-----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, PVpOi3QsJkv37QA/0ORj3e1NXlfviaxNMj0ecNza0IpnoOO/so75S8jzAOnoUkjU lXv027ebl9Mz/tUgpnKPlA== 0000950135-98-000577.txt : 19980211 0000950135-98-000577.hdr.sgml : 19980211 ACCESSION NUMBER: 0000950135-98-000577 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971227 FILED AS OF DATE: 19980210 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COURIER CORP CENTRAL INDEX KEY: 0000025212 STANDARD INDUSTRIAL CLASSIFICATION: BOOK PRINTING [2732] IRS NUMBER: 042502514 STATE OF INCORPORATION: MA FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-07597 FILM NUMBER: 98527714 BUSINESS ADDRESS: STREET 1: 15 WELLMAN AVENUE CITY: NORTH CHELMSFORD STATE: MA ZIP: 01863 BUSINESS PHONE: (978) 251-6000 10-Q 1 COURIER CORPORATION 1 UNITED STATES 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 the quarterly period ended December 27, 1997 ------------------------------------------------- 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 0-7597 --------------------------------------------------- COURIER CORPORATION - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) MASSACHUSETTS 04-2502514 - -------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 15 Wellman Avenue, North Chelmsford, Massachusetts 01863 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (978) 251-6000 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) NO CHANGE - -------------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- 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 January 30, 1998 - -------------------------------------- ------------------------------------- Common Stock, $1 par value 2,079,649 shares Page 1 of 11 2 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) December 27, September 27, ASSETS 1997 1997 - ------ ------------ ------------- Current assets: Cash and cash equivalents $ 23 $ 27 Accounts receivable, less allowance for uncollectible accounts 28,607 25,919 Inventories (Note B) 11,703 9,695 Deferred income taxes 1,670 1,642 Other current assets 699 780 ------- ------- Total current assets 42,702 38,063 Property, plant and equipment, less accumulated depreciation: $64,299 at December 27, 1997 and $62,398 at September 27, 1997 35,548 36,942 Real estate held for sale or lease, net 2,440 2,459 Goodwill and other intangibles 11,906 11,618 Other assets 546 561 ------- ------- Total assets $93,142 $89,643 ======= ======= The accompanying notes are an integral part of the consolidated financial statements. Page 2 of 11 3 COURIER CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) (Dollars in thousands) December 27, September 27, LIABILITIES AND STOCKHOLDERS' EQUITY 1997 1997 - ------------------------------------ ------------ ------------- Current liabilities: Current maturities of long-term debt $ 287 $ 387 Accounts payable 9,585 9,557 Accrued taxes 4,927 4,961 Other current liabilities 9,023 9,070 -------- -------- Total current liabilities 23,822 23,975 Long-term debt 20,773 18,593 Deferred income taxes 3,239 3,375 Other liabilities 2,117 1,952 -------- -------- Total liabilities 49,951 47,895 -------- -------- Stockholders' equity: Preferred stock, $1 par value - authorized 1,000,000 shares; none issued Common stock, $1 par value - authorized 6,000,000 shares; issued 4,500,000 shares 4,500 4,500 Additional paid-in capital 9,445 9,277 Retained earnings 52,988 52,060 Treasury stock, at cost: 2,444,000 shares at December 27, 1997 and 2,493,000 shares at September 27, 1997 (23,742) (24,089) -------- -------- Total stockholders' equity 43,191 41,748 -------- -------- Total liabilities and stockholders' equity $ 93,142 $ 89,643 ======== ======== The accompanying notes are an integral part of the consolidated financial statements. Page 3 of 11 4 COURIER CORPORATION CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (Dollars in thousands except per share amounts) THREE MONTHS ENDED ------------------------------ December 27, December 28, 1997 1996 ------------ ------------ Net sales $35,306 $30,539 Cost of sales 26,517 24,218 ------- ------- Gross profit 8,789 6,321 Selling and administrative expenses 6,525 4,850 Interest expense 347 160 Other income 5 7 ------- ------- Income before taxes 1,922 1,318 Provision for income taxes (Note C) 712 389 ------- ------- Net income $ 1,210 $ 929 ======= ======= Net income per share (Note D): Diluted $ 0.57 $ 0.45 ======= ======= Basic $ 0.60 $ 0.46 ======= ======= Cash dividends declared per share $ 0.14 $ 0.12 ======= ======= The accompanying notes are an integral part of the consolidated financial statements. Page 4 of 11 5 COURIER CORPORATION CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) (Dollars in thousands)
