ITEM 1 -- BUSINESS
American Maize-Products Company is a Maine corporation organized in 1906 (together with its subsidiaries hereinafter referred to as "American Maize" or "Company"). American Maize is engaged primarily in the manufacture and sale of products derived from corn wet milling, such as corn sweeteners and starches for use in the manufacturing processes of several industries. It also manufactures and markets cigars and smokeless tobacco products.
In October 1993, the Company's Board of Directors approved a $160,000,000 program to modernize and expand its corn wet milling plant located in Hammond, Indiana. As part of the program the grind capacity will be increased by approximately 30% and the corn syrup capacity by approximately 50%. Construction on this project is well underway and is expected to be completed by mid-1996.
In 1994, the Company consolidated its tobacco operations. Helme Tobacco Company was merged, effective June 30, 1994, into Swisher International Inc., Helme's parent company and a wholly owned subsidiary of the Company. Helme's executive office in Stamford, Connecticut was closed, and the Helme and Swisher management and sales forces were consolidated. The operations of Helme are now carried out by Swisher. In addition, by the end of the first quarter of 1995, Swisher will have closed its Waycross, Georgia manufacturing facility and consolidated all cigar manufacturing into its expanded Jacksonville, Florida plant. The consolidation of the tobacco businesses has yielded substantial savings in operating costs and is expected to continue to contribute cost savings in the future.
Information required with respect to industry segments of American Maize, is hereby incorporated by reference to Note 16 of "NOTES TO CONSOLIDATED FINANCIAL STATEMENTS" in the Company's 1994 Annual Report to Shareholders, attached hereto as Exhibit 13. See "INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES" elsewhere in this report.
Recent Developments
On February 22, 1995, the Company entered into a definitive merger agreement (the "Merger Agreement") providing for the acquisition of the Company by Eridania Beghin-Say, S.A. ("EBS"). Pursuant to the Merger Agreement, EBS commenced a tender offer for all outstanding shares of common stock of the Company at a purchase price of $40 per share. Following the successful completion of the tender offer, a subsidiary of EBS will merge with the Company and each remaining share of the Company will be converted into the right to receive $40.
In connection with the Merger Agreement, the parties entered into a stock purchase agreement (the "Stock Purchase Agreement"), pursuant to which EBS will purchase, at a price of $40 per share, all authorized but unissued shares and all treasury shares of Class B common stock of the Company (an aggregate of 757,943 shares) which remain available for purchase following the exercise by holders of the Class B common stock of preemptive rights. In this connection, the Company intends to distribute rights to its Class B stockholders which will entitle such stockholders to purchase, at $40 per share, their proportionate share of the Class B common stock available for purchase by EBS.
The tender offer is subject to a number of conditions including, among others, the receipt by EBS of a number of the Company's shares following the tender offer which, together with the shares that EBS is then obligated to purchase under the Stock Purchase Agreement, constitutes a majority of the outstanding shares of each class of the Company's stock. The Stock Purchase Agreement is conditioned upon, among other things, the completion of the tender offer and the preemptive rights offering.
Several lawsuits have been filed in connection with EBS's offer and the Merger Agreement. See also "ITEM 3 -- LEGAL PROCEEDINGS" below.
CORN BUSINESS
American Maize manufactures a number of corn-derived products by the wet milling process through its Ingredients and Sweetener Divisions. The wet milling process involves grinding wet corn and then separating it into starch and other components; thereafter, the starch component is either dried for sale as common starch or processed further into other principal products.
The Sweetener Division produces glucose corn syrups and high fructose corn syrup. Corn syrup is used in many foods and beverages for both sweetness and to provide a wide range of functionalities such as color, texture and freezability. High fructose corn syrup is primarily used by the soft drink industry as a sweetener.
The Ingredients Division makes unmodified and modified starches, corn syrup solids, maltodextrins, dextrins and cyclodextrins. The Ingredients Division extracts starch from common, waxy, high amylose, and various new hybrid strains of corn. It also produces modifications of these starches by chemical or physical processes to make products designed to serve the particular needs of a wide variety of food and industrial users. The Company continues to research new hybrid corn strains to develop new specialty starches which reduce or eliminate chemical usage in the modification process and for new product applications. Specialty starch products derived from waxy corn have characteristics differing from common corn starches, making them useful in many specialty applications. The Company's waxy corn based specialty starches are used as stabilizers, fillers, thickeners and extenders in such products as canned and frozen foods, pie fillings, puddings, salad dressings, baby foods, soups and snack foods.
Corn syrup solids and maltodextrins are used in a variety of food applications, including dry food mixes, beverage mixes, microwaveable and convenience foods.
American Maize is a major supplier of dextrins which are sold to the paper, adhesives, textile and chemical industries for their sizing and adhesive properties. Significant quantities of American Maize's waxy corn starches are used as adhesives by the gummed tape industry.
American Maize is the largest producer of cyclodextrins in the world and the only producer in North America. Cyclodextrins are doughnut-shaped molecular structures, produced from starch, which have many food and non-food applications, including fragrance carrying, cholesterol removing, and drug delivery in the pharmaceutical industry.
The principal by-products produced by American Maize are corn germ, corn gluten feed and corn gluten meal. Corn germ is sold for further processing into corn oil and its co-product, corn germ meal. Corn oil is used as a cooking oil and as an ingredient in salad dressings and margarine. Corn gluten feed and corn gluten meal are sold in commodities markets and directly to manufacturers of various animal feeds.
Competition
The corn wet milling business is highly competitive. Almost all of the Company's products compete with virtually identical or similar products and derivatives manufactured by other companies in the industry. In addition to American Maize, there are ten companies in the corn wet milling industry in the United States, most of which are larger and have greater resources than American Maize.
In addition, many of American Maize's products are in competition with products made from raw materials other than corn. Corn syrup and high fructose corn syrup compete principally with cane and beet sugar. By-products compete with products of the corn dry milling industry and with soybean products. Fluctuation in the prices of these competing products may affect prices of, and profits derived from, the products of American Maize.
The cost of producing corn products is largely dependent upon the market price of corn. As a result, American Maize's profit margins in its corn business are frequently subjected to commodity price pressures which the Company is unable to anticipate. The price of corn sweeteners (especially high fructose corn syrups) is indirectly impacted by government programs supporting sugar prices. If sugar price supports are not continued, American Maize's earnings may be adversely affected.
Raw Materials
Corn is the basic raw material of the corn wet milling industry, which processes approximately 10-15% of the annual domestic crop. The supply of domestic corn has been, and continues to be, adequate for American Maize's needs. The price of this agricultural commodity fluctuates widely as a result of a number of factors, including levels of agricultural production, market demand, livestock feeding demand, government agricultural programs and exports. Due to the competitive nature of the business and to fluctuating prices of competing products such as sugar, end-product prices may not necessarily relate to raw material costs; therefore, an increase in corn prices may adversely affect American Maize's earnings. American Maize purchases common corn in both the cash market and the corn futures market. Waxy and high amylose corn are purchased under contracts with individual farmers.
General
Sales of American Maize's corn products generally are highest during the spring, summer and fall, and decrease during the winter months.
Sales to The Coca-Cola Company accounted for approximately 14% of American Maize's revenues in 1994 and are expected to account for greater than 10% in 1995. The Coca-Cola Company is publicly reported to control approximately 40% of the domestic soft drink industry, the principal user of 55% high fructose corn syrup.
TOBACCO BUSINESS
The Company manufactures and sells cigars and smokeless tobacco products through its wholly owned subsidiary, Swisher International, Inc. ("Swisher"). Prior to the business consolidation and merger which took place in 1994 (see "Business"), Swisher's smokeless tobacco business had been carried on through its wholly owned subsidiary, Helme Tobacco Company.
