UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
AMENDMENT NO. 1
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended Commission file number
June 30, 1999 000-23943
PETER KIEWIT SONS', INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1842817
(State of Incorporation) (I.R.S. Employer Identification No.)
Kiewit Plaza, Omaha Nebraska 68131
(Address of principal executive offices) (Zip Code)
(402) 342-2052
(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 [ ]
The number of shares outstanding of each of the registrant's classes
of common stock as of August 16, 1999:
Title of Class Shares Outstanding
Common Stock, $0.01 par value 34,908,918
PETER KIEWIT SONS', INC.
Index
Page
______________________________________________________________________________
PART I - FINANCIAL INFORMATION
------------------------------
Item 1. Financial Statements.
Consolidated Condensed Statements of Earnings for the three and six months
ended June 30, 1999 and 1998 1
Consolidated Condensed Balance Sheets as of June 30, 1999 and
December 26, 1998 2
Consolidated Condensed Statements of Cash Flows for the six months
ended June 30, 1999 and 1998 3
Notes to Consolidated Condensed Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations. 10
Item 3. Quantitative and Qualitative Disclosure About Market Risk. 14
PART II - OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders. 15
Item 6. Exhibits and Reports on Form 8-K. 16
Signatures 16
Index to Exhibits 17
______________________________________________________________________________
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
PETER KIEWIT SONS', INC.
Consolidated Condensed Statements of Earnings
(unaudited)
Three Months Ended Six Months Ended
(dollars in millions, June 30, June 30,
except per share data) 1999 1998 1999 1998
Revenue $ 996 $ 838 $ 1,775 $ 1,570
Cost of Revenue (923) (766) (1,659) (1,469)
----- ----- ------- -------
73 72 116 101
General and Administrative Expenses (32) (40) (75) (78)
----- ----- ------- -------
Operating Earnings 41 32 41 23
Other Income (Expense):
Investment Income, net 3 3 7 6
Interest Expense, net - (1) (1) (1)
Other, net 14 16 31 28
----- ----- ------- -------
17 18 37 33
----- ----- ------- -------
Earnings Before Income Taxes 58 50 78 56
Provision for Income Taxes (23) (20) (31) (22)
----- ----- ------- -------
Net Earnings $ 35 $ 30 $ 47 $ 34
===== ===== ======= =======
Net Earnings per Share:
Basic $1.04 $ .98 $ 1.39 $ 1.07
===== ===== ======= =======
Diluted $1.02 $ .97 $ 1.36 $ 1.06
===== ===== ======= =======
See accompanying notes to consolidated condensed financial statements.
PETER KIEWIT SONS', INC.
Consolidated Condensed Balance Sheets
June 30, December 26,
1999 1998
(dollars in millions) (unaudited)
______________________________________________________________________________
Assets
Current Assets:
Cash and cash equivalents $ 24 $ 227
Marketable securities 12 9
Receivables, less allowance of $4 and $4 464 454
Unbilled contract revenue 89 88
Contract costs in excess of related revenue 31 26
Investment in construction joint ventures 177 190
Deferred income taxes 74 64
Other 22 15
------ ------
Total Current Assets 1,116 1,073
Property, Plant and Equipment, less accumulated
depreciation and amortization of $484 and $482 236 208
Other Assets 103 96
------ ------
$1,455 $1,377
====== ======
Liabilities and Redeemable Common Stock
Current Liabilities:
Accounts payable, including
retainage of $50 and $47 $ 192 $ 182
Current portion of long-term debt 9 8
Accrued costs on construction contracts 152 125
Billings in excess of related costs and earnings 148 132
Accrued insurance costs 85 81
Other 52 63
------- ------
Total Current Liabilities 638 591
Long-term debt, less current portion 13 13
Other liabilities 70 70
Minority interest 12 12
Deferred income taxes 2 -
------ ------
Total Liabilities 735 686
Redeemable Common Stock ($548 million aggregate redemption value):
Common stock, par $0.01; and 35,017,126 and
35,692,820 shares outstanding - -
Additional paid in capital 176 161
Accumulated other comprehensive income (21) (22)
Retained earnings 565 552
------ ------
Total Redeemable Common Stock 720 691
------ ------
$1,455 $1,377
====== ======
______________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
PETER KIEWIT SONS', INC.
Consolidated Condensed Statements of Cash Flows
(unaudited)
Six Months Ended
June 30,
----------------
(dollars in millions) 1999 1998
______________________________________________________________________________
Cash flows from operations:
Net cash provided by operations $111 $ 100
Cash flows from investing activities:
Proceeds from sales and maturities of
marketable securities 1 10
Purchases of marketable securities (4) (7)
Proceeds from sales of property, plant and equipment 20 8
Acquisitions, net of cash acquired (33) (3)
Distributions from investees 2 6
Capital expenditures (33) (54)
---- -----
Net cash used in investing activities (47) (40)
Cash flows from financing activities:
Short-term debt borrowing - 20
Payments on short-term debt - (25)
Payments on long-term debt (16) -
Issuance of common stock 25 41
Repurchases of common stock (37) (28)
Dividends paid (16) (13)
Exchange of Class C Stock for Class D Stock, net - (122)
---- -----
Net cash used in financing activities (44) (127)
---- -----
Net increase (decrease) in cash and cash equivalents 20 (67)
Cash and cash equivalents at beginning of period 227 232
---- -----
Cash and cash equivalents at end of period $247 $ 165
==== =====
_____________________________________________________________________________
See accompanying notes to consolidated condensed financial statements.
PETER KIEWIT SONS', INC.
Notes to Consolidated Condensed Financial Statements
1. Basis of Presentation:
Peter Kiewit Sons', Inc. (the "Company") was formed by its former parent,
Level 3 Communications, Inc. (formerly Peter Kiewit Sons', Inc.) ("Level
3"), in connection with a transaction (the "Transaction") intended to
separate the construction and materials businesses and the diversified
business of Level 3 into two independent companies. On March 31, 1998,
pursuant to the terms of a Separation Agreement between the Company, Level 3
and certain other parties (the "Separation Agreement"), Level 3 consummated
the Transaction by: (i) transferring 100 shares of the $100 par value common
stock ("KCG Stock") of Kiewit Construction Group Inc. ("KCG"),
representing all of the issued and outstanding shares of KCG Stock, as well as
certain other assets and liabilities related to the construction and materials
businesses which together comprised the Construction and Mining Group (the
"Construction & Mining Group"), to the Company in exchange for 30,711,680
shares of the $.01 par value common stock of the Company ("Common Stock")
(125 million shares authorized) and (ii) distributing 100% of its shares of
the Common Stock to the holders of Level 3's $0.0625 par value Class C
Construction & Mining Group Restricted Redeemable Convertible Exchangeable
Common Stock ("Class C Stock") as of March 31, 1998, in exchange for such
shares of Class C Stock. Prior to the Transaction, the Company was a wholly-
owned subsidiary of Level 3. As a result of the Transaction, the Company is
now owned by the former holders of Level 3's Class C Stock. Prior to
consummation of the Transaction, Level 3's Class C Common Stock was
convertible into Level 3's $0.0625 par value Class D Diversified Group Common
Stock ("Class D Stock"). As the Construction & Mining Group comprised all
of the net assets and operations of the Company, at the time of the
Transaction, the Construction & Mining Group is the Company's predecessor.
Thus, the term "the Company", as used herein, refers to Peter Kiewit Sons',
Inc., its predecessor, and its consolidated subsidiaries.
The consolidated condensed balance sheet of the Company at December 26, 1998
has been condensed from the Company's audited balance sheet as of that date.
All other financial statements contained herein are unaudited and, in the
opinion of management, contain all adjustments (consisting only of normal
recurring accruals) necessary for a fair presentation of financial position
and results of operations for the periods presented. The Company's accounting
policies and certain other disclosures are set forth in the notes to the
consolidated financial statements contained in the Company's Annual Report on
Form 10-K.
Receivables at June 30, 1999 and December 26, 1998 include approximately $104
million and $86 million of retainage on uncompleted projects, the majority of
which is expected to be collected within one year. Included in the retainage
amounts are $26 million and $26 million of securities which are being held by
the owners of various construction projects in lieu of retainage. Also
included in accounts receivable are $15 million and $15 million of securities
held by the owners which are now due as the contracts are completed. These
securities are carried at fair value which is determined based on quoted
market prices for the securities on hand or for similar investments. Net
unrealized holding gains and losses, if any, are reported as a separate
component of accumulated other comprehensive income, net of tax.
The results of operations for the six months ended June 30, 1999 are not
necessarily indicative of the results to be expected for the full year.
When appropriate, items within the consolidated condensed financial statements
have been reclassified in the previous periods to conform to current year
presentation.
2. Earnings Per Share:
Basic earnings per share have been computed using the weighted average number
of shares outstanding during each period. Diluted earnings give effect to
convertible debentures considered to be dilutive common stock equivalents.
Dilutive potential common shares are calculated in accordance with the "if
converted" method. This method assumes that the after-tax interest expense
associated with the debentures is an addition to income and the debentures are
converted into equity with the resulting common shares being aggregated with
the weighted average shares outstanding.
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1999 1998 1999 1998
------------------ ----------------
Net earnings available to common
shareholders (in millions) $ 35 $ 30 $ 47 $ 34
Add: Interest expense, net of
tax effect, associated with
convertible debentures * * * *
------ ------- ------- -------
Net earnings for diluted shares $ 35 $ 30 $ 47 $ 34
====== ======= ======= =======
Total number of weighted average
shares outstanding used to
compute basic earnings per
share (in thousands) 33,555 30,628 33,717 31,460
Additional dilutive shares
Assuming conversion of
convertible debentures 706 364 707 364
------ ------ ------ ------
Total number of shares used
to compute diluted earnings
per share 34,261 30,992 34,424 31,824
====== ====== ====== ======
Net earnings
Basic earnings per share $ 1.04 $ .98 $ 1.39 $ 1.07
Diluted earnings per share $ 1.02 $ .97 $ 1.36 $ 1.06
* Interest expense attributable to convertible debentures was less than $.5
million.
On January 11, 1999, the Company declared a four-for-one stock split in the
form of a stock dividend of three shares of Common Stock for each share of
common stock issued and outstanding, payable on January 15, 1999. All share
and per share amounts for all periods presented have been retroactively
restated to reflect the stock split.
3. Comprehensive Income:
Comprehensive income includes net earnings, unrealized gains (losses) on
securities and foreign currency translation adjustments which are charged or
credited to the cumulative translation account within Redeemable Common Stock.
Comprehensive income for the three months and six months ended June 30, 1999
and 1998 was as follows:
Three Months Ended Six Months Ended
June 30, June 30,
----------------- ----------------
(dollars in millions) 1999 1998 1999 1998
______________________________________________________________________________
Net Earnings $35 $30 $47 $34
Other comprehensive income, before tax:
Foreign currency translation adjustments 2 (2) 4 -
Unrealized gains (losses) arising
during period (2) (4) (2) -
Income tax (expense) benefit related
to items of other comprehensive income - 3 (1) -
--- --- --- ---
Comprehensive Income $35 $27 $48 $34
=== === === ===
4. Segment Data:
The Company is managed and operated in two segments, Construction and
Materials. The Construction segment performs services for a broad range of
public and private customers primarily in North America. Construction
services are performed in the following construction markets: transportation
(including highways, bridges, airports, railroads and mass transit),
commercial buildings, water supply, sewage and waste disposal, dams, mining,
power, heating and cooling, and oil and gas. The Materials segment primarily
operates in Arizona and Oregon. This segment produces construction materials
including ready-mix concrete, asphalt, sand and gravel, landscaping materials
and railroad ballast.
