<PAGE>
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 March 31, 2000
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: 333-32041
---------------
PRECISE TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
Delaware 25-1205268
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
501 Mosside Boulevard
North Versailles, Pennsylvania 15137-2553
(Address of principal executive offices) (Zip Code)
(412) 823-2100
(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
----- -----
As of May 12, 2000, one share of the Company's Common Stock was outstanding.
<PAGE>
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements 3
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
ITEM 3. Quantitative and Qualitative Disclosures About
Market Risk 12
PART II - OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 12
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
---- ----
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 468 $ 318
Accounts receivable, net 17,088 15,133
Inventories, net 7,861 6,352
Deposits on capital leases 4,026 5,276
Prepaid expenses and other 415 289
Deferred income taxes 683 683
-------------- ------------
Total current assets 30,541 28,051
Property, plant and equipment, net 50,776 44,950
Intangible and other assets, net 25,207 25,173
-------------- ------------
Total assets $106,524 $98,174
============== ============
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current Liabilities:
Current maturities of long-term debt $ 7,239 $ 5,722
Accounts payable 12,233 11,789
Accrued liabilities 7,014 4,639
Tooling deposits 2,575 1,292
-------------- ------------
Total current liabilities 29,061 23,442
Long-term debt, less current maturities 88,854 85,829
Deferred income taxes 1,247 1,247
Commitments and Contingencies -- --
Stockholder's deficit:
Common stock, no par value; 1,000 shares authorized,
and 1 share issued and outstanding at March 31, 2000 and
December 31, 1999, respectively 1 1
Additional paid-in-capital 3,555 3,555
Minimum pension liability (193) (193)
Retained deficit (16,001) (15,707)
-------------- ------------
Total stockholder's deficit (12,638) (12,344)
-------------- ------------
Total liabilities and stockholder's deficit $(106,524) $98,174
============== ============
</TABLE>
See accompanying notes.
3
<PAGE>
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------------------
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Net sales $30,692 $26,811
Cost of sales 24,793 20,761
-------------- -------------
Gross profit 5,899 6,050
Selling, general, and administrative 3,256 3,091
Amortization of intangible assets 254 254
-------------- -------------
Operating income 2,389 2,705
Other expense (income):
Interest expense 2,631 2,519
Other -- (1)
-------------- -------------
(Loss) income before income taxes (242) 187
Provision for income taxes 52 195
-------------- -------------
Net loss $ (294) $ (8)
============== =============
</TABLE>
See accompanying notes.
4
<PAGE>
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
---------------------------------
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Operating Activities:
Net loss $ (294) $ (8)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 2,002 1,970
Amortization of financing fees 126 139
(Gain)/loss on sale of fixed assets (1) 13
Changes in operating assets and liabilities:
Accounts receivable (1,955) (1,406)
Inventories (1,509) (1,364)
Deposits on capital leases 1,250 --
Prepaid expenses and other (541) (172)
Accounts payable 445 2,782
Accrued liabilities 2,374 2,025
Tooling deposits 1,284 560
------------- -----------
Net cash provided by operating activities 3,181 4,539
Investing Activities:
Capital expenditures (2,958) (377)
Proceeds from sale of fixed assets 1 --
------------- -----------
Net cash used in investing activities (2,957) (377)
Financing Activities:
Borrowings on revolving line of credit 10,600 5,200
Payments on revolving line of credit (9,800) (7,600)
Repayment of long-term debt (874) (912)
------------- -----------
Net cash used in financing activities (74) (3,312)
------------- -----------
Net increase in cash 150 850
Cash at beginning of period 318 240
------------- -----------
Cash at end of period $ 468 $ 1,090
============= ===========
</TABLE>
See accompanying notes.
5
<PAGE>
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
2000 1999
---- ----
(unaudited)
<S> <C> <C>
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 516 $ 266
============ ============
Income taxes, net of refund $ 50 $ 41
============ ============
Supplemental schedule of noncash investing and financing
activities:
Capital lease agreements for equipment $ 4,613 $ --
============ ============
</TABLE>
See accompanying notes.
6
<PAGE>
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
1. Financial Statement Presentation
The consolidated balance sheet at March 31, 2000, and the consolidated
statements of income and consolidated statements of cash flows for the periods
ended March 31, 2000 and 1999, have been prepared by Precise Technology, Inc.
("Precise"), without audit. In the opinion of Management, all recurring and
non-recurring adjustments necessary to present fairly the financial position,
results of operations and changes in cash flows at March 31, 2000 and for the
periods presented have been made.
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 Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required for complete financial statements prepared in accordance with
generally accepted accounting principles. It is suggested that these
consolidated financial statements be read in conjunction with the Company's
annual report on Form 10-K for the year ended December 31, 1999 which contains a
summary of the Precise's accounting principles and other information.
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 those estimates.
The results of operations for the period ended March 31, 2000 are not
necessarily indicative of the operating results to be expected for the full
year.
2. Inventories
The major components of inventories were as follows:
March 31, December 31,
2000 1999
------------------ ------------------
(unaudited)
Finished products $2,316 $1,998
Raw materials 2,564 1,815
Tooling and dies 2,981 2,539
------------------ ------------------
Total $7,861 $6,352
================== ==================
7
<PAGE>
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
3. Commitments and Contingencies
Precise is involved from time to time in lawsuits that arise in the
normal course of business. Precise actively and vigorously defends all lawsuits.
