<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
(MARK ONE)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
OR
| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________________ TO _________________
Commission file number: 001-12391
--------------------------
PANAVISION INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3593063
- ----------------------------------------------- -------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6219 DE SOTO AVENUE
WOODLAND HILLS, CALIFORNIA 91367
- ----------------------------------------------- -------------------------
(Address of principal executive offices) (Zip code)
(818) 316-1000
Registrant's telephone number including area code
------------------------------
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES |X| NO | |
APPLICABLE ONLY TO CORPORATE ISSUERS:
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
As of May 12, 1999, there were 8,055,619 shares of Panavision Inc. Common
Stock outstanding.
<PAGE>
PANAVISION INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1999
PART I. FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Statements of Operations...............................................3
Condensed Consolidated Balance Sheets.........................................................4
Condensed Consolidated Statements of Cash Flows...............................................5
Notes to Condensed Consolidated Financial Statements..........................................6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.........9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.............................................................13
SIGNATURES............................................................................................14
</TABLE>
2
<PAGE>
PART I
ITEM 1. FINANCIAL STATEMENTS
The financial information herein, and management's discussion thereof,
include consolidated data for Panavision Inc. ("Registrant" or "Panavision") and
its subsidiaries. Registrant and its subsidiaries are sometimes herein referred
to collectively as the "Company".
PANAVISION INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
QUARTER ENDED
MARCH 31,
----------------------------
1999 1998
------------ ------------
<S> <C> <C>
Camera rental.......................................................... $ 31,113 $ 29,926
Lighting rental........................................................ 7,148 4,998
Sales and other........................................................ 8,756 8,230
------------ ------------
Total rental revenue and sales......................................... 47,017 43,154
Cost of camera rental.................................................. 15,575 14,542
Cost of lighting rental................................................ 6,173 4,601
Cost of sales and other................................................ 5,003 4,950
------------ ------------
Gross margin........................................................... 20,266 19,061
Selling, general and administrative expenses........................... 14,139 13,512
Research and development expenses...................................... 1,357 1,057
------------ ------------
Operating income....................................................... 4,770 4,492
Interest income........................................................ 91 166
Interest expense....................................................... (10,202) (2,294)
Foreign exchange gain (loss)........................................... (736) 277
Other income, net...................................................... 205 994
------------ ------------
Income (loss) before income taxes...................................... (5,872) 3,635
Income tax provision................................................... (201) (1,163)
------------ ------------
Net income (loss)...................................................... $ (6,073) $ 2,472
============ ============
Basic earnings (loss) per share........................................ $ (.75) $ .13
============ ============
Diluted earnings (loss) per share...................................... $ (.75) $ .13
============ ============
Shares used in computation - Basic..................................... 8,056 18,929
Shares used in computation - Diluted................................... 8,056 19,354
</TABLE>
See accompanying notes.
3
<PAGE>
PANAVISION INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PAR VALUE DATA)
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
(UNAUDITED)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents ............................ $ 4,193 $ 9,772
Accounts receivable
(net of allowance of $3,192 and $3,391) ............ 29,277 28,716
Inventories .......................................... 9,937 9,648
Prepaid expenses ..................................... 3,272 3,142
Income tax receivable ................................ 1,621 1,678
Other current assets ................................. 862 415
--------- ---------
Total current assets .................................... 49,162 53,371
Property, plant and equipment, net ...................... 213,240 213,306
Goodwill ................................................ 9,677 9,858
Other ................................................... 14,464 15,222
--------- ---------
Total assets ............................................ $ 286,543 $ 291,757
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY/(DEFICIENCY)
Current liabilities:
Accounts payable ..................................... $ 9,028 $ 7,470
Accrued liabilities .................................. 17,991 20,794
Current maturities of long-term debt ................. 6,009 4,814
--------- ---------
Total current liabilities ............................... 33,028 33,078
Long-term debt .......................................... 465,998 463,605
Deferred tax liabilities ................................ 6,755 6,862
Other liabilities ....................................... 2,046 1,977
Commitments and Contingencies
Stockholders' equity/(deficiency):
Preferred stock, $.01 par value; 2,000 shares
authorized;
no shares issued and outstanding ................... -- --
Common stock, $.01 par value; 50,000 shares
authorized; 8,056 shares issued and outstanding
at March 31, 1999, and December 31, 1998 ........... 81 81
Additional paid-in capital ........................... 168,032 168,032
Accumulated deficit .................................. (385,337) (379,264)
Accumulated other comprehensive loss ................. (4,060) (2,614)
--------- ---------
Total stockholders' equity/(deficiency) ............ (221,284) (213,765)
--------- ---------
Total liabilities and stockholders' equity/(deficiency) . $ 286,543 $ 291,757
========= =========
</TABLE>
See accompanying notes.
4
<PAGE>
PANAVISION INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
QUARTER ENDED MARCH 31,
-----------------------
1999 1998
--------- --------
OPERATING ACTIVITIES
Net income (loss) .................................. $ (6,073) $ 2,472
Adjustments to derive net cash provided by operating
activities:
Depreciation and amortization ................. 8,808 7,549
Gain on sale of property and equipment ........ (537) (1,021)
Amortization of discount on subordinated notes 3,894 --
Changes in operating assets and liabilities:
Accounts receivable ......................... (561) (287)
Inventories ................................. (289) 30
Prepaid expenses and other current assets ... (577) (3,490)
Accounts payable ............................ 1,558 (9)
Accrued liabilities ......................... (2,803) (968)
Other, net .................................... 559 2,892
--------- --------
Net cash provided by operating activities .......... 3,979 7,168
INVESTING ACTIVITIES
Capital expenditures ............................... (9,938) (15,627)
Proceeds from dispositions of fixed assets ......... 735 4,187
--------- --------
Net cash used in investing activities .............. (9,203) (11,440)
FINANCING ACTIVITIES
Borrowings under notes payable and credit agreement 3,000 --
Repayments of notes payable and credit agreement ... (3,314) (3,869)
Contribution from Warburg .......................... -- 3,041
Notes receivable from officers and key employees ... -- (103)
--------- --------
Net cash used in financing activities .............. (314) (931)
Effect of exchange rate changes on cash ............ (41) 18
--------- --------
Net decrease in cash and cash equivalents .......... (5,579) (5,185)
Cash and cash equivalents at beginning of period ... 9,772 11,020
--------- --------
Cash and cash equivalents at end of period ......... $ 4,193 $ 5,835
========= ========
SUPPLEMENTAL CASH FLOW INFORMATION
Interest paid during the period .................... $ 6,109 $ 2,316
Income taxes paid during the period ................ $ 597 $ 226
See accompanying notes.
