<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
__________
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 JUNE 30, 1996
OR
TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
- ---- OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 0-20941
PRECISION RESPONSE CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 59-2194806
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1505 N.W. 167TH STREET
MIAMI, FLORIDA 33169
(Address of principal executive offices)
(305) 626-4600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:
Yes No X
----- -----
As of August 14, 1996, there were 20,000,000 shares of the Registrant's
Common Stock outstanding.
This Form 10-Q consists of 40 pages, including exhibits.
The Exhibit Index is on page 14.
<PAGE> 2
PRECISION RESPONSE CORPORATION
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED FINANCIAL STATEMENTS
Condensed Balance Sheets
December 31, 1995, June 30, 1996 (unaudited) and
Pro Forma June 30, 1996 (unaudited)......................................... 3
Condensed Statements of Income (unaudited)
For the Three and Six Months Ended June 30, 1995 and 1996................... 4
Condensed Statements of Cash Flows (unaudited)
For the Six Months Ended June 30, 1995 and 1996............................. 5
Notes to Condensed Financial Statements............................................ 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.............................................................. 8
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K................................................... 12
Signatures......................................................................... 13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
---------------------
ITEM I. CONDENSED FINANCIAL STATEMENTS
PRECISION RESPONSE CORPORATION
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
PRO FORMA
JUNE 30,
DECEMBER 31, JUNE 30, 1996
1995 1996 (NOTE 3)
------------ -------------- -----------
(UNAUDITED) (UNAUDITED)
ASSETS
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents......................................... $ 266,794 $ -- $ --
Accounts receivable, net.......................................... 6,616,844 20,423,504 20,423,504
Prepaid expenses and other current assets......................... 454,867 722,628 722,628
------------ -------------- -----------
Total current assets....................................... 7,338,505 21,146,132 21,146,132
Property and equipment, net........................................ 5,283,832 13,690,953 13,690,953
Other assets....................................................... 90,925 800,032 800,032
------------ -------------- -----------
Total assets............................................... $ 12,713,262 $ 35,637,117 $35,637,117
============ ============== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term obligations....................... $ 1,181,846 $ 1,818,673 $ 1,818,673
Accounts payable.................................................. 2,130,808 7,323,518 7,323,518
Accrued compensation expenses..................................... 1,326,960 2,389,536 2,389,536
Other accrued expenses............................................ 777,104 2,081,308 2,081,308
Customer deposits and other....................................... 556,388 977,793 977,793
Distribution payable to shareholders.............................. -- -- 4,819,558
------------ ---------------- -------------
Total current liabilities.................................. 5,973,106 14,590,828 19,410,386
Revolving credit loan............................................. 2,995,593 9,577,082 9,577,082
Long-term obligations, less current maturities.................... 928,542 5,959,276 5,959,276
Deferred income taxes............................................. -- -- 90,000
------------ --------------- -------------
Total liabilities.......................................... 9,897,241 30,127,186 35,036,744
------------ --------------- -------------
Shareholders' equity:
Common stock, $0.01 par value;
100,000,000 shares authorized,
16,400,000 issued and outstanding.......................... 164,000 164,000 164,000
Additional paid-in capital........................................ 72,095 72,095 72,095
Retained earnings................................................. 2,786,996 5,697,278 364,278
Due from shareholders, net........................................ (207,070) (423,442) --
------------ --------------- -------------
Total shareholders' equity................................. 2,816,021 5,509,931 600,373
------------ --------------- -------------
Total liabilities and shareholders' equity................. $ 12,713,262 $ 35,637,117 $ 35,637,117
============ =============== =============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
PRECISION RESPONSE CORPORATION
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE FOR THE
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------- ---------------------------
1995 1996 1995 1996
-------------- --------------- -------------- -----------
<S> <C> <C> <C> <C>
Revenues $ 8,112,383 $ 21,958,203 $ 14,022,207 $33,607,014
-------------- --------------- -------------- -----------
Operating expenses:
Cost of services.......................................... 4,843,610 13,651,135 8,308,962 20,770,992
Preoperating costs........................................ -- 685,777 -- 859,889
Selling, general and administrative expenses.............. 2,342,968 5,200,602 4,255,822 8,665,285
-------------- --------------- -------------- -----------
Total operating expenses......................... 7,186,578 19,537,514 12,564,784 30,296,166
-------------- --------------- -------------- -----------
Operating income........................................... 925,805 2,420,689 1,457,423 3,310,848
Interest expense........................................... 94,384 264,131 174,935 400,566
-------------- --------------- -------------- -----------
Net income................................................. $ 831,421 $ 2,156,558 $ 1,282,488 $ 2,910,282
============== =============== ============== ===========
Pro Forma Data
(Note 3):
Net income per above....................................... $ 831,421 $ 2,156,558 $ 1,282,488 $ 2,910,282
Pro forma provision for income taxes
relating to S Corporation................................. 361,364 857,680 545,290 1,169,933
-------------- --------------- -------------- -----------
Pro forma net income....................................... $ 470,057 $ 1,298,878 $ 737,198 $ 1,740,349
============== =============== ============== ===========
Pro forma net income per common share...................... $ .08 $ .11
=============== ===========
Weighted average number of common
shares outstanding........................................ 16,527,061 16,527,061
=============== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 5
PRECISION RESPONSE CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS
ENDED JUNE 30,
--------------------------
1995 1996
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income.............................................. $ 1,282,488 $ 2,910,282
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization........................... 535,784 759,517
Changes in operating assets and liabilities:
Accounts receivable..................................... (2,674,821) (13,806,660)
Prepaid expenses and other current assets............... 300,949 (267,761)
Other assets............................................ 15,252 (81,156)
Accounts payable........................................ 437,689 5,192,710
Accrued compensation expenses........................... 370,418 1,062,576
Other accrued expenses.................................. 378,103 918,198
Customer deposits and other............................. 59,649 421,405
----------- -----------
Net cash provided by (used in)
operating activities................................. 705,511 (2,890,889)
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment...................... (814,476) (2,837,756)
----------- -----------
Net cash used in investing activities................. (814,476) (2,837,756)
----------- -----------
Cash flows from financing activities:
Proceeds from revolving credit loan..................... 175,593 6,581,489
Prepaid IPO costs....................................... -- (241,945)
Payments on long-term obligations....................... (536,448) (661,321)
Net advances to shareholders............................ (30,314) (216,372)
----------- -----------
Net cash provided by (used in)
financing activities.................................. (391,169) 5,461,851
----------- -----------
Net decrease in cash and cash
equivalents............................................ (500,134) (266,794)
Cash and cash equivalents at beginning of
period................................................. 787,609 266,794
----------- -----------
Cash and cash equivalents at end of period............... $ 287,475 $ --
=========== ===========
Supplemental cash flow information:
Cash paid for interest.................................. $ 174,935 $ 400,566
=========== ===========
Supplemental schedule of noncash investing
and financing activities:
Installment loans and capital lease
obligations............................................ $ 629,184 $ 6,328,882
=========== ===========
Accrued IPO costs....................................... $ -- $ 386,006
============ ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE> 6
PRECISION RESPONSE CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. OPERATIONS AND ORGANIZATION
Precision Response Corporation (the "Company" or "PRC") is a full-service
provider of telephone-based marketing and customer service solutions on an
outsourced basis to large corporations.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The condensed balance sheet at December 31,
1995 has been derived from the audited financial statements of the Company at
that date. Operating results for the quarter ended June 30, 1996, are not
necessarily indicative of the results that may be expected for the entire
fiscal year ending December 31, 1996. For additional information, refer to
financial statements and footnotes thereto included in Amendment No. 4 to the
Company's Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on July 11, 1996, which financial statements and footnotes
should be read in conjunction with this report.
3. PRO FORMA DISCLOSURES
Pro Forma Income Taxes. Prior to the initial public offering of shares of
the Company's common stock completed on July 22, 1996 as described in Note 4
(the "Initial Public Offering"), the Company had elected to be treated for
Federal and Florida income tax purposes as an S corporation under the Internal
Revenue Code. As a result, earnings of the Company were taxed for Federal and
Florida income tax purposes directly to the shareholders of the Company, rather
than to the Company. The pro forma data in the statements of income for all
periods includes a provision for Federal and state income taxes as if the
Company were subject to Federal and Florida corporate income taxes as a C
Corporation for all periods. This pro forma provision is computed using a
combined Federal and state tax rate of 37.6%. In connection with the Initial
Public Offering the Company was converted from an S corporation to a C
Corporation. Upon termination of the S corporation election, deferred income
taxes reflecting the tax effect of temporary differences between the Company's
financial statements and the tax bases of certain assets and liabilities became
a net liability of the Company and will be reflected on the balance sheet with
a corresponding nonrecurring expense in the statement of income for the first
calendar quarter following the Initial Public Offering. Deferred taxes relate
primarily to accounts receivable, accrued expenses and property and equipment.
