-----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, HRt3aY1WF90L2BnSgvy2r2KvmrYDcC/p78xqFQg5IuU0ctq6wBtKLNZsaGn82nuF CXF8KjG59rgg8wDQsIulWQ== 0000797975-96-000003.txt : 19960813 0000797975-96-000003.hdr.sgml : 19960813 ACCESSION NUMBER: 0000797975-96-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960812 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARMOR ALL PRODUCTS CORP CENTRAL INDEX KEY: 0000797975 STANDARD INDUSTRIAL CLASSIFICATION: SPECIALTY CLEANING, POLISHING AND SANITATION PREPARATIONS [2842] IRS NUMBER: 330178217 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-14946 FILM NUMBER: 96608703 BUSINESS ADDRESS: STREET 1: 6 LIBERTY DR CITY: ALISO VIEJO STATE: CA ZIP: 92656 BUSINESS PHONE: 7143620600 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter 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 0-14946 ARMOR ALL PRODUCTS CORPORATION - ------------------------------------------------------------------ (Exact Name of Registrant as specified in its charter DELAWARE 33-0178217 - ------------------------------- -------------------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 6 Liberty, Aliso Viejo, California 92656 - ------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) (714) 362-0600 - ------------------------------------------------------------------ (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 June 30, 1996 - ----------------------------- ------------------------------- Common stock, $0.01 par value 21,333,222 shares 2 TABLE OF CONTENTS PART I. FINANCIAL INFORMATION ============================== Page ---- Consolidated Balance Sheets June 30, 1996 and March 31, 1996 3 Consolidated Statements of Income Three months ended June 30, 1996 and 1995 4 Consolidated Statements of Cash Flows Three months ended June 30, 1996 and 1995 5 Financial Notes 6 - 7 Financial Review 8 PART II. OTHER INFORMATION =========================== Item - ---- 4 Submission of Matters to a Vote of Security Holders 9 6 Exhibits and Reports on Form 8-K 9 3 PART 1. FINANCIAL INFORMATION =============================== ARMOR ALL PRODUCTS CORPORATION CONSOLIDATED BALANCE SHEETS (unaudited) June 30, March 31, 1996 1996 -------- -------- (in thousands) ASSETS - ------ Current Assets Cash and cash equivalents $ 47,508 $ 20,894 Accounts receivable 44,923 72,009 Inventories 8,966 12,643 Deferred taxes 2,555 2,770 Prepaid expenses 6,953 1,462 ------- ------- Total current assets 110,905 109,778 Property - net 9,106 9,414 Goodwill 25,112 25,394 Patents and Trademarks 13,995 14,297 ------- ------- Total assets $159,118 $158,883 ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ Current Liabilities Accounts payable $ 11,483 $ 13,654 Payable to McKesson 1,343 2,224 Accrued selling expenses 9,514 9,503 Accrued compensation 1,847 1,495 Income and other taxes payable 2,665 591 Dividends payable 3,413 3,411 Other liabilities 4,214 4,458 ------- ------- Total current liabilities 34,479 35,336 ------- ------- Deferred Income Taxes 570 572 ------- ------- Stockholders' Equity Common stock 213 213 Other capital 61,925 61,739 Unearned compensation - restricted stock (1,190) (1,230) Retained earnings 63,747 62,871 Cumulative translation adjustment (626) (618) ------- ------- Total stockholders' equity 124,069 122,975 ------- ------- Total liabilities and stockholders' equity $159,118 $158,883 ======= ======= See accompanying financial notes. 4 ARMOR ALL PRODUCTS CORPORATION CONSOLIDATED STATEMENTS OF INCOME (unaudited) Three Months Ended June 30 -------------------------- 1996 1995 -------- -------- (in thousands except per share amounts) REVENUES $ 55,308 $ 50,224 ------- ------- COSTS AND EXPENSES: Cost of sales 24,926 24,394 Selling, general and administrative 22,651 19,508 Amortization of intangibles 617 613 ------- ------- Total costs and expenses 48,194 44,515 ------- ------- OPERATING INCOME 7,114 5,709 INTEREST INCOME 281 251 ------- ------- INCOME BEFORE INCOME TAXES 7,395 5,960 INCOME TAXES 3,106 2,503 ------- ------- NET INCOME $ 4,289 $ 3,457 ======= ======= EARNINGS PER COMMON SHARE $.20 $.16 === === DIVIDENDS PER COMMON SHARE $.16 $.16 === === WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 21,332 21,276 ====== ====== See accompanying financial notes. 5 ARMOR ALL PRODUCTS CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three Months Ended June 30 -------------------------- 1996 1995 -------- -------- (in thousands) Operating Activities Net income $ 4,289 $ 3,457 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 1,024 980 Deferred income taxes 213 201 Other 40 97 ------- ------- Total 5,566 4,735 ------- ------- Effect of changes in Accounts receivable 27,086 45,793 Inventories 3,677 (3,467) Prepaid expenses (5,491) (12,593) Accounts payable (2,171) (8,381) Accrued selling expenses 11 (3,607) Accrued compensation 352 (959) Income and other taxes payable 2,074 (3,899) Other liabilities (244) (905) ------- ------- Total 25,294 11,982 ------- ------- Net cash provided by operating activities 30,860 16,717 ------- ------- Investing Activities Capital expenditures (99) (174) Other (41) 51 ------- ------- Net cash used by investing activities (140) (123) ------- ------- Financing Activities Payable to McKesson (881) (912) Issuance of common stock 186 137 Dividends paid (3,411) (3,404) ------- ------- Net cash used by financing activities (4,106) (4,179) ------- ------- Net increase in cash and cash equivalents 26,614 12,415 Cash and cash equivalents at beginning of period 20,894 22,249 ------- ------- Cash and cash equivalents at end of period $ 47,508 $ 34,664 ======= ======= See accompanying financial notes. 