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PREPARATION
The accompanying condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. The results of operations for interim periods are not
necessarily indicative of the results that may be expected for the fiscal year.
The condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and accompanying notes included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1998.
All terms used but not defined elsewhere herein have the meaning ascribed to
them in the Company's 1998 Annual Report on Form 10-K.
The condensed consolidated financial statements include the accounts of
Panavision, Panavision International, L.P. ("PILP") and PILP's majority-owned
subsidiaries. All significant intercompany amounts and transactions have been
eliminated.
Certain amounts in previously issued financial statements have been
reclassified to conform to the 1999 presentation.
2. THE PANAVISION RECAPITALIZATION
On June 4, 1998, as contemplated by (i) an Agreement of Recapitalization
and Merger, dated as of December 18, 1997 (the "Recapitalization Agreement"), by
and among PX Holding Corporation ("PX Holding"), PX Merger Corporation (the
"Merger Sub") and Panavision Inc. (the "Company"), and (ii) an Amended and
Restated Voting and Stockholders Agreement, dated as of April 16, 1998 (the
"Stockholders Agreement"), by and among Warburg Pincus Capital Company, L.P., a
Delaware limited partnership ("Warburg"), the Company and Mafco Holdings Inc.
("Mafco"), a Delaware corporation, the Company consummated a merger whereby
Merger Sub was merged with and into the Company (the "Merger"), with the Company
remaining as the surviving corporation.
As a result of the Merger, PX Holding, a wholly owned subsidiary of Mafco,
the sole stockholder of which is Ronald O. Perelman, has acquired an
approximately 91% controlling interest in the Company. Other stockholders own
approximately 9% of Panavision Common Stock.
The Merger has been accounted for as a leveraged recapitalization as there
has been a significant continuation of stockholder ownership.
6
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
3. INVENTORIES
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
MARCH 31, 1999 DECEMBER 31, 1998
-------------- -----------------
<S> <C> <C>
Finished goods ........................... $4,856 $4,608
Work-in-process .......................... 164 100
Component parts .......................... 1,977 1,930
Supplies ................................. 2,940 3,010
------ ------
$9,937 $9,648
====== ======
</TABLE>
4. USE OF ESTIMATES AND OTHER UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from such estimates.
The Company's future results could be adversely affected by a number of
factors, including without limitation, (a) a significant reduction in the number
of feature films produced; (b) competitive pressures arising from changes in
technology, customer requirements and industry standards; (c) an increase in
expenses related to new product initiatives and product development efforts; (d)
unfavorable foreign currency fluctuations; and (e) significant increases in
interest rates.
5. EARNINGS (LOSS) PER SHARE
The following table sets forth the computation for basic and diluted
earnings (loss) per share (in thousands, except per share information):
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
MARCH 31,
-------------------
1999 1998
-------------------
<S> <C> <C>
Numerator for basic and diluted earnings (loss) per share-net
income (loss) ............................................ $(6,073) $ 2,472
------- -------
Denominator:
Denominator for basic earnings (loss) per
share-weighted-average shares ........................ 8,056 18,929
Effect of dilutive securities-employee stock options ... -- 425
------- -------
Denominator for diluted earnings (loss)per
share-adjusted weighted-average shares ............... 8,056 19,354
Basic earnings (loss) per share ............................. $ (.75) $ .13
======= =======
Diluted earnings (loss) per share ........................... $ (.75) $ .13
======= =======
</TABLE>
7
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)
(UNAUDITED)
6. GEOGRAPHICAL AND BUSINESS SEGMENT INFORMATION
The following table presents revenue and other financial information by
business segment (in thousands):
<TABLE>
<CAPTION>
------------ ------------- ------------ ------------ -------------
THREE MONTHS ENDED NORTH ASIA
MARCH 31, 1999 AMERICA EUROPE PACIFIC CORPORATE TOTAL
------------ ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Revenue from
external customers........... $ 24,036 $ 18,324 $ 4,657 - $ 47,017
Intersegment revenue........... 2,595 779 - - 3,374
Operating profit (loss)........ 4,141 770 1,055 (1,196) 4,770
------------ ------------- ------------ ------------ -------------
THREE MONTHS ENDED NORTH ASIA
MARCH 31, 1998 AMERICA EUROPE PACIFIC CORPORATE TOTAL
------------ ------------- ------------ ------------ -------------
Revenue from
external customers........... $ 22,930 $ 15,788 $ 4,436 - $ 43,154
Intersegment revenue........... 1,908 734 - - 2,642
Operating profit (loss)........ 4,492 (271) 1,124 (853) 4,492
</TABLE>
7. COMPREHENSIVE INCOME (LOSS)
For the first quarter ended March 31, 1999 and 1998, comprehensive income
(loss) amounted to $(7,519,000) and $2,823,000, respectively. The difference
between net income (loss) and comprehensive income (loss) relates to the
Company's change in foreign currency translation adjustments.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1999 COMPARED TO QUARTER ENDED MARCH 31, 1998
Camera rental revenue increased $1.2 million, or 4.0%, to $31.1 million for
the quarter ended March 31, 1999 from $29.9 million for the quarter ended March
31, 1998. This increase was primarily due to an increase in commercial
production and television series in the Los Angeles market which resulted in
increased camera rental revenue of $1.9 million. This increase was partially
offset by a decrease in revenue from agents of $0.7 million.
Lighting rental revenue increased $2.1 million, or 42.0%, to $7.1 million
for the quarter ended March 31, 1999 from $5.0 million for the quarter ended
March 31, 1998. This increase was primarily due to an increase in revenue at Lee
Lighting in the U.K. of $2.1 million resulting from increased feature activity.
Sales and other revenue increased $0.6 million, or 7.3%, to $8.8 million
for the quarter ended March 31, 1999 from $8.2 million for the quarter ended
March 31, 1998. This increase was due primarily to an increase in sales at
Panavision Australia of $0.2 million, an increase in sales at the Lee Filters
operations of $0.2 million and other small increases throughout the Company.
Cost of camera rental increased $1.1 million, or 7.6%, to $15.6 million for
the quarter ended March 31, 1998 from $14.5 million for the quarter ended March
31, 1998. This increase was primarily due to increased cost of camera rental at
Panavision Woodland Hills of $0.6 million, at Panavision New Zealand of $0.2
million and other small increases throughout the Company. The increased costs
relate to the growth in camera rental revenue as well as additional depreciation
expense for newly manufactured equipment.
Cost of lighting rental increased $1.6 million, or 34.8%, to $6.2 million
for the quarter ended March 31, 1999 from $4.6 million for the quarter ended
March 31, 1998. The increase was primarily due to increased lighting rental
costs at Lee Lighting of $1.5 million resulting from the growth in lighting
rental revenue.