Swisher is a leading producer of popular priced cigars in the United States under the "King Edward" and "Swisher Sweets" brand names. It also manufactures and sells mid-priced cigars under several brands including "Optimo", "El Trelles", "Santa Fe" and "Keep Moving". Swisher markets little cigars nationally under the brand names "Swisher Sweets Little Cigars", "Swisher Sweets Lights Little Cigars", "Swisher Sweets Menthol Little Cigars" and "King Edward Little Cigars". In addition, Swisher also markets higher priced cigars under its trademarks of "Bering", "La Primadora" and imports and markets "Pleiades" and "Dannemann" cigars and other tobacco products including "MacBaren" pipe tobacco.
Swisher competes in the dry snuff, loose leaf chewing tobacco and moist snuff market segments of the smokeless tobacco industry. Since 1888, it has been a significant producer of dry snuff, the original smokeless tobacco product, which consists of finely powdered tobacco. Swisher's dry snuff brands include "Navy" and "Railroad Mills" and its sales represent approximately one third of this smokeless tobacco market segment. Swisher also produces and markets loose leaf chewing tobacco with its "Mail Pouch", "Chattanooga Chew" and "Lancaster" brands, among others. Swisher has a small share of the moist snuff market with its "Silver Creek", "Gold River" and "Redwood" brands. It markets a low nicotine moist snuff under the "Cooper" brand name. Swisher markets all of its branded moist snuff products under a "buy-one-get-one-free" pricing strategy. Swisher also provides moist snuff and loose leaf chewing tobacco products for the private label market.
Industry and Markets
Unit sales in the domestic cigar industry have been in a general decline for many years. Preliminary estimates for 1994, however, indicate an increase in domestic consumption for large cigars. Swisher has maintained its share of market in this category for the past five years. While domestic consumption of little cigars has grown modestly over the past five years, Swisher's share of this market has grown each year. Unit sales of dry snuff and chewing tobacco have, in general, been declining for the past five years while unit sales of moist snuff have steadily increased. The Company cannot predict whether these trends in consumption will continue.
Swisher sells cigars and smokeless tobacco products through its sales force to direct buying accounts, consisting principally of tobacco distributors, grocery wholesalers and retail chains. Although Swisher's products are sold nationwide, the majority of cigar sales are concentrated in the Southeast, Southwest and Midwest, and the majority of sales of smokeless tobacco products are concentrated in the Southeast, Southwest and Mid-Atlantic states. A small percentage of cigar sales results from exports to the United Kingdom, other European Economic Community member countries and approximately 50 other foreign markets. Although exports represent a small percentage of sales, Swisher is the leading exporter of domestic cigars and is increasing its presence in foreign markets through licensing agreements in addition to its export activities. All of the tobacco markets in which Swisher competes are highly competitive.
Sales of Swisher's tobacco products are not dependent upon any one customer or group of customers and are not affected by seasonal selling factors in any significant degree.
Raw Materials
There are three tobacco components of cigars: filler, binder and wrapper. Swisher uses domestic and imported tobacco purchased through domestic sources for filler and manufactures its own binder. Swisher uses natural wrapper tobacco purchased from domestic dealers, who deal with growers and suppliers in Central America, or specially formulated structured wrapper tobacco which Swisher also manufactures.
The various tobaccos used in the manufacture of smokeless tobacco products are purchased primarily in domestic markets either directly from growers or at auction from several growing areas.
The supply of all the raw materials used in manufacturing cigars and smokeless tobacco products has been, and is expected to continue to be, adequate. However, due to consumer resistance, increases in raw material costs cannot always be passed along on a timely basis in the form of price increases for finished products. Swisher is not substantially dependent upon any one supplier of raw materials and, to date, has not experienced any significant shortage of raw materials.
Trademarks and Trade Secrets
Swisher markets its tobacco products under numerous registered trademarks, including the brand names referred to above. These United States trademarks, which are significant to the Company's tobacco business, expire periodically and are renewable for additional ten year terms upon expiration. A number of these trademarks are registered in several foreign countries. Flavor formulas relating to all of the Company's tobacco products are principal assets of the Company and are maintained under strict secrecy.
GENERAL
The backlog of orders of American Maize and its subsidiaries estimated to be firm at December 31, 1993 and 1994 was $11,911,000 and $9,784,000, respectively. All of the backlog orders at December 31, 1994 are expected to be filled within the current fiscal year.
American Maize is committed to sell some of its products under short-term (two to three months) and long-term (up to one year) contracts. Long-term commitments at December 31, 1993 and 1994, approximated $69,717,000 and $90,041,000, respectively.
American Maize owns a number of patents, is licensed under others, and owns various registered trademarks, relating to products sold by it and processes used in its business. No one patent and no one registered trademark is considered material to the business as a whole.
The day-to-day activities of American Maize are conducted through its operating divisions and subsidiaries. At December 31, 1994, the total number of persons employed by American Maize and its subsidiaries was 1,833, approximately 834 of whom are members of labor unions. American Maize and certain of its subsidiaries maintain for their respective employees who are eligible, employee pension or retirement plans, group life, temporary disability and medical plans, some of which are contributory. American Maize considers its employee relations to be good.
American Maize is engaged continuously in the development of new products and new applications and uses of existing products. During 1992, 1993 and 1994 the expenditures on research activities relating to the development of new products and improvements of existing products were approximately $3,147,000, $3,890,000 and $3,702,000, respectively.
GOVERNMENT REGULATION
General production, packaging, labeling and distribution of many of American Maize's products are subject to various laws and regulations, including regulation by the Federal Food and Drug Administration, the United States Department of Agriculture, the Federal Trade Commission, the Alcohol and Tobacco Tax Unit of the Treasury Department and by various comparable state agencies. Certain of these federal and state agencies have the power, among other things, to order the recall of products that do not meet applicable standards.
In recent years, an increasing amount of legislation affecting the use and sale of tobacco products has been implemented or proposed. Federal legislation requires, among other things, that smokeless tobacco products and advertisements for such products bear one of a series of specified health warnings on a rotating basis and prohibits radio or television advertising of such products. In addition, federal, state and local regulations have been implemented or proposed that would prohibit smoking in certain areas or in certain buildings, require stronger health warnings on tobacco products, impose bans on advertising and promotion, significantly increase tobacco excise taxes, prohibit or impose restrictions on sampling of tobacco products, impose mandatory negative advertising campaigns and eliminate the tax deductions for tobacco advertising and promotional expenses. The Company is unable to assess the future effects these actions may have on the marketing and sale of its tobacco products.
ENVIRONMENTAL MATTERS
The application of federal and state regulations to protect the environment, particularly with respect to emissions into the air and wastewater discharges, may limit or prevent the operation of American Maize's businesses or may substantially increase the cost of operation and/or financing of its operations. American Maize presently spends various amounts, from time to time, for capital improvements to regulate discharges into the environment. In 1995 the Company intends to complete approximately $20 million of capital improvements for wastewater treatment facilities at its Hammond, Indiana facility. See also "ITEM 3 -- LEGAL PROCEEDINGS" below.
ITEM 2
ITEM 2 -- PROPERTIES
American Maize leases its executive offices consisting of approximately 17,000 square feet of space in Stamford, Connecticut, and the offices of its Sweetener Division consisting of approximately 6,500 square feet of space in Chicago, Illinois. In 1994, the aggregate annual rental of all leased real and personal properties of American Maize and its subsidiaries was approximately $13,726,000 most of which represents railroad tank car leases. The Company's leases contain expiration dates ranging from 1995 to 2005.
Corn Processing Facilities
American Maize operates three manufacturing facilities in its corn wet milling business. These facilities are located in Hammond, Indiana; Decatur, Alabama; and Dimmitt, Texas. All three facilities are operated on a continuous basis except for normal maintenance. Capacity utilization of the three facilities in 1994 was approximately 92% reflecting seasonal demand variations and maintenance shutdowns.