6 ARMOR ALL PRODUCTS CORPORATION FINANCIAL NOTES 1. BASIS OF PRESENTATION The accompanying consolidated financial statements present the financial position and results of operations of Armor All Products Corporation and its subsidiaries (the "Company"). In the opinion of the Company, these unaudited consolidated financial statements include all adjustments necessary for a fair presentation of its financial position as of June 30, 1996 and the results of its operations and its cash flows for the three-month periods ended June 30, 1996 and 1995. Such adjustments were of a normal recurring nature. The results of operations for the three-month periods ended June 30, 1996 and 1995 are not necessarily indicative of the results for the full years. It is suggested that these consolidated financial statements be read in conjunction with the consolidated financial statements and related notes thereto included in the Company's Annual Report to Shareholders for the year ended March 31, 1996. That report has previously been filed with the Securities and Exchange Commission as an exhibit to the Annual Report on Form 10-K. 2. CASH MANAGEMENT Pursuant to an agreement with McKesson Corporation ("McKesson"), which owns 55% of the company's stock, the Company's U.S. operations participate daily in a cash management program administered by McKesson. Under this arrangement, the Company invests any excess cash in the cash management program and has unrestricted access to such invested cash to fund disbursements. If the Company needs additional cash above the amount invested, such cash requirements are met through borrowings from McKesson. All amounts invested in the cash management program with McKesson are deposited in a separate bank account in the Company's name, which is used for cash management program transactions. Included in cash and cash equivalents in the accompanying consolidated balance sheets are the following amounts invested in the cash management program: $43,698,000 at 5.4% on June 30, 1996 and $17,359,000 at 5.3% on March 31, 1996. 7 ARMOR ALL PRODUCTS CORPORATION FINANCIAL NOTES 3. INVENTORIES Inventories are comprised of the following: June 30, March 31, 1996 1996 ------ ------ (in thousands) Finished goods $ 8,170 $11,714 Raw materials 796 929 ------ ------ Total $ 8,966 $12,643 ====== ====== 4. PREPAID EXPENSES Prepaid expenses at June 30, 1996 include $6,580,000 of payments related to media advertising. The Company allocates the annual media advertising expense among interim periods in proportion to estimated annual sales volume. 5. INTEREST INCOME Interest income is comprised of the following: Three Months Ended June 30 -------------------------- 1996 1995 ------ ------ (in thousands) Interest income - McKesson $ 247 $ 208 Interest income - other 34 43 ---- ---- Interest income $ 281 $ 251 ==== ==== 8 ARMOR ALL PRODUCTS CORPORATION FINANCIAL REVIEW Results of Operations - --------------------- Revenues increased $5.1 million or 10.1% in the quarter ended June 30, 1996 in comparison with the prior year's quarter. The increase was primarily attributable to higher shipments of Automotive products in the United States and Canada. The principal contributors to this increase were shipments of two new products launched in December 1995 - Armor All(R) Armor Plate(R) Paint Protectant and Armor All(R) FlashBlack Tire Shine - as well as higher shipments of the Company's flagship Armor All(R) Protectant. The automotive revenue comparison benefited from the timing of spring promotional shipments. Home Care revenues were lower primarily because the prior year's shipments included a large new customer's order to fill initial retail inventory requirements. In addition, the current quarter has been adversely affected by cautious retailer buying due to a weather-related slow start to the spring season. International revenues were higher, mainly reflecting increased shipments to Europe and Latin America. Cost of sales as a percentage of revenues was 45.1% and 48.6% in the quarters ended June 30, 1996 and 1995, respectively. The lower cost percentage in the current year was due to several factors, including a favorable product mix, lower raw materials costs, reduced inventory carrying costs, and a selling price increase on certain Automotive products in November 1995. In addition, fixed manufacturing and distribution costs were absorbed over the higher volume. Selling, general and administrative expense as a percentage of revenues was 41.0% and 38.8% in the quarters ended June 30, 1996 and 1995, respectively. The increase in the current quarter was primarily due to a higher rate of accrual for fixed advertising costs, which are expensed over interim periods in proportion to estimated annual sales volume. In addition, there were higher costs associated with spring Automotive promotions in the current quarter due to the timing of shipments, as discussed above. Financial Resources and Liquidity - --------------------------------- The Company's working capital requirements fluctuate during the year, traditionally peaking in the spring due to extended payment terms offered in connection with the Company's winter sales promotional activities. Cash inflow is strongest during the summer months as these receivables are collected. This pattern resulted in cash flow from operations of $30.9 million and $16.7 million in the three-month periods ended June 30, 1996 and 1995, respectively, as accounts receivable were reduced from March 31 levels. The higher cash inflow in the first quarter of fiscal 1997 was primarily due to lower payments for media advertising, changes in the timing of payments for certain payables and accrued liabilities, successful inventory reduction measures, and higher net income. These factors were partially offset by lower collections of accounts receivable due to a lower accounts receivable balance at the beginning of the current fiscal year than at the beginning of the prior fiscal year. As long as the Company continues to participate in the McKesson cash management program, McKesson will make available to the Company the amount of cash necessary to provide the Company with sufficient funds to meet its needs, as defined in its annual capital and operating plans. 9 PART II. OTHER INFORMATION =========================== Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- The Company's Annual Meeting of Stockholders was held on July 26, 1996. The Board of Directors' nominees for director as listed in the proxy statement were each elected to serve for a one-year term by the following vote: Votes For Votes Withheld ---------- -------------- William A. Armstrong 19,828,620 40,681 Jon S. Cartwright 19,832,569 36,732 Kenneth M. Evans 19,830,436 38,865 David L. Mahoney 19,828,245 41,056 David E. McDowell 19,827,380 41,921 Karen Gordon Mills 19,832,646 36,655 Alan Seelenfreund 19,627,401 241,900 The proposal to amend the Company's 1986 stock Option Plan to increase the number of shares authorized for the grant of stock options under the Plan by 800,000 shares to a total of 2,100,000 shares, and to extend the duration of the Plan until such time as it is terminated by action of the Board of Directors, was approved by the following vote: 19,350,465 votes for; 477,342 votes against; 23,097 votes abstaining; and 18,397 broker non-votes. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits 10(A) Armor All Products Corporation 1988 Restricted Stock Plan, as amended through July 26, 1996. 10(B) Armor All Products Corporation 1986 Stock Option Plan, as amended through July 26, 1996. 27 Financial Data Schedule (b) Reports No reports on Form 8-K were filed during the quarter ended June 30, 1996. 10 S I G N A T U R E ================= 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. ARMOR ALL PRODUCTS CORPORATION (Registrant) Dated: August 12, 1996 By /s/Michael G. McCafferty ----------------------------- Michael G. McCafferty Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) 11 EXHIBIT INDEX ============= Exhibit Number Description - ------- ---------------------------------------------- 10(A) Armor All Products Corporation 1988 Restricted Stock Plan, as amended through July 26, 1996 10(B) Armor All Products Corporation 1986 Stock Option Plan, as amended through July 26, 1996 27 Financial Data Schedule EX-10.A 2 Exhibit 10(A) ARMOR ALL PRODUCTS CORPORATION 1988 RESTRICTED STOCK PLAN (As Amended through July 26, 1996) I. GENERAL 1. Definitions. Whenever used herein, the following terms shall have the meanings set forth below: (a) "Approved Retirement" shall mean any termination of employment with the Corporation after attainment of age 65 (except termination for cause) or any retirement before age 65 with the approval of the Board. (b) "Board" means the Board of Directors of the Corporation. (c) "Committee" means the Compensation Committee of the Board, which shall consist of two or more members of the Board who shall be appointed by and serve at the pleasure of the Board, provided, however, that in the case of awards to executive officers and directors of the Corporation, if the Committee does not comply with the requirements of Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Committee shall mean the full Board of Directors. No person who is a Participant may be a member of said Committee, and any person who is appointed a member of said Committee and who accepts such appointment shall, by virtue thereof, be ineligible thereafter to be granted a Restricted Stock Grant under the Plan. (d) "Corporation" means Armor All Products Corporation, a Delaware corporation. (e) "Disability" or "Disabled" shall mean (1) a physical or mental condition which, in the judgment of the Committee based on competent medical evidence satisfactory to the Committee, including, if required by the Committee, medical evidence obtained by an examination conducted by a physician selected by the Committee, renders an individual unable to engage in any substantial gainful activity for the Corporation and which impairment is likely to result in death or to be of long continued and indefinite duration, or (2) a judicial declaration of incompetence. (f) "Eligible Employee" means any employee of the Corporation or any Subsidiary (including employees who are directors and/or officers) who, as determined by the Committee in its sole discretion, has and exercises management functions and responsibilities. (g) "Participant" means an individual to whom a Restricted Stock Grant is granted under the Plan. (h) "Plan" means the 1988 Restricted Stock Plan of the Corporation as described herein. (i) "Restricted Stock Grant" or "Grant" means a grant described in Part II of the Plan which is made by the Corporation and approved by the Committee under and pursuant to the Plan. (j) "Stock" means the Common Stock, $0.01 par value, of the Corporation. (k) "Subsidiary" means a subsidiary of the Corporation or an unincorporated organization controlled, directly or indirectly, by either voting or equity control, by the Corporation, including subsidiaries or unincorporated organizations which may be created or acquired while the Plan is in effect. 2. Purpose. The purpose of the Plan is to aid the Corporation and its Subsidiaries in attracting, retaining and motivating management employees with outstanding ability, competence and potential. The Plan provides such employees with a proprietary interest in the Corporation's success and progress by granting to them shares of Stock in accordance with the terms and conditions set forth below. 3. Administration. The Plan shall be administered by the Committee. Subject to all the applicable provisions of the Plan, the Committee is authorized to approve Restricted Stock Grants in accordance with the Plan, to construe and interpret the Plan, to prescribe, amend, and rescind rules and regulations relating to the Plan, and to make all determinations and to take all actions necessary or advisable for the Plan's administration. The Committee shall act by vote or written consent of a majority of its members. Whenever the Plan authorizes or requires the Committee to take any action, make any determination or decision, or form any opinion, then any such action, determination, decision or opinion by or of the Committee shall be in the absolute discretion of the Committee and shall be final and binding upon all persons in interest, including the Corporation, its shareholders, and all Eligible Employees. 4. Shares of Stock Under the Plan. There may be granted under the Plan an aggregate of not more than 220,000 shares of Stock, subject to adjustment as provided in Section 3 of Part III of the Plan. Shares of Stock granted under the Plan may be either treasury shares or authorized and unissued shares, or any combination thereof. If, on or before termination of the Plan, any shares of Stock shall be reacquired by the Corporation pursuant to the termination provisions described in Section 1 of Part II of the Plan or in the instruments evidencing the making of Restricted Stock Grants, such shares may again be granted under the Plan. Prior to the making of Restricted Stock Grants, the Corporation shall be under no obligation to reserve or retain in its treasury any particular number of shares of Stock at any time, and no particular shares of Stock, whether issued or held as treasury Stock, shall be identified as being available for future Restricted Stock Grants under the Plan. 5. Participants. From time to time the Committee shall, in its sole discretion, but subject to all of the provisions of the Plan, determine which Eligible Employees will be granted Restricted Stock Grants under the Plan and the number of shares of Stock to be granted to each Participant and the terms, conditions and restrictions of each such Restricted Stock Grant. In making such determinations, the