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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended JUNE 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 1-1370
BRIGGS & STRATTON CORPORATION
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(Exact name of registrant as specified in its charter)
A Wisconsin Corporation 39-0182330
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12301 WEST WIRTH STREET
WAUWATOSA, WISCONSIN 53222
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 414-259-5333
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
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Common Stock (par value $0.01
per share) New York Stock Exchange
Common Share Purchase Rights New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE
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
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of voting stock held by nonaffiliates of the
registrant was approximately $1,135,295,000 based on the reported last sale
price of such securities as of September 9, 1996.
Number of Shares of Common Stock Outstanding at September 9, 1996: 28,927,000.
DOCUMENTS INCORPORATED BY REFERENCE
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Part of Form 10-K Into Which Portions
Document of Document are Incorporated
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Annual Report to Shareholders
for year ended June 30, 1996 Parts I (Item 1) and II
Proxy Statement for Annual Meeting
on October 16, 1996 Part III
The Exhibit Index is located on page 9.
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TABLE OF CONTENTS
PART I
Item Page
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1. Business 1
2. Properties 3
3. Legal Proceedings 3
4. Submission of Matters to a Vote of Security Holders 3
Executive Officers of the Registrant 4
PART II
5. Market for the Registrant's Common Equity and Related
Stockholder Matters 6
6. Selected Financial Data 6
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
8. Financial Statements and Supplementary Data 6
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 6
PART III
10. Directors and Executive Officers of the Registrant 6
11. Executive Compensation 6
12. Security Ownership of Certain Beneficial Owners
and Management 6
13. Certain Relationships and Related Transactions 6
PART IV
14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 7
Signatures 8
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PART I
Item 1. Business
Basic Business
Briggs & Stratton Corporation is the world's largest producer of air cooled
gasoline engines for outdoor power equipment. The Company designs,
manufactures, markets and services these products for original equipment
manufacturers worldwide. These engines are air cooled aluminum alloy gasoline
engines ranging from 3 through 20 horsepower.
Engines
In fiscal 1996, approximately 83% of original equipment gasoline engine sales
were to manufacturers of lawn and garden equipment; approximately 17% were to
manufacturers of other powered equipment, primarily for commercial applications
in the construction industry and for agriculture. In the United States and
Canada, where the majority of the Company's engines are sold, engine sales are
primarily made directly to original equipment manufacturers.
Sales to the Company's largest engine customer, MTD Products Inc., were 21% of
total sales in fiscal 1996. Sales to its second largest customer, A B
Electrolux, were 14% of sales and sales to its third largest customer, Tomkins
PLC, were 13% of sales. Under purchasing plans available to all gasoline engine
customers, the Company normally enters into annual engine supply agreements
with these producers of end products powered by the Company's gasoline engines.
Company management has no reason to anticipate a change from the continuation
of this practice or in its historical business relationships with these
companies.
The major domestic competitors of the Company in engine manufacturing are
Tecumseh Products Company, Kohler Co., Kawasaki Heavy Industries, Ltd., Honda
Motor Co., Ltd. and Onan Corporation. Also, two domestic lawn mower
manufacturers, Toro Co. under its Lawn-Boy brand and Honda, manufacture their
own engines. Eight Japanese small engine manufacturers, of which Honda and
Kawasaki are the largest, are worldwide competitors not only in the sale of
engines, but end products as well. Tecumseh Europa S.p.A., located in Italy, is
a major competitor in Europe. Major areas of competition from all engine
manufacturers are product quality, price, timely delivery and service. The
Company believes its product quality and service reputation have given it the
strong brand name identification it enjoys.
Servicing of all the Company's gasoline engine products is done primarily by a
network of over 30,000 independent service parts distribution and repair
outlets in the United States and Canada and most foreign countries.
Manufacturing activity in the lawn and garden industry is driven by the need to
deliver new lawn mowers, garden tractors and tillers for retail sales in the
spring and early summer. Thus, demand from customers is at its peak in their
winter and spring manufacturing season. Most engines are manufactured to
individual customer specifications. The Company's production capacities are not
sufficient to meet customer peak season needs. Therefore, many engines
manufactured during the first half of the fiscal year are for shipments in the
second half of the year. Thus, sales generally are highest in the March quarter
and weakest in the September quarter. Customer orders in the last three months
of the fiscal year depend on spring retail sales, so the June quarter is the
least predictable.
