UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 21, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-12385
NEWPORT NEWS SHIPBUILDING INC.
(Exact name of registrant as specified in its charter)
Delaware 74-1541566
- ---------- -----------
State or Other Jurisdiction of IRS Employer
Incorporation or Organization Identification No.
4101 Washington Avenue, Newport News, Virginia 23607
- ---------------------------------------------- -----
Address of Principal Executive Offices Zip Code
(757) 380-2000
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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
Common Stock, par value $.01 per share: 34,948,663 shares as of
October 15, 1997.
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TABLE OF CONTENTS
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PAGE
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Part I--Financial Information
Newport News Shipbuilding Inc.
Statements of Earnings - Third Quarter.......................................................... 2
Statements of Earnings - Nine Months........................................................ 3
Consolidated Balance Sheets................................................................. 4
Statements of Cash Flows.................................................................... 5
Notes to Financial Statements............................................................... 6
Management's Discussion and Analysis of Financial Condition and Results of Operations....... 8
Part II--Other Information
Item 1. Legal Proceedings....................................................................... 11
Item 2. Changes in Securities and Use of Proceeds............................................... 11
Item 3. Defaults Upon Senior Securities......................................................... *
Item 4. Submission of Matters to a Vote of Security Holders..................................... *
Item 5. Other Information....................................................................... *
Item 6. Exhibits and Reports on Form 8-K........................................................ 11
</TABLE>
*No response to this item is included herein for the reason that it is
inapplicable or the answer to such item is negative.
THIS QUARTERLY REPORT ON FORM 10-Q SHOULD BE READ IN CONJUNCTION WITH THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996 AND
ITS QUARTERLY REPORTS ON FORM 10-Q FOR THE QUARTERS ENDED MARCH 26, 1997 AND
JUNE 22, 1997.
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PART I
FINANCIAL INFORMATION
NEWPORT NEWS SHIPBUILDING INC.
STATEMENTS OF EARNINGS
(UNAUDITED)
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Third Quarter Ended
-------------------------------------
September 21, September 30,
1997 1996
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Millions (Except Shares and Per Share Amounts) (Consolidated) (Combined)
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Revenues............................................................... $ 423 $ 522
Operating Costs and Expenses........................................... 409 486
Other Income (Expense), net............................................ 2 -
-------- ---------
Operating Earnings..................................................... 16 36
Interest Expense, net of interest capitalized.......................... 14 8
-------- ---------
Earnings Before Income Taxes........................................... 2 28
Provision for Income Taxes............................................. 1 13
-------- ---------
Net Earnings........................................................... $ 1 $ 15
======== =========
Weighted Average Number of Common Shares Outstanding................... 34,907,846 N/A
========== =========
Net Earnings Per Common Share.......................................... $ .05 $ N/A
======== =========
Dividends Declared Per Common Share.................................... $ .04 $ N/A
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</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these statements of earnings.
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PART I
FINANCIAL INFORMATION
NEWPORT NEWS SHIPBUILDING INC.
STATEMENTS OF EARNINGS
(UNAUDITED)
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Nine Months Ended
-------------------------------------
September 21, September 30,
1997 1996
-------------- -----------
Millions (Except Shares and Per Share Amounts) (Consolidated) (Combined)
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Revenues............................................................... $ 1,276 $ 1,437
Operating Costs and Expenses........................................... 1,190 1,320
Other Income (Expense), net............................................ 2 -
-------- ---------
Operating Earnings..................................................... 88 117
Interest Expense, net of interest capitalized.......................... 40 25
-------- ---------
Earnings Before Income Taxes........................................... 48 92
Provision for Income Taxes............................................. 20 40
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Net Earnings........................................................... $ 28 $ 52
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Weighted Average Number of Common Shares Outstanding................... 34,715,221 N/A
========== =========
Net Earnings Per Common Share.......................................... $ .82 $ N/A
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Dividends Declared Per Common Share.................................... $ .12 $ N/A
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</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these statements of earnings.
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NEWPORT NEWS SHIPBUILDING INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
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September 21, 1997 December 31, 1996
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Millions (Except Share Amounts)
ASSETS
Current Assets
Cash and Cash Equivalents......................................... $ 73 $ 1
Accounts Receivable............................................... 110 182
Contracts in Process.............................................. 217 258
Deferred Income Taxes............................................. 8 -
Inventory......................................................... 41 45
Other Current Assets.............................................. 8 5
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Total Current Assets.............................................. 457 491
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Noncurrent Assets
Property, Plant and Equipment, net................................ 801 836
Other Assets...................................................... 204 162
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Total Noncurrent Assets........................................... 1,005 998
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$ 1,462 $ 1,489
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Trade Accounts Payable............................................ $ 112 $ 123
Short-Term Debt................................................... 28 28
Deferred Income Taxes............................................. - 4
Accrued Liabilities & Other....................................... 140 101
--------- ---------
Total Current Liabilities......................................... 280 256
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Noncurrent Liabilities
Long-Term Debt.................................................... 552 596
Deferred Income Taxes............................................. 196 183
Postretirement Benefits........................................... 108 109
Other Long-Term Liabilities....................................... 61 113
Commitments and Contingencies (See Note 3)........................ --------- ----------
Total Noncurrent Liabilities...................................... 917 1,001
--------- ---------
Stockholders' Equity
Common Stock, $.01 par value -
authorized 70,000,000 shares; issued
and outstanding 34,925,489 shares at September 21, 1997,
and 34,297,451 shares at December 31, 1996................... 1 1
Paid-In Capital................................................... 253 245
Retained Earnings / (Accumulated Deficit)......................... 11 (14)
--------- ---------
Total Stockholders' Equity........................................ 265 232
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$ 1,462 $ 1,489
========= =========
</TABLE>
The accompanying notes to unaudited financial statements are an integral
part of these balance sheets.
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NEWPORT NEWS SHIPBUILDING INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
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Nine Months Ended
-------------------------------------
September 21, September 30,
1997 1996
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Millions (Consolidated) (Combined)
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Cash Flows from Operating Activities:
Net Earnings ........................................................... $ 28 $ 52
Adjustments to Reconcile Net Earnings Before Accounting Changes to
Net Cash Provided by Operating Activities -
Depreciation.................................................... 51 48
Deferred Income Taxes........................................... 9 (41)
Allocated Corporate Interest, net of tax........................ - 16
Changes in Components of Working Capital -
Decrease (Increase) in -
Accounts Receivable........................................ 73 (38)
Contracts in Process....................................... (20) (35)
Inventory.................................................. 4 6
Other Current Assets....................................... (3) (12)
Increase (Decrease) in -
Trade Accounts Payable..................................... (11) (33)
Accrued Liabilities & Other................................ 31 16
Other, net...................................................... (27) 25
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Net Cash Provided by Operating Activities................................ 135 4
------ -------
Cash Flows from Investing Activities:
Capital Expenditures..................................................... (16) (55)
Other.................................................................... (3) (11)
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Net Cash Used by Investing Activities.................................... (19) (66)
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Cash Flows from Financing Activities:
Cash Transfer from Former Parent......................................... - 61
Net Decrease in Revolving Credit Facility................................ (24) -
Payments on Long-Term Debt............................................... (21) -
Proceeds from Issuance of Common Stock................................... 9 -
Disbursements for Employee Stock Plans................................... (4) -
Dividends Paid........................................................... (4) -
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Net Cash (Used) Provided by Financing Activities......................... (44) 61
------ -------
Net Increase (Decrease) in Cash and Cash Equivalents..................... 72 (1)
Cash and Cash Equivalents at Beginning of Period......................... 1 2
------ -------
Cash and Cash Equivalents at End of Period............................... $ 73 $ 1
====== =======
Cash Paid During the Period for Income Taxes............................. $ 1 $ 67
====== =======
Cash Paid During the Period for Interest................................. $ 32 $ -
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</TABLE>
The accompanying notes to unaudited financial statements are an
integral part of these statements of cash flows.