Intersegment sales are recorded at cost. Operating earnings is comprised of
net sales less all identifiable operating expenses, allocated general and
administrative expenses, depreciation and amortization. Interest income,
interest expense and income taxes have been excluded from segment operations.
The management fee earned by the Company for providing coal mine management
services to Level 3 is excluded from the segment information that follows as
it is included in other income on the Statement of Earnings and not included
in operating earnings. This fee is earned, however, by the Materials segment
and was $14 million and $17 million for the six months ended June 30, 1999 and
1998 and $7 million and $10 million for the three months ended June 30, 1999
and 1998.
Elimina-
tion Of Total
Inter- Inter- Consoli-
External segment Total segment dated Operating
Revenues Revenues Revenues Revenues Revenues Earnings
-------- -------- -------- -------- -------- --------
(dollars in millions)
_______________________
Six Months Ended 6/30/99
- ------------------------
Construction $1,569 $ - $1,569 $ - $1,569 $28
Materials $ 206 $ - $ 206 $ - $ 206 $13
Three Months Ended 6/30/99
- --------------------------
Construction $ 887 $ - $ 887 $ - $ 887 $34
Materials $ 109 $ - $ 109 $ - $ 109 $ 7
Six Months Ended 6/30/98
- ------------------------
Construction $1,406 $ - $1,406 $ - $1,406 $16
Materials $ 164 $ 4 $ 168 $ (4) $ 164 $ 7
Three Months Ended 6/30/98
- --------------------------
Construction $ 745 $ - $ 745 $ - $ 74 $27
Materials $ 93 $ 2 $ 95 $ (2) $ 93 $ 5
5. Other Matters:
In connection with the Transaction, the Company and Level 3 entered into
various agreements including a Separation Agreement, a Tax Sharing Agreement
and an Amended Mine Management Agreement.
The Separation Agreement provides for the allocation of certain risks and
responsibilities between Level 3 and the Company and for cross-
indemnifications that are intended to allocate financial responsibility to the
Company for liabilities arising out of the construction business and to
allocate to Level 3 financial responsibility for liabilities arising out of
the non-construction businesses. The Separation Agreement also provides for
the payment, by the Company, of a majority of the third party costs and
expenses associated with the Transaction.
Under the Tax Sharing Agreement, with respect to periods, or portions thereof,
ending on or before the closing date of the Transaction, Level 3 and the
Company generally will be responsible for paying the taxes relating to such
periods, including any subsequent adjustments resulting from the
redetermination of such tax liabilities by the applicable taxing authorities,
that are allocable to the non-construction businesses and construction
businesses, respectively. The Tax Sharing Agreement also provides that Level
3 and the Company will indemnify the other from certain taxes and expenses
that would be assessed if the Transaction was determined to be taxable, but
solely to the extent that such determination arose out of the breach by Level
3 or the Company, respectively, of certain representations made to the
Internal Revenue Service in connection with the ruling issued with respect to
the Transaction or made in the Tax Sharing Agreement. If the Transaction was
determined to be taxable for any other reason, those taxes would be allocated
50% to Level 3 and 50% to the Company. Finally, under certain circumstances,
Level 3 would make certain liquidated damage payments to the Company if the
Transaction was determined to be taxable in order to take into account the
fact that the Transaction is taxable to the holders of Common Stock.
Additionally, the Mine Management Agreement, pursuant to which the Company
provides mine management and related services to Level 3's coal mining
operations, was amended to provide the Company with a right of offer in the
event that Level 3 was to determine to sell any or all of its coal mining
properties. Under the right of offer, Level 3 would be required to offer to
sell those properties to the Company at the price that Level 3 would seek to
sell the properties to a third party. If the Company were to decline to
purchase the properties at that price, Level 3 would be free to sell them to a
third party for an amount greater than or equal to that price. If Level 3
were to sell the properties to a third party, thus terminating the Mine
Management Agreement, it would be required to pay the Company an amount equal
to the discounted present value of the Mine Management Agreement, determined,
if necessary, by an appraisal process.
On February 28, 1999, the Company purchased the remaining 60% of a materials
operation in the Portland, Oregon/Vancouver, Washington area. A note was
issued to the 60% owner for the purchase price and subsequently paid off on
April 1, 1999. Goodwill recognized on the purchase is being amortized over 20
years. Had the results of operations of this acquisition been consolidated
for the periods presented, there would have been no material impact to the
Company's results.
The Company and certain other defendants are party to certain litigation
involving repairs to runways at Denver International Airport. In December
1998, a jury determined that the defendants were liable for compensatory and
punitive damages. The Company intends to appeal the verdict. Management
believes that any resulting liability, beyond that provided, should not
materially affect the Company's financial position, future results of
operations or future cash flows.
The Company is involved in various other lawsuits and claims incidental to its
business. Management believes that any resulting liability, beyond that
provided, should not materially affect the Company's financial position,
future results of operations or future cash flows.
PETER KIEWIT SONS', INC.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations - Second Quarter 1999 vs. Second Quarter 1998
This document contains forward looking statements and information that are
based on the beliefs of management as well as assumptions made by and
information currently available to the Company. When used in this document,
the words "anticipate," "believe," "estimate," "expect" and similar
expressions, as they relate to the Company or its management, are intended to
identify forward-looking statements. Such statements reflect the current
views of the Company with respect to future events and are subject to certain
risks or uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this document.
Revenue from each of the Company's segments was (in millions):
Three Months Ended
June 30,
------------------
1998 1999
---- ----
Construction $887 $745
Materials 109 93
---- ----
$996 $838
==== ====
Construction. Revenues for the construction business increased $142 million
or 19% for the three months ended June 30, 1999 as compared to the same time
period in 1998. The increase is due to favorable market conditions in the
business sectors that the Company operates.
Contract backlog at June 30, 1999 was $4.7 billion of which 6% is attributable
to foreign operations located in Canada. Domestic projects are spread
geographically throughout the U.S.
Margins as a percentage of revenue on construction projects for the three
months ended June 30, 1999 decreased to 7.2% from 8.7% for the same time
period in 1998. A significant amount of work is in the early stage of
construction. Margins during the startup phase tend to be lower than at later
stages of the project.
Materials. Revenues increased 17% to $109 million during the second quarter
1999 when compared to the same period in 1998. A continued strong market for
materials products in the Southwest that resulted in additional unit sales of
asphalt, ready mix and aggregates accounted for much of the increase.
Additional ballast sales at quarries located in Wyoming and Utah plus the
acquisition of the remaining 60% of the materials operations acquired as of
February 28, 1999 account for the balance of the increase.
Gross margins increased 29% from $7 million to $9 million during 1999 compared
to the second quarter of 1998. The 100% inclusion of the acquired materials
operations account for the increase in margins.
General and Administrative Expenses. General and administrative expenses
decreased 20% in 1999. The decrease was attributable to cost containment and
reassignment of overhead personnel.
Investment Income, net. Investment income remained the same for the three
months ended June 30, 1999 as the same time period in 1998.
Other, net. Other income is comprised primarily of mine management fee
income from Level 3 and gains and losses on the disposition of property, plant
and equipment and other assets.
The Company manages certain coal mines for Level 3. Fees for these services
were $7 million in 1999 and $10 million in 1998. The Company's fee is a
percentage of adjusted operating earnings of the coal mines. The mines
managed by the Company for Level 3 earn the majority of their revenues under
long-term contracts. The remainder of the mines' sales are made on the spot
market where prices are substantially lower than those of the long-term
contracts. As the long-term contracts expire over the next two to five years,
adjusted operating earnings at the mines will decrease substantially, thereby
similarly decreasing the management fee earned by the Company.
Additionally, the Minerals Management Service and Montana Department of
Revenue have issued assessments to the Level 3 mines for the underpayment of
royalties and production taxes. Level 3 is vigorously contesting the
assessments. If Level 3 pays these assessments, the payments could materially
decrease future mine management fees, but will not affect fees previously
received.
Provision for income taxes. The effective income tax rates in 1999 and 1998
differ from the federal statutory rate of 35% due primarily to state income
taxes.
Results of Operations - Six Months 1999 vs. Six Months 1998
Revenue from each of the Company's segments was (in millions):
Six Months Ended
June 30,
----------------
1999 1998
---- ----
Construction $1,569 $1,406
Materials 206 164
------ ------
$1,775 $1,570
====== ======
Construction. Revenues for the construction business increased $163 million
or 12% from the same time period in 1998. The increase is due to favorable
market conditions in the business sectors that the Company operates.
Margins on construction projects as a percentage of revenue for the six months
ended June 30, 1999 decreased to 6.3% from 6.5% for the same time period in
1998.
Materials. Materials revenues increased 26% to $206 million for the year in
1999 when compared to 1998. A continued strong market for materials products
in the Southwest that resulted in additional unit sales of asphalt, ready mix
and aggregates accounted for much of the increase. Additional ballast sales
at quarries located in Wyoming and Utah plus the acquisition of the remaining
60% of the materials operations acquired as of February 28, 1999 account for
the balance of the increase.
Materials margins increased 70% from $10 million to $17 million when compared
to 1998. An increase in sales of higher margin products and the inclusion of
the acquired materials operations accounted for much of the increase. The
elimination of losses taken in 1998 from the Oak Mountain coal operations also
contributed to the increase.
General and Administrative Expenses. General and administrative expenses
decreased 4% in 1999. The decrease was attributable to cost containment and
reassignment of overhead personnel.
Investment Income, net. Investment income increased by $1 million due to the
increase in cash provided by operations.
Other, net. Other income is primarily comprised of mine management fee
income from Level 3 and gains and losses on the disposition of property, plant
and equipment and other assets. The $3 million increase results from
increased gains on equipment sales which were partially offset by the decrease
in the mine management fee.
The Company manages certain coal mines for Level 3. Fees for these services
were $14 million in 1999 and $17 million in 1998. The Company's fee is a
percentage of adjusted operating earnings of the coal mines. The mines
managed by the Company for Level 3 earn the majority of their revenues under
long-term contracts. The remainder of the mines' sales are made on the spot
market where prices are substantially lower than those of the long- term
contracts. As the long-term contracts expire over the next two to five years,
adjusted operating earnings at the mines will decrease substantially, thereby
similarly decreasing the management fee earned by the Company.
Additionally, the Minerals Management Service and Montana Department of
Revenue have issued assessments to the Level 3 mines for the underpayment of
royalties and production taxes. Level 3 is vigorously contesting the
assessments. If Level 3 pays these assessments, the payments could materially
decrease future mine management fees, but will not affect fees previously
received.
Provision for income taxes. The effective income tax rates in 1999 and 1998
differ from the federal statutory rate of 35% due primarily to state income
taxes.
Financial Condition - June 30, 1999 vs. December 26, 1998
The Company's working capital remained unchanged from December 26, 1998.