Committee shall take into account the nature of services rendered and to be rendered by the respective recipients, their present and potential contribution to the Corporation's success and such other factors as the Committee in its discretion deems relevant to the accomplishment of the purposes of the Plan. In any year, the Committee may approve the grant to any Eligible Employee of Restricted Stock Grants subject to differing terms and conditions. The Committee's decision to approve the grant of a Restricted Stock Grant to an employee in any year shall not require the Committee to approve the grant of a Restricted Stock Grant to that employee in any other year or to any other employee in any year; nor shall the Committee's decision with respect to the number of shares of Stock or the terms, conditions and restrictions applicable to any Restricted Stock Grant to be made to an employee in any year, require the Committee to approve the grant of the same number of shares of Stock or of Restricted Stock Grants with the same terms, conditions and restrictions to that employee in any other year or to any other employee in any year. The Committee shall not be precluded from approving the grant of a Restricted Stock Grant to any Eligible Employee solely because such employee previously may have been granted a Restricted Stock Grant under the Plan. 6. Rights with Respect to Shares of Stock. An Employee to whom a Restricted Stock Grant has been made shall be notified of the Grant. Upon written acceptance of the Grant by the Eligible Employee, including the restrictions and other terms and conditions described in the Plan and in the instrument evidencing such Grant, the Corporation shall cause to be issued or transferred to the name of the Eligible Employee a certificate or certificates for the number of shares of Stock granted, subject to the provisions of Part II hereof (including those related to custody arrangements that may be established). The date of issue or transfer of such shares of Stock on the books of the Corporation shall be deemed to be the date of grant (hereinafter, "date of grant") of the Restricted Stock Grant for all purposes of the Plan. From and after the date of grant, the Eligible Employee shall be a Participant and shall have absolute ownership of such shares of Stock, including the right to vote and to receive dividends thereon, subject to the terms, conditions and restrictions described in the Plan and in the instrument evidencing the grant of such Restricted Stock Grant. 7. Employment. In the absence of any specific agreement to the contrary, no grant of a Restricted Stock Grant to a Participant under the Plan shall affect any right of the Corporation or any Subsidiary to terminate, with or without cause, the Participant's employment at any time. II. RESTRICTED STOCK Each Restricted Stock Grant made under the Plan shall contain the following terms, conditions and restrictions and such additional terms, conditions and restrictions as may be determined by the Committee; provided, however, that no Restricted Stock Grant shall be subject to additional terms, conditions and restrictions which are more favorable to a Participant than the terms, conditions and restrictions set forth elsewhere in this Plan. 1. Restrictions. Until the restrictions imposed on any Restricted Stock Grant shall lapse, shares of Stock granted to a Participant pursuant to a Restricted Stock Grant: (a) shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of, and (b) shall, if the Participant's continuous employment with the Corporation or any Subsidiary shall terminate for any reason, except as provided in Section 3 of this Part II, be returned to the Corporation forthwith, and all the rights of the Participant to such shares shall immediately terminate; provided, that if the Committee, in its sole discretion, shall within ninety (90) days of such termination of employment, notify the Participant in writing of its decision not to terminate the Participant's rights in such shares, then the Participant shall continue to be the owner of shares of Stock subject to such continuing restrictions as the Committee may prescribe in such notice. If the Participant's interests in the shares of Stock granted pursuant to a Restricted Stock Grant shall be terminated, such Participant shall forthwith deliver or cause to be delivered to the Secretary or any Assistant Secretary of the Corporation the certificate(s), if any, previously delivered to the Participant for such shares of Stock, accompanied by such endorsement(s) and/or instrument(s) of transfer as may be required by the Secretary or any Assistant Secretary of the Corporation. 2. Lapse of Restrictions. Subject to the provisions of this Plan and the award agreements, the restrictions imposed on any Restricted Stock Grant shall commence with the date of grant and continue during a period set by the Committee. Within these limits, the Committee may provide for the lapse of such restrictions in installments where deemed appropriate. 3. Termination of Employment by Reason of Death, Disability or Approved Retirement. Any provisions of Section 1 of this Part II to the contrary notwithstanding, if a Participant who has been in the continuous employment of the Corporation or a Subsidiary since the date of grant of a Restricted Stock Grant to such Participant shall, while in such employment, be terminated as a result of death, Disability or Approved Retirement, then (a) in the case of awards with time-based vesting restrictions, the restrictions imposed on any Restricted Stock Grant shall lapse as to all shares of Stock granted to such Participant pursuant to such Restricted Stock Grant on the date of such event; and (b) in the case of awards with performance-based vesting restrictions, the Participant's participation shall continue for the duration of each of the applicable performance periods in effect as of the date of such event, and if applicable corporate performance objectives are met during such periods, a pro-rata distribution of shares to the Participant shall occur based upon the number of years and full months in which he or she was employed during each of such respective periods. 