The amount of such deferred tax liability computed using the asset and
liability method of accounting for deferred income taxes approximated $90,000
at June 30, 1996.
Prior to consummation of the Initial Public Offering, the Company's Board
of Directors declared a cash dividend payable to the then current shareholders
of the Company (the "Dividend") of $5,243,000. The Dividend was equal to the
Company's estimate of its cumulative taxable income prior to the conversion to
a C corporation to the extent such taxable income had not previously been
distributed. The Dividend is subject to adjustment based upon actual
cumulative taxable income as finally determined.
6
<PAGE> 7
The pro forma data in the Balance Sheets provides information as if the
Company had terminated its S corporation election, declared the Dividend and
recorded the deferred income tax liability as of June 30, 1996. The Dividend
amount of $5,243,000 has been reflected as a distribution payable to
shareholders in the amount of $4,819,558 net of a repayment by shareholders of
$423,442 due to the Company. The pro forma data does not give effect to the
receipt of any proceeds from the Initial Public Offering or earnings from July
1, 1996 through the date of termination of the S corporation election.
Pro Forma Net Income Per Share. Pro forma net income per share amounts
have been computed based upon the weighted average number of common shares
outstanding during each period after retroactive adjustment for a 127,350-for-1
stock split effected on May 31, 1996, and a 1.287789556-for-1 stock split
effected on June 20, 1996, each effected by way of a share dividend, and gives
effect, as required by generally accepted accounting principles, to the
increase in the number of shares which, when multiplied by the Initial Public
Offering price of $14.50 per share, would have been sufficient to replace the
amount of the Dividend in excess of earnings for the twelve months ended June
30, 1996.
4. SUBSEQUENT EVENTS
On July 22, 1996, the Company and certain selling shareholders completed
the Initial Public Offering of 4,600,000 shares at a price of $14.50 per share.
Of the 4,600,000 shares, 3,600,000 were sold by the Company. The net proceeds
to the Company from the offering were approximately $47.7 million, after
commissions and related expenses. A portion of the proceeds were used to repay
the outstanding balance of $12.8 million on the Company's revolving credit
facility, and various installment loans totaling $960,000, and to pay the
Dividend. The balance of the net proceeds will be used for general corporate
purposes, including call center expansion and working capital.
Supplemental pro forma net income per share for each of the three and six
month periods ended June 30, 1996, after giving effect to the use of a portion
of the net proceeds of the Initial Public Offering to repay the Company's bank
borrowings at January 1, 1995, is substantially equivalent to the pro forma net
income per share.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth statement of income data as a percentage of
revenues for the periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1995 1996 1995 1996
--------- --------- -------- --------
<S> <C> <C> <C> <C>
Revenues.................................... 100.0% 100.0% 100.0% 100.0%
Cost of services............................ 59.7 62.2 59.3 61.8
Preoperating costs.......................... -- 3.1 -- 2.6
Selling, general and administrative expenses 28.9 23.7 30.4 25.8
-------- --------- -------- --------
Operating income............................ 11.4 11.0 10.3 9.8
Interest expense............................ 1.2 1.2 1.2 1.2
-------- --------- -------- --------
Net income as reported (1).................. 10.2 9.8 9.1 8.6
Pro forma provision for income taxes (1).... 4.4 3.9 3.9 3.5
-------- --------- -------- --------
Pro forma net income (1).................... 5.8 5.9 5.2 5.1
======== ========= ======== ========
</TABLE>
- ---------------------
(1) Prior to the Initial Public Offering, the Company was an S corporation
and not subject to Federal and Florida corporate income taxes. The
statement of income data reflects a pro forma provision for income taxes
as if the Company were subject to Federal and Florida corporate income
taxes for all periods. This pro forma provision for income taxes is
computed using a combined Federal and state tax rate of 37.6%. See Note 3
of Notes to Condensed Financial Statements.
Revenues. Revenues increased $13.9 million, or 170.7%, to $22.0 million
for the three months ended June 30, 1996 from $8.1 million for the comparable
period of 1995. Teleservicing activities, principally inbound services,
accounted for the majority of the change with an increase in revenues of $9.7
million, or 165.1%, to $15.6 million for the three months ended June 30, 1996
from $5.9 million for the comparable period of 1995. For the six months ended
June 30, 1996, revenues increased $19.6 million, or 139.7%, to $33.6 million
from $14.0 million for the comparable period of 1995. Teleservicing activities,
principally inbound services, accounted for the majority of the change with an
increase in revenues of $14.3 million, or 152.7%, to $23.6 million for the six
months ended June 30, 1996 from $9.3 million for the comparable period of 1995.
The teleservicing growth was primarily a result of the addition of several new
programs for existing clients, principally in the telecommunications industry.
Revenues for information services in conjunction with teleservicing activities
increased $3.8 million, or 360.4%, to $4.9 million for the three months ended
June 30, 1996 from $1.1 million for the comparable period of 1995. For the six
months ended June 30, 1996, revenues for information services in conjunction
with teleservicing activities increased $4.5 million, or 184.6%, to $6.9
million from $2.4 million for the comparable period of 1995. Information
services include the design, development and implementation of software
applications for use in a particular client program and the
8
<PAGE> 9
integration of the Company's systems with those of its clients. The large
increase in information services revenues resulted primarily from increased
development of systems for use in present and future client programs.
Cost of Services. Cost of services represents labor and telephone
expenses directly related to revenue generating activities as well as each
department's management salaries and equipment depreciation. Cost of services
increased to $13.7 million for the three months ended June 30, 1996 from $4.8
million for the comparable period of 1995, an increase of $8.9 million, or
181.8%. For the six months ended June 30, 1996, cost of services increased to
$20.8 million from $8.3 million for the comparable period of 1995, an increase
of $12.5 million, or 150.0%. The increase in cost of services resulted
primarily from the addition of new employees to staff expanded operations, and
increased telecommunications costs related to new teleservicing programs. As
a percentage of revenues, cost of services increased to 62.2% for the second
three months of 1996 from 59.7% for the comparable period of 1995. Cost of
services increased to 61.8% of revenues for the six months ended June 30, 1996
from 59.3% for the comparable period of 1995. The increase in cost of services
as a percentage of revenue was attributable primarily to volume pricing for
large teleservicing programs.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses represent the cost of central services the Company
provides to support and manage its departmental activities, including senior
management, facilities expenses (including operating leases), and other support
functions such as sales and marketing, human resources and accounting.
Selling, general and administrative expenses increased $2.9 million, or 122.0%,
to $5.2 million for the three months ended June 30, 1996 from $2.3 million for
the comparable period of 1995. For the six months ended June 30, 1996, selling,
general and administrative expenses increased $4.4 million, or 103.6%, to $8.7
million from $4.3 million for the comparable period of 1995. The increase in
selling, general and administrative expenses resulted primarily from increased
salary and operating lease expenses necessary to support the Company's growth,
as well as increased commission expenses related to the increase in revenue.
As a percentage of revenues, selling, general and administrative expenses
decreased to 23.7% for the second three months of 1996 from 28.9% for the
comparable period of 1995. These expenses decreased to 25.8% of revenues for
the six months ended June 30, 1996 from 30.4% for the comparable period of
1995. The percentage decrease in selling, general and administrative expenses
was directly attributable to the Company's overhead burden being absorbed by an
increased base of revenue.
Preoperating Costs. Preoperating costs include certain incremental costs
incurred at a facility prior to the commencement of operations to which they
relate, including rent, new-hire salaries and expenses for utilities, equipment
leases and security. The costs incurred in the three and six months ended June
30, 1996 primarily relate to the opening of two call centers totalling 610
workstations in April 1996, and a 500 workstation call center at the end of
June 1996.
Interest Expense. Interest expense increased to $264,000, or 1.2% of
revenues, for the second quarter of 1996 from $94,000, or 1.2% of revenues, for
the comparable period of 1995. Interest expense increased to $401,000, or 1.2%
of revenues, for the six months ended June 30, 1996 from $175,000, or 1.2% of
revenues, for the comparable period of 1995. This increase reflected higher
average outstanding borrowings, which were used to finance working capital
needs, to open new facilities and to purchase related equipment, partially
offset by lower interest rates on credit facility borrowings.