Sources of cash primarily included $111 million of cash provided by
operations, $20 million in proceeds from the sale of property, plant and
equipment and $2 million in distributions from equity method investees and $25
million from the issuance of common stock. Uses of cash primarily included
stock repurchases of $37 million, dividends of $16 million, purchases of
marketable securities of $4 million, net repayment of debt of $16 million, $33
million for the acquisition of a materials operation, and $33 million for the
purchase of property, plant and equipment.
The Company anticipates investing between $50 and $100 million annually in its
construction and materials businesses. In addition to normal spending, the
Company expects to make significant investments in construction joint ventures
in 1999. The Company continues to explore opportunities to acquire additional
businesses. Other long-term liquidity uses include the payment of income
taxes and the payment of dividends. The Company's current financial condition
and borrowing capacity, together with anticipated cash flows from operations,
should be sufficient for immediate cash requirements and future investing
activities.
In June 1998, the financial Accounting Standards Board ("FASB") issues SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities",
which establishes accounting and reporting standards for derivative
instruments and for hedging activities. This statement is effective for all
fiscal years beginning after June 15, 2000. Management does not expect
adoption of this statement to materially affect the Company's financial
statements as the Company has no material derivative instruments or hedging
activities.
Year 2000 Update
General. The Company's Year 2000 Effort (the "Effort") is proceeding on
schedule. The Effort is comprised of two components: Internal, which
includes updating and replacing all computer systems which are not Year 2000
compliant, and External, which requires developing strategies to protect the
Company from disruptions caused by third parties not being Year 2000
compliant.
Internal. All material internal systems have been tested for Year 2000
compliance and are currently functioning. As a result, the Company does not
believe that a contingency plan with regard to the Internal component of the
Effort is necessary. The Effort did not delay any other information system
projects as several systems were already scheduled to be revised.
External. The primary external factor which could interrupt the Company's
operations is the inability of third party owners to pay the Company on a
timely basis for work performed as a result of their Year 2000 problem. A
large portion of the Company's domestic construction work is with federal,
state and local government agencies. If these agencies are unable to make
payments due to their own Internal Year 2000 problems, the Company could
experience cash flow problems.
Another potentially significant external factor which could interrupt the
Company's operations is the inability of major equipment suppliers to supply
the Company with the equipment needed to complete various construction
projects as a result of their Year 2000 problems. Other major purchasing
components, primarily permanent materials, have alternative procurement
sources, in the event that the primary supplier encounters problems.
Costs. The total cost associated with the Effort was not material to the
Company's financial position. The estimated total cost of the Effort was
approximately $5 million.
Risks. Due to the general uncertainty inherent in the Year 2000 problem,
resulting in large part from the uncertainty of the Year 2000 readiness of
third party suppliers and owners, the Company is unable to determine at this
time whether the consequences of External Year 2000 failures will have a
material impact on the Company's results of operations, liquidity or financial
condition. The Effort is expected to significantly reduce the Company's level
of uncertainty about the Year 2000 problem and, in particular, about the Year
2000 compliance and readiness of its material third party suppliers and
owners. The Company believes that, with the implementation of new business
systems and completion of the Effort as scheduled, the possibility of
significant interruptions of normal operations should be reduced.
Forward Looking Statements. The discussion of the Company's efforts and
management's expectations relating to the Year 2000 problem are forward-
looking statements. The Company's ability to achieve Year 2000 compliance and
the costs associated therewith could be adversely impacted by, among other
things, the availability and cost of programming and testing resources, the
ability of third party suppliers and customers to bring their systems into
Year 2000 compliance, and unanticipated problems identified in the
implementation of the Effort.
Item 3. Quantitative and Qualitative Disclosure About Market Risk.
Not Applicable.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Corporation's annual meeting of stockholders was held on June
19, 1999. The holders of 32,837,020 of the 33,490,776 outstanding shares of
$0.01 par value Common Stock were present in person or by proxy at the annual
meeting. At such meeting, the following matters were submitted to a vote and
approved by the stockholders:
1. Election of Directors. A slate of nominees for director was
proposed by the incumbent directors. No additional nominations were received
and all of the nominees proposed by the board were elected to serve one-year
terms.
Director Nominee Votes For Withheld
---------------- --------- --------
Mogens C. Bay 32,751,192 85,828
Roy L. Cline 32,741,692 95,328
Richard W. Colf 32,121,372 715,648
James Q. Crowe 32,798,112 38,908
Richard Geary 32,811,452 25,568
Bruce E. Grewcock 32,780,452 56,568
William L. Grewcock 32,796,452 40,568
Tait P. Johnson 30,929,328 1,907,692
Peter Kiewit, Jr. 32,811,452 25,568
Allan K. Kirkwood 32,811,452 25,568
Walter Scott, Jr. 32,811,452 25,568
Kenneth E. Stinson 32,806,652 30,368
George B. Toll, Jr. 32,792,652 44,368
2. Bonus Plan Proposal. Approval of the Corporation's 1999 Bonus Plan,
which required the approval of majority of the shares of Common Stock present
in person or by proxy at the annual meeting:
Affirmative Votes Negative Votes Abstentions
----------------- -------------- -----------
31,113,064 1,474,808 249,148
3. Qualification Amendment. Approval of an amendment to Article Fifth
(A)(2)(c) of the Corporation's Restated Certificate of Incorporation
("Certificate"), modifying the definition of "current inside director" by
reducing the required years of employment from 8 years to 6 years, which
required the affirmative vote of the holders of at least 66 2/3% of the issued
and outstanding shares of Common Stock:
Affirmative Votes Negative Votes Abstentions
----------------- -------------- -----------
32,059,928 638,332 138,760
4. Stock Ownership Amendment. Approval of an amendment to the definition of
"Employee" in Article Eighth of the Certificate to include directors of the
Corporation, which required the affirmative vote of the holders of at least
80% of the issued and outstanding shares of Common Stock:
Affirmative Votes Negative Votes Abstentions
----------------- -------------- -----------
29,220,704 3,347,028 269,288
5. Non-Redeemable Series Amendment. Approval of an amendment to the
Certificate eliminating the Corporation's Common Stock, Non-Redeemable Series,
which required the affirmative vote of the holders of at least 80% of the
issued and outstanding shares of Common Stock:
Affirmative Votes Negative Votes Abstentions
----------------- -------------- -----------
32,138,692 518,168 180,160
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits required by Item 601 of Regulation S-K.
Exhibit
Number Description
------- -----------
27 Financial Data Schedule
3.1 Restated Certificate of Incorporation
3.2 Amended and Restated By-Laws
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
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.
PETER KIEWIT SONS', INC.
Date: August 16, 1999 /s/ Kenneth M. Jantz
----------------------------
Kenneth M. Jantz
Vice President and Treasurer
PETER KIEWIT SONS', INC.
INDEX TO EXHIBITS
Exhibit
No.
-------
27 Financial Data Schedule (For electronic filing purposes only)
3.1 Restated Certificate of Incorporation
3.2 Amended and Restated By-Laws
RESTATED CERTIFICATE OF INCORPORATION
OF
PETER KIEWIT SONS', INC.
Peter Kiewit Sons', Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as
follows:
1. The name of the Corporation is Peter Kiewit Sons', Inc.
The Corporation was originally incorporated under the name PKS
Holdings, Inc.
2. The original Certificate of Incorporation of the
Corporation was filed in the office of the Secretary of State of
Delaware on August 4, 1997.
3. This Restated Certificate of Incorporation, which was duly
adopted pursuant to Section 245 of the Delaware General Corporation
Law, restates and integrates, but does not further amend the
provisions of the Corporation's Certificate of Incorporation as
theretofore amended or supplemented, and there is no discrepancy
between those provisions and the provisions of this Restated
Certificate of Incorporation.
4. The text of the Corporation's Certificate of Incorporation
is hereby restated to read in its entirety as follows:
ARTICLE FIRST
NAME
The name of the Corporation (which is hereinafter referred to
as the "Corporation") is: Peter Kiewit Sons', Inc.
ARTICLE SECOND
DELAWARE OFFICE AND REGISTERED AGENT
The registered office of the Corporation in the State of
Delaware is to be located at 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent
therein is The Corporation Trust Company, and the address of said
registered agent is 1209 Orange Street in said City, County and
State.
ARTICLE THIRD
PURPOSES
The nature of the business or purposes to be conducted or
promoted is:
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
ARTICLE FOURTH
CAPITAL STOCK
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 125,250,000 shares; of
which 250,000 shares shall be Preferred Stock, with no par value
per share and of which 125,000,000 shares shall be Common Stock,
with a par value of $0.01 per share (the "Common Stock").
A description of the different classes of stock and a
statement of the designations, powers, preferences, rights,
qualifications, limitations and restrictions of each of said
classes of stock are as follows:
I.
PREFERRED STOCK
Subject to the limitations prescribed by Delaware law and this
Certificate of Incorporation, the Board of Directors of the
Corporation is authorized to issue the Preferred Stock from time to
time in one or more series, each of such series to have such
powers, designations, preferences and relative, participating,
optional or other rights, and such qualifications, limitations or
restrictions thereof, as shall be determined by the Board of
Directors in a resolution or resolutions providing for the issuance
of such Preferred Stock; provided, however, that no series of the
Preferred Stock shall have any voting rights or be convertible into
shares of stock having any voting rights.
II.
COMMON STOCK
(A) Dividends. After any dividend has been declared and set
aside for payment or paid on any series of Preferred Stock having a
preference over the Common Stock with respect to the payment of
dividends, the holders of the Common Stock shall be entitled to
receive out of the funds legally available therefor, cash or non-
cash dividends payable when, as and if declared by the Board of
Directors. The payment of dividends on the Common Stock shall be at
the sole discretion of the Board of Directors.
(B) Liquidation. Upon the liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or
involuntary, after there shall have been paid or set apart for the
holders of any series of Preferred Stock having a preference over
the Common Stock with respect to distributions upon liquidation the
full amount to which they are entitled, the remaining assets
available for distribution to the Corporation's stockholders shall
be distributed to the Common stockholders pro rata on the basis of
the numbers of Common shares held by such stockholders.
III.
VOTING RIGHTS AND CHANGES IN CAPITAL STRUCTURE
(A) Voting Rights. Except as may otherwise be provided by
statute, the holders of the Common Stock shall exclusively possess
voting power for the election of directors and for other purposes,
the holders of record of each share being entitled to one vote for
each share, and the holders of the Preferred Stock shall have no
voting rights nor shall they be entitled to notice of meetings of
stockholders.
(B) Changes in Capital Structure. The Corporation reserves
the right to create new classes of stock, to eliminate classes of
stock, to increase or decrease the amount of authorized stock of
any class or classes, and to otherwise change the powers,
designations, preferences and relative, participating, optional or
other rights, and the qualifications, limitations or restrictions
of any class or classes of stock by the affirmative vote of the
holders of four-fifths of the Common Stock issued and outstanding.
ARTICLE FIFTH
DIRECTORS AND OFFICERS
(A)(1) Number, Quorum, Required Votes. The number of
directors of the Corporation which shall constitute the whole Board
of Directors shall at all times be not less than ten (10) nor more
than fifteen (15). Subject to such minimum and maximum limitations,
the number of directors shall be fixed by, or in the manner
provided in, the by-laws. A majority of the whole Board of
Directors shall constitute a quorum for the transaction of
business. Unless this Certificate of Incorporation shall
specifically require a vote of a greater number, the affirmative
vote of a majority of the whole Board of Directors shall be
required to constitute the act of the Board of Directors.