The Hammond facility, which is owned by the Company, is located on approximately 113 acres and has a grind capacity of approximately 85,000 bushels per day. For a discussion of expansion and modernization of the Hammond facility, see "ITEM 1 -- BUSINESS" on page 1. The Decatur facility and most of its equipment are leased from the Industrial Development Board of the City of Decatur, Alabama under an Industrial Revenue Bond financing lease. The Decatur facility is located on a 33 acre site and has a grind capacity of approximately 55,000 bushels per day. The Dimmitt facility, is owned by the Company in part, and the remainder is leased from Dimmitt Agri Industries, Inc. with an option for the Company to purchase the leased premises and equipment at the end of the lease term for a nominal price. The Dimmitt facility is located on a 22 acre site and has a grind capacity of approximately 55,000 bushels per day. Additionally, there is a 410 acre parcel of undeveloped land approximately two miles from the facility which is used for disposition of processed wastewater. The Company has an option to purchase approximately 655 acres of additional land and is currently studying the site to determine whether it is acceptable for construction of a new wastewater facility for the Dimmitt plant.
American Maize also owns or leases various storage and distribution facilities in various locations and leases its rail transportation equipment.
Tobacco Facilities
Swisher owns cigar manufacturing plants in Jacksonville, Florida (382,500 square feet) and in Waycross, Georgia (105,000 square feet). By the end of the first quarter of 1995, Swisher will have closed its Waycross, Georgia manufacturing facility and consolidated all cigar manufacturing into its expanded Jacksonville, Florida plant. Swisher owns virtually all of its cigar manufacturing equipment except for certain machinery which is leased on a year-to-year basis. In addition, Swisher owns storage facilities and tobacco warehouses in Quincy, Florida; Edgerton, Wisconsin; Lancaster, Pennsylvania; Brookneal, Virginia; and Hopkinsville, Kentucky (totaling approximately 430,000 square feet) which are currently for sale.
Swisher owns, and has listed for sale, the former Helme manufacturing facility in Helmetta, New Jersey. It leases another in Wheeling, West Virginia (389,000 square feet) pursuant to an Industrial Revenue Bond financing lease where it manufactures dry snuff, moist snuff and chewing tobacco.
ITEM 3
ITEM 3 -- LEGAL PROCEEDINGS
Grain Processing Corporation v. American Maize-Products Company
On May 12, 1981, Grain Processing Corporation ("GPC") brought a lawsuit against the Company in the United States District Court for the Northern District of Indiana alleging infringement of a patent owned by GPC relating to certain kinds of waxy starch maltodextrins. The trial court in 1987 found infringement as to one small-volume product, which had been discontinued by the time of the decision. On appeal by GPC, the Court of Appeals in 1988 found that another product also had infringed, in some instances. The case was sent back to trial court to determine how much of the accused product was infringing, to assess what damages should be paid to GPC, and to rule on GPC's claims for increased damages and attorney fees. GPC is contending that it should receive damages based on its lost profits on products it would have sold except for the infringement. The Company contends that any damages awarded should be based on a reasonable royalty rather than lost profits, because GPC never sold the patented product. The law on that issue is in conflict at present. A hearing date of July 10, 1995 has been set to determine the amount of damages the Company will be required to pay to GPC. During the second quarter of 1994, after the trial court denied the Company's motion for reconsideration of the court's previous ruling that the patent was valid, the Company established a reserve in the amount of $4,000,000 based on its contention that damages should be based on a reasonable royalty. However, the Company's ultimate liability for this action is not currently determinable. The GPC patent expired in 1991 and has no present effect on the Company's activities.
U.S. v. The Sanitary District of Hammond, et al.
On August 2, 1993, the United States, on behalf of the U. S. Environmental Protection Agency ("EPA"), filed suit against the Company, four other industrial companies and four municipalities for alleged violations of the Clean Water Act and the Rivers and Harbors Act. The issue in the suit involves discharges of industrial and municipal wastewater by the defendants into the sewage treatment facilities of the City of Hammond, Indiana and from there into the Grand Calumet River. The Government is seeking civil penalties in an unspecified amount for alleged violations of discharge permit limitations, injunctive relief to require compliance with permit terms, and, from the Company and the other industrial defendants and the City of Hammond, additional injunctive relief requiring the development and implementation of a plan to remediate allegedly contaminated sediments in the Grand Calumet River. The Company does not believe that its discharges have caused or contributed to any sedimentation problem in the Grand Calumet River, and it has already taken measures to ensure continued compliance with the terms of its discharge permits. The Company is contesting the Government's allegations vigorously; however, management is unable to predict the final outcome of this matter or the ultimate effect, if any, on its operations or financial condition.
Whitaker v. Swisher International, Inc.
On April 23, 1992, Lloyd T. Whitaker, the trustee in bankruptcy for Olympia Holding Corporation a/k/a P-I-E Nationwide, Inc. ("Olympia") commenced a lawsuit in United States Bankruptcy Court for the Middle District of Florida against Swisher seeking recovery of freight charges that allegedly should have been paid under tariffs filed with the Interstate Commerce Commission ("ICC"). Actual amounts paid were pursuant to a separate lower tariff filed with the ICC which the trustee claims is unlawful. The trustee seeks recovery of approximately $973,000 plus interest on behalf of Olympia for past shipments. In September, 1993, the court ruled in a similar case that the trustee does not have standing to challenge the lower tariff. Swisher believes that it has meritorious defenses to plaintiff's claims, and is contesting this litigation vigorously.
Steiner v. American Maize-Products Company; Katz v. American Maize-Products Company; and Saltzman v. American Maize-Products Company
Three putative class action lawsuits were filed in January, 1995 in Connecticut Superior Court, Stamford, Connecticut, purportedly on behalf of a class of the Company's shareholders naming as defendants the Company and each member of the Board of Directors. The complaints allege that the directors breached their fiduciary duties to the shareholders by not adequately considering an offer by Eridania Beghin-Say to purchase the outstanding common stock of the Company at a price of $32.00 per share, by rejecting the offer, by failing to make adequate disclosure of the offer, and by placing personal interests, including an alleged attempt by the Chairman to retain control of the Company, ahead of the interest of the public shareholders. The plaintiffs seek injunctive relief, including appointment of an independent committee to evaluate the offer, and monetary relief in an unspecified amount. The defendants believe that the allegations in the complaints are without merit and will contest these actions vigorously.
GIH Corp. and William Ziegler, III v. American Maize-Products Company
On February 22, 1995 William Ziegler, III, Chairman of the Board of the Company, commenced litigation in Superior Court, Cumberland County, Maine on behalf of himself and, purportedly, GIH Corp., a Delaware corporation that Mr. Ziegler claims to control, seeking injunctive relief against completion of the Merger Agreement and the Stock Purchase Agreement entered into between the Company and EBS (See also "ITEM 1 -- BUSINESS"). The complaint names as defendants the remaining members of the Company's Board of Directors and asserts that they wrongfully approved the Merger Agreement and Stock Purchase Agreement and states that a "break-up" fee payable to EBS under certain conditions is illegal. The complaint also alleges that the Board wrongfully approved certain severance contracts for its employees. The Company believes this litigation is without merit and intends to vigorously defend it.
Steiner, Steiner, Sarnoff, Katz and Saltzman v. William Ziegler, III
On February 28, 1995, the plaintiffs in the Connecticut actions entitled Steiner, Katz and Saltzman described above filed suit against William Ziegler, III in Maine Superior Court, purportedly as a class action, claiming that Mr. Ziegler has breached his fiduciary duties to the Company's shareholders by refusing to adequately consider the EBS merger, seeking to advance his own interest at the expense of the shareholders and denying the shareholders the opportunity to maximize value by participating in the EBS merger. The plaintiffs seek to consolidate this lawsuit with the lawsuit entitled GIH Corp. and William Ziegler, III v. American Maize-Products Company described above.
