UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission file number: 000-21377
Rofin-Sinar Technologies Inc.
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(Exact name of registrant as specified in its charter)
Delaware 38-3306461
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(State of other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45701 Mast Street, Plymouth, MI 48170
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(Address of principal executive offices) (Zip Code)
(734) 455-5400
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] / No [ ]
11,522,440 shares of the registrant's common stock, par value $0.01 per
share, were outstanding as of May 15, 1998.
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ROFIN-SINAR TECHNOLOGIES INC.
INDEX
PART I FINANCIAL INFORMATION Page No.
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Item 1
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Condensed Consolidated Balance Sheets
March 31, 1998 and September 30, 1997 3
Condensed Consolidated Statements of Operations
Six months and three months ended
March 31, 1998 and March 31, 1997 4
Condensed Consolidated Statements of Cash Flows
Six months ended March 31, 1998 and March 31, 1997 5
Notes to Condensed Consolidated Financial Statements 6
Item 2
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Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II OTHER INFORMATION 16
SIGNATURES 18
Exhibit 3.2 - By-Laws of the Corporation, as amended
Exhibit 11.1 - Computation of Earnings Per Share
Exhibit 27.1 - Financial data schedule for the
six-month period ended March 31, 1998
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PART I. FINANCIAL INFORMATION
Rofin-Sinar Technologies Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(dollars in thousands)
March 31, September 30,
1998 1997
(Unaudited) (Audited)
ASSETS ----------- -------------
Current Assets:
Cash and cash equivalents $ 38,280 $ 40,743
Trade accounts receivable, net 31,114 27,148
Inventories, net (Note 2) 30,373 28,731
Deferred income tax assets - current 2,817 3,508
Other current assets and prepaid expenses 2,244 1,837
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Total current assets 104,828 101,967
Property and equipment, net 22,019 22,118
Intangibles, net 4,610 5,054
Deferred income tax assets - noncurrent 2,643 2,769
Other noncurrent assets 339 281
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Total assets $ 134,439 $ 132,189
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Line of credit (Note 3) $ 15,741 $ 18,569
Accounts payable, trade 7,859 5,837
Accrued liabilities (Note 2) 19,748 22,554
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Total current liabilities 43,348 46,960
Long-term debt (Note 4) 3,249 0
Deferred income tax liability, long-term 217 191
Pension obligations 2,968 3,044
Minority interests 295 69
Other long-term liabilities 19 0
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Total liabilities 50,096 50,264
Stockholders' equity
Preferred stock, 5,000,000 shares authorized,
none issued or outstanding 0 0
Common stock, $0.01 par value, 50,000,000 shares
authorized, 11,513,800 issued and outstanding 115 115
Additional paid-in-capital 75,743 75,666
Cumulative foreign currency translation adjustment ( 4,440) ( 2,810)
Retained earnings 12,925 8,954
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Total stockholders' equity $ 84,343 $ 81,925
Total liabilities and stockholders' equity $ 134,439 $ 132,189
========== ==========
See accompanying notes to condensed consolidated financial statements
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Rofin-Sinar Technologies Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
Periods Ended March 31, 1998 and 1997
(dollars in thousands, except per share amounts)
Six Months Three Months
Ended March 31, Ended March 31,
---------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
Net sales $ 58,173 $ 67,469 $ 29,962 $ 33,435
Cost of goods sold 36,164 43,232 18,974 21,311
---------- ---------- ---------- ----------
Gross profit 22,009 24,237 10,988 12,124
Selling, general, and
administrative expenses 11,320 11,533 5,900 5,651
Research and development expenses 4,714 4,876 2,186 2,719
---------- ---------- ---------- ----------
Income from operations 5,975 7,828 2,902 3,754
Other expense (income):
Interest expense (income), net ( 399) ( 451) ( 100) ( 277)
Other expenses (income) ( 421) ( 393) ( 337) ( 297)
---------- ---------- ---------- ----------
Income before income taxes 6,795 8,672 3,339 4,328
Income tax expense 2,824 3,506 1,405 1,840
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Net income $ 3,971 $ 5,166 $ 1,934 $ 2,488
========== ========== ========== ==========
Net income per common
share (Note 5):
Basic $ 0.34 $ 0.45 $ 0.17 $ 0.22
Diluted $ 0.34 $ 0.45 $ 0.17 $ 0.21
========== ========== ========== ==========
Weighted average shares
used in computing net
income per share (Note 5):
Basic 11,510,830 11,504,500 11,511,488 11,504,500
Diluted 11,599,326 11,578,531 11,605,529 11,587,364
========== ========== ========== ==========
See accompanying notes to condensed consolidated financial statements
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Rofin-Sinar Technologies Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended March 31, 1998 and 1997
(dollars in thousands)
March 31, March 31,
1998 1997
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CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 3,971 $ 5,166
Adjustments to reconcile net income to net
cash provided (used) by operating activities:
Changes in operating assets and liabilities ( 5,665) 1,108
Other adjustments 1,265 1,141
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Net cash provided (used) by
operating activities ( 429) 7,415
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CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale of property and equipment 24 55
Additions to property and equipment ( 2,034) ( 681)
Other 411 0
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Net cash used by investing activities ( 1,599) ( 626)
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CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of former parent loans 0 ( 17,182)
Borrowings from bank 1,157 13,239
Repayment to bank ( 126) 0
Repayment to related party ( 855) 0
Other 77 0
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Net cash provided (used) by
financing activities 253 ( 3,943)
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Effect of foreign currency translation on cash ( 688) ( 365)
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Net increase (decrease) in
cash and cash equivalents ( 2,463) 2,481
Cash and cash equivalents at beginning of period 40,743 34,869
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Cash and cash equivalents at end of period $ 38,280 $ 37,350
========== ==========
See accompanying notes to condensed consolidated financial statements
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Rofin-Sinar Technologies Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (Unaudited)
(dollars in thousands)
1. Summary of Accounting Policies
The accompanying consolidated condensed financial statements have been
prepared in conformity with generally accepted accounting principles,
consistent with those reflected in the Company's annual report to
stockholders for the year ended September 30, 1997. All adjustments
necessary for a fair presentation have been made which comprise only normal
recurring adjustments; however, interim results of operations are not
necessarily indicative of results to be expected for the year.
2. Balance Sheet Detail:
Inventories are stated at the lower of cost (first-in, first-out or weighted
average) or market, and are summarized as follows:
March 31, September 30,
1998 1997
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Finished goods $ 3,137 $ 2,732
Work in progress 8,036 7,944
Raw materials and supplies 8,727 6,903
Demonstration inventory 3,672 4,335
Service parts 6,801 6,817
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Total inventories, net $ 30,373 $ 28,731
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Accrued liabilities are comprised of the following:
March 31, September 30,
1998 1997
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Employee compensation $ 4,560 $ 4,960
Warranty reserves 5,217 5,724
Deferred revenue 202 244
Income taxes payable 5,174 5,826
Customer deposits 2,074 2,016
Other 2,521 3,784
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Total accrued liabilities $ 19,748 $ 22,554
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3. Line of Credit
In October 1996 the Company obtained a credit line for a $25,000 revolving
loan facility with Deutsche Bank AG to support its working capital needs. As
of March 31, 1998, $11,125 was borrowed on a short term basis against this
loan facility by Rofin-Sinar Laser GmbH, Dilas GmbH, Rofin Marubeni Laser
Corp., and Rofin-Sinar S.r.L. at an average interest rate of 3.3%.
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In addition, the Company's foreign subsidiaries have several lines of credit
which allow them to borrow in the applicable local currencies. At March 31,
1998, direct borrowings under these agreements totaled $4,616; and $2,166
remained unused.
4. Long-Term Debt
At March 31, 1998, $542 was borrowed under the credit line with Deutsche Bank
with extended payment terms into the year 2000. Further, Rofin-Sinar Laser
GmbH entered into a loan agreement with a German bank for a $2,790 long-term
credit facility. As of March 31, 1998 $2,707 was borrowed against this loan.
Both loan agreements expire in 2000.
5. Net Income Per Common Share
On March 31, 1997, the Financial Accounting Standards Board issued SFAS No.