(2) Qualifications of Directors.
(a) No more than three (3) directors may be non-
inside directors, and the balance must be inside directors, as
defined in this subparagraph (A)(2).
(b) An "inside director" is a director who is
either a current inside director or a former inside director, as
each of such terms is defined in this subparagraph (A)(2).
(c) A "current inside director" is a director who
(i) is a current Common stockholder of the Corporation; (ii) is
currently an officer of either (A) the Corporation or (B) a
Subsidiary which is engaged primarily in the construction, mining
or materials businesses; and (iii) was continuously employed by the
Corporation, its predecessor, former parent corporation or such a
Subsidiary for at least six (6) years before becoming a director.
(d) If a current inside director ceases to be a
current inside director, such director may continue to serve as a
director so long as there is a sufficient number of other inside
directors so that the limitation on non-inside directors required
by subparagraph (A)(2)(a) is satisfied. However, if as a result of
the change in such director's status such non-inside director
limitation would be exceeded, then such director shall
automatically be deemed to have resigned as and shall cease to be a
director. The remaining directors shall thereupon act promptly to
fill the vacancy created by such resignation. Such a vacancy may be
filled with a former inside director, as defined in subparagraph
(A)(2)(e) below. If the director whose resignation created such
vacancy qualifies as a former inside director pursuant to
subparagraph (A)(2)(e), such director may be appointed to fill such
vacancy.
(e) A "former inside director" is a person who: (i)
was at one time a current inside director; (ii) served as an inside
director for at least eight (8) years; and (iii) is declared to be
a former inside director by a majority vote of the directors
holding office at the time of such declaration.
(3) Nomination Procedures. The incumbent directors
shall nominate a slate of directors for election at each annual
meeting of the stockholders of the Corporation. In nominating such
election slates, the directors shall give due consideration to
selecting nominees from each of the principal business segments
represented by the activities of the Corporation and its
Subsidiaries.
(B) Cumulative Voting. At any election for directors every
holder of Common Stock entitled to vote at such election shall have
the right to vote, in person or by proxy, the number of shares
owned by him for as many persons as there are directors to be
elected and for whose election he has a right to vote, or to
cumulate his votes by giving one candidate as many votes as the
number of such directors multiplied by the number of his shares
shall equal, or by distributing such votes on the same principle
among any number of such candidates.
(C) Officers. The Corporation shall have such officers as the
by-laws may provide, except, however, that the Corporation shall
have an officer or officers who shall be empowered to sign
instruments and stock certificates of the Corporation and shall
have an officer who shall have the duty to record the proceedings
of stockholders' meetings and meetings of the Board of Directors.
Officers shall be chosen in such manner and shall hold their
offices for such terms as the by-laws may prescribe or as shall be
determined by the Board of Directors.
ARTICLE SIXTH
POWERS OF THE CORPORATION AND OF THE
DIRECTORS AND STOCKHOLDERS
The following provisions are inserted for the management of
the business and for the conduct of the affairs of the Corporation,
and in further creation, definition, limitation and regulation of
the powers of the Corporation, its directors and stockholders:
(A) Indemnification.
(1) Fullest Extent Permitted by Law. The Corporation
shall indemnify each person who is or was a director, officer or
Employee of the Corporation (including the heirs, executors,
administrators or estate of such person) or is or was serving at
the request of the Corporation as a director, officer or employee
of another corporation, partnership, joint venture, trust or other
enterprise to the fullest extent permitted under subsections
145(a), (b), (c) and (e) of the Delaware General Corporation Law or
any successor statute.
(2) Non-Exclusivity of Rights. The indemnification
provided by this paragraph (A) of ARTICLE SIXTH shall not be deemed
exclusive of any other rights to which any of those seeking
indemnification or advancement of expenses may be entitled under
any by-law, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director,
officer, Employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(3) Repeal or Modification. Any repeal or modification
of paragraph (A) of this ARTICLE SIXTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director, officer or Employee of the Corporation existing at the
time of such repeal or modification.
(B) Powers of Board. In furtherance and not in limitation of
the powers conferred by statute, the Board of Directors is
expressly authorized:
(1) By-Laws. To make, alter and repeal the by-laws of
the Corporation by affirmative vote of two-thirds of the whole
Board of Directors;
(2) Mortgages, Liens, and Pledges. To authorize and
cause to be executed mortgages and liens on the real and personal
property and pledges of personal property of the Corporation
without the assent or vote of the stockholders;
(3) Payments. In its discretion to pay for any property
or rights acquired by the Corporation, either wholly or partly in
money, stock, bonds, debentures or other securities of the
Corporation;
(4) Determination of Amount Constituting Capital. To fix
and determine from time to time what part of the consideration
received by the Corporation on any issue of stock without par value
shall constitute capital;
(5) Bonds, Debentures, and Other Obligations. Without
the assent or vote of the stockholders, to issue bonds, debentures,
or other obligations of the Corporation from time to time, without
limit as to amount, for any of the objects or purposes of the
Corporation and if desired, to secure the same or any part thereof
by mortgage, pledge, deed of trust or otherwise on any part or all
of its property and to cause the Corporation to guarantee bonds,
debentures, notes, indebtedness or other obligations of persons,
firms and/or other corporations;
(6) Convertible Obligations. To create and issue
obligations of the Corporation that shall confer upon the holders
or owners thereof the right to convert the same into shares of
stock of the Corporation, and to fix the rate at which such
obligations may be so converted and the period or periods of time
during which any such right of conversion shall exist, and any
shares of stock issued upon the conversion of any such obligations
shall be conclusively deemed to be fully paid stock and not liable
to any further call or assessment, and the holder thereof shall not
be liable for any further payment in respect thereof;
(7) Performance-Based Obligations. To create and issue
obligations of the Corporation that shall confer upon the holders
or owners thereof the right to receive interests based in whole or
in part upon the financial performance of the Corporation or any
part, division or subsidiary thereof, and to fix the term,
conditions for sale and repurchase, applicable performance
standards, interest rate and such other conditions, rights and
restrictions for such obligations as it shall determine;
(8) Inspections by Stockholders. To determine from time
to time whether and to what extent and at what times and places and
under what conditions and regulations the accounts and books of the
Corporation, or any of them, shall be open to inspection of the
stockholders; and no stockholder shall have any right to inspect
any account or book or document of the Corporation, except as
expressly conferred by the laws of the State of Delaware, unless
and until authorized so to do by resolution of the Board of
Directors, or by resolution of the Common stockholders;
(9) Committees. By resolution or resolutions, passed by
an affirmative vote of two-thirds of the whole Board of Directors,
to designate one or more committees, each committee to consist of
two or more of the directors of the Corporation, which, to the
extent provided in said resolution or resolutions, or in the by-
laws of the Corporation, shall, to the extent permitted by Delaware
Corporation Law, have and may exercise the powers of the Board of
Directors in the management of the business and affairs of the
Corporation, except the powers to amend the by-laws, to declare
dividends and to act contrary to any action previously undertaken
by the Board of Directors, and may have power to authorize the seal
of the Corporation to be affixed to all papers which may require
it, said committee or committees to have such name or names as may
be stated in the by-laws of the Corporation or as may be determined
from time to time by resolution adopted by the Board of Directors;
and
(10) Additional Powers. The Corporation may in its by-laws
confer powers upon its Board of Directors in addition to the
foregoing and in addition to the powers and authorities expressly
conferred upon it by statute.
(C) Limitations on Powers of Board. In limitation of those
powers conferred by statute regarding the matters described in this
paragraph (C), the Board of Directors is authorized to act as
follows:
(1) Substantial Acquisitions. To acquire for the
Corporation any property, rights or privileges at such price and
for such consideration and generally upon such terms and conditions
as it thinks fit; provided, however, an affirmative vote of two-
thirds of the whole Board of Directors shall be required for the
Corporation to make a substantial acquisition not in the primary,
ordinary and regular course of its business activities; and
provided further that for the purposes of this subparagraph (1)
"substantial acquisition" shall mean an acquisition (or a series of
acquisitions which, in light of the period of time over which they
are effected and the intentions of the Board of Directors in making
them, should be characterized for the purposes of this subparagraph
(1) as a single acquisition) with a price (excluding the amount of
any assumed obligation and any amount paid out of the proceeds of a
loan under the terms of either of which the lender has recourse
only against the asset or assets being acquired) in excess of ten
(10%) percent of the total stockholders' equity of the Corporation,
determined on a consolidated basis as of the fiscal year end
immediately preceding such acquisition;
(2) Substantial Dispositions. To dispose of for the
Corporation any property, rights or privileges at such price and
for such consideration and generally upon such terms and conditions
as it thinks fit; provided, however, an affirmative vote of two-
thirds of the whole Board of Directors shall be required for the
Corporation to make a substantial disposition not in the primary,
ordinary and regular course of its business activities; and
provided that for the purpose of this subparagraph (2) "substantial
disposition" shall mean a disposition (or a series of dispositions
which, in light of the period of time over which they are effected
and the intentions of the Board of Directors in making them, should
be characterized for the purposes of this subparagraph (2) as a
single disposition) with a price in excess of ten (10%) percent of
the total stockholders' equity of the Corporation, determined on a
consolidated basis as of the fiscal year end immediately preceding
such disposition; provided further, however, such sale or
disposition shall not constitute a sale or disposition of all or
substantially all of the Corporation's property and assets, the
approval for which is hereinafter provided;
(3) Sale of All or Substantially All Assets. To sell,
lease or exchange all or substantially all of the Corporation's
property and assets, including its goodwill and its corporate
franchises, upon such terms and conditions and for such
considerations, which may be in whole or in part shares of stock
in, and/or other securities of, any other corporation or
corporations, as said Board of Directors shall deem expedient and
in the best interests of the Corporation, only when and as
authorized by the affirmative vote of the holders of four-fifths of
the Common Stock issued and outstanding;
(4) Offers of Common Stock to Non-Employees. To offer to
sell the Common Stock of the Corporation to persons other than
Employees of the Corporation, in any manner, including but not
limited to a "public offering" within the meaning of the United
States Securities Act of 1933, as it may be amended from time to
time, only when and as authorized by the affirmative vote of the
holders of four-fifths of the Common Stock issued and outstanding;
(5) Change In Stock Price Formula. To change the formula
for determining the Formula Value or the Common Share Price, only
when and as authorized by the affirmative vote of the holders of
four-fifths of the Common Stock issued and outstanding;
(6) Mergers and Consolidations. To merge or consolidate
the Corporation with a corporation other than a Subsidiary, only
when and as authorized by the affirmative vote of the holders of
four-fifths of the Common Stock issued and outstanding; and
(7) Dissolution. To dissolve the Corporation, only when
and as authorized by the affirmative vote of the holders of four-
fifths of the Common Stock issued and outstanding.
(D) Stock Ownership and Transfer Restrictions. The following
restrictions on the ownership and transfer of the Common Stock of
the Corporation are hereby imposed:
(1) Ownership Restrictions. All shares of Common Stock
sold by the Corporation shall be subject to a repurchase agreement,
the terms of which shall be determined by the Board of Directors.