Application of Helen Z. Steinkraus
In March 1991, an agreement was entered into settling various lawsuits which concerned disputes between William Ziegler, III, Helen Z. Steinkraus, GIH Corp. and United States Trust Company of New York with respect to issues of corporate governance and management succession of the Company (the "Settlement Agreement"). Mr. Ziegler is a director and Chairman of the Board and former Chief Executive Officer of the Company. Mrs. Steinkraus, the sister of Mr. Ziegler, is the wife of William C. Steinkraus, a director of the Company. GIH Corp. is a Delaware corporation which owns 47.3% of the Class B Common Stock of the Company. The Class B shares have power to elect 70% of the Board of Directors. GIH Corp., in turn, is wholly owned by a group of trusts for the benefit of Mr. Ziegler, Mrs. Steinkraus and their respective descendants and by Mr. Ziegler, Mrs. Steinkraus and members of their respective families.
In December 1991, Mrs. Steinkraus commenced an action in the Surrogate's Court for New York County, New York to enforce the Settlement Agreement, alleging that the management succession and other provisions of the Settlement Agreement had been breached by Mr. Ziegler and by Donald E. McNicol, a former director of the Company and a party to the Settlement Agreement. Mr. Ziegler and Mr. McNicol have filed answers and counterclaims against Mrs. Steinkraus. On November 17, 1994, the action, including all claims and counterclaims, was discontinued with prejudice by stipulation of the parties.
Eric M. Steinkraus v. William Ziegler, III, et al.
On February 20, 1992, a lawsuit was filed in Superior Court for the County of Cumberland, Maine naming as defendants five then directors of the Company (William Ziegler, III, Leslie C. Liabo, Charles B. Cook, Jr., Patric J. McLaughlin and Donald E. McNicol) and naming the Company as a nominal defendant. The complaint was filed by Eric M. Steinkraus (a son of William C. Steinkraus and Helen Z. Steinkraus). The plaintiff filed the action in the right of the Company, personally and on behalf of a class of the Company's stockholders. The complaint alleged two counts of breach of fiduciary duty and one count of common law fraud, and included derivative and class action allegations. The charges were based on (a) allegations of deception and concealment regarding the "forcible retirement" of two directors of the Company and a proposal to sell the Company's Hammond, Indiana plant to American Fructose Corporation ("AFC"), a former subsidiary of the Company which was merged with and into the Company on February 26, 1993, (b) allegations of actions taken to prevent the election of a new president of the Company, (c) allegations of scheming and misrepresentation to cause the Company to pay fees on behalf of certain of the defendants and salaries to certain other defendants, and (d) an alleged failure to disclose what plaintiff characterizes as an unconditional offer by Archer-Daniels-Midland Company ("ADM") to purchase all of the Company's stock at a premium. On November 8, 1994, the action was dismissed by order of the court, pursuant to stipulation of the parties.
ITEM 4
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5
ITEM 5 -- MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) Market Information.
Information required with respect to this Item 5 (a) is hereby incorporated by reference to information under "Stock Price and Dividend Review" on page 37 of the Company's 1994 Annual Report to security holders, attached hereto as Exhibit "13".
(b) Holders.
Information required with respect to this Item 5 (b) is hereby incorporated by reference to information under "Stock Price and Dividend Review" on page 37 of the Company's 1994 Annual Report to security holders, attached hereto as Exhibit "13".
(c) Dividends.
During 1993 and the first three quarters of 1994, the Company declared and paid a quarterly dividend of $.16 per share on its Class A Common Stock and Class B Common Stock. In the fourth quarter of 1994 the Company declared and paid a quarterly dividend of $.17 per share.
Other information required with respect to this Item 5 (c) is hereby incorporated by reference to the Company's 1994 Annual Report to security holders, attached hereto as Exhibit "13", as follows:
(i) With respect to dividend history, see "Five-Year Summary of Selected Financial Data" on page 19.
(ii) With respect to restrictions on the payment of dividends, see Note 4 of "Notes to Consolidated Financial Statements" on page 25.
ITEM 6
ITEM 6 - SELECTED FINANCIAL DATA
Information required with respect to this Item 6 is hereby incorporated by reference to information under "Five-Year Summary of Selected Financial Data" on page 19 of the Company's 1994 Annual Report to security holders, attached hereto as Exhibit "13".
ITEM 7
ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information required with respect to this Item 7 is hereby incorporated by reference to material under "Financial Review" on pages 15-18 of the Company's 1994 Annual Report to security holders, attached hereto as Exhibit "13".
ITEM 8
ITEM 8 -- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information required with respect to this Item 8 is hereby incorporated by reference to the applicable sections in the Company's 1994 Annual Report to security holders, attached hereto as Exhibit "13". See Financial Statements Incorporated by Reference under "Index to Consolidated Financial Statements and Financial Statement Schedules" elsewhere in this report.
ITEM 9
ITEM 9 -- CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10
ITEM 10 -- DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
DIRECTORS OF THE COMPANY
The names and ages (as of March 6, 1995) of the directors of the Company, their principal occupations or employment during the past five years and other data regarding them, based on information received from the respective directors, are set forth below:
Agreements Affecting Board Membership
The Company's Class B Common Stock has the power to elect 70% of the Company's Board of Directors. GIH Corp. owns approximately 13.3% of the Class A Common Stock and approximately 47.3% of the Class B Common Stock. All the shares of GIH Corp. are held directly by, or in various trusts for the benefit of, William Ziegler, III and his sister, Mrs. Helen Steinkraus.
Control over GIH Corp. is the subject of litigation initiated in New York Surrogate's Court by the children of Mrs. Helen Steinkraus challenging the prior distribution of the controlling share of GIH Corp. common stock to a trust for the benefit of William Ziegler, III. On April 4, 1994, the New York Surrogate's Court issued a decision in favor of Mr. Ziegler, and Mrs. Steinkraus' children have filed an appeal of such decision. The appeal was argued on February 15, 1995.
Until the final resolution of the litigation described above, Mr. Ziegler, Mrs. Steinkraus and GIH Corp. agreed in March, 1991 that their shares of the Company will be voted for directors nominated by the Company in accordance with the Succession Resolutions adopted by the Board of Directors in March, 1991. The resolutions provide for the Board seats for Mr. Ziegler and Mrs. Steinkraus or their designees and require that the majority of the Board consist of directors who are neither employees of the Company nor members of the Ziegler or Steinkraus families.
Mr. Ziegler has informed the Board of Directors of the Company that it is his position that the March, 1991 agreement is no longer in effect as a result of the Surrogate's Court decision. The Company believes that the March, 1991 agreement remains in effect, and the foregoing slate of nominees for election as directors was selected in accordance with the Succession Resolutions.
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below is the age as of March 6, 1995 and certain other information regarding each person currently serving as an executive officer of the Company.
Name Age Office ---- -- ------
William Ziegler, III (1)... 66 Chairman of the Board Patric J. McLaughlin (1)... 49 President and Chief Executive Officer Robert A. Britton ......... 48 Vice President, Treasurer and Assistant Secretary Jane E. Downey ............ 44 Vice President, Human Resources Thomas H. Fisher .......... 48 Director of Taxes Edmond G. Herve, Jr........ 45 Controller Charles A. Koons........... 51 Vice President, Corporate Development and Planning Edward P. Norris........... 54 Vice President and Chief Financial Officer Robert M. Stephan ......... 52 Vice President, General Counsel and Secretary
- ------------- (1) Member of Board of Directors and its Executive Committee
The terms of office of certain of the Company's Executive Officers are governed by their employment agreements. See "ITEM 11
ITEM 11 -- EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth compensation paid or awarded during the last three fiscal years to the Chief Executive Officer and the four other most highly compensated executive officers of the Company in 1994.