128 (FAS 128) , "Earnings Per Share". FAS 128 establishes standards for
computing and presenting earnings per share (EPS) and applies to entities
with publicly held common stock or potential common stock. During the
quarter ended December 31, 1997, the Company adopted FAS 128 and is now
required to report both basic and diluted earnings per share. Basic EPS is
computed by dividing net income by the weighted average number of common
shares outstanding during the period. Diluted EPS reflects the potential
dilution from common stock equivalents (stock options). The Company has
restated earnings per share for the comparative prior periods for fiscal 1997
as required by FAS 128. The calculation of the weighted average number of
common shares outstanding for each period is as follows:
Six Months Ended Three Months Ended
March 31, March 31,
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1998 1997 1998 1997
---------- ---------- ---------- ----------
Weighted average number of
shares for BASIC net income
per common share 11,510,830 11,504,500 11,511,488 11,504,500
Potential additional shares
due to outstanding dilutive
stock options 88,496 74,031 94,041 82,864
---------- ---------- ---------- ----------
Weighted average number of
shares for DILUTED net
income per common share 11,599,326 11,578,531 11,605,529 11,587,364
========== ========== ========== ==========
Excluded from the calculation of diluted EPS for the three months ended March
31, 1998 were 193,000 outstanding stock options. These could potentially
dilute future EPS calculations but were not included in the current period
because their effect was antidilutive.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note Regarding Forward-Looking Statements
Certain statements in this Quarterly Report on Form 10-Q constitute forward-
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties, and other factors which may cause the actual results,
performance or achievements of the Company to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include the following:
Industry Concentration and Cyclicality; Dependence on Sales by Third Parties
The Company's business is significantly dependent on capital expenditures by
manufacturers in the Machine Tool, Automotive and Semiconductor & Electronics
industries. These industries are cyclical and have historically experienced
periods of oversupply, resulting in significantly reduced demand for capital
equipment, including the products manufactured and marketed by the Company.
For the foreseeable future, the Company's operations will continue to be
dependent on capital expenditures in these industries which, in turn, are
largely dependent on the market demand for their products. The Company's net
sales and results of operations may be materially adversely affected if
downturns or slowdowns in the Machine Tool, Automotive and Semiconductor &
Electronics industries occur in the future.
The Company's net sales are dependent in part upon the ability of its OEM
customers to develop and sell systems that incorporate the Company's laser
products. Adverse economic conditions, large inventory positions, limited
marketing resources and other factors affecting these OEM customers could
have a substantial impact upon the Company's financial results. No assurances
can be given that the Company's OEM customers will not experience financial
or other difficulties that could adversely affect their operations and, in
turn, the financial condition or results of operations of the Company.
Variability and Uncertainty of Quarterly Operating Results; Potential
Volatility of Stock Price
The Company has experienced and expects to continue to experience some
fluctuations in its quarterly results. The Company believes that fluctuations
in quarterly results may cause the market price of its Common Stock to
fluctuate, perhaps substantially. Factors which may have an influence on the
Company's operating results in a particular quarter include the timing of the
receipt of orders from major customers, product mix, competitive pricing
pressures, the relative proportions of domestic and international sales, the
Company's ability to design, manufacture and introduce new products on a
cost-effective and timely basis, the delay between incurrence of expenses to
further develop marketing and service capabilities and realization of
benefits from such improved capabilities, and the introduction of new
products by the Company and its competitors. In addition, the Company's
backlog at any given time is not necessarily indicative of actual sales for
any succeeding period. The Company's sales will often reflect orders shipped
in the same quarter that they are received. Moreover, customers may cancel or
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reschedule shipments, and production difficulties could delay shipments.
Accordingly, the Company's results of operations are subject to significant
variability from quarter to quarter.
Other factors which the Company believes may cause the market price of its
Common Stock to fluctuate, perhaps substantially, include announcements of
new products, technologies or customers by the Company or its competitors and
developments with respect to intellectual property and shortfalls in the
Company's operations relative to analysts' expectations. In addition, in
recent years, the stock market in general, and the shares of technology
companies in particular, have experienced wide price fluctuations. These
broad market and industry fluctuations, particularly in the Semiconductor &
Electronics industry, may adversely affect the market price of the Company's
Common Stock.
Currency Risk
Although the Company reports its results in U.S. dollars, approximately two-
thirds of its sales are denominated in other currencies, including primarily
German marks, as well as French francs, Italian lire and Japanese yen.
Although a predominant portion of the Company's cost of goods sold, selling,
general and administrative expenses and research development expenses are
incurred in German marks, net sales and costs and related assets and
liabilities are generally denominated in the functional currencies of the
operations, thereby serving to reduce the Company's exposure to exchange
gains and losses. Exchange differences upon translation from each operation's
functional currency to U.S. dollars are accumulated as a separate component
of equity. The currency translation adjustment component of shareholders'
equity changed from a $2.8 million debit at September 30, 1997 to a $4.4
million debit at March 31, 1998. This change arose primarily from the
strengthening of the U.S. dollar against the German mark, and reflects the
fact that a high proportion of the Company's capital is invested in its
German operations, whose functional currency is the German mark. The
fluctuation of the German mark and the other functional currencies against
the U.S. dollar has had the effect of increasing and decreasing (as
applicable) reported net sales as well as cost of goods sold and gross margin
and selling, general and administrative expenses denominated in such foreign
currencies when translated into U.S. dollars as compared to prior periods.
The Company's subsidiaries will from time to time pay dividends in their
respective functional currencies, thus presenting another area of potential
currency exposure in the future.
The Company has implemented a policy to hedge up to 50% of its net foreign
currency exposure on sales transactions utilizing forward exchange contracts
or foreign exchange options. The Company has also implemented a policy to
continue to borrow in each operating subsidiary's functional currency to
reduce exposure to exchange gains and losses. There can be no assurance that
changes in currency exchange rates will not have a material adverse effect on
the Company's business, financial condition and results of operations.
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<PAGE>
Competition
The laser industry is characterized by significant price competition. The
Company's current and proposed laser products and laser marking products
compete with those of several well-established companies, some of which are
larger and have substantially greater financial, managerial and technical
resources, more extensive distribution and service networks and larger
installed customer bases than the Company. The Company believes that this
competition will be particularly intense in the CO2, diode laser and Nd:YAG
solid state laser markets, as many companies have committed significant
research and development resources to pursue opportunities in these markets.
There can be no assurance that the Company will successfully differentiate
its current and proposed products from the products of its competitors or
that the marketplace will consider the Company's products to be superior to
competing products. With respect to the Company's laser marking products,
because many of the components required to develop and produce a laser-based
marking system are commercially available, barriers to entry into this market
are relatively low, and the Company expects new competitive product entry in
this market. To maintain its competitive position in this market, the Company
believes that it will be required to continue a high level of investment in
engineering, research and development, marketing and customer service and
support. There can be no assurance that the Company will have sufficient
resources to continue to make such investments, that the Company will be able
to make the technological advances necessary to maintain its competitive
position, or that its products will receive market acceptance.
Risks Relating to Sales Growth in CO2, Diode and Nd:YAG Lasers
In recent years, the Company has experienced a period of rapid growth,
attributable in large part to the demand for its laser marking products. If
the Company is to maintain or increase the rate of growth of its laser sales
in the near term, such sales will have to come through increases in market
share for the Company's existing products, through the development of new
products or through the Company's acquisition of its competitors or their
products. To date, a substantial portion of the Company's revenue has been
derived from sales of high-powered CO2 laser sources and, more recently,
solid state flash lamp-pumped laser sources. The Company intends to devote
substantial resources to increasing the output power of its diffusion-cooled
CO2 Slab laser sources and to developing diode lasers and diode-pumped Nd:YAG
solid state laser products in accordance with market demand. The Company is
currently focused on reducing the manufacturing costs of its diffusion-cooled
CO2 Slab lasers to achieve more attractive pricing. The Company's diode-
pumped lasers, however, are currently being introduced to the market and are
not expected to result in marketable products in fiscal 1998. A large part
of the Company's growth strategy depends upon being able to increase
substantially its market share for laser marking products, particularly in
the United States and Japan. If the Company is unable to implement its
strategy of increasing its market share for laser marking products and of
expanding its product range to include higher output power diffusion-cooled
CO2 Slab lasers, diode lasers and diode-pumped Nd:YAG solid state lasers at
attractive prices, it may not be able to achieve its anticipated rate of
growth, as a result of which its business, operating results and financial
condition could be adversely affected. No assurance can be given that the
Company will successfully expand its marking products' market share, increase
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the output power of its diffusion-cooled CO2 Slab laser sources, successfully
redesign diode lasers for industrial production environments or develop
diode-pumped Nd:YAG solid state laser products, or that any such products
will achieve market acceptance or not be rendered obsolete or uncompetitive
by products of other companies.
