ---------- ---------- Net income (loss) on a fully diluted basis $ 99,201 $ 320,606 $ 15,552 $ 187,798 ========== ========== ========== ========== Average number of common shares outstanding 95,508 93,536 95,511 93,686 Add common share effect, assuming conversion of dilutive convertible securities --- 11,814 --- 11,419 ---------- ---------- ---------- ---------- Average number of common shares outstanding on a fully diluted basis 95,508 105,350 95,511 105,105 ========== ========== ========== ========== Per share $ 1.04 $ 3.04 $ 0.16 $ 1.79 ========== ========== ========== ==========
NOTE: (1) The computation of fully diluted earnings per common share assumes that the average number of common shares outstanding during the period is increased by the conversion of securities having a dilutive effect, and that net income applicable to common stock is increased by dividends and after-tax interest on such securities. (2) Earnings per share was calculated for each three month and six month period on a stand-alone basis. On June 22, 1995, the company purchased all 7,894,737 shares of Common Stock that were issued on that date upon conversion of the $92.50 Cumulative Convertible Preference Stock, and on June 30, 1995, the company purchased an additional 2,000,000 shares of Common Stock. As a result of this reduction in the number of shares outstanding, the sum of the earnings per share for the first and second quarters of 1995 does not equal the earnings per share for the first six months of 1995. EX-27 6 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMAITON EXTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND THE CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUN-30-1996 JUN-30-1996 322,130 53,391 577,930 17,716 424,467 1,475,874 11,200,840 3,491,412 9,660,078 971,549 2,862,365 0 0 55,145 3,671,001 9,660,078 2,977,766 2,977,766 2,546,870 2,546,870 0 0 108,178 154,288 55,087 99,201 0 0 0 99,201 1.04 1.04 Includes timber and timberlands.
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