Management believes that there are no pending lawsuits that will have a material
affect on the Precise's financial position.
4. Long-Term Debt
On June 13, 1997, Precise entered into a $30 million Credit Agreement
with a financial institution, which expires in 2002. The Credit Agreement
contains certain covenants which require Precise to maintain leverage ratios,
fixed charge and interest coverage ratios and minimum net worth. The Credit
Agreement further limits capital expenditures, declaration of dividends and
other restricted payments, and additional indebtedness. The Credit Agreement
contains other operating covenants, including a restriction on the sale,
encumbrance or transfer of the Precise's assets or capital stock. The Credit
Agreement was amended, effective March 31, 1999. The amendment reduced the
borrowing capacity of Precise by allowing for draws of a specified percentage of
certain assets, determined on a monthly basis, up to a maximum of $30 million.
The borrowing capacity of Precise as of March 31, 2000, was approximately $16.6
million.
5. Segment Information
Precise has two reportable segments: injection molding and mold
manufacturing. Precise's injection molding segment produces high-volume, highly
engineered, precision thermoplastic products. Precise's mold manufacturing
segment has extensive tool and die manufacturing capabilities.
Precise evaluates performance and allocates resources based on gross
margin and/or market need. As a result, Precise does not allocate certain
general and administrative expenses to its operating segments including
depreciation, amortization and interest expense.
Precise's reportable segments are business units that offer different
products and services. The reportable segments are each managed separately
because they manufacture and distribute distinct products or services with
different production processes.
8
<PAGE>
PRECISE TECHNOLOGY, INC.
(A WHOLLY-OWNED SUBSIDIARY OF
PRECISE HOLDING CORPORATION)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2000
(Unaudited)
5. Segment Information - (continued)
Information by industry segment is set forth below:
<TABLE>
<CAPTION>
Three Months Ended March 31, 2000
---------------------------------------------------------------
Unallocated
Injection Mold Corporate Total
Molding Manufacturing Items Consolidated
-------------- ---------------- --------------- --------------
(in thousands)
<S> <C> <C> <C> <C>
Revenues from external customers $26,703 $3,989 $ -- $30,692
Segment gross margin 5,534 365 -- 5,899
Depreciation and amortization expense 1,540 261 201 2,002
Interest expense -- -- 2,631 2,631
Segment assets 59,073 12,142 35,309 106,524
Net capital expenditures 7,151 365 54 7,570
<CAPTION>
Three Months Ended March 31, 1999
---------------------------------------------------------------
Unallocated
Injection Mold Corporate Total
Molding Manufacturing Items Consolidated
-------------- ---------------- --------------- --------------
(in thousands)
<S> <C> <C> <C> <C>
Revenues from external customers $22,278 $ 4,533 $ -- $26,811
Segment gross margin 5,926 124 -- 6,050
Depreciation and amortization expense 1,358 263 349 1,970
Interest expense -- -- 2,519 2,519
Segment assets 48,287 13,174 33,993 95,454
Net capital expenditures 334 -- 43 377
</TABLE>
6. Subsequent Events
On May 5, 2000, Precise purchased all of the outstanding stock of Phaff
B.V., a private limited company, incorporated under the laws of the Netherlands.
The acquisition was financed with indebtedness under the Credit Agreement
totaling $11.1; $9.0 million of which was a term loan and $2.1 of which was a
draw on Precise's revolving line of credit. The acquisition was accounted for as
a purchase in accordance with generally accepted accounting principles. The
purchase price will be allocated to acquired assets based upon the fair market
values at the date of the acquisition, with any remaining amount being allocated
to goodwill. This allocation will be made within one year of the acquisition
date.
9
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
On May 5, 2000, Precise purchased all of the outstanding stock of Phaff B.V., a
limited liability company, incorporated under the laws of the Netherlands. The
acquisition was financed with a $9.0 million term loan and a $2.1 million draw
on Precise's revolving line of credit.
Precise's operating data for the three months ended March 31, 2000 and 1999 are
set forth below as percentages of net sales:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
2000 1999
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of sales 80.8 77.4
------------- ------------
Gross profit 19.2 22.6
Selling, general and administrative 10.6 11.5
Amortization of intangible assets 0.8 1.0
------------- ------------
Operating income 7.8 10.1
Other expense (income):
Interest expense 8.6 9.4
Other 0.0 (0.0)
------------- ------------
(Loss)/income before income taxes (0.8) 0.7
Provision for income taxes 0.2 0.7
------------- ------------
Net loss (1.0)% (0.0)%
============= ============
</TABLE>
RESULTS OF OPERATIONS
Three Months Ended March 31, 2000 compared to Three Months Ended March 31, 1999
Net sales. Precise's net sales increased to $30.7 million for the three
months ended March 31, 2000, an increase of $3.9 million, or 14.5%, from the
comparable period in the prior year. The increase in net sales was attributable
to increased injection molding sales in the amount of $4.4 million, which were
partially offset by decreased mold manufacturing sales in the amount of $0.5
million.
Injection molding sales for the three months ended March 31, 2000,
increased $4.4 million, or 19.9%, to $26.7 million. The increase is primarily
attributable to sales at two new injection molding facilities in the amount of
$4.2 million. These facilities began operations in the fourth quarter of 1999
and the first quarter of 2000.