While there are currently no commitments with respect to any future
acquisitions, the Company's business strategy includes the expansion of its
products and services, which may be effected through acquisitions. The
Company from time to time reviews various opportunities to acquire
businesses, technologies or products complementary to the Company's present
business. There can be no assurance that the Company will be able to
integrate any acquired business effectively or that any acquisition will
result in long-term benefits to the Company.
Conflicting Patents and Other Intellectual Property Rights of Third Parties;
Limited Protection of Intellectual Property
The Company from time to time receives notices from third parties alleging
infringement of such parties' patent or other intellectual property rights by
the Company's products. While such notices are common in the Company's
industry and the Company has in the past been able to develop non-infringing
technology or license necessary patents or technology on commercially
reasonable terms, there can be no assurance that the Company would in the
future prevail in any litigation seeking damages or expenses from the Company
or to enjoin the Company from selling its products on the basis of such
alleged infringement, or that the Company would be able to develop any non-
infringing technology or license any valid and infringed patents on
commercially reasonable terms. In the event any third party made a valid
claim against the Company or its customers and a license were not made
available to the Company on commercially reasonable terms, the Company would
be adversely affected.
The Company's future success depends in part upon its intellectual property,
including trade secrets, know-how and continuing technological innovation.
There can be no assurance that the steps taken by the Company to protect its
intellectual property will be adequate to prevent misappropriation or that
others will not develop competitive technologies or products. The Company
currently holds 41 United States and foreign patents on its laser sources
which expire from 1998 to 2016. There can be no assurance that other
companies are not investigating or developing other technologies that are
similar to the Company's, that any patents will issue from any application
filed by the Company or that, if patents do issue, the claims allowed will be
sufficiently broad to deter or prohibit others from marketing similar
products. In addition, there can be no assurance that any patents issued to
the Company will not be challenged, invalidated or circumvented, or that the
rights thereunder will provide a competitive advantage to the Company.
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<PAGE>
Risks Associated with International Operations
The Company's products are currently marketed in approximately 25 countries,
with Germany, the rest of Europe, the United States and the Asia/Pacific
region being the Company's principal markets. Sales in the Company's
principal markets are subject to risks inherent in international business
activities, including, in particular, general economic conditions in each
such country, overlap of differing tax structures, management of an
organization spread over various jurisdictions, unexpected changes in
regulatory requirements and compliance with a variety of foreign laws and
regulations. Other general risks associated with international operations
include import and export licensing requirements, trade restrictions and
changes in tariff and freight rates. The business and operations of the
Company's principal subsidiary, RSL, are primarily subject to the changing
economic and political conditions prevailing from time to time in Germany.
Although productivity in Germany is generally high, labor costs, corporate
taxes and employee benefit expenses are high and weekly working hours are
shorter in Germany compared to the rest of the European Union, the United
States and Japan.
Asia-Pacific Risk
Countries in the Asia Pacific region, including Japan, have recently
experienced weaknesses in their currency, banking and equity markets. As the
Asia Pacific market currently represents approximately 18% of the Company's
revenue, these weaknesses could adversely affect consumer demand for the
Company's product, the U.S. dollar value of the Company's foreign currency
denominated sales, and ultimately the Company's consolidated results of
operations.
Year 2000 Compliance
The Company has evaluated the costs necessary to make its computer systems
Year 2000 compliant. The bulk of these costs are expected to be incurred
during fiscal years 1998 and 1999 and are not expected to have a material
impact on the Company's cash flows, results of operations or financial
condition.
Overview
Rofin-Sinar Technologies, Inc. ("Rofin-Sinar", or the "Company") is a leader
in the design, development, engineering, manufacture and marketing of laser-
based products used for cutting, welding and marking a wide range of
industrial materials. During the second quarter of fiscal year 1997 and
fiscal year 1998, respectively, approximately 76% and 67% of the Company's
revenues were from sales and servicing of laser products for cutting and
welding applications and approximately 24% and 33% were from sales and
servicing of laser products for marking applications.
Through its global manufacturing, distribution and service network, the
Company provides a comprehensive range of laser solutions to three principal
target markets for material processing lasers: the Machine Tool, Automotive
and Semiconductor & Electronics industries. The Company sells directly to
industrial end-users, to OEMs who integrate Rofin-Sinar's laser sources with
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other system components and to distributors. Many of Rofin-Sinar's customers
are among the largest global participants in their respective industries.
In January 1998, RSTI formed a new company, Rofin-Sinar UK, Ltd., based in
Kingston upon Hull, England, and acquired the business assets of Palomar
Technologies, Ltd., to design, manufacture and sell low-power CO2 lasers.
Results of Operations
For the periods indicated, the following table sets forth the percentage of
net sales represented by the respective line items in the Company's
consolidated statements of operations.
Six Months Three Months
Ended March 31, Ended March 31,
---------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
Net sales 100% 100% 100% 100%
Cost of goods sold 62% 64% 63% 64%
Gross profit 38% 36% 37% 36%
Selling, general and
administrative expenses 20% 17% 20% 17%
Research and development expenses 8% 7% 7% 8%
Income from operations 10% 12% 10% 11%
Income before income taxes 12% 13% 11% 13%
Net income 7% 8% 7% 7%
Net Sales - Net sales of $30.0 million and $58.2 million represent decreases
of $3.5 million (10%) and $9.3 million (14%) for the three months and six
months ended March 31, 1998, respectively, compared to the corresponding
periods of fiscal 1997. The reduction resulted from net sales decreases of
$8.1 million, or 32%, in the United States, and $1.2 million, or 3%, in
Europe/Asia for the corresponding six month periods as compared to the prior
year. The strengthening of the U.S. dollar against foreign currencies
resulted in lower net sales of $4.7 million for the six month period. Net
sales of laser products for cutting and welding applications for the three
and six months periods decreased by 22% to $19.9 million, and by 24% to $38.9
million as compared to the same periods for fiscal 1997. Net sales of lasers
for marking applications for the three and six month periods increased by 27%
to $10.0 million and by 16% to $19.2 million as compared to fiscal 1997. The
decrease in cutting and welding products is caused mainly by the inclusion in
the fiscal 1997 revenue of a major program to a single automotive airbag
company. The increase in marking revenue is due mainly to strong sales for
marking systems in the semi-conductor industry.
Cost of Goods Sold - Cost of goods sold decreased $2.3 million (11%) and $7.1
million (16%) for the three months and six months ended March 31, 1998,
respectively, compared to the corresponding periods of fiscal 1997, and
reflect the decrease in net sales.
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Gross Profit - The Company's gross profit of $11.0 million and $22.0 million
for the three months and six months ended March 31, 1998, respectively,
represents a $1.1 million and $2.2 million decrease from the same periods of
the prior year. This is due partially to the decline in sales between these
two periods as well as the current year inclusion of start-up manufacturing
costs associated with the UK acquisition. As a percentage of sales over the
corresponding three and six month periods gross profit increased from 36% to
37% and from 36% to 38% due to the higher portion of revenue attributable to
marking and service activity. Gross profit was unfavorably affected by $0.9
million and $1.7 million, for the three and six month periods in fiscal 1998,
due to the strengthening of the U.S. dollar.
Selling, General and Administrative Expenses - Selling, general and
administrative expenses increased $0.2 million (4%) and decreased $0.2
million (2%) for the three months and six months ended March 31, 1998,
respectively, compared to the corresponding periods of fiscal 1997. The
second quarter increase is primarily due to the inclusion of start-up costs
associated with UK operations. SG&A expenses increased from 17% to 20% as a
percentage of sales over both the three and six month periods ended March 31,
1998, due to the fixed nature of certain costs as compared to lower sales
levels in the current year.
Research and Development - The Company spent net $2.2 million and $4.7
million on research and development during the three and six month periods.