4. Change in Control. In the event of a Change in Control of the Corporation, or of its parent, McKesson Corporation (each of which is referred to herein as "Corporation"), all restrictions on outstanding Restricted Stock Grants shall immediately lapse. For purposes of this Plan, a Change in Control shall occur if any of the following occurs: (a) any "person" (as defined in Sections 13(d) and 14(d) of the Exchange Act shall become the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 30% or more of the combined voting power of the Corporation's then outstanding securities; (b) there shall be consummated: (i) any consolidation or merger of the Corporation in which the Corporation is not the continuing or surviving corporation or pursuant to which shares of the Corporation's Stock would be converted into cash, securities or other property, other than a merger of the Corporation in which the holders of the Corporation's Stock immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Corporation; (c) the stockholders of the Corporation approve a plan or proposal for the liquidation or dissolution of the Corporation; or (d) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new director whose election by the Board or nomination for election by the Corporation's stockholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof. Provided, however, that none of the foregoing events shall be deemed to be a Change in Control if the event or events shall have been determined by the affirmative vote of at least a majority of the members of the Board in office immediately prior to such event or events not to be a Change in Control for purposes of the Plan. 5. Agreement by Participant Regarding Withholding Taxes. Each Participant granted a Restricted Stock Grant shall be subject to the following rules (as modified by the provisions of Section 6 of this Part II): (a) No later than the date as to which the restrictions imposed on any Restricted Stock Grant shall lapse, such Participant must pay to the Corporation, or make arrangements satisfactory to the Committee regarding payment of any federal, state or local taxes of any kind required by law to be withheld with respect to the shares of Stock subject to the Restricted Stock Grant. (b) The Corporation and its Subsidiaries shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to the shares of Stock subject to the Restricted Stock Grant. (c) A Participant may make an election to have the Corporation retain some portion of the Restricted Stock Grant to satisfy tax withholding requirements. The election must be made in accordance with the following conditions: (i) The election is made prior to the date on which the amount to be withheld is determined; (ii) The election is subject to the approval of the Committee; (iii) The election is made on or after August 1, 1992. If a qualifying election is made, then upon the lapse of restrictions, the Corporation will retain the number of shares of stock having a value equal to the amount necessary to satisfy any withholding requirements. Calculation of the number of shares to be withheld shall be made based on the fair market value of the Corporation's common Stock. Such fair market value shall be the mean between the lowest reported bid price and the highest reported asked price of the Stock in the over-the-counter market on the date the restrictions lapse, as reported by any publication of general circulation selected by the Corporation which regularly reports the market price of the Stock in such market. In no event, however, shall the Corporation be required to issue fractional shares of Stock. The Committee shall be authorized to establish such rules, forms and procedures as it deems necessary to implement the foregoing. 6. Election to Recognize Gross Income in the Year of Grant. If any Participant properly elects within thirty (30) days of the date of grant, to include in gross income for federal income tax purposes an amount equal to the fair market value of the shares of Stock granted on the date of grant, such Participant shall pay to the Corporation, or make arrangements satisfactory to the Committee to pay to the Corporation in the year of such grant, any federal, state or local taxes required to be withheld with respect to such shares. If such Participant shall fail to make such payments, the Corporation and its Subsidiaries shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any federal, state or local taxes of any kind required by law to be withheld with respect to such shares of Stock. 7. Restrictive Legend; Certificates May be Held in Custody. Each certificate evidencing shares of Stock granted pursuant to a Restricted Stock Grant may bear an appropriate legend referring to the terms, conditions and restrictions described in the Plan and in the instrument evidencing the Restricted Stock Grant. Any attempt to dispose of such shares of Stock in contravention of such terms, conditions and restrictions shall be invalid. As provided in Section 6 of Part I, the Committee may enact rules which provide that the certificates evidencing such shares may be held in custody by a bank or other institution, or that the Corporation may itself hold such shares in custody, until restrictions thereon shall have lapsed. 8. Assignability. Except as provided in Section 9 of this Part II, no benefit payable under or interest in the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action shall be void and no such benefit or interest shall be in any manner liable for or subject to debts, contracts, liabilities, engagements, or torts of any Participant or beneficiary. If any Participant or beneficiary shall become bankrupt or shall attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber or charge any benefit payable under or interest in the Plan, then the Committee in its discretion may hold or apply such benefit or interests or any part thereof to or for the benefit of such Participant or his beneficiary, his spouse, children, blood relatives, or other dependents, or any of them, in such manner and in such proportions as the Committee may consider proper. 9. Designation of Beneficiary. Each Participant who shall be granted a Restricted Stock Grant under the Plan may designate a beneficiary or beneficiaries and may change such designation from time to time by filing a written designation of beneficiaries with the Committee on a form to be prescribed by it; provided, that no such designation shall be effective unless received prior to the death of such Participant. 