Mold manufacturing sales for the three months ended March 31, 2000,
decreased $0.5 million, or 12.0%, to $4.0 million. The decrease is primarily due
to a decrease in mold sales related to the management of mold manufacturing
programs performed by outside vendors of $1.4 million, which was partially
offset by an increase in internally-produced mold manufacturing sales of $0.9
million.
Gross Profit. Precise's gross profit decreased to $5.9 million for the
three months ended March 31, 2000, from $6.1 million for the three months ended
March 31, 1999. Gross profit margin decreased to 19.2% for the three months
ended March 31, 2000 from 22.6% in the comparable period in the prior year.
Injection molding's gross profit for the three months ended March 31,
2000 decreased $0.4 million, or 6.6%, to $5.5 million due as a percentage of
injection molding net sales, gross profit decreased from 26.6% to 20.7% for the
three months ended March 31, 2000. The decrease was primarily due to the start
up of a new facility as well as the start up of significant programs at several
other facilities, a contract restriction in passing resin price increases to a
significant customer and decreased equipment utilization.
Mold manufacturing's gross profit for the three months ended March 31,
2000 increased $241,000, to $365,000 due to increased utilization associated
with the increase in internally-produced mold manufacturing sales.
Selling, general and administrative. Selling, general and
administrative expenses increased to $3.3 million for the three months ended
March 31, 2000, an increase of $165,000, or 5.3%, over the
10
<PAGE>
comparable period in the prior year. Selling, general and
administrative expenses, as a percentage of net sales, decreased from 11.5% to
10.6% for the three months ended March 31, 1999 and March 31, 2000,
respectively. The increase in selling, general and administrative expenses was
primarily due to increased salaries, wages, and fringe benefits due to annual
merit increases and an increase in total employees and an increase in insurance
expense. These increases were partially offset by a decrease in fees and
services.
Amortization. Precise's amortization of intangible assets remained
constant at $254,000 for the three months ended March 31, 2000, compared to the
same period in the prior year. As a percentage of net sales, amortization
expense decreased to 0.8% for the three months ended March 31, 2000, from 1.0%
for the same period in the prior year.
Operating income. Operating income decreased to $2.4 million for the
three months ended March 31, 2000, a decrease of $316,000, or 11.7%, over the
comparable period in the prior year. Operating income as a percentage of net
sales decreased to 7.8% for the three months ended March 31, 2000 from 10.1% in
the comparable period in the prior year, primarily as a result of higher
selling, general and administrative expenses.
Interest expense. Interest expense increased to $2.6 million for the
three months ended March 31, 2000 from $2.5 million in the comparable period in
the prior year representing an increase of 4.4%. This increase is primarily a
result of interest due on a higher level of outstanding indebtedness. As a
percentage of net sales, interest expense decreased from 9.4% for the three
months ended March 31, 1999, to 8.6% for the three months ended March 31, 2000.
Provision for income tax. Precise's effective tax rates differed from
the applicable statutory rates for the three months ended March 31, 2000 and
1999 primarily due to nondeductible goodwill amortization.
Liquidity and Capital Resources
Precise generated cash flows from operations totaling $3.2 million and
$4.5 million in the three months ended March 31, 2000 and 1999, respectively.
The decrease in cash flows from operations is primarily attributable to a lower
increase in accounts payable as compared to the prior period, partially offset
by a decrease in deposits on capital leases. Also contributing to the decrease
in cash flows from operations is the increase in accounts receivable and tooling
deposits, both of which are due to the increase in the level of business
activity.
Precise's cash flows used in investing activities totaled $3.0 million
and $0.4 million in the first quarter of 2000 and 1999, respectively, excluding
capital lease agreements for equipment totaling $4.6 million in the three months
ended March 31, 2000. The capital leases entered into in the first quarter of
2000, related to machinery acquired for new molding programs at several molding
facilities in an aggregate amount of $3.1 million; and $1.3 million for the
acquisition of machinery at a new molding facility. During the first three
months of 2000, Precise expended approximately $1.6 million on leasehold
improvements and automation equipment needed for new programs and $0.5 million
on additional machinery and equipment at the Streetsboro facility. During the
first three months of 1999, Precise expended approximately $0.4 million in cash
capital expenditures primarily for auxiliary and assembly equipment.
Precise's cash flows used in financing activities totaled $74,000 and
$3.3 million for the three months ended March 31, 2000 and 1999, respectively.
During the three months ended March 31, 2000, cash used in financing activities
was comprised of regularly scheduled principal payments on Precise's capital
lease obligations and revolving line of credit, which was partially offset by
borrowings on the revolving line of credit. During the three months ended March
31, 1999, regularly scheduled principal payments on Precise's capital lease
obligations and payments on the revolving line of credit contributed to the cash
used in financing activities.
Management believes that Precise's cash flow from operations, together
with borrowings under its Credit Agreement, which had a borrowing capacity of
$16.6 million of which $7.9 million was available at March 31, 2000, provides it
with sufficient liquidity necessary to fund capital improvements, service
indebtedness and meet working capital requirements for Precise's existing
operations. However, Precise is highly leveraged and, as a result, funds
available for working capital, capital expenditures, and other purposes may be
limited or unavailable in the event Precise does not generate cash flow at or
above expected levels, which could have a material adverse effect on its
business, financial condition and results of operations.