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General
The Company manufactures a majority of the components used in its products and
purchases the balance of its requirements. The Company manufactures its own
ductile and grey iron castings, aluminum die castings and a high percentage of
other major components, such as carburetors and ignition systems. The Company
also purchases certain finished standard commercial parts such as piston rings,
spark plugs, valves, zinc die castings and plastic components, some stampings
and screw machine parts and smaller quantities of other components. Raw
material purchases are for aluminum, steel, and brass. The Company believes its
sources of supply are adequate.
The Company holds certain patents on features incorporated in its products;
however, the success of the Company's business is not considered to be
primarily dependent upon patent protection. Licenses, franchises and
concessions are not a material factor in the Company's business.
For the years ending June 30, 1996, July 2, 1995 and July 3, 1994, the Company
spent approximately $12,737,000, $13,112,000 and $12,520,000, respectively, on
Company sponsored research activities relating to the development of new
products or the improvement of existing products.
The average number of persons employed by the Company during the fiscal year
was 7,507. Employment ranged from a low of 7,011 in July 1995 to a high of
7,823 in December 1995.
Financial Information About Industry Segments
Financial information about industry segments prior to the spin-off of the
automotive lock division in February 1995 appears in Note 4 of the Notes to
Consolidated Financial Statements in the 1996 Annual Report to Shareholders and
is incorporated herein by reference.
Export Sales
Export sales for fiscal 1996 were $323,747,000 (25% of total sales), for fiscal
1995 were $312,234,000 (23% of total sales) and for fiscal 1994 were
$264,866,000 (21% of total sales). These sales were principally to customers in
European countries.
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Item 2. Properties
The corporate offices and four of the Company's manufacturing facilities are
located in suburbs of Milwaukee, Wisconsin. Subsequent to year-end, the Company
entered into a contract to sell one of these facilities. The Company will
vacate the manufacturing portion of the facility (approximately 444,000 square
feet) by December 31, 1996 but will have the right to occupy the warehouse
portion (approximately 414,000 square feet) for up to 10 years. The Company
also has facilities in Murray, Kentucky; Poplar Bluff and Rolla, Missouri;
Auburn, Alabama; Statesboro, Georgia; and Ravenna, Michigan. These are owned
facilities containing over 4.9 million square feet of office, warehouse and
production area, including the facility under contract.
The engine business is seasonal, with demand for engines at its height in the
winter and early spring. Engine manufacturing operations run at capacity levels
during the peak season, with many operations running three shifts. Engine
operations generally run one shift in the summer, when demand is weakest and
production is considerably under capacity. During the winter, when finished
goods inventories reach their highest levels, owned warehouse space may be
insufficient and capacity may be expanded through rented space. Excess
warehouse space exists in the spring and summer seasons. The Company's owned
properties are well maintained.
The Company leases 177,000 square feet of space to house its European warehouse
in the Netherlands and its foreign sales and service operations in Australia,
Canada, France, Germany, Ireland, New Zealand, Sweden, Switzerland and the
United Kingdom.
Item 3. Legal Proceedings
There are no pending legal proceedings that are required to be reported under
this item.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders, through the
solicitation of proxies or otherwise, during the three months ended June 30,
1996.
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Executive Officers of the Registrant
Name, Age, Position Business Experience for Past Five Years
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FREDERICK P. STRATTON, JR., 57 Mr. Stratton was elected to the
Chairman and Chief Executive Officer position of Chief Executive Officer in
(1) (2) (3) May 1977 and Chairman in November 1986.
He also served in the position of
President from January 1992 to August
1994.
JOHN S. SHIELY, 44 Mr. Shiely was elected to his current
President and Chief Operating Officer position in August 1994 after serving
(1) (2) as Executive Vice President -
Administration since November 1991. He
served as Vice President and General
Counsel from November 1990 to November
1991.
ROBERT H. ELDRIDGE, 58 Mr. Eldridge was elected to his current
Executive Vice President and position effective April 1995. He has
Chief Financial Officer, served as Secretary-Treasurer since
Secretary-Treasurer (1) January 1984.