Cost of sales and other was $5.0 million for the quarter ended March 31,
1999 and 1998. Although sales and other revenue increased, cost of sales
remained constant primarily due to better overall margins in Australia.
Selling, general and administrative expenses increased $0.6 million, or
4.4%, to $14.1 million for the quarter ended March 31, 1999 from $13.5 million
for the quarter ended March 31, 1998. The increase was primarily due to an
increase in selling and distribution expenses at Panavision Woodland Hills of
$0.2 million, at Panavision U.K. of $0.2 million as well as other small
increases throughout the Company. The increases reflect an increase in salaries
and wages and sub-rental equipment expense.
Research and development expenses increased $0.3 million, or 27.3%, to $1.4
million for the quarter ended March 31, 1990 from $1.1 million for the quarter
ended March 31, 1998. This increase was primarily due to a change in timing of
material costs for projects within the quarter.
Net interest expense increased $8.0 million, to $10.1 million for the
quarter ended March 31, 1999 from $2.1 million for the quarter ended March 31,
1998. The increase was due to additional borrowings under the New Credit
Agreement and the Notes in connection with the Panavision Recapitalization.
9
<PAGE>
Net other expense was $0.5 million for the quarter ended March 31, 1999 as
compared to net other income of $1.3 million for the quarter ended March 31,
1998. This change was due to the fluctuation of foreign exchange rates between
quarters and a gain from the sale of two buildings in the U.K. of $0.8 million,
which was recognized in the first quarter of 1998.
The effective tax rates for the quarters ended March 31, 1999 and 1998 were
3.4% and 32.0%, respectively. The change in the effective tax rates between
periods was primarily due to the elimination of federal and state income taxes
(other than certain state minimum taxes) as a result of additional interest
expense related to the Panavision Recapitalization. The Company has not
reflected a federal tax benefit relating to its losses as it is more likely than
not that it will not be able to realize benefit for such losses in the future.
LIQUIDITY AND CAPITAL RESOURCES
The following table sets forth certain information from the Company's
Condensed Consolidated Statements of Cash Flows for the periods indicated (in
thousands):
THREE MONTHS
ENDED MARCH 31,
-------------------------
1999 1998
Net cash provided by (used in): -------- --------
Operating activities ......................... $ 3,979 $ 7,168
Investing activities ......................... (9,203) (11,440)
Financing activities ......................... (314) (931)
For the quarter ended March 31, 1999, cash provided by operating activities
was $4.0 million. Net loss of $6.1 million, adjusted for depreciation and
amortization of $12.7 million provided $6.6 million, which was decreased by $2.6
million from the net change in non-cash working capital and miscellaneous items.
Total investing activities of $9.2 million were comprised of capital
expenditures of $9.9 million, offset by $0.7 million of proceeds received from
the disposition of fixed assets. The majority of the capital expenditures were
used to manufacture camera rental systems and accessories. Cash used in
financing activities of $0.3 million was used as a reduction of outstanding
borrowings.
For the quarter ended March 31, 1998, cash provided by operating activities
was $7.2 million. Net income of $2.5 million, adjusted for depreciation and
amortization of $7.5 million, provided $10.0 million, which was decreased by
$2.8 million from the net change in non-cash working capital and miscellaneous
items. Total investing activities of $11.4 million were comprised of capital
expenditures of $15.6 million, offset by $4.2 million of proceeds received from
the disposition of fixed assets. The majority of the capital expenditures were
used to manufacture camera rental systems. Cash used in financing activities of
$0.9 million was used as a reduction of outstanding borrowings of $3.9 million
offset by a contribution from Warburg of $3.0 million.
The Company intends to use the cash provided by operating activities to
make additional capital expenditures to manufacture camera systems and
accessories and to purchase other rental equipment. Additional cash flow
provided by operating activities will be used to repay debt outstanding under
the New Credit Agreement. Although there can be no assurance, the Company
believes that its existing working capital together with borrowings under the
New Credit Agreement and anticipated cash flow from operating activities will be
sufficient to meet its expected operating and capital spending requirements for
the foreseeable future. The Company will not be required to pay interest on the
New Notes until August 1, 2002, which management believes will assist the
Company in implementing its growth strategy.
10
<PAGE>
Panavision currently anticipates that in order to pay the principal amount
at maturity of the New Notes or upon the occurrence of an Event of Default (as
defined in the New Notes), to redeem the New Notes or to repurchase the New
Notes upon the occurrence of a Change of Control (as defined in the New Notes),
Panavision will be required to adopt one or more alternatives, such as seeking
capital contributions or loans from its affiliates, refinancing its indebtedness
or selling its equity securities. None of the affiliates of the Company will be
required to make any capital contributions or other payments to the Company with
respect to the Company's obligations on the New Notes, and the obligations of
the Company with respect to the New Notes will not be guaranteed by any
affiliate of the Company or any other person. There can be no assurance that any
of the foregoing actions could be effected on satisfactory terms, that they
would be sufficient to enable the Company to make any payments in respect of the
New Notes when required or that any of such actions would be permitted by the
terms of the Indenture or the debt instruments of Panavision then in effect.
Panavision is a holding company whose only material asset is the capital
stock of and partnership interests in its subsidiaries. Panavision's principal
business operations are conducted by its subsidiaries, and Panavision has no
operations of its own. Accordingly, Panavision's only source of cash to pay its
obligations, is expected to be distributions with respect to its ownership
interests in its subsidiaries. There can be no assurance that Panavision's
subsidiaries will generate sufficient cash flow to pay dividends or distribute
funds to Panavision or that applicable state law and contractual restrictions,
including negative covenants contained in the debt instruments of such
subsidiaries, will permit such dividends or distributions.
YEAR 2000 COMPLIANCE
The Year 2000 problem is the result of computer programs that were written
using two digits rather than four to define the applicable year. Accordingly,
computer programs that have time-sensitive software may recognize a date using
'00' as the year 1900 rather than the year 2000. This could result in complete
system failure or improper operation of systems, such as miscalculations.
Potential problems of this nature could cause disruptions to operations
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar activities. To address the Year 2000 issues,
the Company is using a multi-phased concurrent approach. The phases include
awareness, assessment, remediation, validation and implementation.
The Company has completed its awareness and assessment phases of the Year
2000 project at all owned-and-operated locations. These phases centered on the
collection of information worldwide relative to system hardware, software and
programming issues which would need modification or replacement to ensure Year
2000 compliance. The assessment phase of the project with respect to the
Company's major customers and vendors is viewed as an ongoing process. The
Company has received a majority of the responses to its original information
requests circulated in 1998. However, the Company continues to request and
review updated information from certain key vendors and customers regarding the
continuing progress of their Year 2000 projects. At this time, the Company does
not believe that the costs associated with the Year 2000 issues applicable to
our vendors and customers will be material.