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NEWPORT NEWS SHIPBUILDING INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PREPARATION
Unless the context otherwise requires, the term "Company" refers to Newport News
Shipbuilding Inc. ("NNS") and its consolidated subsidiaries. Although certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to SEC rules and regulations, the Company believes
that the disclosures included herein are adequate to make the information
presented not misleading. Operating results for the three and nine month periods
ended September 21, 1997, are not necessarily indicative of the results that may
be expected for the year ending December 31, 1997. These unaudited financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996 and its quarterly reports on Form 10-Q for the
quarters ended March 26, 1997 and June 22, 1997.
During the prior year, the Company reported quarterly results on a
calendar-month basis consistent with its former parent. Beginning in 1997, the
Company is reporting quarterly results on an accounting-month basis.
In the opinion of the Company's management, the unaudited financial statements
contain all adjustments (consisting only of normal recurring accruals) necessary
for a fair presentation.
2. EARNINGS PER SHARE
Because there is no significant dilution, net earnings per share is based upon
the weighted average number of common shares outstanding during the period. The
weighted average shares were 34.9 million and 34.7 million for the three and
nine months ended September 21, 1997, respectively. Since the Company was a
wholly-owned subsidiary prior to being spun off by its former parent on December
11, 1996, there are no comparable results for the prior periods.
3. COMMITMENTS AND CONTINGENCIES
Government Contracting
As a general practice within the defense industry, the Defense Contract Audit
Agency (the "DCAA") and other agencies continually review the cost accounting
practices of government contractors and conduct other various investigations. In
the course of those reviews, cost accounting and other issues are identified,
discussed and settled, or resolved through legal proceedings. The Company is
currently engaged in discussions on several cost accounting and other matters
the likely resolution of which, management believes, will not have a material
adverse effect on the Company's financial position or results of operations.
For example, the Company and its former parent have received letters from the
DCAA inquiring about certain aspects of the spinoff, including the disposition
of the former parent's retirement plan (the "FPRP"), which covers salaried
employees of the Company. In the event there is a determination that an amount
is due to the Government related to the FPRP, the Company and its former parent
will share the obligation for such amount, plus the amount of related defense
expenses, in the ratio of 20% and 80%, respectively. Also, the DCAA recently
conducted a post-award audit of the contract to build the aircraft carrier
Reagan. The audit concerned the Company's submission to the U.S. Navy of data
relating to labor and overhead costs in connection with the Reagan contract. A
draft audit report was presented to the Company on May 27, 1997 along with a
request for comments. The draft report is being reviewed and evaluated by the
Company. While the ultimate outcome of these issues is uncertain, and no
assurances can be given, it is not anticipated that they will have a material
adverse impact on the financial position or results of operations of
the Company.
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NEWPORT NEWS SHIPBUILDING INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Significant Estimates
From 1994 to 1996, the Company entered into fixed price contracts to construct a
total of nine Double Eagle product tankers. In January 1997, the Company, one of
the original purchasers and Mobil Oil Corporation ("Mobil") entered into an
agreement whereby Mobil agreed to acquire the first ship.
The first of the nine ships was delivered at the end of September 1997 and the
second ship is scheduled for delivery in late 1997. The remaining seven ships
are scheduled for delivery in 1998, 1999, and 2000. The Company has estimated
that it will incur construction costs of approximately $159 million in excess of
the fixed contract prices on these vessels and has reserved this amount through
charges against current year earnings ($57 million) and previous years' earnings
($102 million). The charge against current year earnings reflects the completion
of the design for the domestic class of ships and its anticipated impact on
delivery schedules, manning plans, and learning curve projections. Material
procurement and subcontractor cost estimates have also increased due to the
substantial design differences that exist between the international and domestic
classes of the Double Eagle product tanker.
The Company intends to continue to review this program at the end of each
quarter. There can be no assurance that the estimate of costs to be incurred on
these contracts will not be revised at that time based on the facts then known
to the Company.
Litigation
The Company is a defendant in matters of varying nature related to the normal
conduct of its business. In the opinion of management, the outcome of these
proceedings should not have a material adverse impact on the financial position
or results of operations of the Company.
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NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
BUSINESS OVERVIEW
The Company's primary business is the design, construction, repair, overhaul and
refueling of nuclear-powered aircraft carriers and submarines for the U.S. Navy.
The Company also provides ongoing maintenance for other U.S. Navy vessels
through work in overhauling, lifecycle engineering, and repair. The U.S.
Government accounted for approximately 90% and 94% of the Company's revenues for
the nine months ended September 21, 1997 and September 30, 1996, respectively.
RESULTS OF OPERATIONS
For the Third Quarter Ended
- -------------------------------------------------------------------------------
1997 1996
- --------------------------------------------------------------------------------
Millions
Revenues......................... $ 423 $ 522
Operating Earnings............... 16 36
Revenues for the quarter of $423 million were $99 million less than the level
reported for the same period in 1996. Commercial ship construction volume grew
in comparison to last year, but overall Construction revenues dropped in the
third quarter of 1997 due to the absence of submarine construction work and a
decrease in conversion work. Additionally, Overhaul & Repair revenues declined
as a result of the Eisenhower carrier delivery in January of 1997.
Third quarter 1997 operating earnings decreased $20 million over the prior year
third quarter. The earnings decline reflects a charge of $57 million to increase
loss reserves for Double Eagle product tankers, lower income contributions
associated with the completion of the Los Angeles-class submarine construction
program in 1996, and lower Overhaul & Repair income associated with the January
1997 delivery of the aircraft carrier Eisenhower. Partially offsetting these
decreases was the 1997 improvement in the Construction area reflecting strong
carrier contributions, particularly with respect to the Reagan contract, while
1996 was impacted by the recognition of commercial construction and Sealift
losses. In addition to the improvements in the carrier program, third quarter
1997 operating earnings were also favorably impacted by the recognition of an
increased asset related to postretirement benefits (PRB) and postemployment
benefits (PEB). The Company previously recorded assets for the portion of the
PRB and PEB liabilities that was recoverable under its government contracts.
Based on recent contract awards, such as for Roosevelt overhaul and repair work
and Nimitz planning, and the projected allocation of these costs to work
objectives, the Company expects to recover a larger portion of the reserves that
were originally established for these benefits.
For the Nine Months Ended
- --------------------------------------------------------------------------------
1997 1996
- --------------------------------------------------------------------------------
Millions
Revenues............................... $1,276 $ 1,437
Operating Earnings..................... 88 117
Revenues for the first nine months of 1997 decreased $161 million to $1,276
million compared with the 1996 period primarily due to the completion of the Los
Angeles-class submarine construction program in 1996 and less Overhaul & Repair
activity, partially offset by increased product tanker and carrier construction
revenue.
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NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Operating earnings for the first nine months of 1997 decreased $29 million over
the prior year period primarily due to lower income contributions associated
with the completion of the Los Angeles-class submarine construction program in
1996, lower Overhaul & Repair income associated with the January 1997 delivery
of the aircraft carrier Eisenhower, and one-time gains in 1996 attributable to
the mix of work and maturity of several contracts. Partially offsetting these
decreases was the 1997 improvement in the Construction area reflecting strong
carrier contributions, particularly with respect to the Reagan contract, and
recognition of an increased asset related to postretirement benefits and
postemployment benefits, while 1996 was impacted by the recognition of Sealift
losses.