This represents decreases of 20% and 3% over the same periods of the prior
year. The decrease in spending was primarily due to the high proportion of
spending denominated in the German mark which weakened against the U.S.
dollar. Gross research and development expenses for the three and six months
were $2.8 and $5.5 million and were reduced by $0.6 and $0.8 million of
government grants.
Income from Operations - The Company's income from operations of $2.9 million
and $6.0 million for the three and six months ended March 31, 1998 represent
decreases of $0.9 million, or 23%, and $1.9 million, or 24% over the
corresponding prior year periods. Income from operations was unfavorably
affected by $0.2 million, for the three month period in fiscal 1998, due to
the strengthening of the U.S. dollar. The unfavorable effect on net sales
was partly offset by corresponding decreases in costs of sales, research and
development, and SG&A from the Company's foreign operations.
Income Before Income Taxes - The Company's income before income taxes of $3.3
million and $6.8 million for the three and six months ended March 31, 1998,
represent decreases of $1.0 million (23%) and $1.9 million (24%) over the
corresponding prior year periods. Net interest income declined due to lower
investment activity in the current period versus the comparable period in the
prior year. In addition, the Company's investment portfolio now includes a
higher ratio of tax-exempt investment vehicles which serve to lower the
interest income yet lower the effective tax rate.
- 14 -
<PAGE>
Income Tax Expense - Income tax expense of $1.4 million and $2.8 million for
the three and six month periods ended March 31, 1998 represent effective tax
rates of 42.1% and 41.6%, compared to prior year corresponding effective tax
rates of 42.6% and 40.4%, respectively. This change in rates is primarily
due to the mix of the Company's Europe/Asian operations as a portion of the
consolidated income before income taxes in fiscal 1998, compared to 1997,
offset by the increase in tax-exempt interest income, as discussed above.
Net Income - In light of the foregoing factors, the Company realized a
consolidated net income of $1.9 million and $4.0 million for the three and
six month periods ended March 31, 1998, which represent decreases of $0.6
million (22%) and $1.2 million (23%) over the comparable prior periods. For
the three months ended March 31, 1998 both basic and diluted earnings per
share equaled $0.17 based upon 11.5 million and 11.6 million common shares
outstanding, respectively, as compared to basic and diluted earnings per
share of $0.22 and $0.21 for the same period of 1997, based on 11.5 million
and 11.6 million shares outstanding, respectively.
Liquidity and Capital Resources
The Company's primary sources of liquidity at March 31, 1998 were cash and
cash equivalents of $38.3 million, a $25.0 million line of credit with
Deutsche Bank AG, and several other lines of credit to support foreign
subsidiaries in their local currencies. As of March 31, 1998, $11.7 million
was borrowed against the Deutsche Bank facility, $4.6 million from other
lines of credit, and $2.7 million from a loan agreement. Of this total $3.2
million is classified as long-term and is due in the year 2000.
Cash and cash equivalents decreased by $2.5 million during the six months
ended March 31, 1998. Approximately $0.4 million in cash and cash
equivalents were used in operating activities, primarily as the result of
increased accounts receivable due to a high proportion of shipments in March
1998, offset by a corresponding increase in accounts payable since year end.
Uses of cash from investing activities totaled $1.6 million for the six
months ended March 31, 1998 and was due primarily to leasehold improvements
and various additions to property and equipment related to introduction of
new products and computer upgrades. Of this amount, $0.9 million is related
to the newly formed Rofin-Sinar UK subsidiary.
Cash provided from financing activities totaled $0.3 million. Proceeds from
bank borrowings totaled $1.2 million which were partially offset by
repayments of $0.9 million to a related party.
Management believes that the Company's cash flow from operations, along with
existing cash and cash equivalents and credit facilities, will provide
adequate resources to meet its capital requirements and operational needs for
the foreseeable future.
- 15 -
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
Use of IPO Proceeds
The Company completed its initial public offering of 11,500,000 shares of its
common stock on September 30, 1996 for gross proceeds of $109.2 million
pursuant to its registration statement on Form S-1 (No. 333-09539) declared
effective on September 25, 1996. The lead managers for the offering were
Deutsche Morgan Grenfell / C.J. Lawrence, Inc., Alex Brown & Sons Inc., and
Lehmann Brothers, Inc. Net proceeds of the offering (after deduction of $6.6
million in underwriting discounts and commissions and $0.3 million in other
offering expenses) were $102.3 million. Of such amount approximately $77.1
million were used to purchase all outstanding shares of Rofin-Sinar Laser and
Rofin-Sinar, Inc. from the former Parent and to repay certain indebtedness
owed to the former Parent. Of the remainder, $25.0 million was invested in
certificates of deposit, with the balance applied to working capital. In the
fourth quarter of fiscal 1997 the Company used approximately $5.2 million of
the $25.0 million of net invested proceeds to consummate the acquisition of
Dilas. In the first quarter of fiscal 1998 the Company used approximately
$0.8 million for working capital purposes. Since the date of the Company's
last report on its use of the proceeds of its initial public offering, the
Company used approximately $0.9 million to consummate the acquisition of the
business assets of Palomar Technologies Ltd., a wholly owned subsidiary of
Palomar Medical Technologies Inc. Of the remaining proceeds approximately
$1.6 million was used for working capital purposes. Accordingly,
approximately $16.5 million of the net offering proceeds remain to be
applied.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On March 25, 1998, the Annual Meeting of Stockholders of Rofin-Sinar
Technologies Inc. was held in Tempe, Arizona.
The following individuals were elected to the Board of Directors of Rofin-
Sinar Technologies, Inc.:
Hinrich Martinen
Gary Willis
- 16 -
<PAGE>
Other matters voted upon at the meeting and the number of affirmative and
negative votes cast with respect to each such matter were as follows:
Affirmative Negative
Votes Votes
----------- ----------
Ratification of the appointment of 4,929,064 0
KPMG Peat Marwick LLP as independent
public accountants for the 1998 fiscal year.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.2 By-Laws of the Company, as amended
11.1 Computation of earnings per share.
27.1 Financial data schedule for three month period ended
March 31, 1998.
(b) Reports on Form 8-K
The Registrant filed the following Current Reports on Form 8-K
during the quarter ended March 31, 1998:
Current Report on Form 8-K, dated February 2, 1998, announced the acquisition
of the business assets of Palomar Technologies Ltd. and formation of a new
UK-based company, Rofin-Sinar UK Ltd., to develop and manufacture a new range
of low-power lasers to complement its existing portfolio of products.
Current Report on Form 8-K, dated February 12, 1998, announced the Company's
earnings for the first quarter of fiscal 1998.
Current Report on Form 8-K, dated March 25, 1998, denied any current plans by
the Company to become listed on the "Neue Markt" stock exchange in Frankfurt,
Germany.
- 17 -
<PAGE>
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.
Rofin-Sinar Technologies Inc.
---------------------------------
(Registrant)
Date: May 15, 1998 /S/ Gunther Braun
---------------------------------
Gunther Braun
Executive Vice President,
Finance and Administration, and
Chief Financial Officer
- 18 -
<PAGE>
-----------------------------------
Exhibit 11.1 - Earnings Per Share
-----------------------------------
Six Months Three Months
Ended March 31, Ended March 31,
---------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
Net income $ 3,971 $ 5,166 $ 1,934 $ 2,488
Weighted average
shares outstanding:
Basic 11,510,830 11,504,500 11,511,488 11,504,500
Diluted 11,599,326 11,578,531 11,605,529 11,587,364
========== ========== ========== ==========
Earnings per share:
Basic $ 0.34 $ 0.45 $ 0.17 $ 0.22
Diluted $ 0.34 $ 0.45 $ 0.17 $ 0.21
========== ========== ========== ==========
(1) Includes common-stock outstanding and common-stock
equivalent-stock options.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of Rofin-Sinar Technologies, Inc. and
Subsidiaries for the six-months ended March 31, 1998, and is qualified
in its entirety by reference to such consolidated financial statements.
</LEGEND>
<CIK> 0001019361
<NAME> ROFIN-SINAR TECHNOLOGIES, INC.