10. Restrictions Upon Making of Restricted Stock Grants. The registration or qualification under any federal or state law of any shares of Stock to be granted pursuant to Restricted Stock Grants or the resale or other disposition of any such shares of Stock by or on behalf of the Participants receiving such shares may be necessary or desirable as a condition of or in connection with such Restricted Stock Grants, and, in any such event, if the Committee in its sole discretion so determines, delivery of the certificates for such shares of Stock shall not be made until such registration or qualification shall have been completed. 11. Restrictions Upon Resale of Stock. If the shares of Stock that have been granted to a Participant pursuant to the terms of the Plan are not registered under the Securities Act of 1933, as amended ("Securities Act"), pursuant to an effective registration statement, such Participant, if the Committee shall deem it advisable, may be required to represent and agree in writing (i) that any shares of Stock acquired by such Participant pursuant to the Plan will not be sold except pursuant to an effective registration statement under the Securities Act, or pursuant to an exemption from registration under said Act and (ii) that such Participant is acquiring such shares of Stock for his or her own account and not with a view to the distribution thereof. III. MISCELLANEOUS 1. Effective Date of the Plan. The Plan shall become effective upon its adoption by the Board, subject to the approval thereof by the stockholders of the Corporation having at least a majority of the voting power of all stock of the Corporation present in person or represented by proxy and entitled to be voted thereon at the Annual Meeting of Stockholders of the Corporation to be held on July 29, 1988 or any reconvened sessions thereof. Notwithstanding the provisions of Section 6 of Part I, Participants shall not have the right to vote or receive dividends on shares of Stock granted pursuant to Restricted Stock Grants until the stockholders of the Corporation have approved the Plan. Should the stockholders of the Corporation fail to approve the Plan, the Plan and all outstanding Restricted Stock Grants thereunder shall be null and void. 2. Duration of Plan. The Plan shall remain in effect from the effective date until terminated by the Board of Directors of the Corporation. Termination of the Plan shall not affect any Restricted Stock Grants previously granted pursuant thereto, which shall remain in effect until their restrictions shall have lapsed, all in accordance with their terms. 3. Adjustments Upon Changes in Capitalization. If there shall be any change in the Stock subject to the Plan or the Stock subject to any Restricted Stock Grant granted hereunder, through merger, consolidation, reorganization, recapitalization, reincorporation, stock split, stock dividend (in excess of 2%), or other change in the corporate structure of the Corporation, appropriate adjustments shall be made by the Committee in the aggregate number of shares subject to the Plan and the number of shares subject to outstanding Restricted Stock Grants in order to preserve, but not to increase, the benefits of the Participant. If the Corporation shall not be the surviving corporation in any merger, consolidation, or reorganization, shares of Stock which are converted into common stock or other securities of the surviving corporation shall be subject to the same terms, conditions and restrictions as applicable to such shares of Stock immediately prior to conversion, unless such terms, conditions and restrictions have lapsed pursuant to Section 3 of Part II hereof. For purposes of the foregoing, a change in the Stock subject to the Plan or the Common Stock subject to any Restricted Stock Grant granted hereunder shall include an extraordinary dividend or other extraordinary distribution (whether in cash, property, securities or any combination thereof) with respect to such Stock. Notwithstanding the first sentence of this Section 3, if the Committee determines that a change (as hereinabove described) shall have occurred in the Stock subject to the Plan or the Stock subject to any Restricted Stock Grant granted hereunder, and that adjustments in the aggregate number of shares subject to the Plan and in the number of shares subject to outstanding Restricted Stock Grants will not adequately preserve the benefits of the Participant, then the Committee shall make such other adjustments or arrangements (including providing for the issuance of cash, property and/or securities in addition to or in lieu of shares of Stock following such change) as in its sole judgment will be adequate for such purpose. 4. Expenses of Plan. The expenses of the Plan shall be borne by the Corporation. 5. Amendment or Termination. The Board may, by resolution, amend or terminate the Plan at any time; provided, however, that, subject to the provisions of Section 3 of this Part III, the Board may not, without approval by the holders of a majority of the shares of Stock represented at a meeting of stockholders called for that purpose, increase the number of shares of Stock which may be granted under the Plan, change the class of management employees eligible to participate in the Plan, or otherwise materially increase the benefits accruing to Participants under the Plan or materially modify the requirements with respect to eligibility for participation in the Plan. In the event that a Restricted Stock Grant has been made to a Participant, then no amendment of the Plan after the date as of which such Restricted Stock Grant was made, shall adversely affect any right of such Participant with respect to such Restricted Stock Grant without the written consent of such Participant. IV. RESTRICTED INCENTIVE STOCK The Committee is authorized to approve Restricted Incentive Stock Grants ("RIS Grants") to Eligible Employees with respect to nonqualified stock options granted to them by the Corporation on or after the date the stockholders of the Corporation have approved the Plan ("Stock Options"). The Committee, in its discretion, shall grant RIS Grants to optionees in order to encourage them to hold shares of Stock following exercise of Stock Options. RIS Grants shall be issued in accordance with the provisions of the Plan applicable to Restricted Stock Grants and shall have the same terms, conditions and restrictions as Restricted Stock Grants (except for the provisions of Section 2 of Part II of the Plan). In addition, RIS Grants shall have the following terms, conditions and restrictions: 1. On the date of exercise of a Stock Option (the "Exercise Date"), the optionee who is the recipient of an RIS Grant shall designate to the Secretary or Assistant Secretary of the Corporation the number of Stock Option shares (the "Option Shares") with respect to which he or she desires to receive shares of Stock pursuant to the RIS Grant. 