0000950130-95-001543.txt : 19950811 0000950130-95-001543.hdr.sgml : 19950811 ACCESSION NUMBER: 0000950130-95-001543 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19950701 FILED AS OF DATE: 19950810 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARIETTA CORP CENTRAL INDEX KEY: 0000792969 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 161074992 STATE OF INCORPORATION: NY FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14699 FILM NUMBER: 95560754 BUSINESS ADDRESS: STREET 1: 37 HUNTINGTON ST CITY: CORTLAND STATE: NY ZIP: 13045 BUSINESS PHONE: 6077536746 MAIL ADDRESS: STREET 1: 37 HUNTINGTON STREET CITY: CORTLAND STATE: NY ZIP: 13045 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended July 1, 1995 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 014699 ------------- MARIETTA CORPORATION (Exact name of registrant as specified in its charter) New York 16-1074992 ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 37 Huntington Street, Cortland, New York 13045 ---------------------------------------- ---------- (Address of Principal Executive Offices) (Zip Code) (607) 753-6746 ------------------------------------------------ (Registrant's telephone number, including area code) Not Applicable ------------------------------------------------ (Former name, former address, and former fiscal year if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------- -------- As of August 1, 1995 there were outstanding 3,596,049 shares of the registrant's Common Stock, par value $.01 per share. MARIETTA CORPORATION -------------------- FORM 10-Q INDEX ----- PART I. FINANCIAL INFORMATION: Item 1. Financial Statements: Consolidated Statements of Operations Consolidated Balance Sheets Consolidated Statements of Cash Flows Notes to Financial Statements Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION: Item 6. Exhibits and Reports on Form 8-K SIGNATURES PART 1. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS MARIETTA CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended Nine Months Ended July 1, July 2, July 1, July 2, 1995 1994 1995 1994 Net sales $18,498,429 $18,722,682 $49,181,859 $50,146,989 Cost of sales 14,841,710 13,124,352 38,029,412 36,112,435 ----------- ----------- ----------- ----------- Gross profit 3,656,719 5,598,330 11,152,447 14,034,554 Selling, general, and administrative expenses 4,511,051 3,907,151 11,814,680 11,162,691 ----------- ----------- ----------- ----------- Operating income (loss) (854,332) 1,691,179 (662,233) 2,871,863 Other income (expense), net 115,554 (443,013) 258,140 (261,683) ----------- ----------- ----------- ----------- Income (loss) before income taxes and cumulative effect of a change in accounting principle (738,778) 1,248,166 (404,093) 2,610,180 Income tax provision (benefit) (281,654) 462,592 (119,049) 1,021,315 ----------- ----------- ----------- ----------- Income (loss) before cumulative effect of a change in accounting principle (457,124) 785,574 (285,044) 1,588,865 Cumulative effect of a change in accounting for income taxes - - - 336,596 ----------- ----------- ----------- ----------- Net income (loss) ($457,124) $785,574 ($285,044) $1,925,461 =========== =========== =========== =========== Earnings (loss) per share: Earnings (loss) before cumulative effect of a change in accounting principle ($0.13) $0.22 ($0.08) $0.45 Cumulative effect of a change in accounting for income taxes - - - 0.09 ----------- ----------- ----------- ----------- Earnings (loss) per share ($0.13) $0.22 ($0.08) $0.54 =========== =========== =========== =========== Weighted average shares and common shares equivalents 3,613,813 3,587,859 3,607,710 3,581,815 =========== =========== =========== ===========
See accompanying notes to condensed consolidated financial statements. MARIETTA CORPORATION CONSOLIDATED BALANCE SHEETS
ASSETS July 1, October 1, 1995 1994 (unaudited) Current assets: Cash and cash equivalents $ 3,407,978 $ 7,476,101 Accounts receivable, net 10,294,022 10,074,495 Inventories 14,828,223 11,926,566 Refundable income taxes 842,829 341,735 Other current assets 252,018 770,475 Deferred tax asset 481,805 467,083 ----------- ----------- Total current assets 30,106,875 31,056,455 Property, plant and equipment, net 23,486,499 22,187,484 Restricted cash 2,600,000 2,300,000 Marketable securities 2,426,508 2,219,823 Excess of cost over net assets acquired, net 3,230,131 3,327,901 Other assets 394,810 744,773 ----------- ----------- Total assets $62,244,823 $61,836,436 =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 3,367,843 $ 2,754,613 Accrued payroll 1,362,408 1,512,467 Accrued rebates 464,200 445,226 Accrued expenses 1,258,998 818,880 Current maturities of long-term debt 381,621 361,894 Income taxes payable 17,489 21,602 ----------- ----------- Total current liabilities 6,852,559 5,914,682 Long-term debt, less current maturities 6,517,205 6,851,034 Convertible subordinated note 276,960 273,720 Deferred tax liability 2,538,250 2,522,406 ----------- ----------- Total liabilities 16,184,974 15,561,842 ----------- ----------- Shareholders' equity: Preferred stock, $0.01 par value, authorized 1,000,000 shares Common stock, $0.01 par value, authorized 10,000,000 shares, issued 4,010,908 and 4,005,717 shares 40,109 40,057 Additional paid-in capital 36,762,049 36,768,483 Common stock notes receivable (607,500) (607,500) Treasury stock, at cost (3,877,333) (3,923,993) Retained earnings 14,524,448 14,750,930 Equity adjustment from foreign currency translation (904,834) (753,383) Marketable securities net unrealized holding gain 122,910 - ----------- ----------- Total shareholders' equity 46,059,849 46,274,594 ----------- ----------- Total liabilities and shareholder' equity $62,244,823 $61,836,436 =========== ===========
See accompanying note to condensed, consolidated financial statements. MARIETTA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended July 1, July 2, 1995 1994 Cash flows from operating activities: Net income (loss) ($ 285,044) $1,925,461 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Cumulative effect of a change in accounting for income taxes 0 (336,596) Depreciation and amortization 2,479,341 2,585,102 Provision for loss on accounts receivable 171,579 129,252 Provision for inventory obsolescence 482,579 498,503 Deferred compensation 0 97,140 Deferred income taxes 1,121 (564,091) Loss on sale of equipment 18,783 8,120 Restricted cash (300,000) (300,000) Other assets 186,722 (358,022) Stock bonuses 61,040 74,610 Changes in working capital: Accounts receivable (426,649) (1,295,596) Inventories (3,358,441) (1,436,703) Other current assets 516,550 585,972 Accounts payable and accrued expenses 927,080 (905,272) Income taxes (504,714) 209,588 ---------- ---------- Net cash provided by (used in) operating activities (30,053) 917,468 ---------- ---------- Cash flows from investing activities: Capital expenditures (3,564,457) (2,008,948) Sales (purchases) of marketable securities (83,775) 216,175 ---------- ---------- Net cash used in investing activities (3,648,232) (1,792,773) ---------- ---------- Cash flows from financing activities: Payments on long-term debt (314,103) (367,300) Employee stock purchase plan 35,039 34,938 Purchase of treasury stock (55,800) 0 Payment of common stock note receivable 0 279,450 ---------- ---------- Net cash used in financing activities (334,864) (52,912) ---------- ---------- Effect of foreign currency translation (54,974) 15,034 ---------- ---------- Net decrease in cash and cash equivalents (4,068,123) (913,183) Cash and cash equivalents, beginning of period 7,476,101 8,844,276 ---------- ---------- Cash and cash equivalents, end of period $3,407,978 $7,931,093 ========== ========== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 358,267 $ 334,442 Income taxes 466,168 1,047,107
See accompanying notes to condensed, consolidated financial statements. MARIETTA CORPORATION NOTES TO FINANCIAL STATEMENTS Note 1. Basis of Presentation The statements for the periods ended July 1, 1995 and July 2, 1994 are unaudited. In the opinion of the Company the statements include all adjustments necessary for a fair presentation of the results for the periods. The results of operations for the period ended July 1, 1995 are not necessarily indicative of the results of operations to be expected for the year ending September 30, 1995. Certain information and footnote disclosure normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. It is suggested that these financial statements be read in conjunction with the audited financial statements and notes thereto for the year ended October 1, 1994 included in the Company's Annual Report. Note 2. Inventories Inventories are stated at lower of cost or market. Cost is determined on the first-in, first-out method. Inventories consisted of the following:
July 1, October 1, 1995 1994 ----------- ----------- Raw materials and $ 5,759,198 $ 4,082,839 supplies Finished goods 9,064,025 7,843,727 ----------- ----------- $14,823,223 $11,926,566 =========== ===========
Note 3. Legal Proceedings As previously reported, as a result of an embezzlement of funds by a former financial officer and of other financial irregularities in Marietta's financial statements discovered by the Company during 1991, the Securities and Exchange Commission and the United States Attorney were each conducting independent investigations. The investigation by the United States Attorney is concluded; however, the investigation by the Securities and Exchange Commission is continuing. As previously reported, an action has been commenced by a former owner of Marietta American, Inc. (formerly American Soap Company, Inc.), and by California Soap, Inc. and two of its shareholders. This complaint alleges, among other things, misrepresentations and omissions in connection with the Company's acquisition of Marietta American, Inc., misrepresentations in and omissions from various financial and other statements made by the Company, breaches of contract and other violations of federal and state laws. This action seeks an unspecified amount of damages. No assurance can be given as to the outcome of this action, which could have a material adverse effect on the Company. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Results of Operations --------------------- Quarter ended July 1, 1995 compared with the quarter ended July 2, 1994 ----------------------------------------------------------------------- Net sales decreased in the quarter ended July 1, 1995 by 1.2% to $18,498,000 from $18,723,000 in the prior year's third quarter. The decrease of $225,000 consisted of a decrease of approximately $1,498,000 in custom packaging sales partially offset by an increase of approximately $1,273,000 in guest amenity sales. Custom packaging sales continued to be affected by delays in receiving customer-supplied materials which in turn caused delays in shipment of finished products by Marietta. For the third quarter of fiscal 1995 the Company's gross profit decreased to 19.8% of sales from 29.9% during the same period of fiscal 1994. Material costs for guest amenities increased significantly in the third quarter of fiscal 1995 as compared to 1994. This increase was primarily attributable to higher than anticipated component costs for tallow, corrugate, bottles and packaging film. In order to offset the resulting decline in gross profit, a price increase will become effective on August 15, 1995. The continued delays in receiving customer-supplied materials for custom packaging caused delays in shipment of finished products and resulted in reduced overhead absorption. In addition, changes in the product mix negatively impacted gross profits. Selling, general and administrative expenses, as a percentage of sales, increased to 24.4% in the current quarter from 20.9% in the third quarter of fiscal 1994. During the third quarter of 1995 the Company expensed $375,000 in respect of the fee to Goldman, Sachs & Co. in connection with its retention as the Company's financial advisor. In addition, legal charges increased $284,000 over the prior year's quarter, primarily in connection with the matters relating to the unsolicited proposal to acquire the Company made by Dickstein Partners. Other income (expense), net represents the netting of interest expense, investment income and other miscellaneous income and expense. For the third quarter of fiscal 1995 interest and other miscellaneous expense was $146,000 compared to $118,000 in the third quarter of fiscal 1994. This increase was due to slightly higher interest rates and to an increase in miscellaneous expenses. Investment income was $186,000 in the third quarter of fiscal 1995 as compared to $117,000 in 1994. This increase was due to higher rates of return and to a gain of $21,000 on the sale of marketable securities. Other miscellaneous income, which is primarily profit on the sale of inventory components was approximately $76,000 in 1995 compared to $30,000 in the third quarter of 1994. The effective tax benefit for federal, state and foreign income taxes was 38.1% in the third quarter of fiscal 1995 while the effective tax rate was 37.1% in the third quarter of fiscal 1994. Nine months ended July 1, 1995 compared with the nine months ended July 2, 1994 ------------------------------------------------------------------------------- Net sales for the nine months ended July 1, 1995 decreased by 1.9% to $49,182,000 from $50,147,000 in the prior year. The decrease of $965,000 consisted of a decrease in custom packaging sales of $3,447,000 partially offset by an increase in guest amenity sales of $2,482,000. Custom packaging sales continue to be affected by delays in receiving customer-supplied materials which in turn caused a delay in shipment of finished products by Marietta. In the first nine months of fiscal 1995 the Company's gross profit decreased to 22.7% of sales from 28.0% during the same period of fiscal 1994. Higher material costs and changes in product mix in the second and third quarters of fiscal 1995 negatively impacted gross margins. In addition, during the second quarter of fiscal 1995 the Company experienced a mechanical breakdown of certain of its soap manufacturing equipment which caused an interruption in its ability to manufacture soap. This necessitated the purchase of soap chips (the raw materials used in making soap bars) on the open market at higher costs to the Company. Also, the lower than anticipated custom packaging sales continued to result in a reduced capability to cover fixed overhead costs. Selling, general and administrative expense, as a percent of sales, increased to 24.0% of sales in the first nine months of 1995 from 22.3% in the same period during 1994. During 1995 the Company expensed $625,000 in respect of the fee to Goldman, Sachs & Co. in connection with its retention as the Company's financial advisor. The Company also reversed $310,000 of legal expenses which