11
<PAGE>
Cautionary Statement on Forward-Looking Statements
This Report contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Investors are cautioned
that any forward-looking statements, including statements regarding the intent,
belief, or current expectations of Precise or its management, are not guarantees
of future performance and involve risks, uncertainties, and other factors, some
of which are beyond Precise's control, and that actual results may differ
materially from those in forward-looking statements. Such risks, uncertainties
and other factors include, but are not limited to: (a) general economic
conditions in the markets in which Precise operates, (b) reliance on key
customers and supply contracts, (c) volatility of customer demand (d) exposure
to fluctuations in resin cost and supply, (e) customer outsourcing decisions,
(f) reliance on key manufacturing facilities, (g) the impact of significant
competition from companies of varying sizes including divisions or subsidiaries
of larger companies and (h) other risks detailed from time to time in the
Company's Securities and Exchange Commission filings. Precise does not intend to
update these forward-looking statements.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Precise is exposed to market risk from changes in interest rates.
Precise's primary interest rate risk relates to its long-term debt obligations.
At March 31, 2000, Precise had total long-term obligations, including the
current portion of those obligations, of approximately $96.1 million. Of that
amount $87.5 million was in fixed rate obligations and $8.6 million was in
variable rate obligations. Assuming a 10% increase in interest rates on
Precise's variable rate obligations (i.e., an increase from the March 31, 2000
weighted average interest rate of 8.80% to a weighted average interest rate of
9.68%), interest expense for the three months ended March 31, 2000 would be
approximately $19,000 higher based on the March 31, 2000 outstanding balance of
variable rate obligations. To date, Precise has not entered into any interest
rate swap or exchange agreements.
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(i) Exhibit 27 - Financial Data Schedule
(ii) Exhibit 3.15 -- Articles of Incorporation of
Precise International, Inc.
(iii) Exhibit 3.16 - Bylaws of Precise International,
Inc.
(b) Reports on Form 8-K
None
12
<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.
PRECISE TECHNOLOGY, INC.
(Registrant)
Date May 15, 2000 /s/ John R. Weeks
------------ -----------------
John R. Weeks
President and Chief Executive Officer
Date May 15, 2000 /s/ Gregory R. Conley
------------ ---------------------
Gregory R. Conley
Vice President and Chief Financial Officer
(Principal financial and accounting officer)
13
<PAGE>
CERTIFICATE OF INCORPORATION
OF
PRECISE INTERNATIONAL, INC.
a Delaware corporation
FIRST. The name of the corporation is Precise International,
Inc. (hereinafter the "Corporation").
SECOND. The address of the Corporation's registered office in
the State of Delaware is Corporation Trust Center, 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.
THIRD. The nature of the business of 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 (the "General Corporation Law").
FOURTH. The total number of shares of capital stock which the
Corporation shall have authority to issue is 100 shares of common stock, par
value $.01 per share.
FIFTH. The Board of Directors is authorized to make, alter
or repeal the By-Laws of the Corporation. Election of directors need not be by
written ballot unless the By-Laws so provide.
SIXTH. The name and mailing address of the sole incorporator
is:
Name Mailing Address
Stacie Corrado 200 Park Avenue
New York, NY 10166-4193
SEVENTH. No director of the Corporation shall be personally
liable to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided, however, that this provision shall not
eliminate or limit the liability of a director: (i) for any breach of the
director's duty of loyalty to the Corporation and its stockholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of the law; (iii) under Section 174 of the General Corporation
Law; or (iv) for any transaction from which the director derived an improper
personal benefit.
EIGHTH. The Corporation shall, to the extent required, and
may, to the extent permitted by the General Corporation Law, indemnify and
reimburse all persons whom it may indemnify and reimburse pursuant thereto.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this 20th day of March, 2000.
/s/ Stacie Corrado
---------------------------
Stacie Corrado
Sole Incorporator
<PAGE>
BY-LAWS
OF
PRECISE INTERNATIONAL, INC.,
a Delaware corporation
ARTICLE I
Offices
-------
Section 1.1 Registered Office. The registered office of the Corporation
in the State of Delaware shall be located at 1209 Orange Street, Wilmington,
Delaware, County of New Castle. The name of the Corporation's registered agent
at such address shall be The Corporation Trust Company.
Section 1.2 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 or the business of the Corporation may
require.
ARTICLE II
Stockholders
------------
Section 2.1 Annual Meetings. An annual meeting of stockholders shall be
held each year for the election of directors at such date, time and place either
within or without the State of Delaware as shall be designated by the Board of
Directors. Any other proper business may be transacted at the annual meeting of
stockholders.
Section 2.2 Special Meetings. Special meetings of stockholders may be
called at any time by the Board of Directors, the Chairman, if any, the Vice
Chairman, if any, or the President and shall be called by the Chairman or the
Secretary at the request, in writing, stating the purpose or purposes of the
meeting, of stockholders who hold a majority of the outstanding shares of each
class of capital stock entitled to vote at the meeting. Each special meeting
shall be held at such date, time and place either within or without the State of
Delaware as shall be designated by the person or persons calling such meeting at
least ten days prior to such meeting.
Section 2.3 Notice of Meeting. Unless otherwise provided by law,
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 date, time
and place of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting is called. Unless otherwise provided 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 the meeting. If
<PAGE>
mailed, notice is given when deposited in the United States mail, postage
prepaid, directed to the stockholder at his address as it appears on the records
of the Corporation.