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> OCT-01-1997
<PERIOD-END> MAR-31-1998
<CASH> 38,280
<SECURITIES> 0
<RECEIVABLES> 32,059
<ALLOWANCES> (945)
<INVENTORY> 30,373
<CURRENT-ASSETS> 104,828
<PP&E> 37,495
<DEPRECIATION> (15,476)
<TOTAL-ASSETS> 134,439
<CURRENT-LIABILITIES> 43,348
<BONDS> 0
0
0
<COMMON> 115
<OTHER-SE> 84,228
<TOTAL-LIABILITY-AND-EQUITY> 134,439
<SALES> 58,173
<TOTAL-REVENUES> 58,173
<CGS> 36,164
<TOTAL-COSTS> 36,164
<OTHER-EXPENSES> 16,034
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 6,795
<INCOME-TAX> 2,824
<INCOME-CONTINUING> 3,971
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,971
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
BY-LAWS
OF
ROFIN-SINAR TECHNOLOGIES INC.
ARTICLE I
OFFICES
SECTION 1. Registered Office in Delaware. The address of the
registered office of Rofin-Sinar Technologies Inc. (hereinafter called the
"Corporation") in the State of Delaware shall be The Corporation Trust
Company, 1209 Orange Street, in the City of Wilmington, County of New
Castle, Delaware 19801, and the registered agent in charge thereof shall be
The Corporation Trust Company.
SECTION 2. Other Offices. The Corporation may have an office or
offices at any other place or places within or without the State of
Delaware.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meeting. The annual meeting of stockholders
for the election of directors and for the transaction of such other
business as may properly come before the meeting shall be held at such
place within or without the State of Delaware, and at such date and hour,
as shall be designated by the Board of Directors of the Corporation (the
"Board") and set forth in the notice or in a duly executed waiver of notice
thereof.
SECTION 2. Special Meetings. A special meeting of the
stockholders for any purpose or purposes may be called at any time by a
majority of the members of the Board or the Chairman of the Board of the
Corporation. A special meeting of stockholders of the Corporation may not
be called by any other person or persons. Any such meeting shall be held
at such place within or without the State of Delaware, and at such date and
hour, as shall be designated in the notice or in a duly executed waiver of
notice of such meeting.
Only such business as is stated in the written notice of a
special meeting may be acted upon thereat.
SECTION 3. Notice of Meetings. Except as otherwise provided by
law, written notice of each annual or special meeting of stockholders
stating the place, date and hour of the meeting, and, in the case of a
special meeting, the purpose or purposes for which the meeting is held,
shall be given personally or by first class mail to each stockholder
entitled to vote at such meeting, not less than 10 nor more than 60
calendar days before the date of the meeting. If mailed, such notice shall
be deemed to be given when deposited in the United States mail, postage
prepaid, directed to the stockholder at such stockholder's address as it
appears on the records of the Corporation. If, prior to the time of
mailing, the Secretary shall have received from any stockholder entitled to
vote a written request that notices intended for such stockholder are to be
mailed to an address other than the address that appears on the records of
the Corporation, notices intended for such stockholder shall be mailed to
the address designated in such request.
Notice of a special meeting may be given by the person or persons
calling the meeting, or, upon the written request of such person or
persons, by the Secretary of the Corporation on behalf of such person or
persons. If the person or persons calling a special meeting of
stockholders give notice thereof, such person or persons shall forward a
copy thereof to the Secretary. Every request to the Secretary for the
giving of notice of a special meeting of stockholders shall state the
purpose or purposes of such meeting.
SECTION 4. Waiver of Notice. Notice of any annual or special
meeting of stockholders need not be given to any stockholder entitled to
vote at such meeting who files a written waiver of notice with the
Secretary, duly executed by the person entitled to notice, whether before
or after the meeting. Neither the business to be transacted at, nor the
purpose of, any meeting of stockholders need be specified in any written
waiver of notice. Attendance of a stockholder at a meeting, in person or
by proxy, shall constitute a waiver of notice of such meeting, except as
provided by law.
SECTION 5. Adjournments. When a meeting is adjourned to another
date, hour or place, notice need not be given of the adjourned meeting if
the date, hour and place thereof are announced at the meeting at which the
adjournment is taken. If the adjournment is for more than 30 calendar
days, or if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the adjourned meeting. At the
adjourned meeting any business may be transacted which might have been
transacted at the original meeting.
When any meeting is convened the presiding officer, if directed
by the Board, may adjourn the meeting if (a) no quorum is present for the
transaction of business, or (b) the Board determines that adjournment is
necessary or appropriate to enable the stockholders (i) to consider fully
information which the Board determines has not been made sufficiently or
timely available to stockholders or (ii) otherwise to exercise effectively
their voting rights.
SECTION 6. Quorum. Except as otherwise provided by law or the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation"), whenever a class of stock of the Corporation is entitled
to vote as a separate class, or whenever classes of stock of the
Corporation are entitled to vote together as a single class, on any matter
brought before any meeting of the stockholders, whether annual or special,
holders of shares entitled to cast one-third of the votes entitled to be
cast by all the holders of the shares of stock of such class voting as a
separate class, or classes voting together as a single class, as the case
may be, outstanding and entitled to vote thereat, present in person or by
proxy, shall constitute a quorum at any such meeting of the stockholders.
If, however, such quorum shall not be present or represented at any such
meeting of the stockholders, the stockholders entitled to vote thereat may
adjourn the meeting from time to time in accordance with Section 5 of this
Article II until a quorum shall be present or represented.
SECTION 7. Voting. Unless otherwise provided in the Certificate
of Incorporation, each stockholder represented at a meeting of stockholders
shall be entitled to cast one vote for each share of capital stock entitled
to vote thereat held by such stockholder. Except as otherwise provided by
law or the Certificate of Incorporation or these By-Laws, when a quorum is
present with respect to any matter brought before any meeting of the
stockholders, the vote of the holders of shares entitled to cast a majority
of the votes entitled to be cast by all the holders of the shares
constituting such quorum shall decide any such matter. Votes need not be
by written ballot, unless the Board, in its discretion, or the officer of
the Corporation presiding at a meeting of stockholders, in his discretion,
requires any vote or votes cast at such meeting to be cast by written
ballot.
SECTION 8. Action by Consent. Any action may be taken by
written consent in lieu of a meeting of shareholders upon the consent of
the holders of 100% of the outstanding shares of the Corporation.
SECTION 9. Proxies. Each stockholder entitled to vote at a
meeting of stockholders may authorize another person or persons to act for
such stockholder by proxy. Such proxy shall be filed with the Secretary
before such meeting of stockholders at such time as the Board may require.
No proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period.
SECTION 10. Advance Notice of Business to Be Transacted at
Annual Meetings. (a) To be properly brought before the annual meeting of
stockholders, business must be either (i) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the
Board (or any duly authorized committee thereof), (ii) otherwise properly
brought before the meeting by or at the direction of the Board (or any duly
authorized committee thereof), or (iii) otherwise properly brought before
the meeting by any stockholder of the Corporation (A) who is a stockholder
of record on the date of the giving of the notice provided for in this
Section 10 and on the record date for the determination of stockholders
entitled to vote at such meeting and (B) who complies with the notice
procedures set forth in this Section 10. In addition to any other
applicable requirements, including but not limited to the requirements of
Rule 14a-8 promulgated by the Securities and Exchange Commission under the
Exchange Act, for business to be properly brought before an annual meeting
by a stockholder pursuant to clause (iii) of this Section 10(a), such
stockholder must have given timely notice thereof in proper written form to
the Secretary of the Corporation.
(b) To be timely, a stockholder's notice to the Secretary
pursuant to clause (iii) of Section 10(a) must be delivered to or mailed
and received at the principal executive offices of the Corporation, not
less than 60 days nor more than 90 days prior to the anniversary date of
the immediately preceding annual meeting of stockholders; provided,
however, that in the event that the annual meeting is called for a date
that is not within 30 days before or after such anniversary date, notice by
the stockholder in order to be timely must be so received not later than
the close of business on the tenth day following the day on which such
notice of the date of the annual meeting is mailed or such public
disclosure of the date of the annual meeting is made, whichever first
occurs.
(c) To be in proper written form, a stockholder's notice to the
Secretary pursuant to clause (iii) of Section 10(a) must set forth as to
each matter such stockholder proposes to bring before the annual meeting
(i) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (ii)
the name and record address of such stockholder, (iii) the class or series
and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, together with evidence
reasonably satisfactory to the Secretary of such beneficial ownership, (iv)
a description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a
representation that such stockholder intends to appear in person or by
proxy at the annual meeting to bring such business before the meeting.