SUMMARY COMPENSATION TABLE
Stock Option Tables
The following tables provide information with respect to stock options granted to, exercised or held by the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table details the value on December 31, 1994 of options to purchase Common Stock held by those persons named in the Summary Compensation Table above.
RETIREMENT BENEFITS
The approximate annual retirement benefits provided under Company retirement plans for employees in higher salary classifications retiring from the Company at age 62 or later are shown in the table below.
The amounts of earnings credited for retirement benefits ("Credited Earnings") are essentially salaries and bonuses as shown in the Summary Compensation Table on page 13. The calculation of each individual's Credited Earnings is based on the highest consecutive 60 months during his or her last 120 months of employment.
The amounts shown in the table are 10 year certain and continuous benefits, converted to straight life annuities. Pay is assumed to remain constant to Normal Retirement Date. The figures shown are not limited by any law or regulation such as Section 415(b) and (e) or Section 401(a)(17) of the Code. The benefits shown reflect the total benefit to be paid under both the 1952 Plan and the Supplemental Plan.
As of December 31, 1994, the executive officers named in the Summary Compensation Table on page 13 had the following credited years of service under the retirement plan: Mr. McLaughlin 20.5 years; Mr. Norris 16.8 years, Mr. Stephan 2.8 years, Mr. Koons 18.0 years, and Ms. Downey 6.3 years.
Compensation of Directors
Directors who are not employees of the Company or its subsidiaries are paid an annual retainer of $15,000 plus an attendance fee of $1,000 for each Board meeting and each Board committee meeting. Directors are also reimbursed for travel expenses to attend Board and committee meetings. Committee Chairs receive additional annual retainers ranging from $5,000 to $12,000. In lieu of the annual director's retainer and Executive Committee attendance fees, Mr. MacDonald received until October, 1994 an annual retainer of $120,000 and was granted 20,000 stock appreciation rights for his service as a director and Chairman of the Executive Committee. In lieu of the annual director's retainer and Board meeting attendance fees, Mr. Ziegler receives an annual retainer of $120,000, use of an office and part-time secretarial support and use of a club membership for his service as a director and Chairman of the Board.
Directors with five years or more of service as a non-employee member of the Board participate in a directors' retirement plan that provides eligible directors, upon retirement, with an annual retirement income equal to 50-100% (depending on the number of years served) of the director's highest twelve monthly consecutive retainers paid during the last 120 months of Board service. For purposes of this calculation, the current annual retainer for the Chairman of the Board is deemed to be $15,000.
Employment Agreements
The Company entered into an employment agreement with Patric J. McLaughlin as President and Chief Executive Officer (the "Agreement") commencing July 1, 1993 and terminating June 30, 1996, subject to automatic one-year extensions on each anniversary date until July 1, 2000. The Agreement provides for a base salary of $400,000 per annum, subject to annual reviews by the Compensation Committee, plus an annual incentive bonus under the Company's management incentive plan with a bonus "target" rate at 50% of base salary. Under the Agreement, in the event Mr. McLaughlin's employment is terminated without "cause," he shall be entitled to severance benefits until the Agreement's termination date, including (i) salary, (ii) target bonus payments and (iii) continued participation in welfare benefit plans, retirement plans and the Company's 401(k) Plan. In such case, stock options awarded prior to his termination without "cause" shall remain exercisable until the earlier of their expiration date or the third anniversary of the termination of his employment. In the event of termination of employment for "cause" or due to death or disability, the Company shall not be obligated to make any severance payments to Mr. McLaughlin. The Agreement provides that the Company will pay an amount necessary to reimburse Mr. McLaughlin, on an after tax basis, for any excise tax due under Section 4999 of the Code as a result of any payment under the Agreement being treated as a "parachute payment" under Section 280G of the Code. The Agreement contains provisions relating to nondisclosure of confidential information by Mr. McLaughlin and nonsolicitation of Company employees for a period of two years after his termination. The Agreement is not assignable by either party, but is binding upon successors of the Company.
The Company entered into employment agreements with Jane E. Downey, Charles A. Koons, Edward P. Norris, Robert M. Stephan and three other executive officers of the Company (the "Agreements") commencing as of January 2, 1995 and terminating December 31, 1997 subject to automatic one-year extensions as of December 31, 1995 and each December 31st thereafter, unless timely notice is given that the term shall not be extended. The Agreements provide that each of the executive officers will serve the Company in the offices listed (with respect to named executive officers) in the Summary Compensation Table and set forth in the Agreements at specified annual base salary rates. The base salaries are subject to annual reviews by the Compensation Committee, plus annual incentive bonuses under the Company's management incentive plan at the bonus "target" rate specified in each Agreement. The Agreements include provisions that are effective in the event the employment of the executive officer is terminated by the Company without "cause" or by the executive officer for "good reason" (each as defined in the Agreements). In such cases, the executive officer is entitled to severance benefits for the remainder of the agreement term, including (i) salary, (ii) target bonus payments and (iii) continued participation in welfare benefit plans, retirement plans and the Company's 401(k) Plan. In such case, stock options awarded prior to the executive officer's termination without "cause" shall become fully vested and shall remain exercisable until the earlier of their expiration date or the third anniversary of the termination of his or her employment. Pursuant to the terms of the Agreements, the Company will pay each executive officer an amount necessary to reimburse him or her, on an after tax basis, for any excise tax due under Section 4999 of the Code as a result of any payment under the Agreements being treated as a "parachute payment" under Section 280G of the Code. The Agreements contain a provision relating to nondisclosure of confidential information by the executive officers. The Agreements are not assignable by either party, but are binding upon successors of the Company.
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee are current or former employees of the Company or its affiliates.
ITEM 12
ITEM 12 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND OFFICERS
The following table sets forth certain information as of February 21, 1995, as to shares of the Company's Common Stock beneficially owned by (a) each director of the Company, (b) each of the executive officers of the Company named in the "Summary Compensation Table" on page 13 and (c) all directors and officers of the Company as a group. Unless otherwise indicated in the footnotes, each of the following persons has sole voting and investment power with respect to the shares of the Company's Common Stock set forth in the table.
OWNERSHIP OF COMMON STOCK BY DIRECTORS AND OFFICERS
OWNERSHIP OF COMMON STOCK BY CERTAIN HOLDERS
The following table sets forth certain information as of February 21, 1995 with respect to the shares of the Company's Common Stock beneficially owned by each person who is known to the Company to be the beneficial owner of more than 5% of a class of the Company's outstanding Common Stock.
ITEM 13
ITEM 13 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Certain Transactions
The Company subleases office space to and shares certain office facilities with GIH Corp., of which Mr. Ziegler is President, for an annual fee of approximately $15,000. Swisher International, Inc., a subsidiary of the Company, has engaged the consulting services of Mr. Harwood in its business and paid Mr. Harwood $30,000 in 1994 for such services. During 1994, the Company and its subsidiaries have had purchase, sale, financial and other transactions in the normal course of business with companies or organizations (including their affiliates) with which some of the Company's directors are associated, including the following: Champion International Corporation, The Bank of New York Company and Janney Montgomery Scott Inc. To the best of the Company's knowledge, none of the above transactions resulted in aggregate payments that were large enough to require disclosure of such transactions by the Company. Management believes that all of the above transactions were on terms that were reasonable and competitive. Additional transactions of this nature may be expected to take place in the ordinary course of business in the future.
In connection with his relocation from Illinois to Connecticut, Mr. McLaughlin was granted a housing loan by the Company on April 29, 1993 in the amount of $150,000 payable in three equal annual installments commencing April 29, 1994 with interest at the rate of 5.24% per annum. The note is secured by a second mortgage on Mr. McLaughlin's principal residence.
PART IV
ITEM 14
ITEM 14 -- EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)(1) and (2) See "Consolidated Financial Statements and Schedules" elsewhere in this report.