Section 2.4 Adjournments. Any meeting of stockholders, annual or
special, may adjourn 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 adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 2.5 Quorum. Unless otherwise provided by law or the certificate
of incorporation, at each meeting of stockholders, the presence in person or
representation by proxy of the holders of a majority of the outstanding shares
of each class of capital stock entitled to vote at the meeting shall constitute
a quorum for the transaction of business. For purposes of the foregoing, two or
more classes or series of capital stock shall be considered a single class if
the holders thereof are entitled to vote together as a single class at the
meeting. In the absence of a quorum, the stockholders so present and represented
may, by vote of the holders of a majority of the shares of capital stock of the
Corporation so present and represented, adjourn the meeting from time to time
until a quorum shall attend, and the provisions of Section 2.4 of these by-laws
shall apply to each such adjournment. Shares of its own capital stock belonging
on the record date for the meeting to the Corporation or to another corporation,
if a majority of the shares entitled to vote in the election of directors of
such other corporation is held, directly or indirectly, by the Corporation,
shall neither be entitled to vote nor be counted for quorum purposes; provided,
however, that the foregoing shall not limit the right of the Corporation to vote
stock, including but not limited to its own stock, held by it in a fiduciary
capacity.
Section 2.6 Organization. Meetings of stockholders shall be presided
over by the Chairman, if any, or in his absence by the Vice Chairman, if any, or
in his absence by the President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 2.7 Voting; Proxies. Unless otherwise provided by the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of capital stock
held by him which has voting power on the subject matter submitted to a vote at
the meeting. 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 duly executed 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 in writing revoking the
proxy or another duly executed proxy bearing a later date with the Secretary
before the proxy is voted. Unless otherwise required by
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law, voting of stockholders for the election of directors need not be by written
ballot. Voting of stockholders for all other matters need not be by written
ballot unless so determined at a stockholders meeting by the vote of the holders
of a majority of the outstanding shares of each class of capital sock present in
person or represented by proxy at the meeting and entitled to vote on the
subject matter submitted to a vote at the meeting. Unless otherwise provided by
law or the certificate of incorporation, the vote of the holders of a majority
of the shares of capital stock of the Corporation present in person or
represented by proxy at a meeting at which a quorum is present and entitled to
vote on the subject matter submitted to a vote at the meeting shall be the act
of the stockholders.
Section 2.8 Fixing Date for Determination of Stockholders of Record. 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 of
Directors may fix, in advance, a record date, which shall not be more than sixty
nor less than ten days before the date of such meeting, more than ten days after
the date upon which the resolution fixing the record date with respect to the
taking of corporate action by written consent without a meeting is adopted by
the Board of Directors, nor more than sixty days prior to any other action. If
no record date is fixed: (a) 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; (b) the record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; (c) the record date for
determining stockholders entitled to express consent to corporate action in
writing without a meeting, when prior action by the Board of Directors is
required, shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action; and (d) the record
date for determining stockholders for any other purpose shall be at the close of
business on the day on which the Board of Directors 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 of Directors may fix a new record
date for the adjourned meeting.
Section 2.9 List of Stockholders Entitled to Vote. The Secretary shall
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
inspected by any stockholder who is present.
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Section 2.10 Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided by the certificate of incorporation, any action required by
law to be taken at any annual or special meeting of stockholders of the
Corporation, or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not 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. Prompt notice of the taking of the corporate action without a meeting by
less than unanimous written consent shall be given to those stockholders who
have not consented in writing.
ARTICLE III
Board of Directors
------------------
Section 3.1 Powers; Number; Qualifications. Unless otherwise
provided by law or the certificate of incorporation, the business and affairs of
the Corporation shall be managed by or under the direction of the Board of
Directors. Unless otherwise provided by the certificate of incorporation, the
Board of Directors shall consist of such number of directors as the Board of
Directors shall from time to time designate. Unless otherwise provided by the
certificate of incorporation, directors need not be stockholders.
Section 3.2 Election; Term of Office; Resignation; Removal; Vacancies.
Each director shall hold office until his successor is elected and qualified or
until his earlier resignation or removal. Any director may resign at any time
upon written notice to the Corporation directed to the Board of Directors or the
Secretary. Such resignation shall take effect at the time specified therein, and
unless otherwise specified therein no acceptance of such resignation shall be
necessary to make it effective. Any director or the entire Board of Directors
may be removed, with or without cause, by the vote of the holders of a majority
of shares of capital stock then entitled to vote at an election of directors.
Whenever the holders of shares of any class or series of capital stock are
entitled to elect one or more directors by the provisions of the certificate of
incorporation, the provisions of the preceding sentence shall apply, in respect
to the removal without cause of a director or directors so elected, to the vote
of the holders of the outstanding shares of that class or series of capital
stock and not to the vote of the holders of the outstanding shares of capital
stock as a whole. Unless otherwise provided by the certificate of incorporation,
vacancies and newly created directorships resulting from any increase in the
authorized number of directors elected by all of the stockholders having a right
to vote as a single class may be filled by the vote of a majority of the
directors then in office, although less than a quorum, or by the vote of the
sole remaining director. Whenever the holders of shares of any class or classes
of capital stock or series thereof are entitled to elect one or more directors
by the provisions of the certificate of incorporation, vacancies and newly
created directorships of such class or classes or series thereof may be filled
by the vote of a majority of the directors elected by such class or classes or
series thereof then in office, or by the vote of the sole remaining director so
elected.