The remediation and validation phases of the project are complete as they
relate to the main computer system and programs in operation at the Company's
headquarters in Woodland Hills, California. The main accounting software and
proprietary rental tracking software have been corrected to allow for the Year
2000 issues. At most other entities, the remediation phase is substantially
complete and we are well into the validation phase. Both of these phases are
expected to be complete prior to June 30, 1999. The Company also anticipates
completing the validation phase relative to its major vendors and customers
prior to June 30, 1999. At that time, if there are key vendors who are not Year
2000 compliant, the Company's contingency plan is to locate replacement vendors
whose operations are Year 2000 compliant.
The Company estimates that it will have completed the implementation phase
relative to its internal systems and computer programs prior to June 30, 1999.
The Company currently believes that it will be able to modify, replace or
mitigate its affected systems in time to avoid any material detrimental impact
on its operations.
11
<PAGE>
The Company has incurred immaterial costs to date relative to Year 2000
issues. At this time, the Company does not believe that the upgrade costs
necessary for equipment and software will be material. The Company estimates
that future costs associated with Year 2000 issues may be approximately
$500,000.
While the Company is not presently aware of any significant exposure
relative to its systems not being properly remediated in a timely manner, there
can be no assurance that all Year 2000 remediation processes will be completed
and properly tested before the Year 2000, or that contingency plans will
sufficiently mitigate the risk of a Year 2000 readiness problem. If the Company
determines that it may be unable to remediate and properly test affected systems
in a timely manner, the Company intends to develop appropriate contingency plans
for any critical systems at the time such determination is made. An interruption
of the Company's ability to conduct its business, due to a Year 2000 readiness
problem, could have a material adverse effect on the Company. However, the
amount of potential liability and lost revenue, if any, cannot be reasonably
estimated at this time nor can the Company identify specifically the most likely
worst-case scenario.
Panavision is a leading designer and manufacturer of high-precision film
camera systems, comprising cameras, lenses and accessories for the motion
picture and television industries. Panavision systems are rented through its
domestic and international owned-and-operated facilities and agent network.
12
<PAGE>
PART II
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Restated Certificate of Incorporation of the Company.
3.2 Restated By-Laws of the Company.
27. Financial Data Schedule.
-----------------
(b) There are no Current Reports on Form 8-K filed in the first quarter of 1999.
13
<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.
PANAVISION INC.
Date: May 13, 1999 By: /S/ JOHN S. FARRAND
------------------------- ----------------------------------------
John S. Farrand
President and Chief Executive Officer
and Director
Date: May 13, 1999 By: /S/ JOSEPH P. PAGE
------------------------- ----------------------------------------
Joseph P. Page
Vice Chairman, Director,
Chief Administrative Officer and
acting Chief Financial Officer
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PANAVISION INC.
Section 1. The name of the corporation (the "Corporation") is:
PANAVISION INC.
Section 2. The address of its registered office in the State of
Delaware is 1209 Orange Street in the City of Wilmington, County of New Castle.
The name of its registered agent at such address is The Corporation Trust
Company.
Section 3. The nature of the business or purpose to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of the State of
Delaware.
Section 4. The total number of shares of stock which the Corporation
shall have authority to issue is 52,000,000 shares, consisting of 50,000,000
shares of Common Stock, par value $.01 per share and 2,000,000 shares of
Preferred Stock, each of which shall have a par value of $.01 per share. The
number of authorized shares of Common Stock or Preferred Stock may be increased
or decreased by the Board of Directors.
Section 5. The shares of Preferred Stock may be issued from time to
time in one or more series of any number of shares, provided that the aggregate
number of shares issued and not cancelled of any and all such series shall not
exceed the total number of shares of Preferred Stock hereinabove authorized, and
with distinctive serial designations, all as shall hereafter be stated and
expressed in the resolution or resolutions providing for the issuance of such
shares of Preferred Stock from time to time adopted by the Board of Directors
pursuant to authority so to do which is hereby vested in the Board of Directors.
Each series of shares of Preferred Stock may have such voting powers, full or
limited, or no voting powers, and such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as shall be stated in said resolutions providing for
the issuance of such shares of Preferred Stock.
Section 6. The Common Stock shall be subject to the express terms of
the Preferred Stock and any series thereof. Each share of Common Stock shall be
equal to each other share of Common Stock. The holders of shares of Common Stock
shall be entitled to one vote for each such share upon all proposals presented
to the stockholders on which the holders of Common. Stock are entitled to vote.
<PAGE>
Section 7. Except as may be provided by law, by this Certificate of
Incorporation or by the resolution or resolutions providing for the issuance of
any class or series of Preferred Stock, the Common Stock shall have the
exclusive right to vote for the election of directors and for all other
purposes, and holders of Preferred Stock shall not be entitled to receive notice
of any meeting of stockholders at which they are not entitled to vote.
Section 8. The Corporation shall be entitled to treat the person in
whose name any share of its stock is registered as the owner thereof for all
purposes and shall not be bound to recognize any equitable or other claim to, or
interest in, such share on the part of any person, whether or not the
Corporation shall have notice thereof, except as expressly provided by
applicable law.
Section 9. Intentionally omitted.
Section 10. In furtherance and not in limitation of the powers
conferred by statute, the by-laws of the Corporation may be made, altered,
amended or repealed by the stockholders or by a majority of the entire Board of
Directors.
Section 11. Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all
stockholders or class of stockholders of this Corporation, as the case may be,
and also on this Corporation.
Section 12. Elections of directors need not be by written ballot.
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Section 13. (a) The Corporation shall indemnify to the fullest extent
permitted under and in accordance with the laws of the State of Delaware 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 by reason of the fact that he is or
was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, trustee,
employee or agent of or in any other capacity with another corporation,
partnership, joint venture, trust or other enterprise, 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.
(b) Expenses incurred in defending a civil or criminal action, suit or
proceeding shall (in the case of any action, suit or proceeding against a
director or officer of the Corporation) be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding as authorized by
the Board of Directors upon receipt of an undertaking by or on behalf of the
indemnified person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Corporation as authorized in
this Section 13.
(c) The indemnification and other rights set forth in this Section 13
shall not be exclusive of any provisions with respect thereto in the by-laws or
any other contract or agreement between the Corporation and any officer,
director, employee or agent of the Corporation.
(d) Neither the amendment nor repeal of this Section 13, subparagraph
(a), (b) or (c), nor the adoption of any provision of this Certificate of
Incorporation inconsistent with Section 13, subparagraph (a), (b) or (c), shall
eliminate or reduce the effect of this Section 13, subparagraphs (a), (b) and
(c), in respect of any matter occurring before such amendment, repeal or
adoption of an inconsistent provision or in respect of any cause of action,
suit or claim relating to any such matter which would have given rise to a
right of indemnification or right to receive expenses pursuant to this Section
13, subparagraph (a), (b) or (c), if such provision had not been so amended or
repealed or if a provision inconsistent therewith had not been so adopted.