MICHAEL D. HAMILTON, 54 Mr. Hamilton was elected to his present
Executive Vice President - position effective June 1989.
Sales and Service
JAMES A. WIER, 53 Mr. Wier was elected to his current
Executive Vice President - Operations position in April 1989.
ERIK ASPELIN, 55 Mr. Aspelin assumed his current
Vice President - POWERCOM-2000 position in October 1995, after serving
as Vice President - Distribution Sales
and Service since July 1989.
JAMES E. BRENN, 48 Mr. Brenn was elected to his current
Vice President and Controller position in November 1988.
RICHARD J. FOTSCH, 41 Mr. Fotsch was elected an executive
Vice President; General Manager - officer in May 1993 after serving the
Small Engine Division Small Engine Division as Vice President
and General Manager from July 1990 to
May 1993.
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HUGO A. KELTZ, 48 Mr. Keltz was elected an executive
Vice President - International officer in May 1992 after serving as
Vice President - International since
June 1991.
CURTIS E. LARSON, JR., 48 Mr. Larson was elected to this
Vice President - Distribution executive officer position in October
Sales and Service 1995 after serving as Vice President -
Industrial Engine Division since
January 1993. He held the position of
Vice President - Sales and Marketing of
the Company's automotive lock division
from December 1988 to January 1993.
PAUL M. NEYLON, 49 Mr. Neylon was elected an executive
Vice President; General Manager - officer in May 1993, after serving the
Specialty Products Division Vanguard Division as Vice President and
General Manager since November 1991.
This division has since been renamed
the Specialty Products Division. He
previously served the Castings Division
as Vice President and General Manager
from July 1989 to November 1991.
STEPHEN H. RUGG, 49 Mr. Rugg was elected to his current
Vice President - Sales position in November 1995, after
serving as Vice President - Sales and
Marketing since November 1988.
THOMAS R. SAVAGE, 48 Mr. Savage was elected to this
Vice President - Administration executive officer position in November
and General Counsel 1994 after serving as General Counsel
since joining the Company in April
1992. He held the position of
Vice President, Secretary and General
Counsel at Sta-Rite Industries, Inc., a
manufacturer of pumps and other
fluids-handling equipment and controls,
from 1984 to 1992.
GREGORY D. SOCKS, 47 Mr. Socks was elected an executive
Vice President; General Manager - officer in May 1993 after serving the
Large Engine Division Large Engine Division as Vice President
and General Manager from July 1990 to
May 1993.
GERALD E. ZITZER, 49 Mr. Zitzer was elected to his current
Vice President - Human Resources position in November 1988.
(1) Officer is also a Director of the Company.
(2) Member of Executive Committee.
(3) Member of Planning Committee.
Officers are elected annually and serve until their successors are elected and
qualify.
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PART II
Item 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
Information required by this Item is incorporated by reference to "Quarterly
Financial Data, Dividend and Market Information" on page 31 of the 1996 Annual
Report to Shareholders.
Item 6. Selected Financial Data
Information required by this Item appears under the heading "Ten Year
Comparisons" on pages 32 and 33 of the 1996 Annual Report to Shareholders and
is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Management's discussion and analysis of results of operations and financial
condition of the Company appears on pages 27 through 30 of the 1996 Annual
Report to Shareholders and is incorporated by reference in this Form 10-K.
Item 8. Financial Statements and Supplementary Data
The information required by Item 8 is incorporated by reference from the
Consolidated Financial Statements and Notes to Consolidated Financial
Statements appearing on pages 12 through 24 and page 31 of the 1996 Annual
Report to Shareholders.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
The Company has not changed independent accountants in the last two years.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information pertaining to directors is incorporated herein by reference from
pages 2 and 3 of the Company's 1996 Annual Meeting Proxy Statement dated
September 9, 1996. Information regarding executive officers required by Item
401 of Regulation S-K is furnished in Part I of this Form 10-K. Information
required by Item 405 of Regulation S-K is incorporated by reference from page 6
of the Company's 1996 Annual Meeting Proxy Statement.