The Company's backlog was $3.1 billion at September 21, 1997, substantially
all of which was U.S. Navy-related.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
The following table reflects the summarized components of the Company's cash
flows for the periods indicated:
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For the Nine Months Ended
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1997 1996
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Millions
Net cash provided by operating activities..................... $ 135 $ 4
Capital expenditures.......................................... (16) (55)
Other investing cash flows.................................... (3) (11)
------- -------
Subtotal...................................................... 116 (62)
Financing activities.......................................... (44) 61
------- -------
Net increase (decrease) in cash and cash equivalents.......... $ 72 $ (1)
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NET CASH PROVIDED BY OPERATING ACTIVITIES
The $131 million increase in 1997's comparative cash flows from operating
activities is primarily due to a decreased investment in working capital,
partially offset by lower operating earnings and higher interest payments as
compared to the prior year. (See "Debt and Interest Allocation" for a discussion
of 1996 interest expense). The lower operating earnings are attributable to the
factors discussed above in "Results of Operations." The reduction in working
capital was due to normal timing fluctuations and management initiatives, as
well as efforts by the Company to reduce accounts receivable balances.
Additionally, 1997 reflects lower tax payments due to the recognition of losses
previously deferred for tax purposes on commercial tankers and a net operating
loss carry forward from 1996.
<PAGE>
NEWPORT NEWS SHIPBUILDING INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
CAPITAL EXPENDITURES
The $39 million decrease in capital expenditures for the period ended September
21, 1997 compared to the period ended September 30, 1996 is attributable to
higher expenditures related to capital improvement programs during the prior
year. The 1996 capital improvement programs consisted principally of three
separate projects: (i) the development of a state-of-the-art automated steel
cutting and fabrication facility; (ii) the extension of a dry dock facility; and
(iii) the construction of the Carrier Refueling Complex. All three of these
projects were substantially complete at the end of 1996, thus explaining the
current period reduction in capital investments.
OTHER INVESTING CASH FLOWS
The 1997 and 1996 investing activities relate to an investment for a 49%
ownership interest in a vessel-owning limited partnership with a U.S. shipping
firm.
FINANCING ACTIVITIES
For the nine months ended September 30, 1996, the Company received $61 million
from its former parent to meet working capital needs and fund capital
expenditure requirements. The financing activities in 1997 reflect the receipt
of $9 million from the issuance of common stock related to the Company's benefit
plans. These funds, as well as those generated from operations, enabled the
Company to pay off long-term debt, to purchase Company stock on the open market
for employee benefit plans, and pay quarterly dividends of four cents per share.
DEBT AND INTEREST ALLOCATION
Results for the nine months ended September 30, 1996 reflect the Company's
former parent's historical practice to incur indebtedness for its consolidated
group at the parent company level or at a limited number of subsidiaries, rather
than at the operating company level, and centrally manage various cash
functions. Consequently, corporate debt of the former parent and its related
interest expense was allocated to the Company based on the portion of their
investment in the Company which was deemed to be debt, generally based upon the
ratio of the Company's net assets to the former parent's consolidated net assets
plus debt. Interest expense was allocated at a rate equivalent to the
weighted-average cost of all corporate debt. The Company was also allocated tax
benefits approximating 35% of the allocated pre-tax interest expense. Although
interest expense, and the related tax effects, were allocated to the Company for
financial reporting on a historical basis, the Company was not billed for these
amounts.
CAUTIONARY STATEMENT FOR PURPOSES OF "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q contains forward-looking statements
concerning, among other things, the Company's prospects, developments and
business strategies. These forward-looking statements are identified by their
use of such terms and phrases as "intends," "estimates," "expects," "projects,"
"anticipates," "should," "believes" and "scheduled." The Company's actual
results may differ materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include (i) the factors
discussed in Note 3 to the Company's Financial Statements, (ii) the factors
addressed in Management's Discussion and Analysis of Financial Condition and
Results of Operations, and (iii) the following factors: (a) general political,
economic and competitive conditions; (b) initiatives to reduce the federal
budget deficit and reductions in defense spending; (c) reductions in the volume
of U.S. Navy contracts awarded to the Company; and (d) unanticipated events
affecting delivery and production schedules or design and manufacturing
processes, thus impairing the Company's efforts to deliver its products on time
or to reduce production costs and cycle time or realize in a timely manner some
or all of the benefits, if any, of such reductions.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Reference is made to Note 3, "Commitments and Contingencies" to the Company's
Financial Statements contained herein, which is incorporated in this Item 1 of
Part II by reference.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
As of October 9, 1997, in connection with the Rights Agreement (the "Rights
Agreement"), dated December 11, 1996, as amended by Amendment No. 1 thereto,
between the Company and First Chicago Trust Company of New York, as Rights
Agent, the Company entered into Amendment No. 2 to the Rights Agreement
("Amendment No. 2"). Amendment No. 2 provides that Rights shall be issued in
respect of all shares of Common Stock that are issued (whether originally issued
or from the Company's treasury) after the Record Date but prior to (i) in the
case of shares of Common Stock issued pursuant to options or other stock-based
awards granted prior to the Distribution Date under any of the Company's
employee or director compensation plans now or hereafter in effect, the
Expiration Date, and (ii) in the case of all other issuances of Common Stock,
the earlier of the Distribution Date or the Expiration Date.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
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Exhibit 3.1 By-laws of Newport News Shipbuilding Inc. Amended and Restated as of October 9, 1997.
Exhibit 10.1 Amendment No.1 to Newport News Shipbuilding Inc. Stock Ownership Plan,
effective as of July 1, 1997.
Exhibit 10.2 Amendment No. 2 to Newport News Shipbuilding Inc. Stock Ownership Plan, effective as of October 9,
1997.
Exhibit 10.3 Amendment No. 3 to Newport News Shipbuilding Inc. Stock Ownership Plan, effective as of May 16,
1997.
Exhibit 10.4 Amendment No. 2 to 1997 Stock Plan for Directors of Newport News Shipbuilding Inc., effective as of
October 9, 1997.
Exhibit 10.5 Amendment No. 2 to Newport News Shipbuilding Inc. Change in Control Severance Benefit Plan for
Key Executives, effective as of October 9, 1997.
Exhibit 10.6 Amendment No. 2 to Rights Agreement, dated as of October 9, 1997.
Exhibit 11.1 Statement Re Computation of Per Share Earnings - Third Quarter
Exhibit 11.2 Statement Re Computation of Per Share Earnings - Nine Months Ended
Exhibit 27.1 Financial Data Schedule
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Newport News Shipbuilding Inc. filed a current report on Form 8-K on September
18, 1997. The Form 8-K was filed to report a $57 million charge to earnings
related to Double Eagle product tankers, and the extension of construction and
delivery schedules for the five domestic ships under contract.
<PAGE>
SIGNATURE
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.
Newport News Shipbuilding Inc.
By David J. Anderson
-------------------------------
Senior Vice President and
Chief Financial Officer
Date: November 4, 1997
Exhibit 3.1
BY-LAWS
OF
NEWPORT NEWS SHIPBUILDING INC.
AMENDED AND RESTATED AS OF OCTOBER 9, 1997
ARTICLE I
PLACE OF STOCKHOLDER MEETINGS
Section 1. All meetings of the stockholders of the corporation shall be
held at such place or places, within or without the State of Delaware, as may
from time to time be fixed by the Board of Directors of the corporation (the
"Board"), or as shall be specified or fixed in the respective notices or waivers
of notice thereof.
ANNUAL MEETING
Section 2. The Annual Meeting of Stockholders shall be held on such
date and at such time as may be fixed by the Board and stated in the notice
thereof, for the purpose of electing directors and for the transaction of only
such other business as is properly brought before the meeting in accordance with
these By-Laws.