Pro Forma Net Income. Pro forma net income increased 176.3% to $1.3
million, or 5.9% of revenues, for the three months ended June 30, 1996 compared
to pro forma net income of $470,000, or 5.8% of revenues, for the comparable
period of 1995. Pro forma net income increased 136.1% to $1.7 million, or 5.1%
of revenues, for the six months ended June 30, 1996 compared to pro forma net
income of $737,000, or
9
<PAGE> 10
5.2% of revenues, for the comparable period of 1995. Pro forma net income
includes a provision for Federal and state income taxes. See Note 3 of Notes
to Condensed Financial Statements.
QUARTERLY RESULTS
The Company has experienced and expects to continue to experience
quarterly variations in revenues and operating income principally as a result
of the timing of clients' marketing campaigns and customer service programs,
the commencement of new contracts, changes in the Company's revenue mix among
its various service offerings, construction and start-up of new call centers
and the timing of additional selling, general and administrative expenses to
acquire and support such new business. While the effects of seasonality on
PRC's business often are obscured by the addition of new clients and growing
revenues, the Company's business tends to be slower in the first and third
quarters of its fiscal year because client marketing and customer service
programs are typically slower in the post-holiday and summer months.
LIQUIDITY AND CAPITAL RESOURCES
In May 1996, the Company entered into a new three-year, $15 million
revolving credit facility under which the Company may borrow up to 85% of
eligible accounts receivable. The credit facility is primarily collateralized
by accounts receivable. The Company is required to maintain certain financial
covenants, including minimum tangible net worth and earnings, to limit capital
expenditures to no more than $11 million per year and to limit additional
indebtedness. The Company has requested, and expects to obtain, less
restrictive covenants. As a result, the Company does not believe the financial
covenants will restrain its ability to grow. The Company is also restricted
from paying dividends except for tax distributions to its shareholders in
connection with S corporation earnings and distributions in connection with the
termination of its S corporation status. As described in Note 4 of the Notes
to Condensed Financial Statements, all amounts outstanding under the revolving
credit facility were repaid with a portion of the proceeds received by the
Company in the Initial Public Offering.
Capital expenditures, including capital lease financings, were $9.2
million for the six months ended June 30, 1996, primarily related to call
center expansion. Historically, capital expenditures have been, and future
expenditures are anticipated to be, primarily for facilities and equipment to
support expansion of PRC's operations.
The Company believes that funds generated from operations, the net
proceeds of the Initial Public Offering completed on July 22, 1996,
availability under its revolving credit facility and lease and other available
financing will be sufficient to finance its current and anticipated operations
and planned capital expenditures at least through 1997. The Company's long term
capital requirements beyond 1997 will depend on many factors, including, but
not limited to, the rate at which the Company expands its business.
10
<PAGE> 11
The following table sets forth certain information from the Company's
statement of cash flows for the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
(IN THOUSANDS)
1995 1996
------ ------
<S> <C> <C>
Net cash provided by (used in) operating activities................ 706 (2,891)
Net cash used in investing activities.............................. (814) (2,838)
Net cash provided by (used in) financing activities................ (391) 5,462
</TABLE>
Cash used in operating activities was $2.9 million for the six months
ended June 30, 1996. Cash provided by operating activities was $706,000 in the
comparable period of 1995. The decrease in cash from operations was
principally related to an increase in accounts receivable resulting from an
increase in revenues over the same period.
Cash used in investing activities for the six months ended June 30, 1996
was $2.8 million, compared to $814,000 in the comparable period of 1995. The
increase in investing activities primarily relates to the purchase of
telecommunications equipment, computers and leasehold improvements in
connection with call center expansion.
Cash provided by financing activities for the six months ended June 30,
1996 was $5.5 million. Cash used in financing activities was $391,000 for the
comparable period of 1995. The increase in financing activities relates
primarily to revolving credit facility borrowings to fund working capital and
capital expenditure requirements.
11
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- ------------------------------------------------------------
<S> <C>
3.2 Bylaws of Precision Response Corporation, as amended on July
23, 1996
27.1 Financial Data Schedule (for SEC use only)
</TABLE>
(b) Reports on Form 8-K
-------------------
The Registrant did not file any reports on Form 8-K during the quarter ended
June 30, 1996.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATED: August 19 , 1996
PRECISION RESPONSE CORPORATION
(Registrant)
By: /s/ Mark J. Gordon
-------------------------------------------------
Mark J. Gordon
Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Joseph E. Gillis
-------------------------------------------------
Joseph E. Gillis
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
13
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Number Numbered Page
- -------------- ---------------
<S> <C> <C>
3.2 Bylaws of Precision Response Corporation, as amended on July 23, 1996 15
27.1 Financial Data Schedule (for SEC use only) 40
</TABLE>
14
<PAGE> 1
Exhibit 3.2
BYLAWS
OF
PRECISION RESPONSE CORPORATION
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
ARTICLE I MEETINGS OF SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Annual Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Special Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 3. Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 4. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 5. Manner of Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 6. Notice of Adjourned Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 7. Fixing of Record Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 8. Shareholders' List For Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 9. Shareholder Quorum and Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 10. Voting Entitlement of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 11. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 12. Voting Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 13. Notice of Shareholder Business and Nominations. . . . . . . . . . . . . . . . . . . . . . . 5
(a) Annual Meetings of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(b) Special Meetings of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
(c) General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 14. Shareholders' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 1. Function. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2. Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 3. Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4. Duties of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5. Presumption of Assent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 6. Number. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 7. Election. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 9. Resignation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 10. Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 11. Removal of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 12. Quorum and Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 13. Conflicts of Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 14. Executive and Other Committees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 15. Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 16. Notice of Meetings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 17. Waiver of Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 18. Action Without a Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 19. Amendment by Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE III OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 1. Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
(i)
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 2. Powers and Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 3. Delegation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4. Resignation and Removal of Officers. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5. Contract Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV STOCK CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 1. Form and Content of Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2. Transfer of Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3. Lost, Stolen or Destroyed Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE V BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 1. Corporate Records. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2. Inspection of Records by Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3. Scope of Inspection Right. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4. Financial Statements for Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1. Distributions to Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2. Share Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII CORPORATE SEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE VIII EXECUTION OF DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE IX INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE X AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
</TABLE>
(ii)
<PAGE> 4
BYLAWS
OF
PRECISION RESPONSE CORPORATION
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting.
The annual meeting of the shareholders of this corporation shall be
held at the time and place designated by the Board of Directors of the
corporation. The annual meeting of shareholders for any calendar year shall be
held no later than thirteen months after the last preceding annual meeting of
shareholders. Business transacted at the annual meeting shall include the
election of directors of the corporation and any proper business as may come
before the meeting.
Section 2. Special Meetings.
Special meetings of the shareholders shall be held when directed by
the Board of Directors, or when a signed and dated written demand is delivered
to the secretary of the corporation by the holders of not less than fifty (50%)
percent of all votes entitled to be cast on any issue to be considered at the
proposed special meeting, describing the purposes of the proposed special
meeting. At any special meeting only such business may be transacted which is
related to the purpose or purposes set forth in the notice of such special
meeting.
Section 3. Place.
Meetings of shareholders may be held within or without the State of
Florida.
Section 4. Notice.
The corporation shall notify shareholders of the date, time and place
of each annual and special shareholders' meeting no fewer than ten (10) or more
than sixty (60) days before the meeting date. Unless the Florida Business
Corporation Act, as amended (the "Act"), or the Articles of Incorporation, as
amended from time to time hereafter (the "Articles of Incorporation") require
otherwise, the corporation is required to give notice only to shareholders
entitled to vote at the meeting. Notice shall be given in the manner provided
in section 5 below, by or at the direction of the president, the secretary, or
the officer or persons calling the meeting. If the notice is mailed at least
thirty (30) days before the date of the meeting, it may be done by a class of
United States mail other than first class. Notwithstanding section 5 below, if
mailed, such notice shall be deemed to be delivered when deposited in the
United States mail addressed to the shareholder at his address as it appears on
the stock transfer books of the corporation, with postage thereon prepaid.
Unless the Act or the Articles of Incorporation require otherwise,
notice of an annual meeting need not include a description of the purpose or
purposes for which the meeting is called.
Notice of a special meeting must include a description of the purpose
or purposes for which the meeting is called.