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Section 3.3 Regular Meetings. Regular meetings of the Board of
Directors shall be held at such dates, times and places either within or without
the State of Delaware as the Board of Directors shall from time to time
determine.
Section 3.4 Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman, if any, the Vice Chairman,
if any, the President or by any two members of the Board of Directors. Each
special meeting shall be held at such date, time and place either within or
without the State of Delaware as shall be fixed by the person or persons calling
the meeting.
Section 3.5 Notice of Meetings. Written notice of each meeting of the
Board of Directors shall be given which shall state the date, time and place of
the meeting. The written notice of any meeting shall be given at least
twenty-four hours in advance of the meeting to each director. Notice may be
given by letter, telegram, telex or facsimile and shall be deemed to have been
given when deposited in the United States mail, delivered to the telegraph
company or transmitted by telex or facsimile, as the case may be.
Section 3.6 Telephonic Meetings Permitted. Members of the Board of
Directors or any committee designated by the Board of Directors may participate
in a meeting of the Board of Directors or of such committee by means of
conference telephone or similar communication equipment by means of which all
persons participating in the meeting can hear each other, and participation in
the meeting pursuant to this by-law shall constitute presence in person at such
meeting.
Section 3.7 Quorum; Vote Required for Action. Unless otherwise required
by law, at each meeting of the Board of Directors, the presence of one-third of
the total number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of the directors present at a meeting at which
a quorum is present shall be the act of the Board of Directors, unless the vote
of a greater number is required by law or the certificate of incorporation. In
case at any meeting of the Board of Directors a quorum shall not be present, the
members of the Board of Directors present may by majority vote to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall attend.
Section 3.8 Organization. Meetings of the Board of Directors shall be
presided over by the Chairman, if any, or in his absence by the Vice Chairman,
if any, or in his absence by the President, or in their absence by a chairman
chosen at the meeting. The Secretary shall act as secretary of the meeting, but
in his absence the chairman of the meeting may appoint any person to act as
secretary of the meeting.
Section 3.9 Action by Directors Without a Meeting. Unless otherwise
provided by the certificate of incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or any committee designated
by the Board of Directors may be taken without a meeting if all members of the
Board of Directors or of such committee consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Board of
Directors or such committee.
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Section 3.10 Compensation of Directors. Unless otherwise provided by
the certificate of incorporation, the Board of Directors shall have the
authority to fix the compensation of directors, which compensation may include
the reimbursement of expenses incurred in connection with meetings of the Board
of Directors or a committee thereof.
ARTICLE IV
Committees
----------
Section 4.1 Committees. The Board of Directors may, by resolution
passed by a majority of the whole Board of Directors, 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 of such committee at any meeting thereof. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or disqualified
member.
Section 4.2 Power of Committees. Any committee designated by the Board
of Directors, to the extent provided in a resolution of the Board of Directors,
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; but no such committee shall have the power or authority to take any
action which by law may only be taken by the Board of Directors or to take any
action with reference to: amending the certificate of incorporation (except that
a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors,
fix the designation and any of the preferences or rights of such shares relating
to dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of dissolution, removing or
indemnifying directors or amending these by-laws; and, unless a resolution of
the Board of Directors expressly so provides, no such committee shall have the
power or authority to declare a dividend, to authorize the issuance of stock or
to adopt a certificate of ownership and merger pursuant to Section 253 of the
General Corporation Law of the State of Delaware.
Section 4.3 Committee Rules. Unless the Board of Directors otherwise
provides, each committee designated by the Board of Directors may adopt, amend
and repeal rules for the conduct of its business. In the absence of a resolution
by the Board of Directors or a provision in the rules of such committee to the
contrary, the presence of a majority of the total number of members of such
committee shall constitute a quorum for the transaction of business, and the
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vote of a majority of the members present at a meeting at which a quorum is
present shall be the act of such committee.
ARTICLE V
Officers
--------
Section 5.1 Officers; Elections. As soon as practicable after the
annual meeting of stockholders in each year, the Board of Directors shall elect
from its membership or outside thereof a President, a Secretary, a Chief
Executive Officer, an Executive Vice President, one or more Vice Presidents, one
or more Assistant Vice Presidents, one or more Assistant Secretaries, a
Treasurer and one or more Assistant Treasurers and such other officers or agents
as it may determine. Unless otherwise provided by the certificate of
incorporation, any number of offices may be held by the same person.
Section 5.2 Term of Office; Resignation; Removal; Vacancies. Except as
otherwise provided by the Board of Directors when electing any officer, each
officer shall hold office until the first meeting of the Board of Directors
after the annual meeting of stockholders next succeeding his election, or until
his successor is elected and qualified or until his earlier resignation or
removal. Any officer may resign at any time upon written notice to the
Corporation directed to the Board of Directors and the Secretary. Such
resignation shall take effect at the time specified therein, and unless
otherwise specified therein no acceptance of such resignation shall be necessary
to make it effective. The Board of Directors may remove any officer or agent
with or without cause at any time. Any such removal shall be without prejudice
to the contractual rights of such officer or agent, if any, with the
Corporation, but the election of an officer or agent shall not of itself create
any contractual rights. Any vacancy occurring in any office of the Corporation
by death, resignation, removal or otherwise may be filled for the unexpired
portion of the term by the Board of Directors.