(e) No director shall be personally liable to the Corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except for any matter in respect of which such director (A) shall be liable
under Section 174 of the General Corporation Law of the State of Delaware or any
amendment
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thereto or successor provision thereto, or (B) shall be liable by reason that,
in addition to any and all other requirements for liability, he:
(i) shall have breached his duty of loyalty to the
Corporation or its stockholders;
(ii) shall not have acted in good faith or, in failing to
act, shall not have acted in good faith;
(iii) shall have acted in a manner involving intentional
misconduct or a knowing violation of law or, in failing to act, shall
have acted in a manner involving intentional misconduct or a knowing
violation of law; or
(iv) shall have derived an improper personal benefit.
If the General Corporation Law of the State of Delaware is amended
after the date hereof to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as so
amended.
Section 14. The Corporation shall have power to 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 General
Corporation Law of the State of Delaware.
Section 15. The Corporation reserves the right to amend this Amended
and Restated Certificate of Incorporation in any manner permitted by the
General Corporation Law of the State of Delaware, as amended from time to time,
and all rights and powers conferred herein on stockholders, directors and
officers, if any, are subject to this reserved power.
Section 16. The Corporation expressly elects not to be governed by
Section 203 of the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, PANAVISION INC. has caused this Amended and
Restated Certificate of Incorporation of the Corporation to be signed by the
undersigned, this 4th day of June, 1998.
PANAVISION INC.
By: /s/ William C. Scott
------------------------------
Name: William C. Scott
Title: Chief Executive
Officer
<PAGE>
Panavision Inc. By-Laws as adopted
through the merger with PX Merger
Corporation on June 4, 1998
BY-LAWS
OF
PX MERGER CORPORATION
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the Corporation
shall be in the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for the
election of directors or for any other purpose shall be held at such time and
place, either within or without the State of Delaware as shall be designated
from time to time by the Board of Directors.
<PAGE>
Section 2. Nature of Business at Meetings of Stockholders. No business
may be transacted at an annual meeting of stockholders, other than business that
is either (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors (or any duly authorized
committee thereof), (b) otherwise properly brought before the annual meeting by
or at the direction of the Board of Directors (or any duly authorized committee
thereof) or (c) otherwise properly brought before the annual meeting by any
stockholder of the Company (i) who is a stockholder of record on the date of the
giving of the notice provided for in this Section 2 and on the record date for
the determination of stockholders entitled to vote at such annual meeting and
(ii) who complies with the notice procedures set forth in this Section 2.
In addition to any other applicable requirements, for business to be
properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Secretary
of the Company.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Company not less
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than sixty (60) days nor more than ninety (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 thirty (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 (10th) day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
of the date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary
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 annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such stockholder, (iii) the
class or series and number of shares of capital stock of the Company which are
owned beneficially or of record by such stockholder, (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 stock-
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holder 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.
No business shall be conducted at the annual meeting of stockholders
except business brought before the annual meeting in accordance with the
procedures set forth in this Section 2; provided, however, that, once business
has been properly brought before the annual meeting in accordance with such
procedures, nothing in this Section 2 shall be deemed to preclude discussion by
any stockholder of any such business. If the Chairman of an annual meeting
determines that business was not properly brought before the annual 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.
Section 3. Special Meetings. Unless otherwise required by law, special
meetings of stockholders, for any purpose or purposes, may be called by either
(i) the Chairman of the Board of Directors, if there be one, (ii) the President
or (iii) the Board of Directors. The ability of the stockholders to call a
special meeting of
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stockholders is hereby specifically denied. The notice of meeting shall state
the purpose or purposes of the proposed meeting. At a Special Meeting of
Stockholders, only such business shall be conducted as shall be specified in
the notice of meeting (or any supplement thereto).
Section 4. Notice. Whenever stockholders are required or permitted to
take any action at a meeting, a written notice of the meeting shall be given
which shall state 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 called.
Unless otherwise required by law, the written notice of any meeting shall be
given not less than ten nor more than sixty days before the date of the meeting
to each stockholder entitled to vote at such meeting.
Section 5. Adjournments. Any meeting of the stockholders may be
adjourned from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting, the Corporation may transact any business which might have
been transacted at the original meeting. If the adjourn-
5
<PAGE>
ment is for more than thirty days, or if after the adjournment a new record
date is fixed for the adjourned meeting, notice of the adjourned meeting shall
be given to each stockholder of record entitled to vote at the meeting.
Section 6. Quorum. Unless otherwise required by law or the Certificate
of Incorporation, the holders of a majority of the capital stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business. A quorum, once established, shall not be broken by the
withdrawal of enough votes to leave less than a quorum. If, however, such
quorum shall not be present or represented at any meeting of the stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, in the manner
provided in Section 5, until a quorum shall be present or represented.
Section 7. Voting. Unless otherwise required by law, the Certificate
of Incorporation or these By-laws, any question brought before any meeting of
stockholders, other than the election of directors, shall be
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<PAGE>
decided by the vote of the holders of a majority of the total number of votes
of the capital stock represented and entitled to vote thereat, voting as a
single class. Unless otherwise provided in the Certificate of Incorporation,
and subject to Section 5 of Article V hereof, each stockholder represented at a
meeting of stockholders shall be entitled to cast one vote for each share of
the capital stock entitled to vote thereat held by such stockholder. Such votes
may be cast in person or by proxy but no proxy shall be voted on or after three
years from its date, unless such proxy provides for a longer period. The Board
of Directors, in its discretion, or the officer of the Corporation presiding at
a meeting of stockholders, in such officer's discretion, may require that any
votes cast at such meeting shall be cast by written ballot.
Section 8. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the Certificate of Incorporation, any action required or
permitted to be taken at any Annual or Special Meeting of Stockholders of the
Corporation, may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not
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<PAGE>
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted and shall be delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business, or
an officer or agent of the corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Every written consent shall bear the date of
signature of each stockholder who signs the consent and no written consent
shall be effective to take the corporate action referred to therein unless,
within sixty days of the earliest dated consent delivered in the manner
required by this Section 8 to the Corporation, written consents signed by a
sufficient number of holders to take action are delivered to the Corporation by
delivery to its registered office in the state of Delaware, its principal place
of business, or an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded. Prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent
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<PAGE>
shall be given to those stockholders who have not consented in writing and who,
if the action had been taken at a meeting, would have been entitled to notice
of the meeting if the record date for such meeting had been the date that
written consents signed by a sufficient number of holders to take the action
were delivered to the Corporation as provided above in this section.