(d) Notwithstanding anything in these By-laws to the contrary, no
business shall be conducted at the annual meeting of stockholders except
business brought before such meeting in accordance with the procedures set
forth in this Section 10; provided, however, that, once business has been
properly brought before such meeting in accordance with such procedures,
nothing in this Section 10 shall be deemed to preclude discussion by any
stockholder of any such business. If the chairman of such meeting
determines that business was not properly brought before the meeting in
accordance with the foregoing procedures, the chairman shall declare to the
meeting that the business was not properly brought before the meeting and
such business shall not be transacted.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. General Powers. The property, business and affairs
of the Corporation shall be managed by the Board, which may exercise all
such powers of the Corporation and do all such lawful acts and things as
are not by law or by the Certificate of Incorporation directed or required
to be exercised or done by the stockholders.
SECTION 2. Number and Term of Holding Office. Subject to the
rights, if any, of holders of preferred stock of the Corporation, the
number of directors which shall constitute the whole Board shall consist of
not less than three nor more than ten members, with the exact number of
directors initially to be equal to six and thereafter to be fixed by the
Board from time to time by a majority of the whole Board. The Board shall,
by resolution passed by a majority of the Board, designate the directors to
serve as initial Class I, Class II and Class III directors upon filing of
the Certificate of Incorporation with the Secretary of State of the State
of Delaware. Except as provided in Section 4 of this Article III,
directors shall be elected by a plurality of the votes cast at annual
meetings of stockholders, and each director so elected shall hold office as
provided by Article VIII of the Certificate of Incorporation. None of the
directors need be stockholders of the Corporation. Directors may not stand
for re-election after reaching age 70.
SECTION 3. Nomination of Directors and Advance Notice Thereof.
(a)Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation,
except as may be otherwise provided in the Certificate of Incorporation
with respect to the right of holders of preferred stock of the Corporation
to nominate and elect a specified number of directors in certain
circumstances. Nominations of persons for election to the Board may be
made at any annual meeting of stockholders, or at any special meeting of
stockholders called for the purpose of electing directors, (i) by or at the
direction of the Board (or any duly authorized committee thereof) or (ii)
by any stockholder of the Corporation (A) who is a stockholder of record on
the date of the giving of the notice provided for in this Section 3 and on
the record date for the determination of stockholders entitled to vote at
such meeting and (B) who complies with the notice procedures set forth in
this Section 3. In addition to any other applicable requirements, for a
nomination to be made by a stockholder pursuant to clause (ii) of this
Section 3(a), such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.
(b) To be timely, a stockholder's notice to the Secretary
pursuant to clause (ii) of Section 3(a) must be delivered to or mailed and
received at the principal executive offices of the Corporation (i) in the
case of an annual meeting, not less than 60 days nor more than 90 days
prior to the anniversary date of the immediately preceding annual meeting
of stockholders; provided, however, that in the event that the annual
meeting is called for a date that is not within 30 days before or after
such anniversary date, notice by the stockholder in order to be timely must
be so received not later than the close of business on the tenth day
following the day on which such notice of the date of the annual meeting is
mailed or such public disclosure of the date of the annual meeting is made,
whichever first occurs, or (ii) in the case of a special meeting of
stockholders called for the purpose of electing directors, not later than
the close of business on the tenth day following the day on which notice of
the date of the special meeting is mailed or public disclosure of the date
of the special meeting is made, whichever first occurs.
(c) To be in proper written form, a stockholder's notice to the
Secretary pursuant to clause (ii) of Section 3(a) must set forth (i) as to
each person whom the stockholder proposes to nominate for election as a
director, (A) the name, age, business address and residence address of the
person, (B) the principal occupation or employment of the person, (C) the
class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (D) any other
information relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection
with solicitations of proxies for election of directors pursuant to Section
14 of the Exchange Act and the rules and regulations promulgated
thereunder; and (ii) as to the stockholder giving the notice, (A) the name
and record address of such stockholder, (B) the class or series and number
of shares of capital stock of the Corporation which are owned beneficially
or of record by such stockholder, together with evidence reasonably
satisfactory to the Secretary of such beneficial ownership, (C) a
description of all arrangements or understandings between such stockholder
and each proposed nominee and any other person or persons (including their
names) pursuant to which the nomination(s) are to be made by such
stockholder, (D) a representation that such stockholder intends to appear
in person or by proxy at the meeting to nominate the persons named in its
notice and (E) any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each proposed nominee to being named as
a nominee and to serve as a director if elected.
(d) No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 3. If the chairman of the meeting determines that a
nomination was not made in accordance with the foregoing procedures, the
chairman of the meeting shall declare to the meeting that the nomination
was defective and such defective nomination shall be disregarded.
SECTION 4. Resignation. Any director may resign at any time by
giving written notice to the Board, the Chief Executive Officer or the
Secretary of the Corporation. Any such resignation shall take effect at
the time specified therein or, if the time when it shall become effective
shall not be specified therein, then it shall take effect when accepted by
action of the Board. Except as aforesaid, acceptance of such resignation
shall not be necessary to make it effective.
SECTION 5. Vacancies. Subject to the rights of the holders of
any series of Preferred Stock or any other class of capital stock of the
Corporation (other than the Common Stock) then outstanding, any vacancy in
the Board, arising from death, resignation, removal, an increase in the
number of directors or any other cause, may be filled only by the Board,
the stockholders acting at an annual meeting or, if the vacancy is with
respect to a director elected by a voting group, by action of any other
directors elected by such voting group or such voting group. Any director
elected to fill a vacancy shall hold office for a term that shall coincide
with the term of the class to which such director shall have been elected.
SECTION 6. Meetings. (a) Annual Meetings. As soon as
practicable after each annual election of directors, the Board shall meet
for the purpose of organization and the transaction of other business,
unless it shall have transacted all such business by written consent
pursuant to Section 7 of this Article III.
(b) Other Meetings. Other meetings of the Board shall be held at
such times as the Board shall from time to time determine or upon call by
the Chairman of the Board, the Chief Executive Officer, the President or
any two directors.
(c) Notice of Meetings. Regular meetings of the Board may be
held without notice. The Secretary of the Corporation shall give notice to
each director of each special meeting, including the time and place of such
special meeting. Notice of each such meeting shall be given to each
director either by mail, at least two days before the day on which such
meeting is to be held, or by telephone, telegram, facsimile, telex or cable
not later than the day before the day on which such meeting is to be held
or on such shorter notice as the person or persons calling such meeting may
deem necessary or appropriate in the circumstances. Notice of any meeting
shall not be required to be given to any director who shall attend such
meeting. A waiver of notice by the person entitled thereto, whether before
or after the time of any such meeting, shall be deemed equivalent to
adequate notice.
(d) Place of Meetings. The Board may hold its meetings at such
place or places within or without the State of Delaware as the Board may
from time to time by resolution determine or as shall be designated in the
respective notices or waivers of notice thereof.
(e) Quorum and Manner of Acting. Except as otherwise provided by
law, the Certificate of Incorporation or these By-Laws, a majority of the
total number of directors then in office shall be necessary at any meeting
of the Board in order to constitute a quorum for the transaction of
business at such meeting, and the affirmative vote of a majority of those
directors present at any such meeting at which a quorum is present shall be
necessary for the passage of any resolution or act of the Board. In the
absence of a quorum for any such meeting, a majority of the directors
present thereat may adjourn such meeting from time to time until a quorum
shall be present thereat. Notice of any adjourned meeting need not be
given.
(f) Organization and Order of Business. The Chairman of the
Board shall act as chairman of each meeting of the Board and preside
thereat, or, in the absence of the Chairman of the Board at any meeting of
the Board, the Chief Executive Officer shall act as chairman of such
meeting and preside thereat, or, in the absence of both the Chairman of the
Board and the Chief Executive Officer at any meeting of the Board, any
other director chosen by a majority of the directors present thereat shall
act as chairman of the meeting and preside thereat. The Secretary of the
Corporation or, in the case of his absence, any person whom the chairman of
the meeting shall appoint, shall act as secretary of such meeting and keep
the minutes thereof.
SECTION 7. Action by Consent. Any action required or permitted
to be taken at any meeting of the Board or of any committee thereof may be
taken without a meeting if a written consent or consents thereto is signed
by all members of the Board or such committee, as the case may be, and such
written consent or consents are filed with the minutes of the proceedings
of the Board or such committee.