Section 5.3 Powers and Duties. The officers of the Corporation shall
have such powers and duties in the management of the Corporation as shall be
stated in these by-laws or in a resolution of the Board of Directors which is
not inconsistent with these by-laws and, to the extent not so stated, as
generally pertain to their respective offices, subject to the control of the
Board of Directors.
Section 5.4 Chairman of the Board. The Chairman of the Board shall
determine and administer the policies of the corporation, subject to the
instructions of the Board of Directors. The Chairman of the Board shall preside
at all meetings of the shareholders and of the Board of Directors and shall be a
member ex officio of all committees of the Board of Directors. The Chairman of
the Board shall execute bonds, mortgages and other contracts requiring a seal,
under the seal of the corporation, except where required of permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Directors to some other
officer or agent of the corporation.
Section 5.5 Chief Executive Officer. The chief executive officer of the
corporation, shall preside at all meetings of the shareholders and the Board of
Directors, shall have general and active management of the business of the
corporation and shall see that all orders and
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resolutions of the Board of Directors are carried into effect. The chief
executive officer shall execute bonds, mortgages and other contracts requiring a
seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.
Section 5.6 President. The president of the corporation, in the absence
or disability of the chief executive officer, shall preside at all meetings of
the shareholders and the Board of Directors, shall have general and active
management 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 bonds, mortgages and other contracts requiring a seal, under the
seal of the corporation, except where required or permitted by law to be
otherwise signed and executed and except where the signing and execution thereof
shall be expressly delegated by the Board of Directors to some other officer or
agent of the corporation.
Section 5.7 Executive Vice-President. The executive vice-president in
the absence or disability of the president, perform the duties and exercise the
powers of the president and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 5.8 Vice Presidents. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the Board of
Directors, shall, in the absence or disability of the executive vice president,
perform the duties and exercise the powers of the executive vice-president and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
Section 5.9 Secretary. The secretary shall attend all meetings of the
Board of Directors and all meetings of the shareholders and record all the
proceedings of the meetings of the corporation and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
Board of Directors, and shall perform such other duties as may be prescribed by
the Board of Directors or president, under whose supervision the secretaries
shall be. The secretary shall have custody of the corporate seal of the
corporation and the secretary or an assistant secretary, shall have authority to
affix the same to any instrument requiring it and when so affixed, it may be
attested by the secretaries signature or by the signature of 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 the affixing by her
signature.
Section 5.10 Assistant Secretaries. The assistant secretary, or if
there be more than one, the assistant secretaries in the order determined by the
Board of Directors, shall, in the absence or disability of the secretary,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
Section 5.11 The 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
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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 the treasurers transactions as treasurer and of the
financial condition of the corporation. If required by the Board of Directors,
the 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 treasurers office and for the restoration to
the corporations in case of the treasurers death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his control belonging to the
corporation.
Section 5.12 Assistant Treasurers. The assistant treasurer, or, if
there shall be more than one, the assistant treasurers in the order determined
by the Board of Directors, shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
Section 5.13 Other Officers; Security. The other officers, if any, of
the Corporation shall have such duties and powers as generally pertain to their
respective offices and such other duties and powers as the Board of Directors
shall from time to time delegate to each such officer. The Board of Directors
may require any officer, agent or employee to give security, by bond or
otherwise, for the faithful performance of his duties.
Section 5.14 Compensation of Officers. The compensation of each officer
shall be fixed by the Board of Directors and no officer shall be prevented from
receiving such compensation by virtue of his also being a director.
ARTICLE VI
Stock
-----
Section 6.1 Certificates. Every holder of one or more shares of capital
stock of the Corporation shall be entitled to have a certificate signed by or in
the name of the Corporation by the Chairman or Vice Chairman, if any, or the
Chief Executive Officer, President or a Vice President, and by the Treasurer or
an Assistant Treasurer, if any, or the Secretary or an Assistant Secretary,
certifying the number of shares owned by him in the Corporation. Any or all of
the signatures on the 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 he were such officer, transfer agent or
registrar at the date of issue.
Section 6.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of
New Certificates. The Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it, alleged to have been lost,
stolen or destroyed, and the Corporation may require the
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owner of the lost, stolen or destroyed certificate, or his legal representative,
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.
ARTICLE VII
Indemnification of Directors and Officers
-----------------------------------------
Section 7.1 Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he is or was a director or officer of the Corporation or
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 or other enterprise, including service with respect to an employee benefit
plan (hereinafter an "indemnitee"), whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than permitted prior thereto), against
all reasonable expense, liability and loss (including, without limitation,
reasonable attorneys' fees, judgments, fines and amounts paid in settlement)
incurred or suffered by such indemnitee in connection therewith and such
indemnification shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators; provided, however, that,
except as provided in Section 7.2 below with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such indemnitee
in connection with a proceeding (or part thereof) initiated by such indemnitee
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation. The right to indemnification conferred in this
ARTICLE VII shall be a contract right and shall include the right to be paid by
the Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition (hereinafter an "advancement of expenses");
provided, however, that, if the Delaware General Corporation Law requires, an
advancement of expenses incurred by an indemnitee in his capacity as a director
or officer (and not in any other capacity in which service was or is rendered by
such indemnitee) shall be made only upon delivery to the corporation of an
undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee,
to repay all amounts so advanced if it shall ultimately be determined by final
judicial decision from which there is no further right to appeal (hereinafter a
"final adjudication") that such indemnitee is not entitled to be indemnified for
such expenses under this ARTICLE VII or otherwise.