Section 9. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make, at least ten days before every meeting of stockholders, a complete
list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be in-
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<PAGE>
spected by any stockholder of the Corporation who is present.
Section 10. Stock Ledger. The stock ledger of the Corporation shall be
the only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 9 of this Article II or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
Section 11. Conduct of Meetings. The Board of Directors of the
Corporation may adopt by resolution such rules and regulations for the conduct
of the meeting of the stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chairman of any meeting of the stockholders shall have the right
and authority to prescribe such rules, regulations and procedures and to do all
such acts as, in the judgment of such chairman, are appropriate for the proper
conduct of the meeting. Such rules, regulations or procedures, whether adopted
by the Board of Directors or prescribed by the chairman of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) the determination of when the
polls shall open and close for any given
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<PAGE>
matter to be voted on at the meeting; (iii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iv) limitations on
attendance at or participation in the meeting to stockholders of record of the
corporation, their duly authorized and constituted proxies or such other persons
as the chairman of the meeting shall determine; (v) restrictions on entry to the
meeting after the time fixed for the commencement thereof; and (vi) limitations
on the time allotted to questions or comments by participants.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of Directors
shall consist of not less than one nor more than fifteen members, the exact
number of which shall initially be fixed by the Incorporator and thereafter from
time to time by the Board of Directors. Except as provided in Section 2 of this
Article III, directors shall be elected by a plurality of the votes cast at the
Annual Meetings of Stockholders and each director so elected shall hold office
until the next Annual Meeting of Stockholders and until such director's
successor is duly elected and qualified, or until such director's earlier death,
resignation or removal. Any director may
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<PAGE>
resign at any time upon written notice to the Corporation. Directors need not
be stockholders.
Section 2. Vacancies. Unless otherwise required by law or the
Certificate of Incorporation, vacancies arising through death, resignation,
removal, an increase in the number of directors or otherwise may be filled by a
majority of the directors then in office, though less than a quorum, or by a
sole remaining director, and the directors so chosen shall hold office until the
next annual election and until their successors are duly elected and qualified,
or until their earlier death, resignation or removal.
Section 3. Duties and Powers. The business and affairs of the
Corporation shall be managed by or under the direction of the Board of
Directors which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws required to be exercised or done by the
stockholders.
Section 4. Meetings. The Board of Directors may hold meetings, both
regular and special, either within or without the State of Delaware. Regular
meetings of the Board of Directors may be held without notice at such time and
at such place as may from time to time
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<PAGE>
be determined by the Board of Directors. Special meetings of the Board of
Directors may be called by the Chairman, if there be one, or the President.
Notice thereof stating the place, date and hour of the meeting shall be given
to each director either by mail not less than forty-eight (48) hours before the
date of the meeting, by telephone or telegram on twenty-four (24) hours'
notice, or on such shorter notice as the person or persons calling such meeting
may deem necessary or appropriate in the circumstances.
Section 5. Quorum. Except as otherwise required by law or the
Certificate of Incorporation, at all meetings of the Board of Directors, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting of the time and
place of the adjourned meeting, until a quorum shall be present.
Section 6. Actions by Written Consent. Unless otherwise provided in
the Certificate of Incorporation,
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<PAGE>
or these By-Laws, any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be taken without a
meeting, if all the members of the Board of Directors or committee, as the case
may be, consent thereto in writing, and the writing or writings are filed with
the minutes of proceedings of the Board of Directors or committee.
Section 7. Meetings by Means of Conference Telephone. Unless otherwise
provided in the Certificate of Incorporation, members of the Board of
Directors of the Corporation, or any committee thereof, may participate in a
meeting of the Board of Directors or such committee by means of a 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 pursuant to this Section 7 shall constitute presence in person at such
meeting.
Section 8. Committees. The Board of Directors may designate one or
more committees, each committee to consist of one or more of the directors of
the Corporation. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of any such committee. In the absence or disqualifica-
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tion of a member of a committee, and in the absence of a designation by the
Board of Directors 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 such member or members constitute a
quorum, may unanimously appoint another member of the Board of Directors to act
at the meeting in the place of any absent or disqualified member. Any
committee, to the extent permitted by law and provided in the resolution
establishing such committee, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it. Each committee shall keep regular
minutes and report to the Board of Directors when required.
Section 9. Compensation. The directors may be paid their expenses, if
any, of attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors and/or a
stated salary as director, payable in cash or securities. No such payment shall
preclude any director from serving the Corporation in any other capacity and
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receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 10. Interested Directors. No contract or transaction between
the Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates
in the meeting of the Board of Directors or committee thereof which authorizes
the contract or transaction, or solely because the director or officer's vote is
counted for such purpose if (i) the material facts as to the director or
officer's relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and the Board
of Directors or committee in good faith authorizes the contract or transaction
by the affirmative votes of a majority of the disinterested directors, even
though the disinterested directors be less than a quorum; or (ii) the material
facts as to the director or officer's relationship or interest and as to
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the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a Treasurer.
The Board of Directors, in its discretion, also may choose a Chairman of the
Board of Directors (who must be a director) and one or more Vice Presidents,
Assistant Secretaries, Assistant Treasurers and other officers. Any number of
offices may be held by the same person, unless otherwise prohibited by law or
the Certificate of Incorporation. The officers of the Corporation need not be
stock-
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holders of the Corporation nor, except in the case of the Chairman of the Board
of Directors, need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors, at its first meeting held
after each Annual Meeting of Stockholders (or action by written consent of
stockholders in lieu of the Annual Meeting of Stockholders), shall elect the
officers of the Corporation who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be determined from
time to time by the Board of Directors; and all officers of the Corporation
shall hold office until their successors are chosen and qualified, or until
their earlier death, resignation or removal. Any officer elected by the Board
of Directors may be removed at any time by the affirmative vote of the Board of
Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other instruments
relating to securities owned by the Corporation may be execut-
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ed in the name of and on behalf of the Corporation by the President or any Vice
President or any other officer authorized to do so by the Board of Directors
and any such officer may, in the name of and on behalf of the Corporation, take
all such action as any such officer may deem advisable to vote in person or by
proxy at any meeting of security holders of any corporation in which the
Corporation may own securities and at any such meeting shall possess and may
exercise any and all rights and power incident to the ownership of such
securities and which, as the owner thereof, the Corporation might have
exercised and possessed if present. The Board of Directors may, by resolution,
from time to time confer like powers upon any other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman of the
Board of Directors, if there be one, shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman of the Board of
Directors shall be the Chief Executive Officer of the Corporation, unless the
Board of Directors designates the President as the Chief Executive Officer,
and, except where by law the signature of the President is required, the
Chairman of the Board of Directors shall possess the same power as the
President to sign all contracts, cer-
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tificates and other instruments of the Corporation which may be authorized by
the Board of Directors. During the absence or disability of the President, the
Chairman of the Board of Directors shall exercise all the powers and discharge
all the duties of the President. The Chairman of the Board of Directors shall
also perform such other duties and may exercise such other powers as may from
time to time be assigned by these By-Laws or by the Board of Directors.