<PAGE> 5
Notwithstanding the foregoing, no notice of a shareholders' meeting need
be given to a shareholder if (a) an annual report and proxy statement for two
consecutive annual meetings of shareholders or (b) all, and at least two, checks
in payment of dividends or interest on securities during a twelve (12) month
period have been sent by first-class United States mail, addressed to the
shareholder at his address as it appears on the share transfer books of the
corporation, and returned undeliverable. The obligation of the corporation to
give notice of a shareholders' meeting to any such shareholder shall be
reinstated once the corporation has received a new address for such shareholder
for entry on its share transfer books.
Section 5. Manner of Notice.
Any notice given under these Bylaws must be written and may be
communicated in person; telegraph, teletype or other form of electronic
communication; or by mail.
Written notice by the corporation to a shareholder shall be effective
when mailed, if mailed postpaid and correctly addressed to the shareholder's
address shown in the corporation's current record of shareholders.
Written notice to a domestic or foreign corporation authorized to
transact business in this state may be addressed to its registered agent at its
registered office or to the corporation or its secretary at its principal
office shown in its most recent annual report or, in the case of corporation
that has not yet delivered an annual report, in a domestic corporation's
articles of incorporation or in a foreign corporation's application for
certificate of authority.
Except as otherwise provided herein or in the Act, written notice
shall be effective at the earliest date of the following: (a) when received;
(b) five days after its deposit in the United States mail, as evidenced by the
postmark, if mailed postpaid and correctly addressed; or (c) on the date shown
on the return receipt, if sent by registered or certified mail return receipt
requested, and the receipt is signed by or on behalf of the addressee.
Section 6. Notice of Adjourned Meetings.
If an annual or special shareholders' meeting is adjourned to a
different date, time or place, notice need not be given of the new date, time
or place if the new date, time or place is announced at the meeting before an
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting.
If a new record date for the adjourned meeting is or must be fixed, however,
notice of the adjourned meeting must be given as provided in section 5 above to
persons who are shareholders as of the new record date who are entitled to
notice of the meeting.
Section 7. Fixing of Record Date.
For the purpose of determining shareholders entitled to notice of a
shareholders' meeting, to demand a special meeting, to vote, or to take any
other action, the Board of Directors may fix the record date. In no event may
a record date fixed by the Board of Directors be a date preceding the date upon
which the resolution fixing the record date is adopted. The record date for
determining shareholders entitled to demand a special meeting is the date the
first shareholder delivers his demand to the corporation.
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If not otherwise provided by or pursuant to these Bylaws, the record
date for determining shareholders entitled to notice of and to vote at an
annual or special shareholders' meeting is the close of business on the day
before the first notice is delivered to shareholders. A record date for
purposes of this section may not be more than seventy (70) days before the
meeting or action requiring a determination of shareholders. A determination
of shareholders entitled to notice of or to vote at a shareholders' meeting is
effective for any adjournment of the meeting unless the Board of Directors
fixes a new record date, which it must do if the meeting is adjourned to a date
more than the one hundred twenty (120) days after the date fixed for the
original meeting.
Section 8. Shareholders' List For Meeting.
After fixing a record date for a meeting, the corporation shall
prepare an alphabetical list of the names of all its shareholders who are
entitled to notice of a shareholders' meeting, arranged by voting group with
the address of, and the number and class and series, if any, of shares held by,
each. The shareholders' list must be available for inspection by any
shareholder for a period of ten (10) days prior to the meeting or such shorter
time as exists between the record date and the meeting and continuing through
the meeting at the corporation's principal office, at a place identified in the
meeting notice in the city where the meeting will be held, or at the office of
the corporation's transfer agent or registrar. A shareholder or his agent or
attorney is entitled on written demand to inspect the list during regular
business hours and at his expense during the period it is available for
inspection. The corporation shall make the shareholders' list available at the
meeting, and any shareholder or his agent or attorney is entitled to inspect
the list at any time during the meeting or any adjournment.
If the requirements of this section have not been substantially
complied with or if the corporation refuses to allow a shareholder or his agent
or attorney to inspect the shareholders' list before or at the meeting, the
meeting shall be adjourned until such requirements are complied with on the
demand of any shareholder in person or by proxy who failed to get such access.
Refusal or failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
Section 9. Shareholder Quorum and Voting.
A majority of the shares entitled to vote, represented in person or by
proxy, shall constitute a quorum at a meeting of shareholders. When a
specified item of business is required to be voted on by a class or series of
stock, a majority of the shares of such class or series shall constitute a
quorum for the transaction of such item of business by that class or series.
If a quorum is present, the affirmative vote of the majority of the
shares represented at the meeting and entitled to vote on the subject matter
shall be the act of the shareholders unless otherwise provided by law or the
Articles of Incorporation.
After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof.
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<PAGE> 7
Section 10. Voting Entitlement of Shares.
Except as otherwise provided below, each outstanding share, regardless
of class, is entitled to one vote on each matter submitted to a vote at a
meeting of shareholders. Only shares are entitled to vote.
The shares of the corporation are not entitled to vote if they are
owned, directly or indirectly, by a second corporation, domestic or foreign,
and the corporation owns, directly or indirectly, a majority of the shares
entitled to vote for directors of the second corporation. This paragraph does
not limit the power of the corporation to vote any shares, including its own
shares, held by it in a fiduciary capacity.
Redeemable shares are not entitled to vote on any matter, and shall
not be deemed to be outstanding, after notice of redemption is mailed to the
holders thereof and a sum sufficient to redeem such shares has been deposited
with a bank, trust company, or other financial institution upon an irrevocable
obligation to pay the holders the redemption price upon surrender of the
shares.
Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxy as the Bylaws of the
corporate shareholder or, in the absence of any applicable provision, by such
person as the Board of Directors of the corporate shareholder may designate.
In the absence of any such designation, or in case of a conflicting designation
by the corporate shareholder, the chairman of the board, the president, any
vice president, the secretary and the treasurer of the corporate shareholder,
in that order, shall be presumed to be fully authorized to vote such shares.
Shares held by an administrator, executor, guardian, personal
representative or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.
Shares held by or under the control of a receiver, a trustee in
bankruptcy proceedings or an assignee for the benefit of creditors may be voted
by him without the transfer thereof into his name.
If a share or shares stand of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety, or otherwise, or if two or more persons
have the same fiduciary relationship respecting the same shares, unless the
secretary of the corporation is given notice to the contrary and is furnished
with a copy of the instrument or order appointing them or creating the
relationship wherein it is so provided, the acts with respect to voting have
the following effect: (a) if only one votes, in person or by proxy, his act
binds all; (b) if more than one votes, in person or by proxy, the act of the
majority so voting binds all; (c) if more than one votes, in person or by
proxy, but the vote is evenly split on any particular matter, each faction is
entitled to vote the share or shares in question proportionally; (d) if the
instrument or order so filed shows that any such tenancy is held in unequal
interest, a majority or a vote evenly split for purposes of this section shall
be a majority or a vote evenly split in interest; (e) the principles of this
section shall apply, insofar as possible, to execution of proxies, waivers,
consents, or objections and for the purpose of ascertaining the presence of a
quorum.
Nothing herein contained shall prevent trustees or other fiduciaries
holding shares registered in the name of a nominee from causing such shares to
be voted by such nominee as the trustee or other fiduciary may direct. Such
nominee may vote shares as directed by a trustee or other fiduciary without the
necessity of transferring the shares to the name of the trustee or other
fiduciary.
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<PAGE> 8
Section 11. Proxies.
A shareholder, other person entitled to vote on behalf of a
shareholder pursuant to section 10 above, or attorney-in-fact may vote the
shareholders' shares in person or by proxy.
A shareholder may appoint a proxy to vote or otherwise act for him by
signing an appointment form, either personally or by his attorney-in-fact. An
executed telegram or cablegram appearing to have been transmitted by such
person, or a photographic, photostatic or equivalent reproduction of an
appointment form, is a sufficient appointment form.
An appointment of a proxy is effective when received by the secretary
or other officer or agent authorized to tabulate votes. An appointment is
valid for up to eleven (11) months unless a longer period is expressly provided
in the appointment form.
The death or incapacity of the shareholder appointing a proxy does not
affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.
If an appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his place.
Section 12. Voting Trusts.