THREE MONTHS ENDED ------------------------------- December 27, December 28, 1997 1996 ------------ ------------ Cash provided from (used for) operating activities $(1,220) $ 1,432 ------- ------- Investment activities: Capital expenditures (506) (2,543) Business acquisition (563) -- ------- ------- Cash used for investment activities (1,069) (2,543) ------- ------- Financing activities: Repayment of long-term debt (170) (165) Increase in long-term borrowings 2,250 1,532 Cash dividends (282) (243) Stock repurchase program - (47) Proceeds from stock plans 487 30 ------- ------- Cash provided from financing activities 2,285 1,107 ------- ------- Decrease in cash and cash equivalents (4) (4) Cash at the beginning of the period 27 33 ------- ------- Cash at the end of the period $ 23 $ 29 ======= =======
The accompanying notes are an integral part of the consolidated financial statements. Page 5 of 11 6 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES UNAUDITED FINANCIAL STATEMENTS The balance sheet as of December 27, 1997, the statements of income for the three-month periods ended December 27, 1997 and December 28, 1996, and the statements of cash flows for the three-month periods ended December 27, 1997 and December 28, 1996 are unaudited and, in the opinion of management, all adjustments necessary for a fair presentation of such financial statements have been recorded. Such adjustments consisted only of normal recurring items. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The year-end balance sheet data as of September 27, 1997 was derived from audited financial statements, but does not include disclosures required by generally accepted accounting principles. It is suggested that these interim financial statements be read in conjunction with the Company's most recent Form 10-K and Annual Report as of September 27, 1997. NEW ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board recently issued SFAS No. 130, "Reporting Comprehensive Income", SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" and SFAS No. 132, "Employer Disclosures about Pensions and Other Postretirement Benefits". These new standards will be effective in the Company's fiscal year ending September 25, 1999. The Company has not determined the effects, if any, that these standards will have on its consolidated financial statements. B. INVENTORIES Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out (LIFO) method for substantially all inventories. Inventories consisted of the following: (000's Omitted) ------------------------------ December 27, September 27, 1997 1997 ------------ ------------- Raw materials $ 4,204 $3,912 Work in process 5,603 4,108 Finished goods 1,896 1,675 ------- ------ $11,703 $9,695 ======= ====== Page 6 of 11 7 COURIER CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) C. INCOME TAXES The statutory federal tax rate is 34%. The total tax provision differs from that computed using the statutory federal tax rate for the following reasons: (000's Omitted) Three Months Ended ------------------------------- December 27, December 28, 1997 1996 ------------ ------------ Federal income taxes at statutory rate $653 $448 State income taxes, net 50 23 Goodwill amortization 49 - Export related income (52) (52) Other 12 (30) ---- ---- Total provision $712 $389 ==== ==== D. NET INCOME PER SHARE During the first quarter of fiscal 1998, the Company adopted SFAS No. 128, "Earnings per Share." Prior period net income per share has been restated to reflect current presentation. Following is a reconciliation of the shares used in the calculation of basic and diluted net income per share. Potentially dilutive securities consist of options issued under the Company's stock option plans. (000's Omitted) --------------------------------- Net Net Income Income Shares Per Share ------ ------ ---------- For the three months ended December 27, 1997: Basic net income per share $1,210 2,030 $.60 Effect of dilutive securities 84 .03 ------ ----- ---- Diluted net income per share $1,210 2,114 $.57 ====== ===== ==== For the three months ended December 28, 1996: Basic net income per share $ 929 2,029 $.46 Effect of dilutive securities 21 .01 ------ ----- ---- Diluted net income per share $ 929 2,050 $.45 ====== ===== ==== Page 7 of 11 8 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: Sales in the first quarter of fiscal 1998 increased 16% to $35.3 million from $30.5 million in the prior year's first quarter. The sales growth reflects increased sales to educational and religious publishing customers. Also, Book-mart Press, Inc. (Book-mart), a New Jersey based printer of short and medium-run books, which was acquired by the Company in July 1997, contributed approximately $3 million to the improvement in revenues. These increases were offset by lower software documentation sales reflecting the continuing industry-wide decline in demand for software documentation manufacturing. On September 30, 1997, the Company acquired the assets of The Home School Books & Supplies (The Home School), a direct marketer of books and other educational products for supplementing or replacing traditional education with