To be properly brought before the meeting, business must be either (a)
specified in the notice of meeting (or any supplement thereto) given by or at
the direction of the Board, (b) otherwise properly brought before the meeting by
or at the direction of the Board, or (c) otherwise properly brought before the
meeting by a stockholder. In addition to any other applicable requirements, for
business to be properly brought before the Annual Meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to the Secretary of
the corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the corporation, not
less than 50 days nor more than 75 days prior to the meeting; provided, however,
that in the event that less than 65 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 15th day following the day on which such notice of the date of
the Annual Meeting was mailed or such public disclosure was made, whichever
first occurs. A stockholder's notice to the Secretary shall set forth as to each
matter the 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 the stockholder proposing such business, (iii) the class
and number of shares of the corporation which are beneficially owned by the
stockholder, and (iv) any material interest of the stockholder in such business.
Notwithstanding anything in these By-Laws to the contrary, no business
shall be transacted at the Annual Meeting except in accordance with the
procedures set forth in this Section, provided, however, that nothing in this
Section shall be deemed to preclude discussion by any stockholder of any
business properly brought before the Annual Meeting.
The Chairman of the Annual Meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the provisions of this Section, and if he
should so determine, he shall so declare to the meeting and any such business
not properly brought before the meeting shall not be transacted.
SPECIAL MEETING
Section 3. Subject to the rights of the holders of any series of
preferred stock, par value $.01 per share, of the corporation (the "Preferred
Stock") to elect additional directors under specified circumstances, special
meetings of the stockholders shall be called by the Board. The business
transacted at a special meeting shall be confined to the purposes specified in
the notice thereof. Special meetings shall be held at such date and at such time
as the Board may designate.
NOTICE OF MEETING
Section 4. Written notice of each meeting of stockholders, stating the
place, date and hour of the meeting, and the purpose or purposes thereof, shall
be mailed not less than ten nor more than sixty days before the date of such
meeting to each stockholder entitled to vote thereat.
QUORUM
Section 5. Unless otherwise provided by statute, the holders of shares
of stock entitled to cast a majority of votes at a meeting, present either in
person or by proxy, shall constitute a quorum at such meeting. The Secretary of
the corporation or in his absence an Assistant Secretary or an appointee of the
presiding officer of the meeting, shall act as the Secretary of the meeting.
VOTING
Section 6. Except as otherwise provided by law or the Restated
Certificate of Incorporation, each stockholder entitled to vote at any meeting
shall be entitled to one vote, in person or by written proxy, for each share
held of record on the record date fixed as provided in Section 4 of Article V of
these By-Laws for determining the stockholders entitled to vote at such meeting.
Except as otherwise provided by law, the Restated Certificate of Incorporation
or these By-Laws, the vote of a majority of any quorum shall be sufficient to
elect directors and to pass any resolution within the power of the holders of
all the outstanding shares.
Elections of directors need not be by written ballot; provided,
however, that by resolution duly adopted, a vote by written ballot may be
required.
PROXIES
Section 7. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period. A proxy shall be
irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument revoking the proxy or by
delivering a proxy in accordance with applicable law bearing a later date to the
Secretary of the corporation. In order to be exercised at a meeting of
stockholders, proxies shall be delivered to the Secretary of the corporation or
his representative at or before the time of such meeting.
INSPECTORS
Section 8. At each meeting of the stockholders the polls shall be
opened and closed; the proxies and ballots shall be received and be taken in
charge, and all questions touching the qualification of voters and the validity
of proxies and the acceptance or rejection of votes shall be decided by three
Inspectors, two of whom shall have power to make a decision. Such Inspectors
shall be appointed by the Board before the meeting, or in default thereof by the
presiding officer at the meeting, and shall be sworn to the faithful performance
of their duties. If any of the Inspectors previously appointed shall fail to
attend or refuse or be unable to serve, substitutes shall be appointed by the
presiding officer.
CONDUCT OF MEETINGS
Section 9. The date and time of the opening and the closing of the
polls for each matter upon which the stockholders will vote at a meeting shall
be announced at the meeting by the chairman of the meeting. The Board may adopt
by resolution such rules and regulations for the conduct of the meeting of
stockholders as it shall deem appropriate. Except to the extent inconsistent
with such rules and regulations as adopted by the Board, the chairman of any
meeting of 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 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) rules
and procedures for maintaining order at the meeting and the safety of those
present; (iii) 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;
(iv) restrictions on entry to the meeting after the time fixed for the
commencement thereof; and (v) limitations on the time allotted to questions or
comments by participants. Unless and to the extent determined by the Board or
the chairman of the meeting, meetings of stockholders shall not be required to
be held in accordance with the rules of parliamentary procedure.
ARTICLE II
BOARD OF DIRECTORS
NUMBER; METHOD OF ELECTION;
TERMS OF OFFICE AND QUALIFICATION
Section 1. The business and affairs of the corporation shall be managed
under the direction of the Board. The number of directors which shall constitute
the entire Board shall not be less than three nor more than sixteen and shall be
determined from time to time by resolution adopted by a majority of the entire
Board.
Nominations of persons for election to the Board of the corporation at
the Annual Meeting of Stockholders may be made at a meeting of stockholders by
or at the direction of the Board of Directors by any nominating committee or
person appointed by the Board or by any stockholder of the corporation entitled
to vote for the election of directors at the meeting who complies with the
notice procedures set forth in this Article II. Such nominations, other than
those made by or at the direction of the Board, shall be made pursuant to timely
notice in writing to the Secretary of the corporation. To be timely, a
stockholder's notice shall be delivered to or mailed and received at the
principal executive offices of the corporation not less than 50 days nor more
than 75 days prior to the meeting; provided, however, that in the event that
less than 65 days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the 15th day following the
day on which such notice of the date of the meeting was mailed or such public
disclosure was made, whichever first occurs. Such stockholder's notice to the
Secretary shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, (i) the name, age, business
address and residence of the person, (ii) the principal occupation or employment
of the person, (iii) the class and number of shares of capital stock of the
corporation which are beneficially owned by the person and (iv) any other
information relating to the person that is required to be disclosed in
solicitations for proxies for election of directors pursuant to Rule 14A under
the Securities Exchange Act of 1934 as amended; and (b) as to the stockholder
giving the notice (i) the name and record address of the stockholder and (ii)
the class and number of shares of capital stock of the corporation which are
beneficially owned by the stockholder. The corporation may require any proposed
nominee to furnish such other information as may reasonably be required by the
corporation to determine the eligibility of such proposed nominee to serve as
director of the corporation. No person shall be eligible for election as a
director of the corporation at the Annual Meeting of Stockholders unless
nominated in accordance with the procedures set forth herein. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that a nomination was not made in accordance with the foregoing procedure, and
if he should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
Any director may resign his office at any time by delivering his
resignation in writing to the corporation, and the acceptance of such
resignation unless required by the terms thereof shall not be necessary to make
such resignation effective.
No person who shall have attained the age of 72 shall be eligible for
election or reelection, as the case may be, as a director of the corporation,
except that the foregoing qualification shall not apply to any director who, at
the time of the adoption of these By-Laws, is then in office and has attained
such age.
MEETINGS
Section 2. The Board may hold its meetings and have an office in such
place or places within or without the State of Delaware as the Board by
resolution from time to time may determine.
The Board may in its discretion provide for regular or stated meetings
of the Board. Notice of regular or stated meetings need not be given. Special
meetings of the Board shall be held whenever called by direction of the Chief
Executive Officer, the President or any two of the directors.
Notice of any special meeting shall be given by the Secretary to each
director either by mail or by telegram, facsimile, telephone or other electronic
communication or transmission. If mailed, such notice shall be deemed adequately
delivered when deposited in the United States mails so addressed, with postage
thereon prepaid, at least three days before such meeting. If by telegram, such
notice shall be deemed adequately delivered when the telegram is delivered to
the telegraph corporation at least twenty-four hours before such meeting. If by
facsimile, telephone or other electronic communication or transmission, such
notice shall be transmitted at least twenty-four hours before such meeting.