Section 5. President. The President shall, subject to the control of
the Board of Directors and, if there be one, the Chairman of the Board of
Directors, have general supervision of the business of the Corporation and
shall see that all orders and resolutions of the Board of Directors are carried
into effect. The President shall execute all bonds, mortgages, contracts and
other instruments of the Corporation requiring a seal, under the seal of the
Corporation, except where required or permitted by law to be otherwise signed
and executed and except that the other officers of the Corporation may sign
and execute documents when so authorized by these By-Laws, the Board of
Directors or the President. In the absence or disability of the Chairman of the
Board of Directors, or if there be none, the President shall
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preside at all meetings of the stockholders and the Board of Directors. If
there be no Chairman of the Board of Directors, or if the Board of Directors
shall otherwise designate, the President shall be the Chief Executive Officer
of the Corporation. The President shall also perform such other duties and may
exercise such other powers as may from time to time be assigned to such officer
by these By-Laws or by the Board of Directors.
Section 6. Vice Presidents. At the request of the President or in the
President's absence or in the event of the President's inability or refusal to
act (and if there be no Chairman of the Board of Directors), the Vice
President, or the Vice Presidents if there is more than one (in the order
designated by the Board of Directors), shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. Each Vice President shall perform such
other duties and have such other powers as the Board of Directors from time to
time may prescribe. If there be no Chairman of the Board of Directors and no
Vice President, the Board of Directors shall designate the officer of the
Corporation who, in the absence of the President or in the event of the
inability or refusal of the President to act, shall
21
<PAGE>
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President.
Section 7. Secretary. The Secretary shall attend all meetings of the
Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for committees of the Board of
Directors when required. The Secretary shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the
Board of Directors, the Chairman of the Board of Directors or the President,
under whose supervision the Secretary shall be. If the Secretary shall be
unable or shall refuse to cause to be given notice of all meetings of the
stockholders and special meetings of the Board of Directors, and if there be no
Assistant Secretary, then either the Board of Directors or the President may
choose another officer to cause such notice to be given. The Secretary shall
have custody of the seal of the Corporation and the Secretary or any Assistant
Secretary, if there be one, shall have authority to affix the same to any
instrument requiring
22
<PAGE>
it and when so affixed, it may be attested by the signature of the Secretary or
by the signature of any such Assistant Secretary. The Board of Directors may
give general authority to any other officer to affix the seal of the
Corporation and to attest to the affixing by such officer's signature. The
Secretary shall see that all books, reports, statements, certificates and other
documents and records required by law to be kept or filed are properly kept or
filed, as the case may be.
Section 8. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall
23
<PAGE>
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of the office of the Treasurer and for the restoration to the
Corporation, in case of the Treasurer's death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property
of whatever kind in the Treasurer's possession or under the Treasurer's control
belonging to the Corporation.
Section 9. Assistant Secretaries. Assistant Secretaries, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Secretary, and in the absence of the Secretary or in
the event of the Secretary's disability or refusal to act, shall perform the
duties of the Secretary, and when so acting, shall have all the powers of and
be subject to all the restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if there be
any, shall perform such duties and have such powers as from time to time may be
assigned to them by the Board of Directors, the President, any Vice President,
if there be one, or the Treasurer, and in
24
<PAGE>
the absence of the Treasurer or in the event of the Treasurer's disability or
refusal to act, shall perform the duties of the Treasurer, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
Treasurer. If required by the Board of Directors, an Assistant Treasurer shall
give the Corporation a bond in such sum and with such surety or sureties as
shall be satisfactory to the Board of Directors for the faithful performance of
the duties of the office of Assistant Treasurer and for the restoration to the
Corporation, in case of the Assistant Treasurer's death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in the Assistant Treasurer's possession or
under the Assistant Treasurer's control belonging to the Corporation.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and powers.
25
<PAGE>
ARTICLE V
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number
of shares owned by such stockholder in the Corporation.
Section 2. Signatures. Any or all of the signatures on a certificate
may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.
Section 3. Lost Certificates. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the
26
<PAGE>
person claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or the owner's legal
representative, to advertise the same in such manner as the Board of Directors
shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed
or the issuance of such new certificate.
Section 4. Transfers. Stock of the Corporation shall be transferable
in the manner prescribed by law and in these By-Laws. Transfers of stock shall
be made on the books of the Corporation only by the person named in the
certificate or by such person's attorney lawfully constituted in writing and
upon the surrender of the certificate therefor, which shall be cancelled before
a new certificate shall be issued. No transfer of stock shall be valid as
against the Corporation for any purpose until it shall have been entered in the
stock records of
27
<PAGE>
the Corporation by an entry showing from and to whom transferred.
Section 5. Record Date.
(a) 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, the board of directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors, and which record date shall not be more
than sixty nor less than ten days before the date of such meeting. If no record
date is fixed by the Board of Directors, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; providing, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
28
<PAGE>
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date shall not be more than ten days after the date
upon which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in this State, its principal
place of business, or an officer or agent of the Corporation having custody of
the book in which proceedings of meetings of stockholders are recorded. Delivery
made to a corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested. If no record date has been fixed by
the Board of Directors and prior action by the Board of Directors is re-
29
<PAGE>
quired by law, the record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be at the close of
business on the day on which the Board of Directors adopts the resolutions
taking such prior action.
(c) In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders 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 of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
Section 6. Record Owners. The Corporation shall be entitled to
recognize the exclusive right of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and to hold liable
for calls and assessments a person registered on
30
<PAGE>
its books as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it shall have express or other notice thereof,
except as otherwise required by law.
ARTICLE VI
NOTICES
Section 1. Notices. Whenever written notice is required by law, the
Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, such notice may be given by mail,
addressed to such director, member of a committee or stockholder, at such
person's address as it appears on the records of the Corporation, with postage
thereon prepaid, and such notice shall be deemed to be given at the time when
the same shall be deposited in the United States mail. Written notice may also
be given personally or by telegram, telex or cable.