Item 11. Executive Compensation
The information required by Item 11 is incorporated by reference from the
section entitled Election of Directors on page 2, the final two paragraphs of
the Nominating and Salaried Personnel Committee Report on Executive
Compensation found on page 11 and the Executive Compensation section found on
pages 12-16 of the Company's 1996 Annual Meeting Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required by Item 12 is incorporated by reference from pages 5
and 6 of the Company's 1996 Annual Meeting Proxy Statement.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 is incorporated by reference from page 4 of
the Company's 1996 Annual Meeting Proxy Statement.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) The following documents are filed as a part of this report:
Page Reference
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1996
Annual Report
1996 to
Form 10-K Shareholders
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1. Financial Statements
Consolidated Balance Sheets,
June 30, 1996 and July 2, 1995 13*
For the Years Ended June 30, 1996,
July 2, 1995 and July 3, 1994:
Consolidated Statements of Income and
Shareholders' Investment 12*, 14*
Consolidated Statements of Cash Flow 15*
Notes to Consolidated Financial Statements 16-24*
Report of Independent Public Accountants 26*
*Incorporated herein by reference to the Registrant's 1996 Annual Report
to Shareholders for the fiscal year ended June 30, 1996.
2. Financial Statement Schedules
All financial statement schedules for which provision is made in the
applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions.
3. Exhibits
See Exhibit Index on page 9 of this report, which is incorporated
herein by reference. Each management contract or compensatory plan or
arrangement required to be filed as an exhibit to this report is
identififed in the Exhibit Index by an asterisk following the Exhibit
Number.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BRIGGS & STRATTON CORPORATION
By /s/ R. H. Eldridge
-----------------------------
R. H. Eldridge
September 19, 1996 Executive Vice President and
Chief Financial Officer,
Secretary-Treasurer
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POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Frederick P. Stratton, Jr. and Robert H. Eldridge, and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments to this report, and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their substitutes, may lawfully
do or cause to be done by virtue thereof.
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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
registrant and in the capacities and on the dates indicated.
/s/ F. P. Stratton, Jr. /s/ John L. Murray
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F. P. Stratton, Jr. September 19, 1996 John L. Murray September 19, 1996
Chairman and Chief Executive Officer and Director
Director (Principal Executive Officer)
/s/ R. H. Eldridge /s/ C. B. Rogers, Jr.
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Robert H. Eldridge September 19, 1996 C. B. Rogers, Jr. September 19, 1996
Executive Vice President and Director
Chief Financial Officer, Secretary-Treasurer
and Director (Principal Financial Officer)
/s/ James E. Brenn /s/ John S. Shiely
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James E. Brenn September 19, 1996 John S. Shiely September 19, 1996
Vice President and Controller President and Chief Operating Officer
(Principal Accounting Officer) and Director
/s/ Michael E. Batten /s/ Charles I. Story
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Michael E. Batten September 19, 1996 Charles I. Story September 19, 1996
Director Director
/s/ Peter A. Georgescu /s/ Elwin J. Zarwell
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Peter A. Georgescu September 19, 1996 Elwin J. Zarwell September 19, 1996
Director Director
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BRIGGS & STRATTON CORPORATION
(Commission File No. 1-1370)
EXHIBIT INDEX
1996 ANNUAL REPORT ON FORM 10-K
Exhibit
Number Description
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3.1 Articles of Incorporation.
(Filed as Exhibit 3.2 to the Company's Report on Form 10-Q for
the quarter ended October 2, 1994, and incorporated by reference
herein.)
3.2 Bylaws.
(Filed as Exhibit 3.2 to the Company's Registration Statement on
Form 8-B dated October 12, 1992 and incorporated by reference
herein.)
4.0 Rights Agreement dated as of August 7, 1996, between Briggs
& Stratton Corporation and Firstar Trust Company which includes the
form of Right Certificate as Exhibit A and the Summary of Rights to
Purchase Common shares as Exhibit B.
(Filed as Exhibit 4.1 to the Company's Registration Statement on
Form 8-A, dated as of August 7, 1996 and incorporated by
reference herein.)
10.0* Forms of Officer Employment Agreements.
(Filed as Exhibit 10.0 to the Company's Annual Report on Form
10-K for fiscal year ended June 27, 1993 and incorporated by
reference herein.)