One or more shareholders may create a voting trust, conferring on a
trustee the right to vote or otherwise act for them, by signing an agreement
setting out the provisions of the trust as provided by law and transferring
their shares to a trustee. The trustee shall thereafter prepare a list of
names and addresses of all owners of beneficial interests in the trust,
together with the number and class of shares of each transferred to the trust,
and deliver copies of the list and agreement to the corporation's principal
office. After filing a copy of the list and agreement in the corporation's
principal office, such copies shall be open to inspection by any shareholder of
the corporation (subject to the requirements of Article V herein) or any
beneficiary of the trust under the agreement during business hours.
Section 13. Notice of Shareholder Business and Nominations.
(a) Annual Meetings of Shareholders.
(1) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be considered by
the shareholders may be made at an annual meeting of shareholders (a) by or at
the direction of the Board of Directors or (b) by any shareholder of the
corporation who was a shareholder of record at the time of giving of notice
provided for in this Bylaw, who is entitled to vote at the meeting and who
complies with the notice procedures set forth in this Bylaw.
(2) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant to clause (b) of
paragraph (a)(1) of this Bylaw, the shareholder must have given timely notice
thereof in writing to the Secretary of the corporation and such other business
must otherwise be a proper matter for shareholder action. To be timely, a
shareholder's notice shall be delivered to the
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<PAGE> 9
Secretary at the principal executive offices of the corporation not later than
the close of business on the sixtieth (60th) day, nor earlier than the close of
business on the ninetieth (90th) day, prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is more than thirty (30) days before or more than
sixty (60) days after such anniversary date, notice by the shareholder to be
timely must be so delivered not earlier than the close of business on the
ninetieth (90th) day prior to such annual meeting and not later than the close
of business on the later of the sixtieth (60th) day prior to such annual
meeting or the tenth (10th) day following the day on which public announcement
of the date of such meeting is first made by the corporation. In no event
shall the public announcement of an adjournment of an annual meeting commence a
new time period for the giving of a shareholder's notice as described above.
Such shareholder's notice shall set forth (a) as to each person whom the
shareholder proposes to nominate for election or re-election as a director all
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors in an election contest, or
is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange act of 1934, as amended (the "Exchange Act") and Rule
14a-11 thereunder (including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected); (b)
as to any other business that the shareholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made (i) the name and address of such
shareholder, as they appear on the corporation's books, and of such beneficial
owner and (ii) the class and number of shares of the corporation which are
owned beneficially and of record by such shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the corporation is
increased and there is no public announcement by the corporation naming all of
the nominees for director or specifying the size of the increased Board of
Directors at least seventy (70) days prior to the first anniversary of the
preceding year's annual meeting, a shareholder's notice required by this Bylaw
shall also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary
at the principal executive offices of the corporation not later than the close
of business on the tenth (10th) day following the date on which such public
announcement is first made by the corporation.
(b) Special Meetings of Shareholders. Only such business shall be
conducted at a special meeting of shareholders as shall have been brought
before the meeting pursuant to the corporation's notice of meeting.
Nominations of persons for election to the Board of Directors may be made at a
special meeting of shareholders at which directors are to be elected pursuant
to the corporation's notice of meeting (a) by or at the direction of the Board
of Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any shareholder of the
corporation who is a shareholder of record at the time of giving of notice
provided for in this Bylaw, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this Bylaw. In the event
the corporation calls a special meeting of shareholders for the purposes of
electing one or more directors to the Board of Directors, any such shareholder
may nominate a person or persons (as the case may be), for election of such
position(s) as specified in the corporation's notice of meeting, if the
shareholder's notice required by paragraph (a)(2) of this Bylaw shall be
delivered to the Secretary at the principal executive offices of the
corporation not earlier than the close of business on the ninetieth (90th) day
prior to such special meeting and not later than the close of business on the
later of the sixtieth (60th) day prior to such special meeting or the tenth
(10th)
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<PAGE> 10
day following the day on which public announcement is first made of the date of
the special meeting and of the nominees proposed by the Board of Directors to
be elected at such meeting. In no event shall the public announcement of an
adjournment of a special meeting commence a new time period for the giving of a
shareholder's notice as described above.
(c) General.
(1) Only such persons who are nominated in accordance with
the procedures set forth in this Bylaw shall be eligible to serve as directors
and only such business shall be conducted at a meeting of shareholders as shall
have been brought before the meeting in accordance with the procedures set
forth in this Bylaw. Except as otherwise provided by law, the Chairman of the
meeting shall have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made or proposed, as the
case may be, in accordance with the procedures set forth in this Bylaw and, if
any proposed nomination or business is not in compliance with this Bylaw, to
declare that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a document
publicly filed by the corporation with the Securities and Exchange Commission
pursuant to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this
Bylaw, a shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to
affect any rights (i) of shareholders to request inclusion of proposals in the
corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of preferred stock to elect directors under
specified circumstances.
Section 14. Shareholders' Agreements.
Two or more shareholders of this corporation may provide for
the manner in which they vote their shares by signing an agreement for that
purpose as provided by law.
ARTICLE II
DIRECTORS
Section 1. Function.
All corporate powers shall be exercised by or under the authority of,
and the business and affairs of the corporation managed under the direction of,
its Board of Directors.
Section 2. Qualification.
Directors must be natural persons who are eighteen (18) years of age
or older but need not be residents of the State of Florida or shareholders of
this corporation.
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Section 3. Compensation.
The Board of Directors may fix the compensation of directors.
Section 4. Duties of Directors.
A director shall discharge his duties as a director, including his
duties as a member of a committee: in good faith; with the care an ordinarily
prudent person in a like position would exercise under similar circumstances;
and in a manner he reasonably believes to be in the best interests of the
corporation.
In discharging his duties, a director is entitled to rely on
information, opinions, reports or statements, including financial statements
and other financial data, if prepared or presented by:
(a) One or more officers or employees of the corporation whom the
director reasonably believes to be reliable and competent in
the matters presented;
(b) Legal counsel, public accountants or other persons as to
matters the director reasonably believes are within the
persons' professional or expert competence; or
(c) A committee of the Board of Directors of which he is not a
member, if the director reasonably believes the committee
merits confidence.
In discharging his duties, a director may consider such factors as the
director deems relevant, including the long-term prospects and interests of the
corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the corporation
or its subsidiaries, the communities and society in which the corporation or
its subsidiaries operate, and the economy of the state and the nation.
A director is not acting in good faith if he has knowledge concerning
the matter in question that makes reliance otherwise permitted by this section
unwarranted. A director shall not be liable for any action taken as a
director, or any failure to take any action, if he performed the duties of his
office in compliance with this section.
Section 5. Presumption of Assent.
A director of the corporation who is present at a meeting of its Board
of Directors or a committee of the Board of Directors when corporate action is
taken is deemed to have assented to the action taken unless: (a) he objects at
the beginning of the meeting (or promptly upon his arrival) to holding it or
transacting specified business at the meeting; or (b) he votes against or
abstains from the action taken.
Section 6. Number.
The number of directors of this corporation shall be not less than
four (4) nor more than seven (7). The number of directors of this corporation
shall initially be set at four (4). The number of directors may be increased
or decreased from time to time as determined by a majority of the entire Board
of Directors of this corporation or by amendment to these Bylaws.
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Section 7. Election.
Directors are elected at the first annual shareholders' meeting and at
each annual meeting thereafter.
Section 8. Term.
The terms of the initial directors of the corporation expire at the
first shareholders' meeting at which directors are elected. The terms of all
other directors expire at the next annual shareholders' meeting following their
election. A decrease in the number of directors does not shorten an incumbent
director's term. The term of a director elected to fill a vacancy expires at
the next shareholders' meeting at which directors are elected. Despite the
expiration of a director's term, he or she continues to serve until his or her
successor is elected and qualifies or until there is a decrease in the number
of directors.
Section 9. Resignation.
A director may resign at any time by delivering written notice to the
Board of Directors or its chairman or to the corporation. A resignation is
effective when the notice is delivered unless the notice specifies a later
effective date. If a resignation is made effective at a later date, the Board
of Directors may fill the pending vacancy before the effective date if the
Board of Directors provides that the successor does not take office until the
effective date.
Section 10. Vacancies.
Whenever a vacancy occurs on the Board of Directors, including a
vacancy resulting from an increase in the number of directors, it may be filled
by the affirmative vote of a majority of the remaining directors, though less
than a quorum of the Board of Directors or by the shareholders.
A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date or otherwise) may be filled before the
vacancy occurs but the new director may not take office until the vacancy
occurs.
Section 11. Removal of Directors.