(a)(3) Exhibits
Regulation S-K Exhibit No. : 2 (a) -- Agreement and Plan of Merger among the Company, Eridania Beghin-Say, S.A. and Cerestar USA, dated February 22, 1995, filed as Exhibit "2.1" to the Company's Registration Statement on Form S-3 (File No. 33-57863), is incorporated herein by reference.
(b) -- Stock Purchase Agreement between the Company, Eridania Beghin Say, S.A. and Cerestar USA, dated February 22, 1995, filed as Exhibit "2.2" to the Company's Registration Statement on Form S-3 (File No. 33-57863), is incorporated herein by reference.
(c) -- The Amended and Restated Agreement and Plan of Merger, dated as of December 15, 1992, by and between the Company and AFC attached as Annex A to the Joint Proxy Statement/Prospectus forming a part of the Company's Registration Statement on Form S-4 (File No. 33- 55946), is incorporated herein by reference.
3.(a) -- The Restated Articles of Incorporation of the Company, as amended through February 26, 1993, filed as Exhibit "3.(a)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1- 6244), is incorporated herein by reference.
(b) -- By-Laws, as amended to February 24, 1993, filed as Exhibit "3.(b)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244), is incorporated herein by reference.
4.(a) -- A specimen copy of the certificates for the Company's Class A Common Stock, par value $.80 per share, filed as Exhibit "4.3" to the Company's Registration Statement on Form S-4 (File No. 33-55946), is incorporated herein by reference.
(b) -- A specimen copy of the certificates for the Company's Class B Common Stock, par value $.80 per share, filed as Exhibit "4.(b)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244), is incorporated herein by reference.
(c) -- Note Agreement dated as of March 3, 1993 among the Company and each Purchaser in the Private Placement of the Company's 7.875% Senior Notes due March 3, 2003, filed as Exhibit "4.(g)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244), is incorporated herein by reference.
10.(a) -- Supplemental Pension Program, filed as Exhibit "10.(f)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1- 6244), is incorporated herein by reference.
(b) -- Unfunded Supplemental Pension Plan Trust Agreement relating to Item 10.(a) above, filed as Exhibit "10.(g)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1- 6244), is incorporated herein by reference.
(c) -- Funded Supplemental Pension Plan Trust Agreement relating to Item 10.(a) above, filed as Exhibit "10.(h)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1- 6244), is incorporated herein by reference.
(d) -- Deferred Compensation Plan, filed as Exhibit "10." to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1981 (File No. 1-6244), is incorporated herein by reference.
(e) -- Executive Life Insurance Program summary, filed as Exhibit "10.(j)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244), is incorporated herein by reference.
(f) -- Summary of 1994 Management Incentive Plan is attached hereto as Exhibit "10.(f)".
(g) -- American Maize-Products Company Directors Retirement Benefit Plan, filed as Exhibit "10.(l)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244), is incorporated herein by reference.
(h) -- The 1985 Stock Option Plan, filed as Exhibit "5." to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1985 (File No. 1-6244), is incorporated herein by reference.
(i) -- The 1985 Stock Option Plan, as amended, filed as Exhibit "4.(f)" to the Company's Registration Statement on Form S-8 on July 7, 1988 (File No. 33-22943), is incorporated herein by reference.
(j) -- Lease between Harbor Plaza Associates, Landlord, and the Company, Tenant, relating to the offices located at 41 Harbor Plaza Drive (presently known as 250 Harbor Drive), Stamford, Connecticut, filed as Exhibit "13." to the Company's Form 10-K Annual Report for the fiscal year ended December 31, l981 (File No. 1-6244), is incorporated herein by reference.
(k) -- Services Agreement dated February 1, 1973 between Dimmitt Agri Industries, Inc. and Amstar Corporation, filed as Exhibit "10.1(a)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244), is incorporated herein by reference.
(l) -- Assignment of Services Agreement dated November 28, 1984 among Amstar Corporation, Dimmitt Operating Inc. and Dimmitt Agri Industries, Inc., filed as Exhibit "10.1(e)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244), is incorporated herein by reference.
(m) -- Letter Amendments dated August 24, 1977, November 24, 1980 and November 18, 1982 in connection with Exhibit "10(l)" above, filed as Exhibits "10.1(b)", "10.1(c)" and "10.1(d)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244), are incorporated herein by reference.
(n) -- Lease Agreement dated as of February 1, 1973 between Dimmitt Agri Industries, Inc. and Amstar Corporation, filed as Exhibit "10.2(a)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244), is incorporated herein by reference.
(o) -- Assignment of Lease Agreement dated November 28, 1984 among Amstar Corporation, Dimmitt Operating Inc., Dimmitt Agri Industries, Inc. and Texas Bank for Cooperatives filed as Exhibit "10.2(b)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244), is incorporated herein by reference.
(p) -- Agreement dated as of March 1, 1991 among William Ziegler, III, Helen Z. Steinkraus, GIH Corp., Donald E. McNicol and the trustees of certain trusts for the benefit of Mr. Ziegler and his issue and the trustees of certain trusts for the benefit of Mrs. Steinkraus and her issue, filed as Exhibit "10.(a)" to the Company's Form 8-K Current Report dated March 29, 1991 (File No. 1-6244), is incorporated herein by reference.
(q) -- Amendment No. 1 dated as of March 14, 1991, to Item 10.(p) above, filed as Exhibit "10.(b)" to the Company's Form 8-K Current Report dated March 29, 1991 (File No. 1-6244), is incorporated herein by reference.
(r) -- Stockholders Agreement dated as of March 1, 1991 among William Ziegler, III, Helen Z. Steinkraus, certain trusts for the benefit of Mr. Ziegler and his issue and certain trusts for the benefit of Mrs. Steinkraus and her issue, filed as Exhibit "10.(c)" to the Company's Form 8-K Current Report dated March 29, 1991 (File No. 1-6244), is incorporated herein by reference.
(s) -- Amendment effective April 24, 1992 to the 1985 Stock Option Plan, as amended, filed as Exhibit "10.(bb)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244), is incorporated herein by reference.
(t) -- The American Fructose Corporation 1986 Stock Option Plan, assumed by the Company pursuant to the merger of American Fructose Corporation with and into the Company on February 26, 1993, filed on July 14, 1986 on Form S-8 (File No. 33-7062), is incorporated herein by reference.
(u) -- Employment Agreement dated as of July 1, 1993 between the Company and Patric J. McLaughlin filed as Exhibit "10.(cc)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1993 (File No. 1- 6244), is incorporated herein by reference.
(v) -- Promissory Note dated April 29, 1993 in the amount of $150,000 of Patric J. McLaughlin in favor of the Company filed as Exhibit "10.(dd)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1993 (File No. 1-6244), is incorporated herein by reference.
(w) -- Credit Agreement dated as of March 31, 1994 among the Company, the signatory lenders thereto, and The Bank of New York, as agent, filed as Exhibit "10(a)" to the Company's Form 10-Q Quarterly Report for the quarterly period ended March 31, 1994 (File No. 1-6244), is incorporated herein by reference.
(x) -- First Amendment, dated as of January 2, 1995 to Employment Agreement, dated July 1, 1993 between the Company and Patric J. McLaughlin (item 10.(u) above), filed with Exhibit "11" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(y) -- Employment Agreement dated as of January 2, 1995, between the Company and Frederick M. Ash, filed as Exhibit "10" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(z) -- Employment Agreement dated as of January 2, 1995, between the Company and Jane E. Downey, filed as Exhibit "9" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(aa) -- Employment Agreement dated as of January 2, 1995, between the Company and Michael J. Gorbitz, filed as Exhibit "8" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(bb) -- Employment Agreement dated as of January 2, 1995, between the Company and Charles A. Koons, filed as Exhibit "7" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(cc) -- Employment Agreement dated as of January 2, 1995, between the Company and Timothy Mann, filed as Exhibit "6" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995, is incorporated herein by reference.