Section 2. Waivers of Notice. Whenever any notice is required by law,
the Certificate of Incorporation or these By-Laws, to be given to any director,
member of a committee or stockholder, a waiver thereof in writing, signed, by
the person or persons entitled to
31
<PAGE>
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto. Attendance of a person at a meeting, present in person or
represented by proxy, shall constitute a waiver of notice of such meeting,
except where the person attends the meeting for the express purpose of
objecting at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the requirements of the DGCL and the provisions of the
Certificate of Incorporation, if any, may be declared by the Board of Directors
at any regular or special meeting of the Board of Directors (or any action by
written consent in lieu thereof in accordance with Section 6 of Article III
hereof), and may be paid in cash, in property, or in shares of the
Corporation's capital stock. Before payment of any dividend, there may be set
aside out of any funds of the Corporation available for dividends such sum or
sums as the Board of Directors from time to time, in its absolute discretion,
deems proper as a reserve or re-
32
<PAGE>
serves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for any proper purpose, and the
Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
33
<PAGE>
ARTICLE VIII
INDEMNIFICATION
Section 1. Power to Indemnify in Actions, Suits or Proceedings other
than Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VIII, the Corporation 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 such person is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director or officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with such action, suit or proceeding if such person acted
in good faith and in a manner such person 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 such
34
<PAGE>
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, 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 such person
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 such person's conduct was unlawful.
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article VIII, the
Corporation 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 such person is or was a director or officer of the Corporation, or is
or was a director or officer of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
against expenses (including attorneys' fees)
35
<PAGE>
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good faith and in
a manner such person reasonably believed to be in or not opposed to the best
interests of the Corporation; except 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 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. Authorization of Indemnification. Any indemnification under
this Article VIII (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 or officer is proper in the circumstances
because such person has met the applicable standard of conduct set forth in
Section 1 or Section 2 of this Article VIII, as the case may be. Such
determination shall be made (i) by a majority vote of the
36
<PAGE>
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. To the extent, however, that a director or officer of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described above, or in defense of any claim, issue
or matter therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
therewith, without the necessity of authorization in the specific case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VIII, a person shall be deemed to have acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the Corporation, or, with respect to any criminal action
or proceeding, to have had no reasonable cause to believe such person's conduct
was unlawful, if such person's action is based on the records or books of
account of the Corporation or another enterprise, or on information supplied to
such person by the officers of the Corporation or another
37
<PAGE>
enterprise in the course of their duties, or on the advice of legal counsel for
the Corporation or another enterprise or on information or records given or
reports made to the Corporation or another enterprise by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Corporation or another enterprise. The term "another
enterprise" as used in this Section 4 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise of
which such person is or was serving at the request of the Corporation as a
director, officer, employee or agent. The provisions of this Section 4 shall
not be deemed to be exclusive or to limit in any way the circumstances in which
a person may be deemed to have met the applicable standard of conduct set forth
in Section 1 or 2 of this Article VIII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VIII, and
notwithstanding the absence of any determination thereunder, any director or
officer may apply to the Court of Chancery in the State of Delaware for
indemnification to the extent otherwise permissible under Sections 1 and 2 of
this
38
<PAGE>
Article VIII. The basis of such indemnification by a court shall be a
determination by such court that indemnification of the director or officer is
proper in the circumstances because such person has met the applicable
standards of conduct set forth in Section 1 or 2 of this Article VIII, as the
case may be. Neither a contrary determination in the specific case under
Section 3 of this Article VIII nor the absence of any determination thereunder
shall be a defense to such application or create a presumption that the
director or officer seeking indemnification has not met any applicable standard
of conduct. Notice of any application for indemnification pursuant to this
Section 5 shall be given to the Corporation promptly upon the filing of such
application. If successful, in whole or in part, the director or officer
seeking indemnification shall also be entitled to be paid the expense of
prosecuting such application.
Section 6. Expenses Payable in Advance. Expenses incurred by a
director or 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
39
<PAGE>
shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation as authorized in this Article VIII.
Section 7. Nonexclusivity of Indemnification and Advancement of
Expenses. The indemnification and advancement of expenses provided by or
granted pursuant to this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses
may be entitled under the Certificate of Incorporation, any By-Law, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in such person's official capacity and as to action in another capacity while
holding such office, it being the policy of the Corporation that
indemnification of the persons specified in Sections 1 and 2 of this Article
VIII shall be made to the fullest extent permitted by law. The provisions of
this Article VIII shall not be deemed to preclude the indemnification of any
person who is not specified in Section 1 or 2 of this Article VIII but whom the
Corporation has the power or obligation to indemnify under the provisions of
the General Corporation Law of the State of Delaware, or otherwise.
40
<PAGE>
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director or officer of the
Corporation, or is or was a director or officer of the Corporation serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such person's
status as such, whether or not the Corporation would have the power or the
obligation to indemnify such person against such liability under the provisions
of this Article VIII.
Section 9. Certain Definitions. For purposes of this Article VIII,
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 or officers, so that any person who is or was a director or officer
of such constituent corporation, or is or was a director or officer of such
constituent corporation serving at the request of such constituent corporation
as
41
<PAGE>
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise, shall stand in
the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued. For
purposes of this Article VIII, references to "fines" shall include any excise
taxes assessed on a person with respect to an 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 services by, such director or officer with
respect to an employee benefit plan, its participants or beneficiaries; and a
person who acted in good faith and in a manner such person 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 VIII.
Section 10. Survival of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by, or granted
pursuant
42
<PAGE>
to, this Article VIII shall, unless otherwise provided when authorized or
ratified, continue as to a person who has ceased to be a director or officer
and shall inure to the benefit of the heirs, executors and administrators of
such a person.
Section 11. Limitation on Indemnification. Notwithstanding anything
contained in this Article VIII to the contrary, except for proceedings to
enforce rights to indemnification (which shall be governed by Section 5
hereof), the Corporation shall not be obligated to indemnify any director or
officer in connection with a proceeding (or part thereof) initiated by such
person unless such proceeding (or part thereof) was authorized or consented to
by the Board of Directors of the Corporation.
Section 12. Idemnification of Employees and Agents. The Corporation
may, to the extent authorized from time to time by the Board of Directors,
provide rights to indemnification and to the advancement of expenses to
employees and agents of the Corporation similar to those conferred in this
Article VIII to directors and officers of the Corporation.
43
<PAGE>
ARTICLE IX
AMENDMENTS
Section 1. Amendments. These By-Laws may be altered, amended or
repealed, in whole or in part, or new By-Laws may be adopted by the
stockholders or by the Board of Directors, provided, however, that notice of
such alteration, amendment, repeal or adoption of new By-Laws be contained in
the notice of such meeting of stockholders or Board of Directors as the case
may be. All such amendments must be approved by either the holders of a
majority of the outstanding capital stock entitled to vote thereon or by a
majority of the entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article IX and
in these By-Laws generally, the term "entire Board of Directors" means the
total number of directors which the Corporation would have if there were no
vacancies.
* * *
Adopted as of: SEE Page #1
------------------------
Last Amended as of:___________________
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