Unless otherwise indicated in the notice thereof, any and all business may be
transacted at a special meeting.
Except as otherwise provided by applicable law, at any meeting at which
every director shall be present, even though without notice, any business may be
transacted. No notice of any adjourned meeting need be given.
The Board shall meet immediately after election, following the Annual
Meeting of Stockholders, for the purpose of organizing, for the election of
corporate officers as hereinafter specified, and for the transaction of any
other business which may come before it. No notice of such meeting shall be
necessary.
QUORUM
Section 3. Except as otherwise expressly required by these By-Laws or
by statute, a majority of the directors then in office (but not less than
one-third of the total number of directors constituting the entire Board) shall
be present at any meeting of the Board in order to constitute a quorum for the
transaction of business at such meeting, and the vote of a majority of the
directors present at any such meeting at which quorum is present shall be
necessary for the passage of any resolution or for an act to be the act of the
Board. In the absence of a quorum, a majority of the directors present may
adjourn such meeting from time to time until a quorum shall be present. Notice
of any adjourned meeting need not be given.
COMPENSATION OF BOARD OF DIRECTORS
Section 4. Each director (other than a director who is a salaried
officer of the corporation or of any subsidiary of the corporation), in
consideration of his serving as such, shall be entitled to receive from the
corporation such amount per annum and such fees for attendance at meetings of
the Board or of any committee of the Board (a "Committee"), or both, as the
Board shall from time to time determine. The Board may likewise provide that the
corporation shall reimburse each director or member of a Committee for any
expenses incurred by him on account of his attendance at any such meeting.
Nothing contained in this Section shall be construed to preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor.
ARTICLE III
COMMITTEES OF THE BOARD
COMMITTEES
Section 1. The Board shall elect from the directors an Executive
Committee, an Audit Committee, a Compensation Committee and any other Committee
which the Board may by resolution prescribe. Any such other Committee shall be
comprised of such persons and shall possess such authority as shall be set forth
in such resolution.
PROCEDURE
Section 2. (1) Each Committee shall fix its own rules of procedure and
shall meet where and as provided by such rules. Unless otherwise stated in these
By-Laws, a majority of a Committee shall constitute a quorum.
(2) In the absence or disqualification of a member of any Committee,
the members of such Committee present at any meeting, and not disqualified from
voting, whether or not they constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any such absent or
disqualified member. Fees in connection with such appointments shall be
established by the Board.
REPORTS TO THE BOARD
Section 3. All completed actions by the Executive, Audit and
Compensation Committees shall be reported to the Board at the next succeeding
Board meeting and shall be subject to revision or alteration by the Board,
provided, that no acts or rights of third parties shall be affected by any such
revision or alteration.
EXECUTIVE COMMITTEE
Section 4. The Board shall elect an Executive Committee comprised of
the Chief Executive Officer and not less than four additional members of the
Board. During the interval between the meetings of the Board, the Executive
Committee shall possess and may exercise all the powers of the Board in the
management and direction of all the business and affairs of the corporation
(except the matters hereinafter assigned to the Compensation Committee)
including, without limitation, the power and authority to declare dividends and
to authorize the issuance of stock, in such manner as the Executive Committee
shall deem best for the interests of the corporation in all cases in which
specific directions shall not have been given by the Board.
COMPENSATION COMMITTEE
Section 5. The Board shall elect a Compensation Committee consisting of
at least three members of the Board, none of whom shall be officers or employees
of the corporation or of any subsidiary corporation. The Board shall appoint a
chairman of such Committee who shall be one of its members. The Compensation
Committee shall have such authority and duties as the Board by resolution shall
prescribe.
AUDIT COMMITTEE
Section 6. The Board shall elect from among its members an Audit
Committee consisting of at least three members. The Board shall appoint a
chairman of said Committee who shall be one of its members. The Audit Committee
shall have such authority and duties as the Board by resolution shall prescribe.
In no event shall a director who is also an officer or employee of the
corporation or any of its subsidiary companies serve as a member of such
Committee. The Chief Executive Officer shall have the right to attend (but not
vote at) each meeting of such Committee.
NOMINATING AND MANAGEMENT DEVELOPMENT COMMITTEE
Section 7. The Board shall elect from among its members a Nominating
and Management Development Committee consisting of at least three members. The
Board shall appoint a chairman of said Committee who shall be one of its
members. The Nominating and Management Development Committee shall have such
authority and duties as the Board by resolution shall prescribe. In no event
shall a director who is also an officer or employee of the corporation or any of
its subsidiary companies serve as a member of such Committee. The Chief
Executive Officer shall have the right to attend (but not vote at) each meeting
of such Committee.
ARTICLE IV
OFFICERS
GENERAL PROVISIONS
Section 1. The corporate officers of the corporation shall consist of
the following: a Chairman and/or a President, one of whom shall be designated
Chief Executive Officer and each of whom shall be chosen from the Board; one or
more Vice Chairman, Executive Vice Presidents, Senior Vice Presidents, Vice
Presidents and Assistant Vice Presidents; a General Counsel, a Secretary, one or
more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers, a
Controller, and such other officers as the Board may from time to time
designate. Insofar as permitted by statute, the same person may hold two or more
offices. All officers chosen by the Board shall each have such powers and duties
as generally pertain to their respective offices, subject to the specific
provisions of this Article IV.
The Chairman and/or President, each Vice Chairman, Executive Vice
President, Senior Vice President and Vice President, the Secretary and the
Treasurer shall be elected by the Board. Each such officer shall hold office
until his successor is elected or appointed and qualified or until his earlier
death, resignation or removal.
Any officer may be removed, with or without cause, at any time by the
Board.
A vacancy in any office may be filled for the unexpired portion of the
term in the same manner as provided in these By-Laws for election or appointment
to such office.
POWERS AND DUTIES OF THE CHIEF EXECUTIVE OFFICER
Section 2. The Chief Executive Officer shall have general charge and
management of the affairs, property and business of the corporation, subject to
the Board, the Executive Committee and the provisions of these By-Laws. The
Chief Executive Officer or in his absence such other individual as the Board may
select, shall preside at all meetings of the stockholders. He shall also preside
at meetings of the Board and the Executive Committee, and in his absence the
Board or the Executive Committee, as the case may be, shall appoint one of their
number to preside.
The Chief Executive Officer shall perform all duties assigned to him in
these By-Laws and such other duties as may from time to time be assigned to him
by the Board. He shall have the power to appoint and remove, with or without
cause, such officers, other than those elected by the Board as provided for in
these By-Laws, as in his judgment may be necessary or proper for the transaction
of the business of the corporation, and shall determine their duties, all
subject to ratification by the Board.
POWERS AND DUTIES OF OTHER OFFICERS
Section 3. The Chairman shall perform such duties as may from time to
time be assigned to him by the Board, the Executive Committee or the Chief
Executive Officer.
Section 4. Each Vice Chairman shall perform such duties as may from
time to time be assigned to him by the Board, the Executive Committee or the
Chief Executive Officer.
Section 5. The President shall perform such duties as may from time to
time be assigned to him by the Board, the Executive Committee or the Chief
Executive Officer.
Section 6. Each Executive Vice President shall perform such duties as
may from time to time be assigned to him by the Board, the Executive Committee
or the Chief Executive Officer.
Section 7. Each Senior Vice President shall perform such duties as may
from time to time be assigned to him by the Board, the Executive Committee or
the Chief Executive Officer.
Section 8. Each Vice President and Assistant Vice President shall
perform such duties as may from time to time be assigned to him by the Board,
the Executive Committee, the Chief Executive Officer or an Executive Vice
President.