With the prior approval of the Board of Directors and subject to
paragraph (D)(3), Employees, fiduciaries for the benefit of the
Employee's spouse and/or children, corporations one hundred (100%)
percent owned by Employees or Employees and their spouse and/or
children, and fiduciaries for the benefit of such corporations,
charities and fiduciaries for charities designated by any such
persons shall be eligible to own Common Stock of the Corporation.
(2) Transfers to Charitable Organizations. The holders
of the Common Stock may transfer such stock to tax-exempt
charitable organizations approved as such by the Internal Revenue
Service; provided, that any such transfer shall be subject to a
repurchase agreement which provides, in part, that said charitable
owners shall agree not to transfer, assign, pledge, hypothecate, or
otherwise dispose of such stock except in a sale to the
Corporation, and said charitable owners shall at any time upon five
(5) days' written notice and demand by the Corporation sell such
stock to the Corporation. The Corporation shall be obligated to
accept any offer made by the charitable owners to sell such stock
to the Corporation. The purchase price for the Common Stock shall
be the Common Share Price. Payment of the purchase price shall be
made by the Corporation within sixty (60) days of its acquiring of
any such stock, without interest.
(3) Transfer Restrictions On Common Stock.
(a) Sales to Corporation. The holders of Common
Stock shall not sell, transfer, assign, pledge, hypothecate or
otherwise dispose of such stock except in a sale to the Corporation
or in a transfer to an authorized transferee approved by the Board
of Directors pursuant to subparagraph (D)(1) above or a transfer in
accordance with subparagraph (D)(2) above. Holders of Common Stock
may, at any time on or prior to the 15th day of any calendar month,
offer to sell part or all of their Common Stock to the Corporation
by delivering the certificate or certificates representing such
stock to the Corporation along with a written notice offering such
stock to the Corporation. Such offer must be accepted by the
Corporation, and payment shall be made for such stock within sixty
(60) days after the receipt of such stock and such written notice
by the Corporation, without interest. The rights of redemption
provided for in this subparagraph (D)(3)(a), and each other right
of redemption of Common Stock provided for in this Certificate of
Incorporation, shall be subject to the requirement that no shares
of any class shall be redeemed, either at the option of the holder
thereof or of the Corporation, unless after giving effect to such
redemption there remain outstanding at least 1,000 shares of stock
of the Corporation having full voting power.
(b) Termination. Upon the termination of the
employment of any Employee with the Corporation for any reason
other than death, the Employee or his authorized transferee shall
sell and deliver the Common Stock held by such Employee or his
authorized transferee to the Corporation within ten (10) days after
the date of a written notice from the Corporation to sell and
deliver such stock (a "Repurchase Notice"). The Corporation shall
give such Repurchase Notice within the period commencing on the day
of termination and ending on the 90th day after such termination.
Payment for such stock shall be made within sixty (60) days after
the date of such Repurchase Notice, without interest.
(c) Death. Upon the death of any Employee, the
estate, successor or personal representative of such Employee or
the authorized transferee of such Employee shall sell and deliver
the Common Stock previously held by such Employee or held by his
authorized transferee to the Corporation within ten (10) days after
the date of a written notice from the Corporation to sell and
deliver such stock. The Corporation shall give the notice to sell
and deliver within the period commencing on the day of death of
such Employee and ending on the 180th day after said death. Payment
for such stock shall be made within sixty (60) days after the date
of said notice, without interest. Upon the death of an Employee
holding stock of the Corporation on the day of his death, the
Employee's estate, successor or personal representative and any
authorized transferee of such deceased Employee shall have the
option to defer the purchase by the Corporation of its Common Stock
to a date or dates later than that provided for in this
subparagraph (D)(3) but prior to the January 10th next succeeding
the fiscal year during which the Employee's death occurred.
(d) Ownership of Excessive Amount. Upon a
determination by the Board of Directors that the amount of Common
Stock held by an Employee and/or his authorized transferee is
excessive in view of the Corporation's policy that the level of an
Employee's stock ownership should reflect certain factors,
including but not limited to (i) the relative contribution of that
Employee to the economic performance of the Corporation, (ii) the
effort being put forth by such Employee, and/or (iii) the level of
responsibility of such Employee, the Corporation shall have the
option to purchase from such Employee and/or his authorized
transferee an amount of Common Stock sufficient to decrease the
amount of such stock owned by such Employee or his authorized
transferee to an amount that the Board of Directors, in its sole
discretion, believes is appropriate. In the event that the
Corporation elects to exercise this option, it shall give the
Employee and/or his authorized transferee written notice to that
effect and the Employee and/or his authorized transferee shall sell
and deliver the amount of stock specified in such notice to the
Corporation within ten (10) days after the date of the notice, with
payment to be made for such stock within sixty (60) days after the
date of said notice, without interest.
(e) Pledges. Notwithstanding anything contained in
this subparagraph (D)(3) to the contrary, an Employee may pledge
Common Stock for loans in connection with the ownership of the
Corporation's stock.
(f) Authorized Transferee. For purposes of this
subparagraph (D)(3), the term "authorized transferee" shall mean
any stockholder permitted to own stock of the Corporation pursuant
to paragraph (D)(1) above.
(g) Failures to Meet Time Limits. No failure by the
Corporation, a stockholder, an authorized transferee, or the
estate, successor, or personal representative of a stockholder to
take any action within any time period prescribed by this
subparagraph (D)(3) shall render the Common Stock of the
Corporation transferable other than in conformance with the
provisions of this subparagraph (D)(3) or preclude the Corporation
from exercising its right to purchase any such stock.
(4) Stock Price. The Corporation shall purchase or sell
any share of Common Stock for a price equal to the Common Share
Price. The consideration paid for such Common Stock shall be in
cash or such other form as mutually agreed upon by the Corporation
and the Common stockholder.
(5) Limitations On Amount of Ownership. No more than ten
(10%) percent of the shares of the Common Stock issued and
outstanding shall at any time be owned of record, or voted, by or
for the account of any one Employee as hereinbefore described. For
purposes of calculation of said ten (10%) percent limitations
Common Stock of the Corporation owned by an Employee's spouse,
children, grandchildren, parents, grandparents and spouses of such
persons (collectively, an Employee's "family members"), fiduciaries
for the benefit of an Employee or his family members, fiduciaries
for charities designated by an Employee or his family members, and
any entity which an Employee or his family members have created or
control, directly or indirectly, or in which an Employee or his
family members have a beneficial or reversionary interest, shall be
counted as being owned by the Employee. All calculations regarding
the ten (10%) percent limitation (including both the numerator and
denominator of the calculations) shall be on a fully diluted basis
(i.e., all stock that in the future will be issued upon the
conversion of any then-issued and outstanding Convertible
Debentures of the Corporation shall be included in the
calculations). The ten (10%) percent limitations shall be
calculated as of the 1st day of January of each year, and any
stockholder who owns more Common Stock than the ten (10%) percent
limitation permits shall be so notified by the Corporation and
shall, at the stockholder's option, be permitted to hold the excess
stock until the next succeeding January 1, and on or before said
January 1, the stockholder shall take the action described in
subparagraph (D)(6) below.
(6) Sales of Excess Stock. In the event that any
stockholder through his own action or the action of others becomes
an owner of more than ten (10%) percent, as defined in subparagraph
(D)(5) above, of the Common Stock, he shall offer to the
Corporation, and the Corporation shall purchase within sixty (60)
days of such offer, at the price defined in subparagraph (D)(4)
above, such amount of his stock that is in excess of said ten (10%)
percent limitation. In the event that a stockholder shall fail to
offer such stock to the Corporation within the period described in
subparagraph (D)(5) above, the Corporation shall, within sixty (60)
days following the end of such period, purchase such excess stock
holdings.
(7) Termination of Certain Owners. Any stockholder-
Employee of the Corporation who owns two (2%) percent or more of
the Common Stock issued and outstanding shall not be terminated
from employment of the Corporation except by an affirmative vote of
two-thirds of the whole Board of Directors. The Board of Directors
shall have the right to reduce said two (2%) percent requirement in
the by-laws of the Corporation to a lower percentage requirement by
an affirmative vote of two-thirds of the whole Board of Directors.
For purposes of calculation of this percentage requirement, the
attribution rules specified in paragraph (D)(5) above regarding the
ten (10%) percent limitation on ownership shall apply.
(8) Suspension of Repurchase Duties. Notwithstanding
anything in this ARTICLE SIXTH to the contrary, in the event that
the Board of Directors determines that the Formula Value to be
determined at the end of the fiscal year during which such
determination is made is likely to be less than (i) the Formula
Value determined at the end of the prior fiscal year less (ii) the
aggregate amount of dividends declared on the Common Stock since
the end of the prior fiscal year, the Board may suspend the
Corporation's duty to repurchase shares of Common Stock in
accordance with this paragraph (D)(8). Any such suspension shall
not extend for a period longer than three hundred sixty-five (365)
days from the date of the Board's declaration of suspension. During
any such suspension period, the Corporation shall not repurchase
any shares of Common Stock tendered or required to be tendered for
repurchase pursuant to the second sentence of subparagraph
(D)(3)(a). During any such suspension period, the Corporation shall
continue to repurchase Common Stock tendered to the Corporation
pursuant to any other provision of this Certificate of
Incorporation, but (a) payment for such repurchases shall not be
required until sixty (60) days after the end of the suspension
period, (b) such payment shall be made without interest, and (c)
the repurchase price shall be the Common Share Price determined as
of (i) the end of the prior fiscal year, in the case of a
suspension period that ends before July 1 of the fiscal year,
(provided that such computation of the Share Price shall be reduced
by the amount of dividends per share declared on the Common Stock
since the end of the prior fiscal year), or (ii) in the case of a
suspension period that ends after June 30 of a fiscal year, the end
of the fiscal year during which the suspension period ends.
(E) Payments Where Stock Price Not Yet Computed. If the price
at which the Corporation is to purchase stock pursuant to any
provision in this Certificate of Incorporation has not been
computed within the time period prescribed for payment for such
stock because the preparation of the audited Consolidated Financial
Statements of the Corporation and Consolidated Subsidiaries has not
yet been completed, the Corporation shall, within the time period
prescribed for payment for such stock, make an initial payment in
an amount equal to the price that would have been paid for such
stock if it had been purchased by the Corporation during the next
preceding fiscal year. The balance shall be paid within ten (10)
days after the date on which the price at which the Corporation is
to purchase such stock has been computed. In the event that the
price at which the Corporation is to purchase such stock is less
than the amount paid by the Corporation, in the "initial payment"
provided for in this paragraph (E), the Corporation shall be
entitled to recover the difference between the two amounts. Such
difference shall be paid by the person or entity to whom the
Corporation made the "initial payment" within ten (10) days of the
date of a written notice from the Corporation to pay such amount,
without interest.
(F) Ratification By Stockholders. Any contract, transaction
or act of the Corporation or of the directors, which shall be
ratified by a majority of a quorum of the stockholders then
entitled to vote at any annual meeting or at any special meeting
called for such purpose, shall, so far as permitted by law and by
this Certificate of Incorporation, be as valid and as binding as
though ratified by every stockholder entitled to vote at such
meeting.
(G) Meetings, Offices, and Books Outside State of Delaware.