SECTION 8. Meetings by Conference Telephone, etc. Any one or
more members of the Board, or of any committee thereof, may participate in
a meeting of the Board, or of such committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a
meeting by such means shall constitute presence in person at such meeting.
SECTION 9. Compensation. Each director, in consideration of his
serving as such, shall be entitled to receive from the Corporation such
amount per annum, if any, or such fees, if any, for attendance at meetings
of the Board or of any committee thereof, or both, as the Board shall from
time to time determine. The Board may likewise provide that the
Corporation shall reimburse each director or member of a committee for any
expenses incurred by him on account of his attendance at any such meeting.
Nothing contained in this Section 8 shall be construed to preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
ARTICLE IV
COMMITTEES
The Board, by resolution passed by a majority of the whole Board,
may designate members of the Board to constitute one or more committees
which shall in each case consist of such number of directors, not fewer
than two, and, to the extent permitted by law and provided in the
resolution establishing such committee, shall have and exercise all the
powers and authority of the Board in the management of the business and
affairs of the Corporation. The Board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified members at any meeting of any such committee. In the absence
or disqualification of a member of a committee, and in the absence of a
designation by the Board of an alternate member to replace the absent or
disqualified member, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any absent or disqualified member. A majority of
all the members of any such committee may fix its rules of procedure,
determine its action and fix the time and place, whether within or without
the State of Delaware, of its meetings and specify what notice thereof, if
any, shall be given, unless the Board shall otherwise by resolution
provide. The Board shall have power to change the members of any such
committee at any time, to fill vacancies therein and to discharge any such
committee, either with or without cause, at any time. Any committee, to
the extent allowed by law and provided in the resolution establishing such
committee, shall have and may exercise all the powers and authority of the
Board in the management of the business and affairs of the Corporation.
Each committee shall keep regular minutes and report to the Board when
required.
ARTICLE V
OFFICERS
SECTION 1. Executive Officers. The officers of the Corporation
shall be a Chairman of the Board, a Chief Executive Officer, a President,
one or more Vice Presidents, a Treasurer and a Secretary. Each such
officer shall be elected or appointed by the Board at its annual meeting
and shall hold office for such term as may be determined by the Board.
Each such officer shall hold office until the next succeeding annual
meeting of the Board and until his successor is elected or until his
earlier death or resignation or removal in the manner hereinafter provided.
Any two or more offices may be held by the same person. Officers need not
be directors or stockholders of the Corporation.
The Board may elect or appoint such other officers of the
Corporation (including one or more Assistant Vice Presidents, Assistant
Treasurers and Assistant Secretaries) as it deems necessary who shall have
such authority and shall perform such duties as the Board may prescribe.
If additional officers are elected or appointed, each of them shall hold
office until his successor is elected or appointed or until his earlier
death or resignation or removal in the manner hereinafter provided.
SECTION 2. Authority and Duties. All officers, as between
themselves and the Corporation, shall have such authority and perform such
duties in the management of the Corporation as may be provided in these By-
Laws or, to the extent not so provided, by resolution of the Board.
SECTION 3. Resignation and Removal. (a) Any officer may resign
at any time by giving written notice to the Board, the Chief Executive
Officer or the Secretary of the Corporation, and such resignation shall
take effect at the time specified therein or, if the time when it shall
become effective shall not be specified therein, when accepted by action of
the Board. Except as aforesaid, the acceptance of such resignation shall
not be necessary to make it effective.
(b) All officers and agents elected or appointed by the Board
shall be subject to removal at any time by the Board with or without cause.
SECTION 4. Vacancies. Any vacancy in any office may be filled
for the unexpired portion of the term in the same manner as provided for
election and appointment to such office.
SECTION 5. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the Board and at all meetings of the
stockholders and shall have and exercise such further powers and duties as
may from time to time be conferred upon or assigned to him by the Board.
SECTION 6. Chief Executive Officer. The Chief Executive Officer
of the Corporation, subject to the direction of the Board, shall have
general charge of the business and affairs of the Corporation, shall have
the direction of all other officers, agents and employees of the
Corporation and may assign such duties to the other officers of the
Corporation as he deems appropriate.
SECTION 7. President. The President of the Corporation, subject
to the direction of the Chief Executive Officer, shall have charge of the
day-to- day operations of the Corporation, shall assist the Chief Executive
Officer in carrying out the orders and resolutions of the Board and shall
perform such other duties as the Chief Executive Officer or the Board shall
from time to time assign. At the request of the Chief Executive Officer,
or in case of the absence or inability to act of the Chief Executive
Officer, the President, until otherwise determined, and subject to any
limitations imposed by the Board, shall assume the duties of the Chief
Executive Officer and, when so acting, but subject to the foregoing, shall
have all of the powers of, and be subject to all the restrictions upon, the
Chief Executive Officer.
SECTION 8. Vice Presidents. Each Vice President of the
Corporation shall have such powers and perform such duties as the Chief
Executive Officer or the Board may from time to time prescribe and shall
perform such other duties as may be prescribed by these By-laws.
SECTION 9. Treasurer. The Treasurer of the Corporation shall
have charge and custody of and be responsible for all funds and securities
of the Corporation.
SECTION 10. Secretary. The Secretary of the Corporation shall
keep the records of all meetings of the stockholders and the Board. He
shall affix the seal of the Corporation to all deeds, contracts, bonds or
other instruments requiring the corporate seal when the same shall have
been signed on behalf of the Corporation by a duly authorized officer and
shall be the custodian of all contracts, deeds, documents and all other
indicia of title to properties owned by the Corporation and of its other
corporate records.
ARTICLE VI
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 1. Execution of Documents. Any officer, employee or
agent of the Corporation designated by the Board (or any duly authorized
committee of the Board to the extent permitted by law) shall have power to
execute and deliver deeds, contracts, mortgages, bonds, debentures, checks,
drafts and other orders for the payment of money and other documents for
and in the name of the Corporation, and the Board (or such a committee) may
authorize any such officer, employee or agent to delegate such power
(including authority to redelegate) by written instrument to other
officers, employees or agents of the Corporation.
SECTION 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation or otherwise as the Board or the Chief Executive Officer or any
other officer of the Corporation to whom power in that respect shall have
been delegated by the Board shall select.
SECTION 3. Proxies in Respect of Stock or Other Securities of
Other Corporations. The Board or the Chief Executive Officer shall
designate the officers of the Corporation who shall have authority from
time to time to appoint an agent or agents of the Corporation to exercise
in the name and on behalf of the Corporation the powers and rights that the
Corporation may have as the holder of stock or other securities in any
other corporation, and to vote or consent in respect of such stock or
securities. Such designated officers may instruct the person or persons so
appointed as to the manner of exercising such powers and rights, and such
designated officers may execute or cause to be executed in the name and on
behalf of the Corporation and under its corporate seal, or otherwise, such
written proxies, powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise such powers
and rights.
ARTICLE VII
SHARES AND TRANSFER OF SHARES
SECTION 1. Certificates of Stock. Every owner of shares of
stock of the Corporation shall be entitled to have a certificate evidencing
the number of shares of stock of the Corporation owned by him or it and
designating the class of stock to which such shares belong, which shall
otherwise be in such form as the Board shall prescribe. Each such
certificate shall bear the signature (or a facsimile thereof) of the
Chairman of the Board or the Chief Executive Officer or the President or a
Vice President and the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary of the Corporation.
SECTION 2. Record. A record shall be kept of the name of the
person, firm or corporation owning the stock represented by each
certificate evidencing stock of the Corporation issued, the number of
shares represented by each such certificate, and the date thereof, and, in
the case of cancellation, the date of cancellation. Except as otherwise
expressly required by law, the person in whose name shares of stock stand
on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation.
SECTION 3. Transfer of Stock. (a) The transfer of shares of
stock and the certificates evidencing such shares of stock of the
Corporation shall be governed by Article 8 of Subtitle I of Title 6 of the
Delaware Code (the Uniform Commercial Code), as amended from time to time.
(b) Registration of transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation upon request
of the registered holder thereof, or of his attorney thereunto authorized
by power of attorney duly executed and filed with the Secretary of the
Corporation, and upon the surrender of the certificate or certificates
evidencing such shares properly endorsed or accompanied by a stock power
duly executed.