home-based learning. Gross profit increased to $8.8 million, or 25% of sales, in the first quarter from $6.3 million, or 21% of sales, in the same period last year. The improvement in gross profit reflects the benefits of increased sales volume and gains in productivity. In addition, last year's first quarter included $350,000 in costs associated with consolidating operations in Philadelphia into a newer, more efficient manufacturing facility. Selling and administrative expenses increased to $6.5 million in the first quarter of fiscal 1998 from $4.9 million in the same period last year. As a percentage of sales, selling and administrative expenses were 18% compared to 16% in the first quarter last year. The increase was attributable to the incremental selling and administrative expenses of Book-mart and The Home School of approximately $0.9 million, including goodwill amortization of approximately $150,000. In addition, selling and administrative expenses in the first quarter of fiscal 1998 increased due to expansion of the Company's Copyright Management Services (CMS) division and expenses that relate to the increase in profitability. Interest expense was $347,000 compared to $160,000 in the first quarter of fiscal 1997 reflecting increased average borrowings which were primarily due to the acquisitions of Book-mart and The Home School. Interest of approximately $28,000 was capitalized in the first quarter of fiscal 1997. No interest was capitalized in the first quarter of fiscal 1998. The Company's effective tax rate for the first quarter was 37%. This rate was higher than the 30% rate in the corresponding period last year primarily because of nondeductible goodwill related to the recent acquisitions. In addition, a higher effective state tax rate and a proportionately lower benefit from export-related income also resulted in an increase in the overall effective tax rate. Net income for the first quarter of fiscal 1998 was $1,210,000, up 30% over last year's earnings of $929,000. Net income per share on a diluted basis increased 27% to $.57 per share from $.45 per share in the corresponding period last year. Earnings from the Company's core book manufacturing operations increased 48% over last year's first quarter reflecting increased sales volume combined with higher levels of productivity and lower costs. The Company's newer businesses, CMS and The Home School, which focus on providing customized educational products, reduced first quarter earnings by $.23 per share compared to a reduction of $.07 per share for the same period last year, attributable to CMS. Revenues and related earnings for these businesses, both of which are highly seasonal, are expected to increase in the fourth quarter coinciding with the months of highest market demand. Weighted average shares outstanding were comparable to last year's first quarter. Shares exercised under the Company's stock option plans and shares issued as compensation for non-compete agreements were offset by shares acquired under the Company's 1997 stock repurchase program. The Financial Accounting Standards Board recently issued SFAS No. 130, "Reporting Comprehensive Income", SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information" and SFAS No. 132, "Employer Disclosures about Pensions and Other Postretirement Benefits". These new standards will be effective in the Company's fiscal year ending September 25, 1999. The Company has not determined the effects, if any, that these standards will have on its consolidated financial statements. Page 8 of 11 9 COURIER CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES: During the first quarter of fiscal 1998, operations used approximately $1.2 million of cash. Net income was $1.2 million and depreciation was $2.1 million. Working capital utilized approximately $4.6 million of cash due to increases in accounts receivable of $2.7 million and inventories of $1.9 million. Investment activities in the first three months of fiscal 1998 used approximately $0.5 million of cash for capital expenditures and $0.6 million for the acquisition of The Home School. For the entire fiscal year, capital expenditures are expected to approximate $10 million, which includes plans for the purchase and installation of a new web press to provide additional book printing capacity. In addition, up to $1 million is expected to be used on upgrading the Company's management information systems. In December 1996, the Company completed the consolidation of operations in Philadelphia from an older, multistory facility to the recently expanded, more efficient manufacturing facility. In September 1997, the Company signed an agreement to sell the old multistory facility to a developer for approximately $4.6 million. Closing is scheduled for the spring of 1998, but a number of contingencies remain. The Company's Raymond, New Hampshire facility, which had been leased through June 