The stockholders and the Board of Directors may hold their meetings
and the Corporation may have one or more offices outside of the
State of Delaware, and subject to the provisions of the laws of
said state, may keep the books of the Corporation outside of said
state and at such places as may be from time to time designated by
the Board of Directors.
(H) Removal of Directors. At any meeting of the holders of
the Common Stock called for the purpose, any one or more of the
directors may, by a majority vote of the holders of the Common
Stock at the time, be removed from office, with or without cause,
and another director or other directors be elected by such majority
vote of said holders of the Common Stock in the place or places of
the person or persons so removed, to serve for the remainder of his
or their term or terms, as the case may be; provided, however, that
if less than all the directors are to be removed, no individual
director shall be removed without cause when the votes cast against
his removal would be sufficient to elect him if then cumulatively
voted at an annual election of all the directors.
(I) By-Law Provisions for Conduct of Business. The
Corporation may in its by-laws make any other provisions or
requirements for the conduct of the business of the Corporation,
provided the same be not inconsistent with the provisions of this
Certificate of Incorporation, or contrary to the laws of the State
of Delaware. The by-laws may be amended by affirmative vote of two-
thirds of the whole Board of Directors or by affirmative vote of
the holders of two-thirds of the Common Stock issued and
outstanding.
(J) Requirements of Votes Greater Than Required By-Law.
Whenever this Certificate of Incorporation contains provisions
requiring for any corporate action the vote of a larger portion of
the stock or a larger portion of the directors than is required by
the General Corporation Law of the State of Delaware, the
provisions of this Certificate of Incorporation shall govern and
control.
(K) Amendments of Certificate. Subject to any limitations
herein contained, the Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Certificate
of Incorporation, or in any amendment thereto by an affirmative
vote of the holders of two-thirds of the Common Stock issued and
outstanding, and all rights conferred upon stockholders in said
Certificate of Incorporation or any amendment thereto, are granted
subject to this reservation; provided, however, that the provisions
of this Certificate of Incorporation requiring for action by the
stockholders a vote greater than such two-thirds vote shall not be
amended except by such greater vote; and provided further that this
Paragraph (K) shall not be amended except by an affirmative vote of
the holders of four-fifths of the Common Stock issued and
outstanding.
ARTICLE SEVENTH
LIMITATION OF LIABILITY
A director of this Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the Corporation
or its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation
Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law
is amended after approval by the stockholders of this ARTICLE
SEVENTH to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of
a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law as
so amended. Any repeal or modification of this paragraph by the
stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at
the time of such repeal or modification.
ARTICLE EIGHTH
DEFINITIONS
As used in this Certificate of Incorporation, the following
meanings (with terms defined in the singular having comparable
meaning when used in the plural and vice versa), unless another
definition is provided or the context otherwise requires:
"Formula Value" means the sum of:
(a) the total stockholders' equity as shown on the
consolidated balance sheet contained in the Consolidated Financial
Statements of the Corporation and Consolidated Subsidiaries,
prepared in conformity with generally accepted accounting
principles applied on a consistent basis for the Corporation and
its consolidated Subsidiaries as of the fiscal year end immediately
preceding the date of determination (the "prior year end") and
audited and certified by an independent firm of certified public
accountants selected and engaged by the Board of Directors; minus
(b) the sum of: (i) the book value of Property, Plant
and Equipment as of the prior year end; plus (ii) the total
stockholders' equity attributable to any issued and outstanding
Preferred Stock, as reflected on the consolidated balance sheet,
plus the amount of any accrued, accumulated and undeclared
dividends thereon, all as of the date of determination.
"Common Share Price" with respect to any share of Common
Stock, means the amount determined by dividing:
(a) the sum of (i) the Formula Value plus (ii) the face
amount of any outstanding Convertible Debentures convertible into
Common Stock, determined as of the fiscal year end immediately
preceding the date of determination (the "prior year end"); by
(b) the sum of (i) the total number of issued and
outstanding shares of Common Stock, plus (ii) the total number of
shares of Common Stock reserved for the conversion of outstanding
Convertible Debentures convertible into Common Stock, in each case
determined as of the prior year end;
and deducting from the quotient (rounded to the nearest $0.05) the
amount of any dividends per share declared on Common Stock
subsequent to the prior year end.
"Convertible Debenture" means any debenture or other
instrument evidencing indebtedness of the Corporation convertible
at any time into shares of the Common Stock.
"Employee" means an individual employed by (i) the
Corporation, any Subsidiary or Twenty Percent Subsidiary or any
joint venture in which the Corporation and/or any Subsidiary or
Twenty Percent Subsidiary has a twenty percent or more interest
or (ii) Kiewit Coal Properties, Inc. or any subsidiary thereof or
any joint venture in which Kiewit Coal Properties, Inc. or any
such subsidiary has a twenty percent or more interest. An
Employee shall also include any person serving on the Board of
Directors of the Corporation.
"Property, Plant and Equipment" means those assets included
within such classification as reflected on the consolidated balance
sheets contained as a part of the Consolidated Financial Statements
of the Corporation and Consolidated Subsidiaries, that are utilized
in or associated with the Corporation's ordinary and regular course
of construction activities.
"Subsidiary" means a corporation, partnership or other entity
with respect to which the Corporation holds, directly or
indirectly, at least a majority of the issued and outstanding
capital stock or other equity interests, measured in terms of total
dollar value if such entity has outstanding more than one class of
capital stock or other equity interests.
"Twenty Percent Subsidiary" means a corporation, partnership,
or other entity with respect to which the Corporation owns,
directly or indirectly, twenty percent or more of the issued and
outstanding capital stock or other equity interests, measured in
terms of total dollar value if such corporation, partnership or
other entity has outstanding more than one class of capital stock
or other equity interests.
IN WITNESS WHEREOF, Peter Kiewit Sons', Inc. has caused this
Restated Certificate of Incorporation, to be signed and attested by
its duly authorized officers as of the 19th day of June, 1999.
PETER KIEWIT SONS', INC.
By: /s/ Kenneth E. Stinson
----------------------
Kenneth E. Stinson, President
ATTEST:
By: /s/ Tobin A. Schropp
--------------------
Tobin A. Schropp, Secretary
BY-LAWS
OF
PETER KIEWIT SONS', INC.
OFFICES
1. The registered office of the corporation shall be in the
City of Wilmington, County of New Castle, State of Delaware, and
the name of the registered agent in charge thereof is The
Corporation Trust Company.
2. The corporation shall also have an office in the City of
Omaha, State of Nebraska, and also offices at such other places as
the board of directors may from time to time designate.
SEAL
3. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words
"Corporate Seal, Delaware." Said seal may be used by causing it or
a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
STOCKHOLDERS' MEETINGS
4. The annual meeting of the stockholders of the corporation
shall be held at such date, place and time as may be determined by
the board of directors and as may be designated in the notice of
such meeting for the purpose of electing a board of directors and
the transaction of such other business as may properly be brought
before the meeting.
5. Special meetings of the stockholders may be held at such
time and place as shall be stated in the notice of the meeting.
6. The holders of a majority of the stock issued and
outstanding, and entitled to vote thereat, present in person, or
represented by proxy, shall be requisite and shall constitute a
quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute, by the Restated
Certificate of Incorporation or by these By-laws. If, however, such
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in
person, or by proxy, shall have power to adjourn the meeting from
time to time without notice other than announcement at the meeting,
until a quorum shall be present. At such adjourned meeting at which
a quorum shall be present any business may be transacted which
might have been transacted at the meeting as originally notified.
7. Each stockholder at every meeting of the stockholders
shall be entitled to one vote in person or by proxy for each share
of the capital stock entitled to vote held by such stockholder, but
no proxy shall be voted on after three (3) years from its date,
unless the proxy provides for a longer period.
At each election for directors every stockholder entitled
to vote at such election shall have the right to vote, in person or
by proxy, the number of shares owned by him for as many persons as
there are directors to be elected and for whose election he has a
right to vote, or to cumulate his votes by giving one candidate as
many votes as the number of such directors multiplied by the number
of his shares shall equal, or by distributing such votes on the
same principle among any number of such candidates.
8. Notice of the annual meeting of the stockholders shall be
given by the Secretary or an Assistant Secretary of the corporation
as required by law.
9. A complete list of the stockholders entitled to vote at
every meeting of the stockholders shall be prepared, at least ten
(10) days before every meeting, by the officer who has charge of
the stock ledger of the corporation. The list shall be arranged in
alphabetical order and shall show 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 (10) 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. This 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.
10. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by
the chairman of the board and shall be called by the chairman of
the board or secretary at the request in writing of a majority of
the board of directors, or at the request in writing of
stockholders owning a majority in amount of the entire capital
stock of the corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the
proposed meeting.
11. Business transacted at all special meetings shall be
confined to the objects stated in the call.
12. Written notice of a special meeting of stockholders,
stating the time and place and object thereof, shall be served upon
or mailed at least ten (10) days before such meeting to each
stockholder entitled to vote thereat at such address as appears on
the books of the corporation.
DIRECTORS
13. The number of directors of the corporation which shall
constitute the whole board shall be such number, not less than ten
(10) nor more than fifteen (15), as the board of directors may from
time to time fix by resolution. The directors shall be elected at
the annual meeting of the stockholders, and each director shall be
elected to serve until his successor shall be elected and shall
qualify. Newly created directorships resulting from any increase in
the authorized number of directors may be filled by a majority of
the directors then in office, and the directors so elected shall
hold office until the next annual election and until their
successors are duly elected and shall qualify.
13A. Nominations for the election of directors shall be made
by the board of directors or a stockholder entitled to vote for the
election of directors. However, a stockholder may nominate one or
more persons for election as directors at a meeting held to elect
directors only if written notice of such stockholder's intent to
make each such nomination has been received by the Secretary of the
corporation not later than (i) with respect to an election to be
held at the annual meeting of stockholders, sixty (60) days before
such meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders, the close of business on the
seventh day following the date on which notice of such meeting is
first given to stockholders.
Each such notice from the stockholder to the Secretary shall
set forth: (a) the name and address of the stockholder who intends
to make the nomination and of the person or persons to be
nominated; (b) a representation that the stockholder is a holder of
record of stock of the corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (c) the
written consent of each nominee to serve as a director of the
corporation if so elected; (d) a description of all arrangements or
understandings between the stockholder and each nominee and any
other person or persons (naming each such person) pursuant to which
the nomination or nominations are to be made by the stockholder;
(e) such other information regarding each nominee proposed by such
stockholder as would be required to be included in a preliminary
proxy statement filed pursuant to the proxy rules of the Securities
and Exchange Commission, had the nominee been nominated, or
intended to be nominated, by the board of directors; and (f) such
additional information about each such nominee as the board of
directors may reasonably request to determine the eligibility of
the nominee. The chairman of the meeting may refuse to acknowledge
the nomination of any person not made in compliance with the
foregoing procedure.
14. The directors may hold their meetings and keep the books
of the corporation outside of Delaware at the office of the
corporation in the City of Omaha, Nebraska, or at such other places
as they may from time to time determine.
15. If the office of any director or directors becomes vacant
by reason of death, resignation, retirement, disqualification,
removal from office, or otherwise, a majority of the remaining
directors, though less than a quorum, may choose a successor or
successors, who shall hold office for the unexpired term in respect
to which such vacancy occurred or until the next election of
directors. However, if the stockholders remove a director, the
vacancy shall be filled only upon the election of a successor
director by the stockholders.