2. On the Exercise Date, an optionee shall be awarded, pursuant to a RIS Grant, one share of Stock for every eight Option Shares. 3. The Corporation shall hold certificates evidencing shares of Stock granted pursuant to an RIS Grant and the related Option Shares. 4. The restrictions imposed on any RIS Grant shall lapse on the third anniversary of the Exercise Date provided that the related Option Shares have not been sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of prior to such third anniversary. If the related Option Shares have been so disposed of, then all rights to the shares granted pursuant to the RIS Grant shall immediately terminate. EX-10.B 3 Exhibit 10(B) ARMOR ALL PRODUCTS CORPORATION 1986 STOCK OPTION PLAN (As Amended through July 26, 1996) 1. Establishment, Purpose and Definitions. (a) There is hereby adopted the Armor All Products Corporation (the "Company") 1986 Stock Option Plan (the "Plan"). (b) The purpose of the Plan is to provide a means whereby key employees and directors of the Company and its affiliates and members of the Board of Directors of the Company who are not employed as regular salaried officers or employees of the Company or any affiliate of the Company (collectively, "Nonemployee Directors," or singly, "Nonemployee Director"), may be given an opportunity to purchase shares of the Common Stock ($.01 par value) of the Company (the "Stock") pursuant to options. (c) The term "affiliates" as used in the Plan means parent or subsidiary corporations, as defined in Section 425 of the Internal Revenue Code (but substituting "Company" for "employer corporation"), including parents or subsidiaries which become such after adoption of the Plan. The term "key employee" or "key employees" shall mean one or more employees of the Company or of its affiliates who render those types of services which tend to contribute materially to the success of the Company or of an affiliate or which may reasonably be anticipated to contribute materially to the future success of the Company or of an affiliate. 2. Stock Subject to the Plan. (a) Options may be granted under the Plan from time to time to purchase an aggregate of not more than 2,100,000 shares of Stock. As the Committee (as hereinafter defined) may determine from time to time, the shares may consist either in whole or in part of shares of authorized but unissued Stock, or shares of authorized and issued Stock reacquired by the Company and held in its treasury. If an option is surrendered for cash or for any other reason (except surrender for shares of Stock) ceases to be exercisable in whole or in part, the shares which were subject to such option but as to which the option had not been exercised shall continue to be available under the Plan. (b) If there shall be any change in the Stock subject to the Plan or the Stock subject to any option granted hereunder, through merger, consolidation, reorganization, recapitalization, reincorporation, stock split, stock dividend (in excess of 2%), or other change in the corporate structure of the Company, appropriate adjustments shall be made by the Committee in the aggregate number of shares subject to the Plan and the number of shares and the price per share subject to outstanding options in order to preserve, but not to increase, the benefits of the optionee. If the Company shall not be the surviving corporation in any merger, consolidation, or reorganization, every option outstanding hereunder shall be assumed by the surviving corporation. 3. Eligibility. Persons who shall be eligible to have granted to them the options provided for by the Plan shall be (i) such bona fide key employees and directors (other than Nonemployee Directors) of the Company or its affiliates as the Committee, in its discretion, shall designate from time to time and (ii) Nonemployee Directors. 4. Administration of the Plan. (a) The Plan shall be administered by a committee (the "Committee") consisting of two or more directors of the Company to be appointed by the Board of Directors, provided, however, that in the case of grants to executive officers and directors of the Corporation, if the Committee does not comply with the requirements of Rule 16b-3 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended, the Committee shall mean the full Board of Directors. The Board of Directors may from time to time remove members from, or add members to, the Committee. Vacancies on the Committee, howsoever caused, shall be filled by the Board of Directors. No member of the Committee other than a Nonemployee Director shall be eligible, nor shall have been eligible at any time within one year prior to his appointment as a member of the Committee, to receive an option under the Plan. The Committee shall select one of its members as chairman, and shall hold meetings at such times and places as it may determine. A majority of the Committee shall constitute a quorum and acts of the Committee at which a quorum is present, or acts reduced to or approved in writing by all the members of the Committee, shall be the valid acts of the Committee. (b) The Committee may from time to time determine which key employees and directors of the Company or of any affiliate shall be granted options under the Plan, the terms thereof, and the number of shares for which an option or options shall be granted to an optionee. (c) The Committee shall report to the Board of Directors the names of employees granted options, the number of shares covered by each option, and the terms and conditions of each such option. (d) The Committee shall have the sole authority, in its absolute discretion, to adopt, amend, and rescind such rules and regulations as, in its opinion, may be advisable in the administration of the Plan, to construe and interpret the Plan, the rules and regulations, and the instruments evidencing options granted under the Plan and to make all other determinations deemed necessary or advisable for the administration of the Plan. All decisions, determinations, and interpretations of the Committee shall be binding on all optionees. (e) Until such time as the Committee is appointed, the Board of Directors shall serve as the Committee and shall have all of the Committee's rights and powers. 