Section 9. The General Counsel shall have general supervision and
control of all of the corporation's legal business. He shall perform such other
duties as may be assigned to him by the Board, the Executive Committee or the
Chief Executive Officer.
Section 10. The Secretary or an Assistant Secretary shall record the
proceedings of all meetings of the Board, the Executive Committee of the Board
and the stockholders, in books kept for that purpose. The Secretary shall be the
custodian of the corporate seal, and he or an Assistant Secretary shall affix
the same to and countersign papers requiring such acts; and he and the Assistant
Secretaries shall perform such other duties as may be required by the Board, the
Executive Committee or the Chief Executive Officer.
Section 11. The Treasurer and Assistant Treasurers shall have care and
custody of all funds of the corporation and disburse and administer the same
under the direction of the Board, the Executive Committee or the Chief Executive
Officer and shall perform such other duties as the Board, the Executive
Committee or the Chief Executive Officer shall assign to them.
Section 12. The Controller shall maintain adequate records of all
assets, liabilities and transactions of the corporation and see that audits
thereof are currently and regularly made; and he shall perform such other duties
as may be required by the Board, the Executive Committee or the Chief Executive
Officer.
SALARIES AND APPOINTMENTS
Section 13. The salaries of corporate officers shall be fixed by the
Compensation Committee provided for in Section 5 of Article III hereof, except
that the fixing of salaries below certain levels, determinable from time to time
by the Compensation Committee, may in the discretion of the Committee be
delegated to the Chief Executive Officer, subject to the approval of the Board.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 14. (1) The corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person (an "Indemnitee") who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
appeals (a "proceeding"), by reason of the fact that he, or a person for whom he
is the legal representative, is or was a director or officer of the corporation
or, while a director or officer of the corporation, is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or nonprofit
entity, including service with respect to employee benefit plans, against all
liability and loss suffered and expenses (including attorneys' fees) reasonably
incurred by such Indemnitee. Notwithstanding the preceding sentence, except as
otherwise provided in paragraph (3) of this Section 14, the corporation shall be
required to indemnify an Indemnitee in connection with a proceeding (or part
thereof) commenced by such Indemnitee only if the commencement of such
proceeding (or part thereof) by the Indemnitee was authorized by the Board.
(2) The corporation shall pay the expenses (including attorneys' fees)
incurred by an Indemnitee in defending any proceeding in advance of its final
disposition, provided, however, that, to the extent required by law, such
payment of expenses in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Indemnitee to repay all
amounts advanced if it should be ultimately determined that the Indemnitee is
not entitled to be indemnified under this Section 14 or otherwise.
(3) If a claim for indemnification or payment of expenses under this
Section 14 is not paid in full within thirty days after a written claim therefor
by the Indemnitee has been received by the corporation, the Indemnitee may file
suit to recover the unpaid amount of such claim and, if successful in whole or
in part, shall be entitled to be paid the expense of prosecuting such claim. In
any such action the corporation shall have the burden of proving that the
Indemnitee is not entitled to the requested indemnification or payment of
expenses under applicable law.
(4) The rights conferred on any Indemnitee by this Section 14 shall not
be exclusive of any other rights which such Indemnitee may have or hereafter
acquire under any statute, provision of the Restated Certificate of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(5) The corporation's obligation, if any, to indemnify or to advance
expenses to any Indemnitee who was or is serving at its request as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust, enterprise or nonprofit entity shall be reduced by any amount such
Indemnitee may collect as indemnification or advancement of expenses from such
other corporation, partnership, joint venture, trust, enterprise or nonprofit
enterprise.
(6) Any repeal or modification of the foregoing provisions of this
Section 14 shall not adversely affect any right or protection hereunder of any
Indemnitee in respect of any act or omission occurring prior to the time of such
repeal or modification.
(7) This Section 14 shall not limit the right of the corporation, to
the extent and in the manner permitted by law, to indemnify and to advance
expenses to persons other than Indemnitees when and as authorized by appropriate
corporate action.
ARTICLE V
CAPITAL STOCK
CERTIFICATES OF STOCK
Section 1. Certificates of stock certifying the number of shares owned
shall be issued to each stockholder in such form not inconsistent with the
Restated Certificate of Incorporation as shall be approved by the Board. Such
certificates of stock shall be numbered and registered in the order in which
they are issued and shall be signed by the Chairman, the President or a Vice
President, and by the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary. Any and all the signatures on the certificates may be a
facsimile.
TRANSFER OF SHARES
Section 2. Transfers of shares shall be made only upon the books of the
corporation by the holder, in person, or by power of attorney duly executed and
filed with the Secretary of the corporation, and on the surrender of the
certificate or certificates of such shares, properly assigned. The corporation
may, if and whenever the Board shall so determine, maintain one or more offices
or agencies, each in charge of an agent designated by the Board, where the
shares of the capital stock of the corporation shall be transferred and/or
registered. The Board may also make such additional rules and regulations as it
may deem expedient concerning the issue, transfer and registration of
certificates for shares of the capital stock of the corporation.
LOST, STOLEN OR DESTROYED CERTIFICATES
Section 3. The corporation may issue a new certificate of capital stock
of the corporation in place of any certificate theretofore issued by the
corporation, alleged to have been lost, stolen or destroyed, and the corporation
may, but shall not be obligated to, require the owner of the alleged lost,
stolen or destroyed certificate, or his legal representatives, to give the
corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate, as the officers of the
corporation may, in their discretion, require.
FIXING OF RECORD DATE
Section 4. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is adopted
by the Board, and which record date: (1) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty nor
less than ten days before the date of such meeting; (2) in the case of
determination of stockholders entitled to express consent to corporate action in
writing without a meeting, shall not be more than ten days from the date upon
which the resolution fixing the record date is adopted by the Board; and (3) in
the case of any other action, shall not be more than sixty days prior to such
other action. If no record date is fixed by the Board: (1) 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; (2) the record date
for determining stockholders entitled to express consent to corporate action in
writing without a meeting shall be determined in accordance with Article VI of
these By-Laws; and (3) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board
adopts the resolution relating thereto. 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; provided, however, that the Board may fix a
new record date for the adjourned meeting.
ARTICLE VI
CONSENTS TO CORPORATE ACTION
RECORD DATE
Section 1. The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting shall be as
fixed by the Board or as otherwise established under this Section. Any person
seeking to have the stockholders authorize or take corporate action by written
consent without a meeting shall by written notice addressed to the Secretary and
delivered to the corporation, request that a record date be fixed for such
purpose. The Board may fix a record date for such purpose which shall be no more
than 10 days after the date upon which the resolution fixing the record date is
adopted by the Board and shall not precede the date such resolution is adopted.
If the Board fails within 10 days after the corporation receives such notice to
fix a record date for such purpose, the record date shall be the day on which
the first written consent is delivered to the corporation in the manner
described in Section 2 below unless prior action by the Board is required under
the General Corporation Law of Delaware, in which event the record date shall be
at the close of business on the day on which the Board adopts the resolution
taking such prior action.
PROCEDURES
Section 2. Every written consent purporting to take or authorizing the
taking of corporate action and/or related revocations (each such written consent
and related revocation is referred to in this Article VI as a "Consent") shall
bear the date of signature of each stockholder who signs the Consent, and no
Consent shall be effective to take the corporate action referred to therein
unless, within 60 days of the earliest dated Consent delivered in the manner
required by this Section 2, Consents signed by a sufficient number of
stockholders to take such action are delivered to the corporation.
A Consent 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 to the
corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested.