(dd) -- Employment Agreement dated as of January 2, 1995, between the Company and Edward P. Norris, filed as Exhibit "5" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(ee) -- Employment Agreement dated as of January 2, 1995, between the Company and Robert M. Stephan, filed as Exhibit "4" to the Company's Solicitation/Recommendation Statement on Schedule 14D- 9 dated February 28, 1995, is incorporated herein by reference.
(ff) -- The 1994 Stock Plan filed as Exhibit "4.4" to the Company's Registration Statement on Form S-8 (File No. 33-54893), is incorporated herein by reference.
(gg) -- Loan Agreement dated as of December 1, 1994 between the Company and the City of Hammond, Indiana is attached hereto as "Exhibit 10.(gg)".
(hh) -- Indenture of Trust dated December 1, 1994 between the City of Hammond, Indiana as Issuer and Bank One, Indianapolis, N.A. as Trustee, is attached hereto as "Exhibit 10.(hh)".
11.(a)-- Calculation of Primary Earnings Per Share for the fiscal years ended December 31, 1994, 1993 and 1992 inclusive is attached hereto as Exhibit "11.(a)".
11.(b)-- Calculation of Fully-Diluted Earnings Per Share for the fiscal years ended December 31, 1994, 1993 and 1992 inclusive is attached hereto as Exhibit "11.(b)".
13. -- 1994 Annual Report to security holders of the Company, is attached hereto as Exhibit "13".
21. -- Subsidiaries of the Company as of December 31, 1994 is attached hereto as Exhibit "21.".
23. -- Consent of Coopers & Lybrand L.L.P., dated March 6, 1995, is attached hereto as Exhibit "23.".
(b) Reports on Form 8-K
A Form 8-K Current Report was filed during the quarterly period ended December 31, 1994. The report was dated November 30, 1994 and described an agreement among shareholders concerning membership of the Company's Board of Directors and differing views on whether the agreement remains in effect.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
AMERICAN MAIZE-PRODUCTS COMPANY (Company)
March 7, 1995 By Edward P. Norris ------------------------------------- Edward P. Norris, Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
March 7, 1995 By Patric J. McLaughlin ------------------------------------- Patric J. McLaughlin, President and Chief Executive Officer and Director (Principal Executive Officer)
March 7, 1995 By Leslie C. Liabo ------------------------------------- Leslie C. Liabo, Director
March 7, 1995 By Charles B. Cook, Jr. ------------------------------------- Charles B. Cook, Jr., Director
March 7, 1995 By Paul F. Engler ------------------------------------- Paul F. Engler, Director
March 7, 1995 By James E. Harwood ------------------------------------- James E. Harwood, Director
March 7, 1995 By John R. Kennedy ------------------------------------- John R. Kennedy, Director
March 7, 1995 By C. Alan MacDonald ------------------------------------- C. Alan MacDonald, Director
March 7, 1995 By H. Barclay Morley ------------------------------------- H. Barclay Morley, Director
March 7, 1995 By William L. Rudkin ------------------------------------- William L. Rudkin, Director
March 7, 1995 By Wendell M. Smith ------------------------------------- Wendell M. Smith, Director
March 7, 1995 By William C. Steinkraus ------------------------------------- William C. Steinkraus, Director
March 7, 1995 By Raymond S. Troubh ------------------------------------- Raymond S. Troubh, Director
March 7, 1995 By Edward P. Norris ------------------------------------- Edward P. Norris, Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
FORM 10-K ANNUAL REPORT ----------
CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES for the years ended December 31, 1994, 1993 and 1992 ----------
AMERICAN MAIZE-PRODUCTS COMPANY ----------
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
Consolidated Financial Statements Incorporated by Reference
The consolidated financial statements of American Maize-Products Company and its subsidiaries and the Report of Independent Accountants related thereto are incorporated herein by reference to the Company's 1994 Annual Report to shareholders (Exhibit 13), which Exhibit is not "filed" as a part of this Form 10-K except for the consolidated financial statements and notes thereto and Report of Independent Accountants on pages 20 through 37 thereof and certain other information incorporated elsewhere herein.
Consolidated Financial Statements and Financial Statement Schedules: Page
Report of Independent Accountants
Financial Statement Schedules:
II. Valuation and Qualifying Accounts and Reserves for the years ended December 31, 1994, 1993 and 1992
Financial Statement Schedules Omitted
Financial Statement Schedules other than those listed above are omitted because they are not required or are not applicable or that the required information is presented in the consolidated financial statements or notes thereto. Columns omitted from financial statement schedules filed have been omitted because the information is not applicable. Any other information omitted from the financial statement schedules filed has been omitted due to immateriality.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of American Maize-Products Company:
We have audited the consolidated financial statements of American Maize-Products Company and Subsidiaries as of December 31, 1994 and 1993, and for each of the three years in the period ended December 31, 1994, which financial statements are included on Pages 20 through 37 of the 1994 Annual Report to Shareholders of American Maize-Products Company and incorporated by reference herein. We have also audited the financial statement schedules listed in the accompanying index of this Form 10-K. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of American Maize-Products Company and Subsidiaries as of December 31, 1994 and 1993, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1994 in conformity with generally accepted accounting principles. In addition, in our opinion, the financial statement schedules referred to above, when considered in relation to the basic financial statements taken as a whole, present fairly, in all material respects, the information required to be included therein.
As discussed in Notes 7 and 8 to the consolidated financial statements referred to above, effective January 1, 1993, the Company changed its methods of accounting for postretirement benefits other than pensions and postemployment benefits.
As discussed in Note 14 to the consolidated financial statements referred to above, the consolidated financial statements include an accrual related to a patent infringement claim. The Company's ultimate liability for this action is not presently determinable. In addition, the Company is a defendant in an environmental civil action, the ultimate financial effect of which is not presently determinable, and, accordingly, no amounts have been recorded in the financial statements.
COOPERS & LYBRAND L.L.P.
Stamford, Connecticut February 28, 1995.
AMERICAN MAIZE-PRODUCTS COMPANY AND ITS SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the years ended December 31, 1994, 1993 and 1992
(In thousands)
INDEX TO EXHIBITS
Sequential Regulation S-K Page Exhibit No: Exhibit Number
2(a) -- Agreement and Plan of Merger among the Company, * Eridania Beghin-Say, S.A. and Cerestar USA, dated February 22, 1995, filed as Exhibit "2.1" to the Company's Registration Statement on Form S-3 (File No. 33-57863).
(b) -- Stock Purchase Agreement between the Company, * Eridania Beghin-Say, S.A. and Cerestar USA, dated February 22, 1995, filed as Exhibit "2.2" to the Company's Registration Statement on Form S-3 (File No. 33-57863).
(c) -- The Amended and Restated Agreement and Plan of * Merger, dated as of December 15, 1992, by and between the Company and AFC attached as Annex A to the Joint Proxy Statement/Prospectus forming a part of the Company's registration statement on Form S-4 (File No. 33-55946).
3.(a)-- The Restated Articles of Incorporation of the * Company, as amended through February 26, 1993, filed as Exhibit "3.(a)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244).
(b)-- By-Laws, as amended to February 24, 1993, filed * as Exhibit "3.(b)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244).
4.(a)-- A specimen copy of the certificates for the * Company's Class A Common Stock, par value $.80 per share, filed as Exhibit "4.3" to the Company's registration statement on Form S-4 (File No. 33-55946).
(b)-- A specimen copy of the certificates for the * Company's Class B Common Stock, par value $.80 per share, filed as Exhibit "4.(b)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244).
(c)-- Note Agreement dated as of March 3, 1993 among * the Company and each Purchaser in the Private Placement of the Company's 7.875% Senior Notes due March 3, 2003, filed as Exhibit "4.(g)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244).