1996, continues to be vacant pending sale or lease. Financing activities for the first quarter of fiscal 1998 provided approximately $2.3 million of cash. At December 27, 1997, the Company utilized approximately $19 million of its borrowing capacity available under a $30 million long-term revolving credit facility. Management is currently assessing the impact of the "Year 2000" problem on the Company's operations and is working with vendors and consultants to formulate and implement cost effective approaches to resolving this issue. As part of this process, the Company expects to replace or upgrade certain information systems with systems designed to give the Company the benefit of new technology with enhanced functionality and resultant improvements in service and productivity. The total cost of the Year 2000 problem and its impact on the Company's future results is in the process of being determined. FORWARD-LOOKING INFORMATION: Statements that describe future expectations, plans or strategies are considered forward looking. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those currently anticipated. Factors that could affect actual results include, among others, changes in customers' demand for the Company's products, changes in raw material costs and availability, seasonal changes in customer orders, pricing actions by competitors, success in the integration of recently acquired businesses, and general changes in economic conditions. These factors should be considered in evaluating the forward-looking statements, and undue reliance should not be placed on such statements. The forward-looking statements included herein are made as of the date hereof, and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. Page 9 of 11 10 COURIER CORPORATION PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit No. Description of Exhibit ----------- ---------------------- 10 Courier Corporation Deferred Compensation Program dated November 6, 1997 with Messrs. Conway III, Story, Nichols and Osenton. 27 Financial Data Schedule (b) Reports on Form 8-K None. Page 10 of 11 11 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COURIER CORPORATION ------------------- (REGISTRANT) February 9, 1998 By: /s/ James F. Conway III - --------------------------- ---------------------------------- Date James F. Conway III Chairman, President and Chief Executive Officer February 9, 1998 By: /s/ Robert P. Story, Jr. - --------------------------- ---------------------------------- Date Robert P. Story, Jr. Senior Vice President and Chief Financial Officer February 9, 1998 By: /s/ Peter M. Folger - --------------------------- ---------------------------------- Date Peter M. Folger Vice President and Chief Accounting Officer Page 11 of 11 EX-10 2 DEFERRED COMPENSATION PLAN 1 Exhibit 10 TERMS AND CONDITIONS OF THE COURIER CORPORATION DEFERRED COMPENSATION PROGRAM 1. Eligibility in the Courier Corporation Deferred Compensation Program (the "Program") shall be granted to the following employees of Courier Corporation (the "Company") who have been designated by the Board of Directors of the Company (the "Board") as being eligible for the Program: James F. Conway III, Robert P. Story, Jr., George Q. Nichols, and Thomas A. Osenton (the "Participants"). The Board shall have full power and discretion to name additional employees of the Company as Participants and at such times as it shall decide in its sole discretion. 2. Each capitalized term herein shall have the same meaning attributed to such term in the Courier Profit Sharing and Savings Plan (the "Plan"), except as otherwise provided. 3. (a) RETROACTIVE AWARD. Each Participant who is actively employed by the Company on November 6, 1997 shall receive a deferred compensation award in an amount equal to the sum of the differences for each of 1994, 1995, and 1996 between (i) the amount of the Profit Sharing Contributions to which he would have been entitled under the Plan and the amount of ESOP Contributions to which he would have been entitled under the Courier Employee Stock Ownership Plan (the "ESOP"), were such Participant's Compensation under the Plan and the ESOP not limited each year to $150,000 (or such amount as may be increased from time to time pursuant to Section 401(a)(17) of the Code) as provided in Section 2.10 of the Plan and 2.10 of the ESOP for such calendar year, and (ii) the actual amount of Profit Sharing Contributions credited to such Participant's Profit Sharing Contribution Account under the Plan and the actual amount of ESOP Contributions credited to such Participant's Account under the ESOP for such calendar year. Such award shall be adjusted with interest in an amount determined at the discretion of the Administrator (as such term is defined in Paragraph 15 hereof) and credited to a separate book account (a "Deferred Compensation Account") in the Participant's name on or before December 31, 1997. (b) Annual Award. Each