The shareholders may remove one or more directors with or without
cause at a meeting of shareholders, provided the notice of the meeting states
that the purpose, or one of the purposes, of the meeting is removal of the
director.
Section 12. Quorum and Voting.
A quorum of the Board of Directors consists of a majority of the
number of directors. If a quorum is present when a vote is taken, the
affirmative vote of a majority of directors present is the act of the Board of
Directors.
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Section 13. Conflicts of Interest.
No contract or other transaction between this corporation and one or
more of its directors or any other corporation, firm, association or entity in
which one or more of the directors are directors or officers or are financially
interested shall be either void or voidable because of such relationship or
interest or because such director or directors are present at the meeting of
the Board of Directors or a committee thereof which authorizes, approves or
ratifies such contract or transaction or because his or their votes are counted
for such purpose, if:
(a) the fact of such relationship or interest is disclosed or
known to the Board of Directors or committee which authorizes,
approves or ratifies the contract or transaction by a vote or
consent sufficient for the purpose without counting the votes
or consents of such interested directors; or
(b) the fact of such relationship or interest is disclosed or
known to the shareholders entitled to vote and they authorize,
approve or ratify such contract or transaction by vote or
written consent; or
(c) the contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the Board,
committee or the shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
For purposes of subparagraph (b) above, a conflict of interest
transaction is authorized, approved or ratified if it receives the vote of a
majority of the shares entitled to be counted under this section. Shares owned
by or voted under the control of a director who has a relationship or interest
in the transaction described in this section may not be counted in a vote of
shareholders to determine whether to authorize, approve or ratify a conflict of
interest transaction under subparagraph (b) above. The vote of those shares,
however, is counted in determining whether the transaction is approved under
other sections of the Act. A majority of the shares, whether or not present,
that are entitled to be counted in a vote on the transaction under this section
constitutes a quorum for the purpose of taking action under this section.
Section 14. Executive and Other Committees.
The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate from among its members an executive
committee and one or more other committees, consisting of a minimum of two (2)
directors who serve at the pleasure of the Board of Directors, each of which,
to the extent provided in such resolution, shall have and may exercise all the
authority of the Board of Directors, except that no committee shall have the
authority to:
(a) Approve or recommend to shareholders actions or proposals
required by law to be approved by shareholders;
(b) Fill vacancies on the Board of Directors or any committee
thereof;
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(c) Adopt, amend or repeal the Bylaws;
(d) Authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the Board
of Directors; or
(e) Authorize or approve the issuance or sale or contract for the
sale of shares, or determine the designation and relative
rights, preferences and limitations of a voting group, except
that the Board of Directors may authorize a committee (or a
senior executive officer of the corporation) to do so within
limits specifically prescribed by the Board of Directors.
The provisions of section 12 above and sections 15, 16 and 17 below,
which govern meetings, notice and waiver of notice, and quorum and voting
requirements of the Board of Directors, shall apply to committees and their
members as well.
Section 15. Meetings.
The Board of Directors may hold regular or special meetings in or out
of the State of Florida. A majority of the directors present, whether or not a
quorum exists, may adjourn any meeting of the Board of Directors to another
time and place. Notice of any such adjourned meeting shall be given to the
directors who were not present at the time of the adjournment and, unless the
time and place of the adjourned meeting are announced at the time of the
adjournment, to the other directors. Meetings of the Board of Directors may be
called by the chairman of the Board or by the president of the corporation.
The Board of Directors may permit any or all directors to participate in a
regular or special meeting by, or conduct the meeting through the use of, any
means of communication by which all directors participating may simultaneously
hear each other during the meeting. A director participating in a meeting by
this means is deemed to be present in person at the meeting.
Section 16. Notice of Meetings.
Regular meetings of the Board of Directors may be held without notice
of the date, time, place or purpose of the meeting. Special meetings of the
Board of Directors must be preceded by at least two (2) days' notice of the
date, time and place of the meeting. The notice need not describe the purpose
of the special meeting unless required by the articles of incorporation or
these Bylaws.
Section 17. Waiver of Notice.
Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and a waiver of any and all objections to the place of the
meeting, the time of the meeting, or the manner in which it has been called or
convened, except when a director states, at the beginning of the meeting or
promptly upon arrival at the meeting, any objection to the transaction of
business because the meeting is not lawfully called or convened.
Section 18. Action Without a Meeting.
Any action required or permitted to be taken at a Board of Directors'
meeting or committee meeting may be taken without a meeting if the action is
taken by all members of the Board of Directors or the
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committee. The actions must be evidenced by one or more written
consents describing the action taken and signed by each director or committee
member.
Action taken under this section is effective when the last director
signs the consent, unless the consent specifies a different effective date. A
consent signed under this section has the effect of a meeting vote and may be
described as such in any document.
Section 19. Amendment by Board of Directors.
The corporation's Board of Directors may adopt one or more amendments
to the corporation's Articles of Incorporation without shareholder action:
(1) To delete the names and addresses of the initial directors;
(2) To delete the name and address of the initial registered agent
or registered office, if a statement of change is on file with
the Department of State;
(3) To delete any other information contained in the Articles of
Incorporation that is solely of historical interest;
(4) To change each issued and unissued authorized share of an
outstanding class into a greater number of whole shares if the
corporation has only shares of that class outstanding;
(5) To delete the authorization for a class or series of shares
authorized as provided by law, if no shares of such class or
series have been issued;
(6) To change the corporate name by substituting the word
"corporation," "Incorporated," or "company," or the
abbreviation "corp.," "Inc.," or "Co.," for a similar word or
abbreviation in the name, or by adding, deleting, or changing
a geographical attribution for the name; or
(7) To make any other change expressly permitted by the Act to be
made without shareholder action.
ARTICLE III
OFFICERS
Section 1. Officers.
The Board of Directors may elect from its own number a chairman of the
Board and may elect a president, chief executive officer, chief operating
officer, chief financial officer, such vice presidents and a treasurer as in
the opinion of the Board of Directors the business of the corporation requires.
The Board of Directors shall elect a secretary and shall delegate to the
secretary responsibility for preparing minutes of the directors' and
shareholders' meetings and for authenticating records of the corporation. The
Board of Directors or the president may appoint one or more other officers or
assistant officers. The same individual may simultaneously hold more than one
office in the corporation.
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Section 2. Powers and Duties.
The officers of the corporation shall have the following duties:
(a) The chairman of the Board, if elected, or failing his or her
election, the president, shall preside at all meetings of the
shareholders and Board of Directors and shall have such other
powers and perform such other duties as may be prescribed from
time to time by the Board of Directors.
(b) The president shall have general charge and supervision of its
business, affairs, administration and operations subject to
the direction of the Board of Directors, and shall, in the
absence or failing the election of a chairman of the Board,
preside at all meetings of the shareholders and the Board of
Directors. The president shall have such other powers and
perform such other duties as may from time to time be assigned
to him by the Board of Directors.
(c) Each of the chief executive officer, chief operating officer
and vice presidents, if elected, shall have such powers and
shall perform such duties as may from time to time be assigned
to him or her by the Board of Directors.
(d) The secretary shall be the custodian of, and shall maintain,
all of the corporate records except the financial records,
shall authenticate all corporate records, shall prepare and
record the minutes of all meetings of the shareholders and
Board of Directors, send out all notices of meetings, and
shall have such other powers and shall perform such other
duties as may be prescribed by the Board of Directors or the
president.
(e) The chief financial officer or treasurer shall be the
custodian of all corporate funds, securities and financial
records, shall keep full and accurate accounts of receipts and
disbursements and render accounts thereof at the annual
meetings of shareholders and whenever else required by the
Board of Directors or the president, and shall have such other
powers and perform such other duties as may be prescribed by
the Board of Directors or the president.
Section 3. Delegation.
In the event of the absence of any officer of this corporation or for
any other reason that the Board of Directors may deem sufficient, the Board of
Directors may at any time and from time to time delegate all or any part of the
powers or duties of any officer to any other officer or officers or to any
director or directors.
Section 4. Resignation and Removal of Officers.
An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless
the notice specifies a later effective date. If a resignation is made
effective at a later date and the corporation accepts the future effective
date, the Board of Directors may fill the pending vacancy before the effective
date if the Board of Directors provides that the successor does not take office
until the effective date.
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The Board of Directors may remove any officer at any time with or
without cause. Any officer or assistant officer, if appointed by the
president, may likewise be removed by the president.
Section 5. Contract Rights.
The appointment of an officer does not itself create contract rights.