16. The property, business and affairs of the corporation
shall be managed by its board of directors which may exercise all
lawful powers of the corporation and do all such lawful acts and
things as are not by statute or by the Restated Certificate of
Incorporation or by these By-laws directed or required to be
exercised or done by the stockholders.
HONORARY DIRECTORS
17. The board of directors by resolution may create an
advisory board of directors and appoint one or more persons to such
advisory board of directors. Persons appointed to said advisory
board shall be considered honorary directors of the corporation.
Members of said advisory board shall be entitled to attend regular
and special meetings of the board of directors and participate in
such meetings by their offering advice and consultation; but
members of said advisory board shall not be entitled to vote on any
matter being considered by the board of directors. A member of the
advisory board of directors shall not be considered in any way a
member of the board of directors or an officer or employee of the
corporation.
BOARD COMMITTEES
18. The board of directors may by resolution passed by an
affirmative vote of two-thirds of the whole board designate
committees of the board, each consisting of two (2) or more of its
members. Such committees shall include, but are not limited to, an
executive committee, a compensation committee, and an audit
committee. The board of directors shall designate the chairman of
each committee and all of the members of the committee shall serve
at the pleasure of the board of directors.
A majority of each committee shall constitute a quorum. Each
committee shall adopt its own rules of procedure and shall meet at
stated times as provided by its rules of procedure or upon the call
of the chairman of the committee or of any two members of the
committee. Notice of each such meeting, stating the place, date,
and hour thereof, shall be served personally on each member of the
committee, or shall be mailed, telegraphed or telephoned to his
address on the books of the corporation, at least twenty-four (24)
hours before the meeting. A notice need not state the business
proposed to be transacted at the meeting. No notice of the time or
place of any meeting of the committee need be given to any member
thereof who attends in person or who, in writing executed and filed
with the records of the meeting either before or after the holding
thereof, waives such notice. No notice need be given of an
adjourned meeting of the committee. Meetings of the committee may
be held at such place or places, either within or outside of the
City of Omaha, State of Nebraska, as the committee shall determine,
or as may be specified or fixed in the respective notices or
waivers thereof. Each committee shall keep appropriate minutes of
its proceedings and report all significant actions to the board of
directors at the regular meetings thereof held next after such
actions have been taken. Vacancies on such committee shall be
filled by the board of directors. Members of such committee may be
removed by the board of directors at any time with or without
cause.
EXECUTIVE COMMITTEE
19. The executive committee shall have and may exercise all
or any of the powers of the board of directors in the management of
the normal and ordinary business and affairs of the corporation at
all times when the board of directors is not in session, and in
connection therewith, the executive committee shall have full
charge of the property, interest, business and transactions of the
corporation. Specifically, but not by way of limitation, the
executive committee shall have the following powers, duties and
responsibilities while the board of directors is not in session:
(a) To fix all remuneration of the officers and employees of
the corporation, other than its executive officers, within the
guidelines recommended by the compensation committee and approved
by the board of directors.
(b) To maintain general charge and control of all accounting
and data processing affairs of the corporation.
(c) To maintain general charge and control of all major
financial arrangements, and of acquisitions and dispositions of
property which are not in the ordinary, routine, and regular course
of business of the corporation and to make recommendations as to
all matters within the purview of this subparagraph (c) to the
board of directors.
(d) To maintain general charge of and to supervise the
financial affairs of the corporation, including the budgetary,
accounting, and statistical methods and procedures of the company,
financial policies, practices and problems of the corporation and
to make recommendations as to such financial or related matters as
shall be referred to it by the board of directors, or which shall
be raised by the committee on its own initiative.
(e) To supervise the borrowing of money, and the issuance of
bonds, notes, or other obligations and evidences of indebtedness
therefor.
(f) To assure compliance with ethical standards.
(g) To supervise the investment of funds of this corporation
in the purchase and acquisition of stocks, bonds, and other
securities, in the name and in behalf of this corporation, and to
sell and dispose of the stocks, bonds, and other securities owned
by this corporation, at such times and upon such terms as it may
deem wise and advantageous to this corporation.
The executive committee shall not have the power or authority of
the board of directors in reference to amending the Restated
Certificate of Incorporation, amending the By-laws, declaring
dividends, 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 a dissolution, authorizing the issuance of stock
or to act contrary to any action previously undertaken by the board
of directors, and shall not have the specific powers conferred upon
other committees by these By-laws or by resolution of the board
pursuant to the Restated Certificate of Incorporation of the
corporation. The executive committee shall not have the authority
to inaugurate reversals of, or departures from, fundamental
policies and methods of conducting the business of the corporation,
as prescribed by the board. It shall have the power to authorize
the seal of the corporation to be affixed to all papers and
documents which may require it. All actions of the executive
committee shall be subject to revision or alteration by the board
of directors provided that no rights or acts of third parties shall
be affected by any such revision or alteration.
COMPENSATION COMMITTEE
20. Under the direction of the board of directors, the
committee shall have the following functions:
(a) To review, and approve or disapprove, all compensation of
whatever nature to be paid to the executive officers of the
corporation, i.e. the employee directors of the corporation and any
other persons whom the board of directors specifically designate as
executive officers.
(b) To review the ownership of the corporation's securities
by employee stockholders and make determinations concerning
excessive stock ownership pursuant to Article Sixth (D)(3)(d) of
the Restated Certificate of Incorporation.
(c) At the specific request of the board of directors or the
chairman of the board, conduct investigations, make
recommendations, or perform other functions as requested.
(d) To recommend to the board of directors the compensation
ranges of the management personnel of the corporation.
(e) To make recommendations to the board of directors about
the salaries and bonuses to be paid to all key management personnel
and the terms and conditions of their employment.
(f) To make recommendations to the board of directors about
any other plans affecting employees' remuneration, including fringe
benefits, as well as ownership of the corporation's stock and
convertible debentures.
(g) To review and approve all requests by stockholders of the
corporation to transfer stock of the corporation to transferees
within the guidelines established by Section 38 of these By-laws.
AUDIT COMMITTEE
21. None of the members of the audit committee shall be
directly involved in the supervision or management of the financial
affairs of the corporation or any of its subsidiaries. The audit
committee shall have the following duties and responsibilities
while the board of directors is not in session:
(1) To recommend to the board of directors for appointment,
retention or termination by the board of directors independent
public accountants to audit the books, records, and accounts of the
corporation.
(2) To examine and make recommendations to the board of
directors with respect to the overall scope of the audit conducted
by the corporation's independent public accountants, the audit
procedures which will be followed during the course of the audit,
their final opinion and the compensation to be paid for the
services of the independent public accountants.
(3) To review all recommendations made by the corporation's
independent public accountants to the board of directors with
respect to the accounting methods used by the corporation or any
other accounting matters and to advise the board of directors with
respect thereto.
(4) To review the following matters with the independent
public accountants, upon completion of their audit:
(a) the financial statements and any report or opinion
proposed to be rendered in connection therewith,
(b) the independent public accountant's perceptions of
the company's financial and accounting personnel,
(c) the cooperation which the independent public
accountants receive during the course of their audit,
(d) the extent to which the resources of the company
were or should be utilized to minimize the audit fee,
(e) any significant transactions which were not in the
ordinary, routine, and regular course of business of the
corporation,
(f) any change in accounting principles, policies or
standards,
(g) all significant adjustments proposed by the
independent public accountants,
(h) general policies and procedures utilized by the
corporation with respect to internal auditing and financial
controls, and
(i) any recommendations which the independent
accountants may have with respect to internal financial controls,
choice of accounting policies and principles, or management
reporting systems.
(5) To meet with the company's financial and accounting staff
periodically to review and discuss the scope of internal accounting
procedures and controls then in effect and the extent which any
recommendations made by the internal audit department or by the
independent public accountants have been implemented.
(6) To meet with appropriate internal audit department
personnel periodically to review the audit results and plans, and
evaluate the internal audit department's effectiveness. The audit
committee shall emphasize the policy pursuant to which the internal
audit department reports to the audit committee, in order to
protect such independence as is necessary to work in compliance
with recognized standards of internal auditing.
(7) To direct and supervise any investigation of any matter
brought to its attention within the scope of its duties. The audit
committee may retain outside consultants in connection with any
such investigation.
(8) To prepare and present to the board of directors a report
covering its activities twice yearly at regular board meetings,
specified by board resolution, or more often, when considered
necessary, to report a material irregularity.
COMPENSATION OF DIRECTORS
22. No stated salary or other compensation for services as a
director shall be paid to a director who is otherwise paid a salary
as an employee of the corporation or any of its subsidiaries or who
holds a corporate officer position of this corporation. Any
director without these qualifications, by resolution of the board,
may be paid an annual sum for services as a director and such
director may also be paid a fixed sum and expenses for each board
meeting attended. A director shall not be precluded from serving
the corporation in any other capacity and receiving compensation
therefor.
23. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
MEETINGS OF THE BOARD
24. The first meeting of each newly elected board shall be
held at Omaha, Nebraska after the adjournment of the annual
stockholders' meeting or at such other time and place either within
or without the State of Delaware as shall be fixed by the newly
elected directors, and no notice of such meeting shall be
necessary.
25. Regular meetings of the board may be held at such places
within or without the State of Delaware and at such times as the
board may from time to time determine, and if so determined notices
thereof need not be given.
26. Special meetings of the board may be called by the
chairman of the board on three (3) days' notice to each director,
either personally or by mail or by telegraph; special meetings
shall be called by the chairman of the board of secretary in like
manner and on like notice on the written request of two (2)
directors.
27. At all meetings of the board of directors a majority of
the whole board of directors shall constitute a quorum for the
transaction of business and the affirmative vote of a majority of
the whole board shall be required to constitute the act of the
board of directors, except as may be otherwise specifically
provided by statute or by the Restated Certificate of Incorporation
or by these By-laws.
OFFICERS
28. The officers of the corporation shall be a president,
vice president, secretary and treasurer. In addition the board of
directors may elect a chairman of the board, one or more vice
chairmen of the board, a chairman of any committee designated by
the board, additional vice presidents, one or more of whom may be
executive vice presidents, one or more assistant vice presidents, a
controller, one or more assistant secretaries, assistant
treasurers, assistant controllers and such other subordinate
officers, and may appoint such other agents, as the board of
directors may deem necessary.
29. The president, vice president, secretary and treasurer
shall be elected annually by the board of directors at the first
meeting of the board following the stockholders' annual meeting, or
as soon thereafter as is conveniently possible. Other officers of
the corporation may be elected by the board of directors from time
to time. Agents of the corporation may be appointed by the board of
directors from time to time. Each officer shall serve until his
successor shall have been elected and qualified, or until his
death, resignation or removal.
30. Any officer or agent may be removed from office, with or
without cause, at any time by the affirmative vote of a majority of
the board of directors then in office.
31. Any vacancy in any office from any cause may be filled
for the unexpired portion of the term by the board of directors.
32. The compensation of all executive officers of the
corporation shall be fixed by the executive compensation committee
of the board of directors. The compensation of all other officers
of the corporation shall be fixed by the executive committee of the
board of directors within the compensation ranges recommended by
the management compensation committee and approved by the board of
directors. No executive officer shall be ineligible to receive such
compensation by reason of the fact that he is also a director of
the corporation and receiving compensation therefor.