previously had been accrued in connection with defense costs incurred by the Company's former Chief Executive Officer. In addition, legal charges increased $505,000 over the prior year. This increase was attributable primarily to the matters relating to the unsolicited proposal to acquire the Company made by Dickstein Partners. For the first nine months of 1995 interest and other expense was $465,000 compared to $333,000 in the same period last year. This increase was due to an increase in rates over last year. Investment income was $521,000 in the first nine months of fiscal 1995 as compared to $378,000 in 1994. This increase was due to higher rates of return on both restricted cash and Canadian funds combined with larger invested balances in these areas. Other miscellaneous income of approximately $203,000 in the first nine months of fiscal 1995 was comparable to miscellaneous income of approximately $165,000 in the same period during 1994. Marietta's effective tax benefit for federal, state and foreign income taxes was 29.5% in the first nine months of 1995 compared to an effective tax rate of 39.1% for 1994. Both were impacted by state and provincial francise/equity taxes. Liquidity and Capital Resources ------------------------------- The Company's working capital decreased to $23,254,000 at July 1, 1995 from $25,142,000 at October 1, 1994. Cash used by operating activities for the first nine months of 1995 was $30,000 compared to $917,000 being provided by operating activities for the first nine months of 1994. The decrease in cash provided by operating activities was primarily the result of the net loss and a significant increase in inventories partially offset by an increase in accounts payable and accrued expenses. The increase of cash used in investing activities in 1995 as compared to 1994 was caused primarily by an increase in capital expenditures. The Company has a $12,000,000 Revolving Credit Facility, all of which was available as of July 1, 1995. The revolving credit portion of the facility expires in October 1996, and thereafter the outstanding balance is payable in equal quarterly installments over a four year period. Borrowings under the facility bear interest at the prime rate or, if elected by the Company, at an interest rate 1.1% above the LIBOR rate. Management believes that the Company is in sound financial condition as evidenced by its total shareholders' equity of $46,060,000 versus its long-term debt of $7,176,000. Management believes that its current assets plus funds provided by operations and the Company's existing line of credit and debt capacity will be adequate to meet its anticipated capital and short-term needs. Management also believes that inflation has not had a material effect on its business. Shareholders' equity was affected by a reduction in the Canadian exchange rate and an increase in the fair value of certain long-term securities. The Company experienced a decline in the equity adjustment from foreign currency translation of $151,000 as a result of a reduction in the Canadian exchange rate from 74.49% at October 1, 1994 to 72.87% at July 1, 1995, offset by an increase in shareholders' equity of $123,000 due to the increase in fair value of certain long-term marketable securities. In fiscal 1995 the Company anticipates making expenditures for capital improvements aggregating approximately $6,000,000. To date, during fiscal 1995 the Company has authorized expenditures of approximately $5,790,000. The Company is unable to determine the impact upon the Company's financial condition of an adverse determination, if any, in any action, proceeding or investigation arising out of the events discussed in Note 3 of the Notes to Financial Statements. Seasonality ----------- The Company's guest amenity business is subject to some fluctuation in results reflecting the seasonal nature of the travel and lodging industry. As a consequence the revenues from the Company's guest amenity business in its third and fourth fiscal quarters tend to be slightly higher than during the rest of the year. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibit No. ----------- 10.1 Agreement dated June 13, 1995 by and between Marietta Corporation and Stephen D. Tannen with regard to SAR Units 10.2 Amendment to Employment Agreement dated May 31, 1995 by and between Marietta Corporation and Ronald C. DeMeo 27 Financial Data Schedule (b) None. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MARIETTA CORPORATION Date: August 9, 1995 By: /s/ Stephen D. Tannen ----------------- Stephen D. Tannen President and Chief Executive Officer By: /s/ Philip A. Shager ---------------- Philip A. Shager Chief Accounting Officer and Treasurer EXHIBIT INDEX
Filed Exhibit Herewith No. Description Page No. ------- ----------- --------- 10.1 Agreement dated June 13, 1995 by and between 13 Marietta Corporation and Stephen D. Tannen with regard to SAR Units 10.2 Amendment to Employment Agreement dated 15 May 31, 1995 by and between Marietta Corporation and Ronald C. DeMeo 27 Financial Data Schedule 19