An officer's removal does not affect the officer's contract rights, if any,
with the corporation. An officer's resignation does not affect the
corporation's contract rights, if any, with the officer.
ARTICLE IV
STOCK CERTIFICATES
Section 1. Form and Content of Certificates.
Shares may, but are not required to, be represented by certificates.
At a minimum each share certificate, if this corporation has share
certificates, must state on its face: the name of the corporation and that the
corporation is organized under the laws of the State of Florida; the name of
the person to whom issued; and the number and class of shares and the
designation of the series, if any, the certificate represents.
If the corporation is authorized to issue different classes of shares
or different series within a class, the designations, relative rights,
preferences, and limitations applicable to each class and the variations in
rights, preferences, and limitations determined for each series (and the
authority of the Board of Directors to determine variations for future series)
must be summarized on the front or back of each certificate if this corporation
has share certificates. Alternatively, each certificate, if this corporation
has share certificates, may state conspicuously on its front or back that the
corporation will furnish the shareholder a full statement of this information
on request and without charge.
Each share certificate must be signed (either manually or in
facsimile) by the president or a vice president and the secretary or an
assistant secretary of the corporation and shall bear the corporate seal or its
facsimile.
If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
The Board of Directors may authorize the issuance of some or all of
the shares of any or all of its classes or series without certificates pursuant
to and to the extent permitted by applicable law.
Section 2. Transfer of Stock.
Subject to any restrictions on the transfer or registration of
transfer of the shares represented by a stock certificate which have been
imposed or adopted as authorized by the Act, the corporation shall register a
stock certificate presented to it for transfer if the certificate is properly
endorsed by the holder of record or by his duly authorized attorney and is
accompanied with any additional documents, instruments, certificates, signature
guaranties or other items required from time to time by the Board of Directors
in its sole discretion.
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Section 3. Lost, Stolen or Destroyed Certificates.
The corporation shall issue a new stock certificate in the place of
any certificate previously issued if the holder of record of the certificate
(a) makes proof in affidavit form that it has been lost, destroyed or
wrongfully taken; (b) requests the issue of a new certificate before the
corporation has notice that the certificate has been acquired by a purchaser
for value in good faith and without notice of any adverse claim; (c) gives bond
or other security or indemnity in such form as the corporation may direct to
indemnify the corporation, the transfer agent, and registrar against any claim
that may be made on account of the alleged loss, destruction, or theft of a
certificate; and (d) satisfies any other reasonable requirements imposed by the
corporation.
ARTICLE V
BOOKS AND RECORDS
Section 1. Corporate Records.
The corporation shall keep as permanent records minutes of all
meetings of its shareholders and its Board of Directors, a record of all
actions taken by the shareholders or Board of Directors without a meeting, and
a record of all actions taken by a committee of the Board of Directors in place
of the Board of Directors on behalf of the corporation. The corporation shall
maintain accurate accounting records.
The corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each. The corporation shall maintain
its records in written form or in another form capable of conversion into
written form within a reasonable time. The corporation shall keep a copy of
the following records:
(a) Its Articles or Restated Articles of Incorporation and all
amendments to them currently in effect;
(b) Its Bylaws or Restated Bylaws and all amendments to them
currently in effect;
(c) Resolutions adopted by its Board of Directors creating one or
more classes or series of shares and fixing their relative
rights, preferences, and limitations, if shares issued
pursuant to those resolutions are outstanding;
(d) The minutes of all shareholders' meetings and records of all
action taken by shareholders without a meeting for the past
three (3) years.
(e) Written communications to all shareholders generally or all
shareholders of a class or series within the past three (3)
years, including the financial statements required to be
furnished for the past three (3) years under section 4 of this
Article V;
(f) A list of the names and business street addresses of its
current directors and officer; and
(g) Its most recent annual report delivered to the Department of
State.
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Section 2. Inspection of Records by Shareholders.
A shareholder of the corporation is entitled to inspect and copy,
during regular business hours at the corporation's principal office, any of the
records of the corporation described in subparagraphs (a) through (g) in
section 1 above if he gives the corporation written notice of his demand at
least five (5) business days before the date on which he wishes to inspect and
copy.
A shareholder of the corporation is entitled to inspect and copy,
during regular business hours at a reasonable location specified by the
corporation, any of the following records of the corporation if the shareholder
meets the requirements of this section and gives the corporation written notice
of his demand at least five (5) business days before the date on which he
wishes to inspect and copy:
(a) Excerpts from minutes of any meeting of the Board of
Directors, records of any action of a committee of the Board
of Directors while acting in place of the Board of Directors
on behalf of the corporation, minutes of any meeting of the
shareholders, and records of action taken by the shareholders
or Board of Directors without a meeting, to the extent not
otherwise subject to inspection under these Bylaws;
(b) Accounting records of the corporation;
(c) The record of shareholders; and
(d) Any other books and records.
A shareholder may inspect and copy the records described in subparagraphs (a)
through (d) in the preceding paragraph only if:
(a) His demand is made in good faith and for a proper purpose;
(b) He describes with reasonable particularity his purpose and the
records he desires to inspect; and
(c) The records are directly connected with his purpose.
This section does not affect the right of a shareholder to inspect and
copy records under Article I, section 8 of these Bylaws, or, if the shareholder
is in litigation with the corporation, to the same extent as any other
litigant; or the power of a court, independently of the Act, to compel the
production of corporate records for examination.
For purposes of this section, the term "shareholder" includes a
beneficial owner whose shares are held in a voting trust or by a nominee on his
behalf; and a "proper purpose" means a purpose reasonably related to such
person's interest as a shareholder.
Section 3. Scope of Inspection Right.
A shareholder's agent or attorney has the same inspection and copying
rights as the shareholder he represents. The right to copy and/or to have
converted unwritten records into written form and/or to
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otherwise inspect the corporate records, including expenses and charges
therefore, shall be the same as provided or permitted by law.
Section 4. Financial Statements for Shareholders.
Unless modified by resolution of the shareholders within one hundred
twenty (120) days of the close of each fiscal year, the corporation shall
furnish its shareholders annual financial statements which may be consolidated
or combined statements of the corporation and one or more of its subsidiaries,
as appropriate, that include a balance sheet as of the end of the fiscal year,
an income statement for that year, and a statement of cash flows for that year.
If financial statements are prepared for the corporation on the basis of
generally accepted accounting principles, the annual financial statements must
also be prepared on that basis.
If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the president or the person responsible for the
corporation's accounting records:
(a) Stating his reasonable belief whether the statements were
prepared on the basis of generally accepted accounting
principles and, if not, describing the basis of preparation;
and
(b) Describing any respects in which the statements were not
prepared on a basis of accounting consistent with the
statements prepared for the preceding year.
A corporation shall mail the annual financial statements to each
shareholder within one hundred twenty (120) days after the close of each fiscal
year or within such additional time thereafter as is reasonably necessary to
enable the corporation to prepare its financial statements if, for reasons
beyond the corporation's control, it is unable to prepare its financial
statements within the prescribed period. Thereafter, on written request from a
shareholder who was not mailed the statements, the corporation shall mail him
the latest annual financial statements.
ARTICLE VI
DIVIDENDS
Section 1. Distributions to Shareholders.
The Board of Directors may authorize and the corporation may make
distributions to its shareholders subject to restriction by its Articles of
Incorporation and/or the Act.
If the Board of Directors does not fix the record date for determining
shareholders entitled to a distribution (other than one involving a purchase,
redemption or other acquisition of the corporation's shares), it is the date
the Board of Directors authorizes the distribution. No distribution may be
made if, after giving it effect: the corporation would not be able to pay its
debts as they become due in the usual course of business; or the corporation's
total assets would be less than the sum of its total liabilities plus the
amount that would be needed, if the corporation were to be dissolved at the
time of the distribution, to satisfy the preferential rights upon dissolution
of shareholders whose preferential rights are superior to those receiving the
distribution. The Board of Directors may base a determination that a
distribution is not prohibited either on financial statements prepared on the
basis of accounting practices and principles that are reasonable in
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the circumstances or on a fair valuation or other method that is
reasonable in the circumstances. In the case of any distribution based upon
such a valuation, each such distribution shall be identified as a distribution
based upon a current valuation of assets, and the amount per share paid on the
basis of such valuation shall be disclosed to the shareholders concurrent with
their receipt of the distribution.