Participant who is actively employed by the Company on the last day of each calendar year beginning on and after January 1, 1997 shall receive a deferred compensation award for such calendar year in an amount equal to the difference between (i) the amount of the Profit Sharing Contributions and ESOP Contributions to which he would have been entitled under Sections 7.3 and 7.5 of the Plan were such Participant's Compensation under the Plan not limited to $160,000 (or such amount as may be increased from time to time pursuant to Section 401(a)(17) of the Code) as provided in Section 2.10 of the Plan, and (ii) 2 the actual amount of Profit Sharing Contributions and ESOP Contributions credited to such Participant's Profit Sharing Contribution Account and ESOP Account for such calendar year. All amounts awarded to a Participant under this Paragraph 3(b) shall be credited to the Deferred Compensation Account in his name the following calendar year. 4. On or before January 15th of each calendar year, beginning with January 15, 1999, the amount standing to the credit of a Participant's Deferred Compensation Account on such date shall be adjusted for deemed earnings or losses as if such amount had been invested in the Participant's investment choice for the entire preceding calendar year. The reasonable determination of such adjustment by the Administrator shall be conclusive and binding on all Participants and their Beneficiaries. The investment choices available to Participants shall be as specified by the individual appointed by the Board to administer the Program pursuant to Paragraph 15 hereof (the "Administrator") from time to time, but each Participant may select only one investment choice for each annual period on a prospective basis. On an ongoing basis, each Participant must make an investment choice for a calendar year prior to January 15 of such calendar year. If a Participant fails to make a timely election, such Participant's investment choice which was in effect for the prior calendar year will continue in effect, unless such failure occurs in 1998, in which event the Administrator shall make an election on behalf of such Participant. 5. During his period of active employment, each Participant shall be fully vested in all amounts credited to his Deferred Compensation Account, but no Participant shall have any rights to the amounts which he has been awarded hereunder. Participation in the Program, and any actions taken pursuant to the Program, shall not create or be deemed to create a trust or fiduciary relationship of any kind between the Company and the Participant. The Company may, but shall have no obligation to, establish any separate fund, reserve, or escrow or to provide security with respect to any amounts awarded under the Program. Any assets of the Company which are set aside in any separate fund, reserve or escrow shall continue for all purposes to be a part of the general assets of the Company, with title to the beneficial ownership of any such assets remaining at all times in the Company. No Participant, nor his legal representatives, nor any of his beneficiaries shall have any right, other than the right of an unsecured general creditor of the Company, in respect of the Deferred Compensation Account established hereunder, and such persons shall have no property interest whatsoever in any specific assets of the Company. 6. Upon the termination of a Participant's employment with the Company for any reason other than Retirement, death or disability, the Participant shall be entitled to receive all amounts standing to the credit of his Deferred Compensation Account (including amounts to be credited under Paragraph 3(b) for the prior calendar year), as adjusted for earnings or losses based on the total investment return based on the Participant's investment choice through December 31 of the year of termination in one (1) lump sum payment. Such payment shall be made within 90 days after the beginning of the calendar year following the calendar year in which such Participant's termination of employment occurs, and shall completely discharge the Company's obligation under the Program. 2 3 7. Upon the Retirement of a Participant from employment with the Company or the termination of the Participant's employment with the Company by reason of death or disability, the Participant (or his Beneficiary, in the case of death) shall be entitled to receive all amounts standing to the credit of his Deferred Compensation Account as of the December 31 preceding the date of termination, as well as any amounts to be credited under Paragraph 3(b) for the prior calendar year, all as adjusted for earnings or losses based on the total investment return of the Participant's investment choice from January 1 of the year of termination until the actual date of termination, in one (1) lump sum payment. The Company shall also credit to the Participant's Deferred Compensation Account an award for the year of termination as calculated pursuant to Paragraph 3(b), but based on the Participant's Compensation earned through the date of termination and based on the rate of Profit Sharing Contributions and ESOP Contributions estimated by the Administrator in good faith. Such payment shall be made within 60 days after such Participant's termination of employment, and shall completely discharge the Company's obligation under the Program. 