10.1* Survivor Annuity Plan.
(Filed as Exhibit 10.1 to the Company's Annual Report on Form
10-K for fiscal year ended June 30, 1986 and incorporated by
reference herein.)
10.2* Supplemental Retirement Program.
(Filed as Exhibit 10.3 to the Company's Annual Report on Form
10-K for fiscal year ended June 30, 1990 and incorporated by
reference herein.)
10.3(a)* Economic Value Added Incentive Compensation Plan, as amended and
restated effective April 18, 1995.
(Filed as Exhibit 10.3 (b) to the Company's Annual Report on Form
10-K for fiscal year ended July 2, 1995 and incorporated by
reference herein.)
10.3(b)* Amendment to Economic Value Added Incentive Compensation Plan.
(Filed as Exhibit 10.3 (c) to the Company's Report on Form 10-Q
for the quarter ended December 31, 1995 and incorporated by
reference herein.)
10.4* Form of Change of Control Employment Agreements.
(Filed as Exhibit 10.4 to the Company's Annual Report on Form
10-K for fiscal year ended June 27, 1993 and incorporated by
reference herein.)
10.5(a)* Trust Agreement with an independent trustee to provide payments
under various compensation agreements with company employees upon
the occurrence of a change in control.
(Filed as Exhibit 10.5 (a) to the Company's Annual Report on Form
10-K for fiscal year ended July 2, 1995 and incorporated by
reference herein.)
10.5(b)* Amendment to Trust Agreement with an independent trustee to provide
payments under various compensation agreements with company
employees.
(Filed as Exhibit 10.5 (b) to the Company's Annual Report on Form
10-K for fiscal year ended July 2, 1995 and incorporated by
reference herein.)
10.6* Stock Incentive Plan.
(Filed as Exhibit A to the Company's 1993 Annual Meeting Proxy
Statement, which was filed as Exhibit 100A to the Company's
Annual Report on Form 10-K for fiscal year ended June 27, 1993
and incorporated by reference herein.)
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Exhibit
Number Description
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10.7(a)* Leveraged Stock Option Program.
(Filed as Exhibit 10.7 to the Company's Annual Report on
Form 10-K for fiscal year ended June 27, 1993 and
incorporated by reference herein.)
10.7(b)* Amendment to Leveraged Stock Option Program.
(Filed as Exhibit 10.7 (b) to the Company's Annual Report
on Form 10-K for fiscal year ended July 2, 1995 and
incorporated by reference herein.)
10.8* Amended and Restated Deferred Compensation Agreement for
Fiscal 1995.
(Filed as Exhibit 10.9 to the Company's Annual Report on
Form 10-K for fiscal year ended July 2, 1995 and
incorporated by reference herein.)
10.9* Deferred Compensation Agreement for Fiscal 1996.
(Filed as Exhibit 10.10 to the Company's Annual Report on
Form 10-K for fiscal year ended July 2, 1995 and
incorporated by reference herein.)
10.10* Deferred Compensation Agreement for Fiscal 1997.
(Filed herewith.)
10.11* Officer Employment Agreement.
(Filed as Exhibit 10.11 to the Company's Report on Form
10-Q for the quarter ended December 31, 1995 and
incorporated by reference herein.)
10.12* Deferred Compensation Plan for Directors.
(Filed as Exhibit 10.12 to the Company's Report on Form
10-Q for the quarter ended December 31, 1995 and
incorporated by reference herein.)
11 Computation of Earnings Per Share of Common Stock.
(Filed herewith.)
13 Annual Report to Shareholders for Year Ended June 30, 1996.
(Filed herewith solely to the extent specific portions
thereof are incorporated herein by reference.)
21 Subsidiaries of the Registrant.
(Filed as Exhibit 21 to the Company's Annual Report on
Form 10-K for fiscal year ended July 2, 1995 and
incorporated by reference herein.)
23 Consent of Independent Public Accountants.
(Filed herewith.)
24 Power of Attorney
(Included in the Signatures Page of this report.)
27 Financial Data Schedule
(Filed herewith.)
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* Management contracts and executive compensation plans and arrangements
required to be filed as exhibits pursuant to Item 14 (c) of Form 10-K.
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