In the event of the delivery to the corporation of a Consent, the
Secretary of the corporation shall provide for the safe-keeping of such Consent
and shall promptly conduct such ministerial review of the sufficiency of the
Consents and of the validity of the action to be taken by shareholder consent as
he deems necessary or appropriate, including, without limitation, whether the
holders of a number of shares having the requisite voting power to authorize or
take the action specified in the Consent have given consent; provided, however,
that if the corporate action to which the Consent relates is the removal or
replacement of one or more members of the Board, the Secretary of the
corporation shall promptly designate two persons, who shall not be members of
the Board, to serve as Inspectors with respect to such Consent and such
Inspectors shall discharge the functions of the Secretary of the corporation
under this Section 2. If after such investigation the Secretary or the
Inspectors (as the case may be) shall determine that the Consent is valid and
that the action therein specified has been validly authorized, that fact shall
forthwith be certified on the records of the corporation kept for the purpose of
recording the proceedings of meetings of stockholders, and the Consent shall be
filed in such records, at which time the Consent shall become effective as
stockholder action. In conducting the investigation required by this Section 2,
the Secretary or the Inspectors (as the case may be) may, at the expense of the
corporation, retain special legal counsel and any other necessary or appropriate
professional advisors, and such other personnel as they may deem necessary or
appropriate to assist them, and shall be fully protected in relying in good
faith upon the opinion of such counsel or advisors.
ARTICLE VII
MISCELLANEOUS
DIVIDENDS AND RESERVES
Section 1. Dividends upon the capital stock of the corporation may be
declared as permitted by law by the Board or the Executive Committee at any
regular or special meeting. Before payment of any dividend or making any
distribution of profits, there may be set aside out of the surplus or net
profits of the corporation such sum or sums as the Board or the Executive
Committee, from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for such other purposes as the Board or
Executive Committee shall think conducive to the interests of the corporation,
and any reserve so established may be abolished and restored to the surplus
account by like action of the Board or the Executive Committee.
SEAL
Section 2. The seal of the corporation shall bear the corporate name of
the corporation, the year of its incorporation and the words "Corporate Seal,
Delaware".
WAIVER
Section 3. Whenever any notice whatever is required to be given by
statute or under the provisions of the Restated Certificate of Incorporation or
these By-Laws, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent thereto. Neither the business to be transacted at, nor the
purpose of, any annual or special meeting of the stockholders or the Board, as
the case may be, need be specified in any waiver of notice of such meeting.
FISCAL YEAR
Section 4. The fiscal year of the corporation shall begin with January
first and end with December thirty-first.
CONTRACTS
Section 5. Except as otherwise required by law, the Restated
Certificate of Incorporation or these By-Laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of the
corporation by such officer or officers of the corporation as the Board may from
time to time direct. Such authority may be general or confined to specific
instances as the Board may determine. The Chairman of the Board, the President
or any Vice President may execute bonds, contracts, deeds, leases and other
instruments to be made or executed for or on behalf of the corporation. Subject
to any restrictions imposed by the Board, the Chairman of the Board, the
President or any Vice President of the corporation may delegate contractual
powers to others under his jurisdiction, it being understood, however, that any
such delegation of power shall not relieve such officer of responsibility with
respect to the exercise of such delegated power.
PROXIES
Section 6. Unless otherwise provided by resolution adopted by the
Board, the Chairman of the Board, the President or any Vice President may from
time to time appoint an attorney or attorneys or agent or agents of the
corporation, in the name and on behalf of the corporation, to cast the votes
which the corporation may be entitled to cast as the holder of stock or other
securities in any other corporation or other entity, any of whose stock or other
securities may be held by the corporation, at meetings of the holders of the
stock or other securities of such other corporation or other entity, or to
consent in writing, in the name of the corporation as such holder, to any action
by such other corporation or other entity, and may instruct the person or
persons so appointed as to the manner of casting such votes or giving such
consent, and may execute or cause to be executed in the name and on behalf of
the corporation and under its corporate seal or otherwise, all such written
proxies or other instruments as he may deem necessary or proper in the premises.
AMENDMENTS
Section 7. The Board from time to time shall have the power to make,
alter, amend or repeal any and all of these By-Laws, but any By-Laws so made,
altered or repealed by the Board may be amended, altered or repealed by the
stockholders.
<PAGE>
CERTIFICATION
The undersigned hereby certifies that he is the duly elected and acting
Secretary of Newport News Shipbuilding Inc., a Delaware corporation, and the
keeper of its corporate records and minutes. The undersigned further hereby
certifies that the above and foregoing is a true and correct copy of the By-Laws
of said corporation, as in force at the date hereof.
WITNESS the hand of the undersigned and the seal of said corporation,
this 13th day of October, 1997.
------------------------------
Secretary
Exhibit 10.1
FIRST AMENDMENT TO
NEWPORT NEWS SHIPBUILDING INC. STOCK OWNERSHIP PLAN
The Newport News Shipbuilding Inc. Stock Ownership Plan is
hereby amended as follows, effective as of July 1, 1997
Section 8(c) of the Plan is amended to read as follows:
(c) Restricted Stock. The Committee may award Restricted Stock
to any Participant. Awards of Restricted Stock shall be subject to such
conditions and restrictions as are established by the Committee and set
forth in the Award Agreement, which may include, but are not limited
to, continued service with the Company, achievement of specific
business objectives, and other measurements of individual or business
unit or Company performance. Restricted Stock Awards shall have a
minimum vesting period of three years unless there is a specific
performance benchmark established, in which case the vesting period may
be a minimum of one year.
IN WITNESS WHEREOF, this amendment is hereby executed this 20th day of October,
1997.
NEWPORT NEWS SHIPBUILDING INC.
D. J. Anderson
------------------------------
Senior Vice President
ATTEST: Peter A. V. Huegel
-------------------------
Exhibit 10.2
SECOND AMENDMENT
TO
NEWPORT NEWS SHIPBUILDING INC. STOCK OWNERSHIP PLAN
The Newport News Shipbuilding Inc. Stock Ownership Plan (the "Plan") is
hereby amended as follows, effective as of October 9, 1997.
Section 7 of the Plan is amended by inserting at the end of the second
paragraph thereof the following:
"provided, that such adjustments shall be made by the Committee to all
outstanding Awards in the event of the occurrence of the `Distribution Date' and
the `Rights' becoming exercisable under the Company's Rights Agreement (the
"Rights Agreement") dated as of December 11, 1996 with First Chicago Trust
Company of New York, as Rights Agent, as amended, and any similar occurrence
under any substitute, replacement or successor to the Rights Agreement."
IN WITNESS WHEREOF, this amendment is hereby executed this 20th day of
October, 1997.
NEWPORT NEWS SHIPBUILDING INC.
David J. Anderson
---------------------------------
By:
Its: Senior Vice President
ATTEST: Peter A. V. Huegel
---------------------------
Assistant Secretary
Exhibit 10.3
THIRD AMENDMENT TO
NEWPORT NEWS SHIPBUILDING INC. STOCK OWNERSHIP PLAN
The Newport News Shipbuilding Inc. Stock Ownership Plan is
hereby amended as follows, effective as of May 16, 1997.
Section 6(a) of the Plan is amended by deleting the numeral
"4,000,000" and substituting therefore the numeral "5,250,000", by deleting the
numeral "12" and substituting therefore the numeral "15", and by inserting the
phrase "the Third Amendment to" between the words "of" and "the Plan". The
amended Section 6(a) shall read as follows:
6. Authorized Awards; Limitations
(a) Except for adjustments pursuant to Section 7, the maximum
number of shares of Common Stock that shall be available for issuance
under the Plan (the "Authorized Plan Shares") shall be 5,250,000
(approximately 15% of the issued and outstanding shares of Common Stock
on the effective date of the Third Amendment to the Plan).
IN WITNESS WHEREOF, this amendment is hereby executed this 20th day of October,
1997.
NEWPORT NEWS SHIPBUILDING INC.