8. Notwithstanding anything to the contrary contained herein, in the event of a good faith determination by the Administrator that any of the following acts or omissions were committed by a Participant, then such Participant shall immediately forfeit all rights to amounts credited to such Participant's Deferred Compensation Account, and the Participant, his estate, his legal representative and his Beneficiaries shall have no further rights with respect to such Participant's Deferred Compensation Account or any claims against the Company under this Program: (a) dishonest statements or acts of the Participant with respect to the Company, or any subsidiary or affiliate of the Company; (b) the commission by or indictment of the Participant for (i) a felony or (ii) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud ("indictment," for these purposes, meaning an indictment, probable cause hearing or any other procedure pursuant to which an initial determination of probable or reasonable cause with respect to such offense is made); (c) gross negligence, willful misconduct or insubordination of the Participant with respect to the Company or any subsidiary or affiliate of the Company; or (d) breach by the Participant of any contract with, or other obligation to, the Company. 9. Any distribution of deferred compensation payments will be reduced by the amounts required to be withheld pursuant to any governmental law or regulation with respect to taxes or similar provisions. 3 4 10. If a Participant who has deferred compensation under the Program dies before he has received full payment of the amount credited to his Deferred Compensation Account, such unpaid portion shall be paid to the Participant's Beneficiary as designated by the Participant in writing. If no Beneficiary has been designated or if a designated Beneficiary has predeceased the Participant, such unpaid portion shall be paid to the Participant's estate. 11. The deferred compensation payable under this Program shall not be subject to alienation, assignment, garnishment, execution, or levy of any kind, and any attempt to cause any compensation to be so subjected shall not be recognized. 12. All expenses incurred, or taxes paid by the Company, and attributable to a Participant's Deferred Compensation Account shall be borne by the Company and shall not reduce the amount credited to such Deferred Compensation Account. 13. Nothing in this Program shall be construed as giving any Participant the right to be retained in the employ of the Company in any capacity. The Company expressly reserves the right to dismiss any employee, at any time, without liability for the effect which such dismissal may have upon such employee hereunder. 14. This Program may be amended in any way or may be terminated, in whole or in part, at any time, and from time to time, by the Board. The foregoing provisions of this paragraph notwithstanding, no amendment or termination of the Program shall adversely affect the amounts payable hereunder on account of compensation awarded under the Program prior to the effective date of such amendment or termination. 15. The Board shall delegate the administration of this Program to an individual who shall serve as the Administrator. The Administrator shall have the exclusive discretionary authority to determine eligibility for and the amounts of benefits under the Program, make factual determinations, construe and interpret terms of the Program, supply omissions and determine any questions which may arise in connection with its operation and administration. Its decisions or actions in respect thereof, including any determination of any amount credited or charged to the Participant's Deferred Compensation Account or the amount or recipient of any payment to be made therefrom, shall be conclusive and binding for all purposes upon the Company and upon any and all Participants, their Beneficiaries, and their respective heirs, distributees, executors, administrators and assignees; subject, however, to the right of a Participant or his Beneficiary to file a written claim under the provisions of Paragraph 22. 16. All notices, elections, or designations by a Participant to the Company shall be delivered in person or by registered mail, postage prepaid, and noted to be brought to the attention of the Administrator. 17. The terms of this Program shall be binding upon and shall inure to the benefit of the Company and its successors or assigns and each Participant and his Beneficiaries, heirs, executors, and administrators. 