Section 7.2 Right of Indemnitee to Bring Suit. If a claim under Section
7.1 above is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be thirty days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole or
in
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part in any such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
shall be entitled to be paid also the expense of prosecuting or defending such
suit. In (a) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that and
(b) in any suit by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking the Corporation shall be entitled to
recover such expenses upon a final adjudication that, the indemnitee has not met
the applicable standard of conduct set forth in the General Corporation Law of
the State of Delaware. Neither the failure of the Corporation (including its
Board of Directors, independent legal counsel or its stockholders) to have made
a determination prior to the commencement of such suit that indemnification of
the indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent counsel or its stockholders) that the indemnitee has not
met such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this ARTICLE VII or otherwise shall be on the
Corporation.
Section 7.3 Non-Exclusivity of Rights under this ARTICLE. The rights to
indemnification and to the advancement of expenses conferred in this ARTICLE VII
shall not be exclusive of any other right which any person may have or hereafter
acquire under any statute, provision of the certificate of incorporation,
by-law, agreement, vote of stockholders or disinterested directors or otherwise.
Section 7.4 Insurance. The Corporation may purchase and maintain
insurance on its own behalf or 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
expense, liability or loss asserted against him in any such capacity, or arising
out of his status as such, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
General Corporation Law of the State of Delaware.
Section 7.5 Indemnification of Employees and Agents. The Corporation
may, to the extent authorized at any time from time to time by the Board of
Directors, grant rights to indemnification and the advancement of expenses to
any employee or agent of the Corporation to the fullest extent of the provisions
of this ARTICLE VII with respect to the indemnification and advancement of
expenses of directors and officers of the Corporation.
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ARTICLE VIII
Miscellaneous
-------------
Section 8.1 Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors.
Section 8.2 Seal. The Corporation may have a corporate seal which shall
have the name of the Corporation inscribed thereon and shall be in such form as
may be approved from time to time by the Board of Directors.
Section 8.3 Waiver of Notice of Meetings of Stockholders, Directors and
Committees. Whenever notice is required to be given by law, the certificate of
incorporation or these by-laws, a written waiver thereof, signed by the person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
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. Unless otherwise provided by the certificate of incorporation, neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the stockholders, directors or members of a committee of directors
need be specified in any written waiver of notice.
Section 8.4 Interested Directors, Officers, Quorum. 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 his or
their votes are counted for such purpose, if: (a) the material facts as to his
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 vote of a majority of the disinterested directors, even though the
disinterested directors be less than a quorum; or (b) the material facts as to
his relationship or interest and as to 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 (c) 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.
Section 8.5 Books and Records. The books and records of the Corporation
may be kept within or without the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors. Any records
maintained by the Corporation in the regular course of its business, including
its stock ledger, books of account and minute books, may be kept on, or be in
the form of, punch cards, magnetic tape, photographs, microphotographs or any
other information storage device provided that the records so kept can
-12-
<PAGE>
be converted into clearly legible form within a reasonable time. The Corporation
shall so convert any records so kept upon the request of any person entitled to
inspect the same.
Section 8.6 Amendment of By-Laws. These By-laws may be amended or
repealed, and new by-laws adopted, by the Board of Directors, but the
stockholders entitled to vote may adopt additional by-laws and may amend or
repeal any by-law whether or not adopted by them.
-13-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (1) THE
CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS OF PRECISE TECHNOLOGY, INC.
AS OF MARCH 31, 2000 AND FOR THE THREE MONTHS THEN ENDED AND (2) THE
CONSOLIDATED FINANCIAL STATEMENTS OF PRECISE TECHNOLOGY, INC. AS OF DECEMBER 31,
1999 AND FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-2000 DEC-31-1999
<PERIOD-END> MAR-31-2000 DEC-31-1999
<CASH> 468 318
<SECURITIES> 0 0
<RECEIVABLES> 17,230 15,218
<ALLOWANCES> 142 85
<INVENTORY> 7,861 6,352
<CURRENT-ASSETS> 30,541 28,051
<PP&E> 77,630 70,049
<DEPRECIATION> 26,854 25,099
<TOTAL-ASSETS> 106,524 98,174
<CURRENT-LIABILITIES> 29,061 23,442
<BONDS> 0 0
0 0
0 0
<COMMON> 1 1
<OTHER-SE> (12,638) (12,344)
<TOTAL-LIABILITY-AND-EQUITY> 106,524 98,174
<SALES> 30,692 110,130
<TOTAL-REVENUES> 30,692 110,130
<CGS> 24,793 85,809
<TOTAL-COSTS> 28,303 99,203
<OTHER-EXPENSES> 0 (243)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,631 10,365
<INCOME-PRETAX> (242) 805
<INCOME-TAX> 52 755
<INCOME-CONTINUING> (294) 50
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (294) 50
<EPS-BASIC> 0.0 0.0
<EPS-DILUTED> 0.0 0.0
</TABLE>