D. J. Anderson
------------------------------
Senior Vice President
ATTEST: Peter A. V. Huegel
---------------------
Exhibit 10.4
SECOND AMENDMENT
TO
1997 STOCK PLAN FOR DIRECTORS
OF
NEWPORT NEWS SHIPBUILDING INC.
The 1997 Stock Plan For Directors Of Newport News Shipbuilding Inc.
(the "Plan") is hereby amended as follows, effective as of October 9, 1997.
Section IV (b) of the Plan is amended by inserting at the end of the
Section the following:
"The adjustments contemplated by this Section shall be made by the Committee to
all outstanding Awards in the event of the occurrence of the `Distribution Date'
and the `Rights' becoming exercisable under the Company's Rights Agreement (the
"Rights Agreement") dated as of December 11, 1996 with First Chicago Trust
Company of New York, as Rights Agent, as amended, and any similar occurrence
under any substitute, replacement or successor to the Rights Agreement."
IN WITNESS WHEREOF, this amendment is hereby executed this 20th day of
October, 1997.
NEWPORT NEWS SHIPBUILDING INC.
David J. Anderson
---------------------------------
By: David J. Anderson
Its: Senior Vice President
ATTEST: Peter A. V. Huegel
---------------------
Assistant Secretary
Exhibit 10.5
SECOND AMENDMENT
TO
NEWPORT NEWS SHIPBUILDING INC.
CHANGE IN CONTROL SEVERANCE BENEFIT PLAN
FOR
KEY EXECUTIVES
The Newport News Shipbuilding Inc. Change in Control Severance Benefit
Plan for Key Executives (the "Plan") is hereby amended as follows, effective as
of October 9, 1997.
Section 1A(1) of the Plan is amended by deleting from the Section the
words and numbers "twenty-five percent (25%)", in every instance that they
appear in the Section, and in every such instance substituting therefor the
words and numbers "twenty percent (20%)".
IN WITNESS WHEREOF, this amendment is hereby executed this 20th day of
October, 1997.
NEWPORT NEWS SHIPBUILDING INC.
David J. Anderson
---------------------------------
By: David J. Anderson
Its: Senior Vice President
ATTEST: Peter A. V. Huegel
----------------------
Assistant Secretary
Exhibit 10.6
AMENDMENT NO. 2 TO
RIGHTS AGREEMENT
This Amendment, dated as of October 9, 1997, to the Rights Agreement,
dated as of December 11, 1996 between Newport News Shipbuilding Inc. (the
"Company") and First Chicago Trust Company of New York, as Rights Agent (the
"Rights Agent"), as previously amended by an Amendment No. 1 dated as of March
25, 1997 (the "Rights Agreement"), provides:
WHEREAS, the Company now believes it is desirable to amend the Rights
Agreement in certain respects to clarify the treatment of certain options to
acquire common stock of the Company granted or to be granted pursuant to certain
employee benefit plans maintained by the Company; and
WHEREAS, such amendment is permitted by and in compliance with Section
26, clauses (ii) and (iv) of the Rights Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Rights Agent
hereby agree as follows:
1. Capitalized terms used, but not defined, herein shall have the
meanings set forth in the Rights Agreement.
2. The first sentence of Section 3(c) of the Rights Agreement is
amended to read as follows:
Rights shall be issued in respect of all shares of Common Stock that
are issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to (i) in the case of shares of Common
Stock issued pursuant to options or other stock-based awards granted
prior to the Distribution Date under any of the Company's employee or
director compensation plans now or hereafter in effect, the Expiration
Date, and (ii) in the case of all other issuances of Common Stock, the
earlier of the Distribution Date or the Expiration Date.
3. Except as amended hereby, the Rights Agreement shall remain in
effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the date and year first above written.
<PAGE>
ATTEST: NEWPORT NEWS SHIPBUILDING INC.
By Peter A. V. Huegel By Stephen B. Clarkson
------------------ -------------------
Name: Peter A. V. Huegel Name: Stephen B. Clarkson
Title: Assistant Secretary Title: Vice President, General Counsel
and Secretary
ATTEST: FIRST CHICAGO TRUST COMPANY
OF NEW YORK
By Craig Broomfield By Charles D. Keryc
-------------------------- --------------------------
Name: Craig Broomfield Name: Charles D. Keryc
Title: Assistant Vice President Title: Vice President
Exhibit 11.1, 3rd Quarter
Form 10-Q, Commission File Number 1-12385
NEWPORT NEWS SHIPBUILDING INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Third Quarter
--------------------------
1997 1996
------------- ---------
<S> <C>
Millions (Except Shares and Per Share Data)
NET EARNINGS:
Continuing Operations...................................................... $ 1 $ 15
Discontinued Operations.................................................... - -
------------- -------
$ 1 $ 15
============= =======
Weighted average common shares outstanding................................. 34,907,846 N/A
NET EARNINGS PER SHARE - PRIMARY:
Continuing Operations...................................................... $ .04 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .04 $ N/A
============= =======
Common shares from above................................................... 34,907,846 N/A
Assumed exercise of options (treasury stock method)........................ 860,862 N/A
------------- -------
35,768,708 N/A
============= =======
NET EARNINGS PER SHARE - FULLY DILUTED:
Continuing Operations...................................................... $ .04 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .04 $ N/A
============= =======
Common shares from above................................................... 34,907,846 N/A
Assumed exercise of options (treasury stock method)........................ 948,036 N/A
------------- -------
35,855,882 N/A
============= =======
</TABLE>
Exhibit 11.2, Nine Months Ended
Form 10-Q, Commission File Number 1-12385
NEWPORT NEWS SHIPBUILDING INC.
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
--------------------------
1997 1996
------------- ---------
<S> <C>
Millions (Except Shares and Per Share Data)
NET EARNINGS:
Continuing Operations...................................................... $ 28 $ 52
Discontinued Operations.................................................... - -
------------- -------
$ 28 $ 52
============= =======
Weighted average common shares outstanding................................. 34,715,221 N/A
NET EARNINGS PER SHARE - PRIMARY:
Continuing Operations...................................................... $ .80 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .80 $ N/A
============= =======
Common shares from above................................................... 34,715,221 N/A
Assumed exercise of options (treasury stock method)........................ 633,915 N/A
------------- -------
35,349,136 N/A
============= =======
NET EARNINGS PER SHARE - FULLY DILUTED:
Continuing Operations...................................................... $ .79 $ N/A
Discontinued Operations.................................................... - N/A
------------- -------
$ .79 $ N/A
============= =======
Common shares from above................................................... 34,715,221 N/A
Assumed exercise of options (treasury stock method)........................ 948,036 N/A
------------- -------
35,663,257 N/A
============= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE NEWPORT
NEWS SHIPBUILDING INC. BALANCE SHEET AS OF SEPTEMBER 21, 1997, AND THE RELATED
STATEMENT OF EARNINGS FOR THE NINE MONTHS ENDED SEPTEMBER 21, 1997 AND IS
QUALIFIED IN ITS ENTIRETY TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-21-1997
<CASH> 73
<SECURITIES> 0
<RECEIVABLES> 110
<ALLOWANCES> 0
<INVENTORY> 41
<CURRENT-ASSETS> 457
<PP&E> 1,609
<DEPRECIATION> 808
<TOTAL-ASSETS> 1,462
<CURRENT-LIABILITIES> 280
<BONDS> 400
0
0
<COMMON> 1
<OTHER-SE> 264
<TOTAL-LIABILITY-AND-EQUITY> 1,462
<SALES> 1,276
<TOTAL-REVENUES> 1,276
<CGS> 1,190
<TOTAL-COSTS> 1,190
<OTHER-EXPENSES> (2)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40
<INCOME-PRETAX> 48
<INCOME-TAX> 20
<INCOME-CONTINUING> 28
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28
<EPS-PRIMARY> .80
<EPS-DILUTED> .79
</TABLE>