4 5 18. Subject to its obligation to pay the amount credited to the Participant's Deferred Compensation Account at the time distribution is called, neither the Company, any person acting on behalf of the Company, nor the Administrator shall be liable for any act performed or the failure to perform any act with respect to the terms of the Program, except in the event that there has been a judicial determination of willful misconduct on the part of the Company, such person or the Administrator. 19. This Program, and all actions taken hereunder, shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts, except as such laws may be superseded by any applicable Federal laws. 20. Notwithstanding anything to the contrary contained herein, in the event of a "Change in Control," each Participant shall have the right to receive a distribution, within 30 days of such Change in Control, of all amounts standing to the credit of his Deferred Compensation Account as of the December 31 preceding the date of the Change in Control, as adjusted for earnings and losses based on the total investment return of the Participant's investment choice from January 1 of the year of the Change in Control until the actual date of such Change in Control, in one (1) lump sum payment. "Change in Control" shall mean an event which shall be deemed to have occurred if (i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company, is or becomes the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities; or (ii) individuals who at November 6, 1997 constitute the Board and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clauses (i) or (iii) of this paragraph) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least 80% of the directors then still in office who either were directors at November 6, 1997 or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the Board; or (iii) the stockholders of the Company approve a merger or consolidation of the Company with or into any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all the Company's assets. 21. This Program shall be effective as of November 6, 1997. 5 6 22. (a) All claims for benefits under this Program shall be filed in writing with the Administrator in accordance with such procedures as the Administrator shall reasonably establish. (b) The Administrator shall, within 90 days of submission of a claim, provide adequate notice in writing to any claimant whose claim for benefits under the Program has been denied. Such notice shall contain the specific reason or reasons for the denial and references to specific Program provisions on which the denial is based. The Administrator shall also provide the claimant with a description of any material or information which is necessary in order for the claimant to perfect his claim and an explanation of why such information is necessary. If special circumstances require an extension of time for processing the claim, the Administrator shall furnish the claimant a written notice of such extension prior to the expiration of the 90-day period. The extension notice shall indicate the reasons for the extension and the expected date for a final decision, which date shall not be more than 180 days from the initial claim. (c) The Administrator shall, upon written request by a claimant within 60 days of receipt of the notice that his claim has been denied, afford a reasonable opportunity to such claimant for a full and fair review by the Administrator of the decision denying the claim. The Administrator will afford the claimant an opportunity to review pertinent documents and submit issues and comments in writing. The claimant shall have the right to be represented. (d) The Administrator shall, within 60 days of receipt of a request for a review, render a written decision on his review. If special circumstances require extra time for the Administrator to review his decision, the Administrator will attempt to make his decision as soon as practicable, and in no event will the Administrator take more than 120 days to send the claimant a written notice of his decision. IN WITNESS WHEREOF, this Program has been signed and sealed for and on behalf of the Company by its duly authorized officer this 6th day of November, 1997. COURIER CORPORATION By: /s/ Diana L. Sawyer ---------------------------- Title: Vice President EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS SEP-26-1998 SEP-28-1997 DEC-27-1997 23 0 28,607 1,166 11,703 42,702 99,847 64,299 93,142 23,822 0 0 0 4,500 38,691 93,142 35,306 35,306 26,517 26,517 6,482 38 347 1,922 712 1,210 0 0 0 1,210 0.60 0.57 RECEIVABLES ARE NET OF ALLOWANCES FOR UNCOLLECTIBLE ACCOUNTS. OTHER SE INCLUDES TREASURY STOCK. BASIC EPS AS PER SFAS NO. 128, "EARNINGS PER SHARE." DILUTED EPS AS PER SFAS NO. 128, "EARNINGS PER SHARE."
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