SECTION 4. Addresses of Stockholders. Each stockholder shall
designate to the Secretary of the Corporation an address at which notices
of meetings and all other corporate notices may be served or mailed to him,
and, if any stockholder shall fail to so designate such an address,
corporate notices may be served upon him by mail directed to him at his
post office address, if any, as the same appears on the share record books
of the Corporation or at his last known post office address.
SECTION 5. Lost, Destroyed or Mutilated Certificates. A holder
of any shares of stock of the Corporation shall promptly notify the
Corporation of any loss, destruction or mutilation of any certificate or
certificates evidencing all or any such shares of stock. The Board may, in
its discretion, cause the Corporation to issue a new certificate in place
of any certificate theretofore issued by it and alleged to have been
mutilated, lost, stolen or destroyed, upon the surrender of the mutilated
certificate or, in the case of loss, theft or destruction of the
certificate, upon satisfactory proof of such loss, theft or destruction,
and the Board may, in its discretion, require the owner of the lost, stolen
or destroyed certificate or his legal representative to give the
Corporation a bond sufficient to indemnify the Corporation against any
claim made against it on account of the alleged loss, theft or destruction
of any such certificate or the issuance of such new certificate.
SECTION 6. Facsimile Signatures. Any or all of the signatures
on a certificate evidencing shares of stock of the Corporation may be
facsimiles.
SECTION 7. Regulations. The Board may make such rules and
regulations as it may deem expedient, not inconsistent with the Certificate
of Incorporation or these By-Laws, concerning the issue, transfer and
registration of certificates evidencing stock of the Corporation. It may
appoint, or authorize any principal officer or officers to appoint, one or
more transfer agents and one or more registrars, and may require all
certificates of stock to bear the signature or signatures (or a facsimile
or facsimiles thereof) of any of them. The Board may at any time terminate
the employment of any transfer agent or any registrar of transfers. In
case any officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall cease to be
such officer, transfer agent or registrar, whether because of death,
resignation, removal or otherwise, before such certificate or certificates
shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued
and delivered as though the person or persons who signed or whose facsimile
signature has been placed upon such certificate or certificates had not
ceased to be such officer, transfer agent or registrar.
SECTION 8. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of, or to vote at, any
meeting of stockholders or any adjournment thereof, or entitled to receive
payment of any dividend or other distribution or allotment of any rights,
or entitled to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board
may fix, in advance, a record date, which shall not be more than sixty nor
less than ten days before the date of such meeting, nor more than sixty
days prior to any other such action. A determination of stockholders
entitled to notice of, or to vote at, any meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board
may fix a new record date for the adjourned meeting.
SECTION 9. Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its
records as the owner of shares of stock to receive dividends and to vote as
such owner, shall be entitled to hold liable for calls and assessments a
person registered on its records as the owner of shares of stock, and shall
not be bound to recognize any equitable or other claim to or interest in
such share or shares of stock on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise
provided by the laws of the State of Delaware.
SECTION 10. Stockholder Agreements. Shares of stock of the
Corporation may be subject to one or more agreements abridging, limiting or
restricting the rights of any one or more stockholders to sell, assign,
transfer, mortgage, pledge or hypothecate any or all of the stock of the
Corporation held by them, or may be subject to one or more agreements
providing a purchase option with respect to any shares of stock of the
Corporation. If such agreements exist, all certificates evidencing shares
of stock subject to such abridgements, limitations, restrictions or options
shall have reference thereto endorsed on such certificate and such stock
shall not thereafter be transferred on the books of the Corporation except
in accordance with the terms and conditions of such agreement or
agreements. Copies of such agreement or agreements shall be maintained at
the offices of the Corporation.
ARTICLE VIII
BOOKS AND RECORDS
The books and records of the Corporation may be kept at such
place or places within or without the State of Delaware as the Board may
from time to time determine.
ARTICLE IX
SEAL
The Board shall provide a corporate seal which shall bear the
full name of the Corporation.
ARTICLE X
FISCAL YEAR
The fiscal year of the Corporation shall be fixed, and shall be
subject to change from time to time, by the Board.
ARTICLE XI
INDEMNIFICATION
SECTION 1. General. The Corporation (a) shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that he is or was a
director or an officer of the Corporation, or is or was serving at the
request of the Corporation as a director or an officer of another
corporation, partnership, joint venture, trust or other enterprise, to the
full extent authorized or permitted by law, as now or hereafter in effect,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding 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 and (b) may
indemnify, if the Board of Directors determines such indemnification is
appropriate, any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the Corporation) by reason of the fact that he
is or was an employee or agent of the Corporation, or is or was serving at
the request of the Corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, to the
full extent authorized or permitted by law, as now or hereafter in effect,
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding 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 action, suit or 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, and, with respect
to any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
SECTION 2. Derivative Actions. The Corporation (a) shall
indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit 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 or an officer of the Corporation, or
is or was serving at the request of the Corporation as a director or an
officer of another corporation, partnership, joint venture, trust or other
enterprise, to the full extent authorized or permitted by law, as now or
hereafter in effect, against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement
of such action or suit 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 (b) may indemnify, if the Board of Directors determines
such indemnification is appropriate, any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit 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 an employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as an employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, to the full extent authorized or permitted by
law, as now or hereafter in effect, against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit 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; provided, however, that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable to the Corporation unless and
only to the extent that the Court of Chancery of the State of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
SECTION 3. Successful Defense. To the extent that (a) a
director or an officer of the Corporation, or (b) any other employee or
agent of the Corporation who the Board has authorized the Corporation to
indemnify, has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in sections 1 and 2 above, or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
SECTION 4. Proceedings Initiated by any Person. Notwithstanding
anything to the contrary contained in sections 1 or 2 above, except for
proceedings to enforce rights to indemnification, the Corporation shall not
be obligated to indemnify any person in connection with a proceeding (or
part thereof) initiated by such person unless such proceeding (or part
thereof) was authorized in advance, or unanimously consented to, by the
Board of Directors.
SECTION 5. Procedure. Any indemnification under sections 1 and
2 above (unless ordered 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 sections 1 and 2 above. Such determination shall be made (i) by a
majority vote of the directors who are not parties to such action, suit or
proceeding even though less than a quorum, or (ii) if there are no such
directors, or if such directors so direct, by independent legal counsel in
a written opinion, or (iii) by the stockholders.
SECTION 6. Advancement of Expenses. Expenses (including
attorneys' fees) incurred by a director or an officer in defending any
civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by or on
behalf of such director or officer to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation pursuant to this Article XI or as otherwise authorized by law.
Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the Board
of Directors deems appropriate.
SECTION 7. Rights Not Exclusive. The indemnification and
advancement of expenses provided by, or granted pursuant to, the other
subsections of this Article XI shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses
may be entitled under any by-law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
SECTION 8. Insurance. 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 the DGCL.
SECTION 9. Definition of "Corporation". For purposes of this
Article XI, references to "the Corporation" shall include, in addition to
the resulting corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority
to indemnify its directors, officers, employees or agents so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article XI
with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation if its separate existence had
continued.
SECTION 10. Certain Other Definitions. For purposes of this
Article XI, references to "other enterprises" shall include employee
benefit plans; references to "fines" shall include any excise taxes
assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves service by, such director, officer, employee
or agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in
a manner "not opposed to the best interests of the Corporation", as
referred to in this Article XI.
SECTION 11. Continuation of Rights. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article
XI shall, unless otherwise provided when authorized or ratified, continue
as 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.
SECTION 12. Repeal or Modification. Any repeal or modification
of this Article XI by the stockholders of the Corporation shall not
adversely affect any rights to indemnification and to advancement of
expenses that any person may have at the time of such repeal or
modification with respect to any acts or omissions occurring prior to such
repeal or modification.
ARTICLE XII
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or
repealed, or new by-laws may be made, but only to the extent any such
alteration, amendment, repeal or new by-law is not inconsistent with any
provision of the Certificate of Incorporation, either by a majority of the
whole Board or by the stockholders of the Corporation upon the affirmative
vote of the holders of 80% or more of the outstanding shares of capital
stock of the Corporation entitled to vote thereon.