EX-10.1 2 MARIETTA CORPORATION AGREEMENT EXHIBIT 10.1 MARIETTA CORPORATION AGREEMENT AGREEMENT made as of June 13, 1995, by and between Marietta Corporation, a New York corporation having offices at 37 Huntington Street, Cortland, New York 13045 (the "Company"), and Stephen D. Tannen, residing at 52 Beverly Drive, Bernardsville, New Jersey 07924 (the "Executive"). W I T N E S S E T H: ------------------- WHEREAS, in order to (i) induce the Executive to accept the Company's offer to serve as its President and Chief Executive Officer and (ii) provide the Executive an added incentive to advance the interests of the Company, the Company had previously agreed to grant to the Executive pursuant to Stock Option Agreements, each dated December 6, 1994, options to acquire 90,000 shares of the Company's common stock, par value $.01 per share (the "Common Stock"), at a purchase price of $7.00 per share (the "Options"); WHEREAS, pursuant to Cash Bonus Agreements, each dated January 26, 1995 (the "Cash Bonus Agreements"), the Executive and the Company had further agreed that in the event the shareholders of the Company did not approve the grant of the Options, the Executive would receive from the Company stock appreciation rights units ("SAR Units") providing him with substantially the economic equivalent of the Options; and WHEREAS, the Executive and the Stock Option Committee have now determined to terminate the Options and that the grant of the SAR Units pursuant to the Cash Bonus Agreements shall be and become effective immediately. NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, the Company and the Executive hereby agree as follows: 1. The Company and the Executive hereby agree that the Options are hereby terminated and shall be of no further force or effect. 2. Notwithstanding anything to the contrary contained in the Cash Bonus Agreements, the Company and the Executive hereby agree that the SAR Units granted to the Executive pursuant to the Cash Bonus Agreements are hereby effective immediately and that the Executive shall be entitled to all of the rights in and to the SAR Units in accordance with the Cash Bonus Agreements. 3. Except as otherwise modified by this Agreement, the Cash Bonus Agreements shall continue in full force and effect in accordance with their terms. 4. Any communication or notice required or permitted to be given pursuant to this Agreement shall be in writing, and mailed by registered or certified mail, sent by overnight courier or delivered by hand, if to the Company, to the attention of the Chairman of the Board at the Company's principal place of business; and, if to the Executive, to his then current residence as it appears on the records of the Company. 5. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY THEREIN WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES. 6. (a) The headings contained in this Agreement are for convenience of reference only and in no way define, limit or describe the scope or intent of this Agreement or in any way affect this Agreement. (b) This Agreement may be executed in two or more counterparts each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 7. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and assigns. IN WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be executed as of the day and year first above written. MARIETTA CORPORATION By:_________/s/______________ Name: Title: ___________/s/_______________ Stephen D. Tannen EX-10.2 3 AMENDMENT TO EMPLOYEE AGREEMENT EXHIBIT 10.2 AMENDMENT TO EMPLOYMENT AGREEMENT --------------------------------- FIRST AMENDMENT, dated as of May 31, 1995, by and between MARIETTA CORPORATION, a New York corporation having its principal offices at 37 Huntington Street, Cortland, New York 13045 ("Marietta"), and RONALD C. DEMEO, -------- residing at 2 Southern Slope Terrace, Morristown, New Jersey 07960 (the "Employee"). --------- W I T N E S S E T H: ------------------- WHEREAS, the parties desire to amend the Employment Agreement, dated as of June 1, 1992 (the "Employment Agreement"), by and between Marietta and the -------------------- Employee. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties hereto agree as follows: 1. All terms used herein, and not otherwise defined herein, shall have the same meanings as such terms have in the Employment Agreement. 2. Section 1(c) of the Employment Agreement is hereby amended by deleting the first sentence of such section and substituting the following therefor: "(c) The term of the Employee's employment hereunder shall commence on the date hereof and shall terminate on September 30, 1996 (the "Expiration Date"), unless sooner terminated as hereinafter provided." ---------------- 3. Section 3(a) of the Employment Agreement is hereby amended by deleting the word "and" at the end of clause (iii), by substituting a semicolon for the period at the end of clause (iv) and adding clauses (v) and (vi) immediately following clause (iv): "(v) One Hundred Fifteen Thousand ($115,000) Dollars for the period June 1, 1995 through May 31, 1996; and (vi) One Hundred Twenty Thousand ($120,000) Dollars for the period June 1, 1996 through September 30, 1996." 