5. The Option Price. The exercise price of the Stock covered by each option shall not be less than 85 percent of the fair market value of such Stock on the date the option is granted as to options granted to key employees, and not less than 100% of the fair market value as to options granted to Nonemployee Directors. Such fair market value shall be the closing price of the Stock on the date the option is granted, (i) in the over-the-counter market, if the Stock is not listed or admitted to trading on any stock exchange, as reported by any publication of general circulation selected by the Company which regularly reports the market price of the Stock in such market, or, (ii) on the principal stock exchange on which the Stock is then listed or admitted to trading. Such price shall be subject to adjustment as provided in paragraph 2(b) hereof. 6. Terms and Conditions of Options. (a) Each option granted pursuant to the Plan shall be evidenced by a written stock option grant agreement executed by the Company and the person to whom such option is granted. (b) The term of each option shall be for no more than ten years. (c) The stock option grant agreement may contain such other terms, provisions, and conditions as may be determined by the Committee not inconsistent with this Plan. 7. Use of Proceeds. Proceeds realized from the sale of Stock pursuant to options granted under the Plan shall constitute general funds of the Company. 8. Granting of Options to Nonemployee Directors. Notwithstanding any restrictions contained elsewhere in the Plan, each Nonemployee Director (i) commencing or continuing his or her term on the Board of Directors at the Company's annual meeting of stockholders on July 29, 1988 or (ii) who is elected to the Board of Directors for the first time by the stockholders of the Company at any special or annual meeting of the stockholders, will automatically receive, on such date, an option to purchase 5,000 shares of Stock (subject to adjustment as provided in paragraph 2(b) above), which option shall be immediately exercisable in full but shall expire in 1,000 share installments on the date of each of the next five succeeding annual meetings of stockholders. On the date of each annual meeting of stockholders subsequent to the meeting on July 29, 1988, each continuing Nonemployee Director (i.e., a director not elected by stockholders for the first time) will automatically receive, on such date, an option to purchase 1,000 shares of Stock (subject to adjustment as provided in paragraph 2(b) above), which option shall be immediately exercisable in full and shall expire on the date of the fifth annual meeting of stockholders next succeeding the date of grant. The approval by the Company's stockholders on July 29, 1988, of the granting of a limited number of options to the Nonemployee Directors under this Plan shall constitute the only action required to determine the Nonemployee Directors to whom stock options may be granted under this Plan and the number of shares of Stock which may be covered by Stock options granted to such Nonemployee Directors; no further action being required of the Company's Board of Directors. Subject to the aforementioned expiration provisions, the term of each option shall be five years. All such options shall be designated as Nonqualified Stock Options. Subject to the foregoing, all provisions of the Plan not inconsistent with the foregoing shall apply to options granted to Nonemployee Directors, except that with respect to an option granted to a Nonemployee Director, (a) any requirement for employment with the Corporation or a subsidiary shall be deemed to be a requirement for service as a director, (b) any requirement of continuous employment shall be deemed to be a requirement of continuous service as a director, (c) any reference to termination of employment shall be deemed to mean termination of service as a director, and (d) all unexercised options held by a nonemployee director who retires from the Board after attaining age 70 shall become fixed and be immediately exercisable on the date of his or her retirement. 9. Amendment, Suspension or Termination of the Plan. The Board of Directors may at any time suspend or terminate the Plan, and may amend it from time to time in such respects as the Board may deem advisable; provided, however, that, except as provided in paragraph 2(b) hereof, the Board of Directors shall not amend the Plan in the following respects without the consent of stockholders then sufficient to approve the Plan in the first instance: (a) To increase the maximum number of shares subject to the Plan; (b) To change the designation or class of individuals eligible to receive options under the Plan. No option may be granted during any suspension or after the termination of the Plan, and no amendment, suspension or termination of the Plan shall, without the optionee's consent, alter or impair any rights or obligations under any option theretofore granted to him under the Plan. This Plan shall remain in effect from the effective date until terminated by the Board of Directors of the Corporation. (c) To change the provisions of the Plan relating to Nonemployee Directors in a way that would require stockholder approval under Rule 16b-3. 10. Assignability. Each option granted pursuant to this Plan shall, during optionee's lifetime, be exercisable only by him, and neither the option nor any right thereunder (including any stock appreciation right) shall be transferable by optionee by operation of law or otherwise other than by will or the laws of descent and distribution. 11. Payment Upon Exercise. Payment of the purchase price upon exercise of any option granted under this Plan shall be made in cash; provided, however, that the Committee, in its sole discretion, may permit an option holder to pay the option price, in whole or in part, by tendering to the Company shares of Armor All Products Corporation common stock owned by the optionholder, and having a fair market value equal to the option price. The fair market value of such stock shall be determined by the Committee as it deems appropriate, or as may be required in order to comply with any applicable law or regulation. EX-27 4
5 0000797975 ARMOR-ALL-PRODUCTS 1,000 3-MOS MAR-31-1997 APR-01-1996 JUN-30-1996 47,508 0 46,391 1,468 8,966 110,905 16,323 7,217 159,118 34,479 0 213 0 0 123,856 159,118 55,308 55,308 24,926 24,926 0 115 0 7,395 3,106 0 0 0 0 4,289 .20 0
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