Except as otherwise provided herein, the effect of a distribution
under this section is measured:
(a) In the case of distribution by purchase, redemption or other
acquisition of the corporation's shares, as of the earlier of:
(1) The date money or other property is transferred or
debt incurred by the corporation; or
(2) The date the shareholder ceases to be a shareholder
with respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as of
the date the indebtedness is distributed;
(c) In all other cases, as of:
(1) The date the distribution is authorized if the
payment occurs within one hundred twenty (120) days
after the date of authorization; or
(2) The date the payment is made if it occurs more than
one hundred twenty (120) days after the date of
authorization.
The corporation's indebtedness to a shareholder incurred by reason of
a distribution made in accordance with this section is at parity with the
corporation's indebtedness to its general unsecured creditors, except to the
extent subordinated by agreement.
Indebtedness of the corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations
under this section if its terms provide that payment of principal and interest
are made only if and to the extent that payment of a distribution to
shareholders could then be made under this section. If the indebtedness is
issued as a distribution, each payment of principal or interest is treated as a
distribution, the effect of which is measured on the date the payment is
actually made.
Section 2. Share Dividends.
Shares may be issued pro rata and without consideration to the
corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this subsection is a share dividend.
Shares of one class or series may not be issued as a share dividend in
respect of shares of another class or series unless a majority of the votes
entitled to be cast by the class or series to be issued approves the issue, or
there are no outstanding shares of the class or series to be issued. If the
Board of Directors does not fix the record date for determining shareholders
entitled to a share dividend, it is the date the Board of Directors authorizes
the share dividend.
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ARTICLE VII
CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the corporation,
the year of incorporation, the word "Florida" and the word "seal"; it may be a
facsimile, engraved, printed or an impression seal.
ARTICLE VIII
EXECUTION OF DOCUMENTS
All contracts, instruments, agreements, bills payable, notes, checks,
drafts, warrants or other obligations of this corporation shall be made in the
name of the corporation and shall be signed by such officer or officers as the
Board of Directors may from time to time designate.
ARTICLE IX
INDEMNIFICATION
(a) The corporation shall indemnify any person who was or is a
party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of
the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise against
liability incurred in connection with such proceeding, including any appeal
thereof, if he acted in good faith and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any proceeding by judgment, order,
settlement, or conviction or upon a plea of nolo contendere or its equivalent
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in, or not opposed to,
the best interests of the corporation or, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The corporation shall indemnify any person, who was or is a
party to any proceeding by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
against expenses and amounts paid in settlement not exceeding, in the judgment
of the board of directors, the estimated expense of litigating the proceeding
to conclusion, actually and reasonably incurred in connection with the defense
or settlement of such proceeding, including any appeal thereof, if such person
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, except that no
indemnification shall be made under this subsection in respect of any claim,
issue, or matter as to which such person shall have been adjudged to be liable
unless, and only to the extent that, the court in which such proceeding was
brought, or any other court of competent jurisdiction, shall determine upon
application that, despite the adjudication of liability but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
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(c) To the extent that a director, officer, employee, or agent of
a corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsection (a) or subsection (b), or in defense of
any claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under subsection (a) or subsection (b),
unless pursuant to a determination by a court, shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in subsection (a) or subsection (b). Such determination shall be made:
(1) By the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to such proceeding;
(2) If such a quorum is not obtainable or, even if
obtainable, by majority vote of a committee duly designated by the Board
of Directors (in which directors who are parties may participate) consisting
solely of two or more directors not at the time parties to the proceeding;
(3) By independent legal counsel:
1. Selected by the Board of Directors prescribed
in paragraph (1) or the committee prescribed
in paragraph (2); or
2. If a quorum of the directors cannot be
obtained for paragraph (1) and the committee
cannot be designated under paragraph (2),
selected by majority vote of the full Board
of Directors (in which directors who are
parties may participate); or
(4) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such proceeding or, if no
such quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
(e) Evaluation of the reasonableness of expenses and authorization
of indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of
permissibility is made by independent legal counsel, persons specified by
paragraph (d)(3) shall evaluate the reasonableness of expenses and may
authorize indemnification.
(f) Expenses incurred by an officer or director in defending a
civil or criminal proceeding shall be paid by the corporation in advance of the
final disposition of such proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if he is ultimately
found not to be entitled to indemnification by the corporation pursuant to this
section. Expenses incurred by other employees and agents shall be paid in
advance upon such terms or conditions that the board of directors deems
appropriate.
(g) The indemnification and advancement of expenses provided
pursuant to these Bylaws are not exclusive, and the corporation may make any
other or further indemnification or advancement of expenses of any of its
directors, officers, employees, or agents, under any bylaw, agreement, vote of
share-
20
<PAGE> 24
holders or disinterested directors, or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. However, indemnification or advancement of expenses shall not be made
to or on behalf of any director, officer, employee, or agent if a judgment or
other final adjudication establishes that his actions, or omissions to act,
were material to the cause of action so adjudicated and constitute:
(1) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful;
(2) A transaction from which the director, officer,
employee, or agent derived an improper personal benefit;
(3) In the case of a director, a circumstance under which
the liability provisions of Section 607.0834 of the Florida Business
Corporation Act are applicable; or
(4) Willful misconduct or a conscious disregard for the
best interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder.
(h) Indemnification and advancement of expenses as provided in
these Bylaws shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person, unless otherwise provided when authorized or
ratified.
(i) For purposes of this Bylaw, the term "corporation" includes,
in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger, so that any person who is or was a director, officer, employee, or
agent of a constituent corporation, or is or was serving at the request of a
constituent corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, IS in the
same position under this section with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued.
(j) For purposes of this section:
(1) The term "other enterprises" includes employee
benefit plans;
(2) The term "expenses" includes counsel fees, including
those for appeal;
(3) The term "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an
excise tax assessed with respect to any employee
benefit plan), and expenses actually and reasonably
incurred with respect to a proceeding;
(4) The term "proceeding" includes any threatened,
pending, or completed action, suit, or other type of
proceeding, whether civil, criminal, administrative,
or investigative and whether formal or informal;
21
<PAGE> 25
(5) The term "agent" includes a volunteer;
(6) The term "serving at the request of the corporation"
includes any service as a director, officer,
employee, or agent of the corporation that imposes
duties on such persons, including duties relating to
an employee benefit plan and its participants or
beneficiaries; and
(7) The term "not opposed to the best interest of the
corporation" describes the actions of a person who
acts in good faith and in a manner he reasonably
believes to be in the best interests of the
participants and beneficiaries of an employee benefit
plan.
(k) The corporation may purchase and maintain insurance on behalf
of any person who is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust, or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
ARTICLE X
AMENDMENT
These Bylaws may be altered, amended or repealed by either the Board
of Directors or the shareholders, but the Board of Directors may not alter,
amend or repeal the Bylaws generally or a particular Bylaw provision adopted by
the shareholders if the shareholders expressly provide that the Bylaws
generally or a particular Bylaw provision is not subject to amendment,
alteration or repeal by the Board of Directors.
22
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE COMPANY'S CONDENSED
FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 20,512,021
<ALLOWANCES> 88,517
<INVENTORY> 0
<CURRENT-ASSETS> 21,146,132
<PP&E> 17,733,244
<DEPRECIATION> 4,042,291
<TOTAL-ASSETS> 35,637,117
<CURRENT-LIABILITIES> 14,590,828
<BONDS> 15,536,358
0
0
<COMMON> 164,000
<OTHER-SE> 5,345,931
<TOTAL-LIABILITY-AND-EQUITY> 35,637,117
<SALES> 0
<TOTAL-REVENUES> 33,607,014
<CGS> 0
<TOTAL-COSTS> 20,770,992
<OTHER-EXPENSES> 859,888
<LOSS-PROVISION> 28,517
<INTEREST-EXPENSE> 400,566
<INCOME-PRETAX> 2,910,282
<INCOME-TAX> 1,169,933<F1>
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,740,349<F2>
<EPS-PRIMARY> .11<F2>
<EPS-DILUTED> .11<F2>
<FN>
<F1>REPRESENTS PRO FORMA PROVISION FOR INCOME TAXES RELATING TO S CORPORATION.
SEE NOTE 3 OF NOTES TO CONDENSED FINANCIAL STATEMENTS.
<F2>AMOUNTS ARE PRESENTED ON A PRO FORMA BASIS ASSUMING CONVERSION FROM AN S
CORPORATION. SEE NOTE 3 OF NOTES TO CONDENSED FINANCIAL STATEMENTS.
</FN>
</TABLE>