4. Section 6(b) of the Employment Agreement is hereby amended by deleting such section in its entirety and substituting the following therefor: "(b) Notwithstanding any other provision of this Agreement, Employee's employment under this Agreement may be terminated at the option of Employee prior to the Expiration Date in the event of (i) any attempt by Marietta to terminate Employee's employment for any reason not expressly set forth in Section 6(a), or (ii) any other material breach by Marietta of the terms hereof which breach continues uncured for a period of 30 days after written notice thereof from Employee to Marietta." 5. Section 8 of the Employment Agreement is hereby amended by inserting the following preamble prior to Section 8(a): "8. Severance Benefit. In addition to all other amounts due ----------------- hereunder, Marietta agrees to pay to the Employee, upon the terms and conditions set forth in this Section 8, the applicable severance benefit set forth below. The payment of any severance benefit under any of clauses (a), (b) or (c) of this Section 8 shall preclude payment pursuant to any other such clause." 6. Section 8(a) of the Employment Agreement is hereby amended by deleting such section in its entirety and substituting the following therefor: "(a) If, immediately upon a Change in Control (as hereinafter defined): (i) this Agreement is terminated other than pursuant to Section 6(a) hereof; or (ii) the Employee is not offered a position as an employee which is substantially equivalent to his position as an employee prior to such Change in Control and which is at a location within 25 miles of the location in Parsippany, New Jersey where he performed his duties hereunder prior to such Change in Control, and the Employee, in his sole and absolute discretion, elects to terminate this Agreement; then, in either such event, Marietta agrees to pay to the Employee a severance bonus equal to the Severance Amount (as hereinafter defined) times the number of full or partial years that the Employee has been employed by Marietta. For purposes of this Section 8, the term "Severance --------- Amount" shall mean the quotient obtained by dividing two times the ------ Employee's Base Salary in effect at the time of calculation of the Severance Amount by 12. Nothing contained in this Agreement shall be construed to entitle the Employee to receive any Severance Amount pursuant to this Section 8(a), nor shall Employee have any rights under this Agreement, by reason of the Employee's failure to be nominated or elected to serve as a member of the Board of Directors of Marietta." 7. Section 8(c) of the Employment Agreement is hereby amended by deleting such section in its entirety and substituting the following therefor: "(c) In the event that Employee's employment is terminated because Marietta does not offer to renew this Agreement for a period of three years on the same terms and conditions (or terms and conditions more favorable to the Employee) upon its expiration on the Expiration Date (or upon the expiration of any renewal or extension of Employee's employment pursuant to this Agreement) Marietta agrees to pay to the Employee a severance bonus equal to the Severance Amount times the number of full or partial years that the Employee has been employed by Marietta." 8. Section 13 of the Employment Agreement is hereby amended by deleting the address of the Employee set forth therein and substituting therefor the following: "Mr. Ronald C. DeMeo 2 Southern Slope Terrace Morristown, New Jersey 07960" 9. The parties agree that in all respects, except as expressly modified hereby, the Employment Agreement shall remain in full force and effect. 10. This Amendment shall be governed by and construed in accordance with the laws of the State of New York without reference to conflict of laws principles. 11. This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written. MARIETTA CORPORATION By:_________/s/__________________ Stephen D. Tannen, President and Chief Executive Officer __________/s/____________________ RONALD C. DEMEO EX-27 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT. 3-MOS 9-MOS SEP-30-1995 SEP-30-1995 APR-02-1995 OCT-02-1994 JUL-01-1995 JUL-01-1995 3,407,978 3,407,978 0 0 10,294,022 10,294,022 0 0 14,828,223 14,828,223 30,106,875 30,106,875 23,486,499 23,486,499 0 0 62,244,823 62,244,823 6,852,559 6,852,559 6,794,165 6,794,165 40,109 40,109 0 0 0 0 46,019,740 46,019,740 62,244,823 62,244,823 18,498,429 49,181,859 18,498,429 49,181,859 14,841,710 38,029,412 14,841,710 38,029,412 0 0 53,976 130,097 116,578 365,401 (738,778) (404,093) (281,654) (119,049) (457,124) (285,044) 0 0 0 0 0 0 (457,124) (285,044) (0.13) (0.08) (0.13) (0.08)