33. The board of directors shall determine who shall preside
at all meetings of the board of directors and shall also determine
who shall preside at all meetings of the stockholders.
34. The officers of the corporation shall hold such powers
and perform such duties as from time to time may be assigned them
by the board of directors.
35. The chairman of the board, vice chairman of the board,
chairman of the executive committee of the board, president, vice
presidents, including the executive vice presidents, and assistant
vice presidents, shall be empowered to sign contracts, bids,
proposals, certificates and other instruments of the corporation.
The secretary and assistant secretaries shall be empowered to
attest to such documents.
36. The board of directors may from time to time delegate the
powers and duties of any officer to any other officer, director or
other person whom it may select.
37. Any officer, agent or employee of the corporation, if so
required by the board of directors, shall be bonded for the
faithful performance of his duties, with such penalties, conditions
and security as the board may require.
SHARES OF STOCK
38. The following restrictions on the ownership and transfer
of the Common Stock of the corporation are hereby imposed:
(1) Shares of Common Stock may be sold by the
corporation only to Employees(as defined in the Restated
Certificate of Incorporation). With the prior approval of the board
of directors, an employee owning such stock having a value of
$2,000,000 or more may transfer stock (a) to a fiduciary for the
benefit of members of the stockholder-employee's spouse and/or
children, (b) to a corporation 100 percent owned by the
stockholder-employee or the stockholder-employee and his spouse
and/or children, or (c) to a fiduciary for the benefit of such a
corporation; provided, however, that no employee may have in
existence at any one time more than four trusts owning shares of
Common Stock of the corporation. With the prior approval of the
board of directors, Common stockholders may transfer stock to a
tax-exempt charitable organization approved as such by the Internal
Revenue Service.
(2) Common stockholder-employees may pledge such stock
for loans in connection with the ownership of the corporation's
stock.
(3) All Common Stock of the corporation shall be issued
and held at all times subject to the corporation's standard
applicable repurchase agreements.
CERTIFICATES OF STOCK
39. The certificates of stock of the corporation shall be
numbered and shall be entered in the books of the corporation as
they are issued. They shall exhibit the holder's name and number of
shares and shall be signed by the president or a vice president and
the treasurer or an assistant treasurer, or the secretary or an
assistant secretary. Any or all of the signatures on the
certificate may be by facsimile. They shall have noted on their
face or back a reference to any repurchase agreement to which the
shares of stock they represent are subject. If the corporation has
a transfer agent or an assistant transfer agent or a transfer clerk
acting on its behalf and a registrar, the signature of any such
officer may be by facsimile. There shall be set forth on the face
or back of the certificates of stock of the corporation a statement
that the corporation will furnish without charge to each
stockholder who so requests, a description of the powers,
designations, preferences and relative, participating, optional or
other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences
and/or rights.
TRANSFERS OF STOCK
40. Subject to the transfer restrictions applicable thereto,
upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the duty of the corporation to
issue a new certificate to the person entitled thereto, cancel the
old certificate and record the transaction upon its books.
FIXING RECORD DATE
41. 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 (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty
days prior to any other action. 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.
REGISTERED STOCKHOLDERS
42. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact
thereof, and, accordingly, shall not be bound to recognize any
equitable or other claim to or interest in such share on the part
of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of
Delaware.
LOST CERTIFICATES
43. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost or destroyed, upon the making of an affidavit of the fact
by the person claiming the certificate of stock to be lost or
destroyed. When authorizing such issue of a new certificate or
certificates, the board of directors may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of
such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall
require and/or give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been
lost or destroyed.
CHECKS
44. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such
other person or persons as the board of directors may from time to
time designate.
FISCAL YEAR
45. The fiscal year shall end on the last Saturday of
December in each year.
DIVIDENDS
46. Dividends upon the capital stock of the corporation,
subject to the provisions of the Restated Certificate of
Incorporation, if any, may be declared by the board of directors at
any regular or special meeting, pursuant to law. Dividends may be
paid in cash, in property, or in shares of the capital stock.
47. Before payment of any dividend there may be set aside out
of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute
discretion, think proper as a reserve fund to meet contingencies,
or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to
the interest of the corporation, and the directors may abolish any
such reserve in the manner in which it was created.
NOTICES
48. Whenever under the provisions of these By-laws notice is
required to be given to any director or stockholder, it shall not
be construed to mean personal notice, but such notice may be given
in writing, by either personal delivery or mail. If mailed, notice
is given when deposited in the United States mail, postage prepaid,
directed to the stockholder or director at his address as it
appears on the records of the corporation. No notice is required to
be given to a stockholder to whom notices of two consecutive annual
meetings (and any other written notice sent between those meetings)
have been mailed addressed to him at his address as shown on the
corporate records and have been returned undeliverable.
49. Any notice required to be given under these By-laws may
be waived in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein. Any
person in attendance at any meeting in person or by proper proxy
shall be deemed to have duly waived any notice thereof.
AMENDMENTS
50. These By-laws may be amended by the affirmative vote of
two-thirds of the whole board of directors or by the affirmative
vote of the holders of two-thirds of the Common Stock issued and
outstanding.
INDEMNIFICATION
51. (a) Actions, Suits or Proceedings Not by or in the Right
of the Corporation. The corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened pending or completed action, suit or proceeding, whether
civil, criminal, administrative, or investigative (other than an
action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer or employee of the
corporation, or is or was serving at the request of the corporation
as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding (including appeals)
if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe his conduct was
unlawful.
(b) Actions or Suits by or in the Right of the
Corporation. The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer or employee of the
corporation, or is or was serving at the request of the corporation
as a director, officer or employee of another corporation,
partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit
(including appeals) if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made
under this paragraph (b) in respect of any claim, issue or matter
as to which the person seeking indemnification shall have been
adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to
indemnity for such indemnification which the Court of Chancery or
such other court shall deem proper. No indemnity shall be paid
under this paragraph (b) with respect to any claim, issue or matter
arising out of any action by the person seeking indemnification
which was knowingly fraudulent or deliberately dishonest or which
involved willful misconduct, or arising out of such person's
gaining any personal profit or advantage to which he was not
legally entitled.
(c) Indemnification Against Expenses of Successful
Party. Notwithstanding the other provisions of this Section 51, to
the extent that a director, officer or employee of the corporation
has been successful on the merits or otherwise, including the
dismissal of an action without prejudice, in defense of any action,
suit or proceeding or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(d) Advances of Expenses. Expenses incurred by an
officer or director in defending a civil or criminal action, suit
or proceeding shall be paid by the corporation in advance of the
final disposition of such action, suit or proceeding if the person
seeking the advance shall undertake to repay such amount in the
event that it is ultimately determined, as provided herein, that
such person is not entitled to indemnification. Such expenses
incurred by other employees and agents may be so paid upon such
terms and conditions, if any, as the board of directors deems
appropriate.
(e) Right to Indemnification Upon Application; Procedure
Upon Application. Any indemnification under paragraphs (a), (b), or
(c), or advance under paragraph (d) of this Section 51, shall be
made promptly, and in any event within ninety days of a claim under
paragraph (a), (b), or (c) and within thirty days of a claim under
paragraph (d), upon the written request of the person seeking the
indemnification or advance, unless with respect to applications
under paragraph (a) or (b) a determination is made within ninety
days (i) by the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such action suit or
proceeding, or (ii) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (iii) by the
shareholders, that such person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the
best interests of the corporation, or with respect to any criminal
proceeding, that such person believed or had reasonable cause to
believe that his conduct was unlawful. In the event that no quorum
of disinterested directors is obtainable, the board of directors
shall promptly direct that independent legal counsel shall decide
whether the person seeking the indemnification acted in the manner
set forth in paragraphs (a) and (b). The right to indemnification
and advances granted by this Section 51 shall be enforceable in any
court of competent jurisdiction, if the corporation denies the
claim, in whole or in part, or if no disposition of such claim is
made within the ninety or thirty day time period specified in this
paragraph (e). In any action to enforce the rights to
indemnification and advancement of expenses created by this Section
51, a denial of the claim by the corporation shall not create any
presumption that the person bringing the action did not act in a
manner that would entitle him to such indemnification and
advancement of expenses. In any such action, or in any suit by the
corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the person
seeking indemnification or an advancement of expenses is not
entitled to such indemnification or advancement of expenses, under
this Section 51 or otherwise, shall be on the corporation. Expenses
incurred in successfully establishing a right to indemnification or
advances, in whole or in part, in any such proceeding shall also be
indemnified by the corporation.
(f) Non-Exclusivity of Rights; Extent and Nature of
Rights. The indemnification and advancement of expenses provided by
this Section 51 shall not be deemed exclusive of any other rights
to which any person seeking indemnification or advancement of
expenses may be entitled under any by-laws, agreement, vote of
shareholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer or employee and
shall inure to the benefit of the heirs, executors and
administrators of such a person. All rights to indemnification and
advances of expenses under this Section 51 shall be deemed to be
provided by a contract between the corporation and the director,
officer or employee who serves in such capacity at any time while
these By-laws are in effect, and shall inure to the benefit of such
person, his heirs, personal representatives, and estate, and shall
be binding on any successor to the corporation. Neither any repeal
or modification of these By-laws nor the merger or consolidation of
the corporation with any other entity shall affect any rights or
obligations in effect at the time of the repeal, modification,
merger or consolidation. Notwithstanding any other provisions of
this Section 51, except as provided in paragraph (e) hereof with
respect to proceedings to enforce rights to indemnification, the
corporation shall not indemnify any person in connection with a
proceeding (or part thereof) initiated by such person unless such
proceeding (or part thereof) was authorized by the board of
directors of the corporation.
(g) Other Enterprises, Fines, and Serving at
Corporation's Request. For purposes of this Section 51, references
to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a
person with respect to any employee benefit plan; and references to
"serving at the request of the corporation" shall include any
service as a director, officer or employee of the corporation which
imposes duties on, or involves services by, such director, officer
or employee with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest
of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best
interests of the corporation" as referred to in this Section 51.
(h) Savings Clause. If this Section 51 or any portion
thereof shall be invalidated on any ground by any court of
competent jurisdiction, then the corporation shall nevertheless
indemnify each agent of the corporation as to expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, to the full extent
permitted by any applicable portion of this Section 51 that shall
not have been invalidated or by any applicable law.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-25-1999
<PERIOD-END> JUN-30-1999
<CASH> 247
<SECURITIES> 12
<RECEIVABLES> 464
<ALLOWANCES> 4
<INVENTORY> 0
<CURRENT-ASSETS> 1116
<PP&E> 720
<DEPRECIATION> 484
<TOTAL-ASSETS> 1455
<CURRENT-LIABILITIES> 638
<BONDS> 13
0
0
<COMMON> 0
<OTHER-SE> 720
<TOTAL-LIABILITY-AND-EQUITY> 1455
<SALES> 1775
<TOTAL-REVENUES> 1775
<CGS> 1659
<TOTAL-COSTS> 1659
<OTHER-EXPENSES> 75
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1
<INCOME-PRETAX> 78
<INCOME-TAX> 31
<INCOME-CONTINUING> 47
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 47
<EPS-BASIC> 1.39
<EPS-DILUTED> 1.36
</TABLE>