10.(a)-- Supplemental Pension Program, filed as Exhibit * "10.(f)" to the Company's Form 10- K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244).
(b)-- Unfunded Supplemental Pension Plan Trust * Agreement relating to Item 10.(a) above, filed as Exhibit "10.(g)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244).
(c)-- Funded Supplemental Pension Plan Trust Agreement * relating to Item 10.(a) above, filed as Exhibit "10.(h)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244).
(d)-- Deferred Compensation Plan, filed as Exhibit * "10." to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1981 (File No. 1- 6244).
(e)-- Executive Life Insurance Program summary, filed * as Exhibit "10.(j)" to the Company's Form 10- K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244).
(f)-- Summary of 1994 Management Incentive Plan is * attached hereto as Exhibit "10.(f)".
(g)-- American Maize- Products Company Directors * Retirement Benefit Plan, filed as Exhibit "10.(l)" to the Company's Form 10- K Annual Report for the fiscal year ended December 31, 1991 (File No. 1-6244).
(h)-- The 1985 Stock Option Plan, filed as Exhibit * "5." to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1985 (File No. 1- 6244).
(i)-- The 1985 Stock Option Plan, as amended, filed as * Exhibit "4.(f)" to the Company's registration statement on Form S-8 on July 7, 1988 (File No. 33-22943).
(j)-- Lease between Harbor Plaza Associates, Landlord, * and the Company, Tenant, relating to the offices located at 41 Harbor Plaza Drive (presently known as 250 Harbor Drive), Stamford, Connecticut, filed as Exhibit "13." to the Company's Form 10-K Annual Report for the fiscal year ended December 31, l981 (File No. 1-6244).
(k)-- Services Agreement dated February 1, 1973 * between Dimmitt Agri Industries, Inc. and Amstar Corporation, filed as Exhibit "10.1(a)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244).
(l)-- Assignment of Services Agreement dated November * 28, 1984 among Amstar Corporation, Dimmitt Operating Inc. and Dimmitt Agri Industries, Inc., filed as Exhibit "10.1(e)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244).
(m)-- Letter Amendments dated August 24, 1977, * November 24, 1980 and November 18, 1982 in connection with Exhibit "10(l)" above, filed as Exhibits "10.1(b), "10.1(c)" and "10.1(d)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244).
(n)-- Lease Agreement dated as of February 1, 1973 * between Dimmitt Agri Industries, Inc. and Amstar Corporation, filed as Exhibit "10.2(a)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244).
(o)-- Assignment of Lease Agreement dated November 28, * 1984 among Amstar Corporation, Dimmitt Operating Inc., Dimmitt Agri Industries, Inc. and Texas Bank for Cooperatives filed as Exhibit "10.2(b)" to the Company's Form 8-K Current Report on December 13, 1984 (File No. 1-6244).
(p)-- Agreement dated as of March 1, 1991 among * William Ziegler, III, Helen Z. Steinkraus, GIH Corp., Donald E. McNicol and the trustees of certain trusts for the benefit of Mr. Ziegler and his issue and the trustees of certain trusts for the benefit of Mrs. Steinkraus and her issue, filed as Exhibit "10.(a)" to the Company's Form 8-K Current Report dated March 29, 1991 (File No. 1-6244).
(q)-- Amendment No. 1 dated as of March 14, 1991, to * Item 10.(p) above, filed as Exhibit "10.(b)" to the Company's Form 8-K Current Report dated March 29, 1991 (File No. 1-6244).
(r)-- Stockholders Agreement dated as of March 1, 1991 * among William Ziegler, III, Helen Z. Steinkraus, certain trusts for the benefit of Mr. Ziegler and his issue and certain trusts for the benefit of Mrs. Steinkraus and her issue, filed as Exhibit "10.(c)" to the Company's Form 8-K Current Report dated March 29, 1991 (File No. 1-6244).
(s)-- Amendment effective April 24, 1992 to the 1985 * Stock Option Plan, as amended, filed as Exhibit "10.(bb)" to the Company's Form 10-K Annual Report for the fiscal year ended December 31, 1992 (File No. 1-6244).
(t)-- The American Fructose Corporation 1986 Stock * Option Plan, assumed by the Company pursuant to the merger of American Fructose Corporation with and into the Company on February 26, 1993, filed on July 14, 1986 on Form S-8 (File No. 33-7062).
(u)-- Employment Agreement dated as of July 1, 1993 * between the Company and Patric J. McLaughlin filed as Exhibit "10.(cc)" to the Company's Form 10- K Annual Report for the fiscal year ended December 31, 1993 (File No. 1-6244).
(v)-- Promissory Note dated April 29, 1993 in the * amount of $150,000 of Patric J. McLaughlin in favor of the Company filed as Exhibit "10.(dd)" to the Company's Form 10- K Annual Report for the fiscal year ended December 31, 1993 (File No. 1-6244).
(w)-- Credit Agreement dated as of March 31, 1994 * among the Company, the signatory lenders thereto, and The Bank of New York, as agent, filed as Exhibit "10(a)" to the Company's Form 10-Q Quarterly Report for the quarterly period ended March 31, 1994 (File No. 1-6244).
(x)-- First Amendment, dated as of January 2, 1995 to * Employment Agreement, dated July 1, 1993 between the Company and Patric J. McLaughlin (item 10.(u) above), filed with Exhibit "11" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(y)-- Employment Agreement dated as of January 2, * 1995, between the Company and Frederick M. Ash, filed as Exhibit "10" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(z)-- Employment Agreement dated as of January 2, * 1995, between the Company and Jane E. Downey, filed as Exhibit "9" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(aa)-- Employment Agreement dated as of January 2, * 1995, between the Company and Michael J. Gorbitz, filed as Exhibit "8" to the Company's Solicitation/ Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(bb)-- Employment Agreement dated as of January 2, * 1995, between the Company and Charles A. Koons, filed as Exhibit "7" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(cc)-- Employment Agreement dated as of January 2, * 1995, between the Company and Timothy Mann, filed as Exhibit "6" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(dd)-- Employment Agreement dated as of January 2, * 1995, between the Company and Edward P. Norris, filed as Exhibit "5" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(ee)-- Employment Agreement dated as of January 2, * 1995, between the Company and Robert M. Stephan, filed as Exhibit "4" to the Company's Solicitation/Recommendation Statement on Schedule 14D-9 dated February 28, 1995.
(ff)-- The 1994 Stock Plan filed as Exhibit "4.4" to * the Company's Registration Statement on Form S-8 (File No. 33-54893).
(gg)-- Loan Agreement dated as of December 1, 1994 * between the Company and the City of Hammond, Indiana is attached hereto as "Exhibit 10.(gg)".
(hh)-- Indenture of Trust dated December 1, 1994 * between the City of Hammond, Indiana as Issuer and Bank One, Indianapolis, N.A. as Trustee, is attached hereto as "Exhibit 10.(hh)".
11.(a)-- Calculation of Primary Earnings Per Share for the fiscal years ended December 31, 1994, 1993 and 1992 inclusive is attached hereto as Exhibit "11.(a)".
11.(b)-- Calculation of Fully Diluted Earnings Per Share for the fiscal years ended December 31, 1994, 1993 and 1992 inclusive is attached hereto as Exhibit "11.(b)".
13. -- 1994 Annual Report to security holders of the Company is attached hereto as Exhibit "13".
21. -- Subsidiaries of the Company as of December 31, 1994 is attached hereto as Exhibit "21.".
23. -- Consent of Coopers & Lybrand L.L.P., dated March 6, 1995, is attached hereto as Exhibit "23.".
- ------------------ * Incorporated by Reference.
The Company will make the foregoing exhibits available upon request upon payment of a charge of $.25 per page and postage. Requests should be addressed to the Secretary, American Maize-Products Company, P.O. Box 10128, 250 Harbor Drive, Stamford, CT 06904.