SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) Quarterly Report pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
Commission file number 1-1043
BRUNSWICK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-0848180
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 N. Field Ct., Lake Forest, Illinois 60045-4811
(Address of principal executive offices) (Zip Code)
(847) 735-4700
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
At May 8, 1998, there were 99,435,511 shares of the Company's
Common Stock ($.75 par value) outstanding.
Part I- Financial Information
Item I-Financial Statements
<TABLE>
Brunswick Corporation
Consolidated Statements of Income
for the three months ended March 31
(in millions, except per share data)
(unaudited)
1998 1997
<S> <C> <C>
Net sales 904.2 841.6
Cost of sales 647.9 601.0
Selling, general and administrative expense 148.2 147.2
Operating earnings 108.1 93.4
Interest expense (14.9) (11.1)
Other income and expense 1.8 2.8
Earnings before income taxes 95.0 85.1
Income tax provision 36.1 32.4
Net earnings 58.9 52.7
Earnings per common share
Basic 0.59 0.53
Diluted 0.59 0.53
Average shares used for computation of
Basic earnings per share 99.5 98.7
Diluted earnings per share 100.5 99.7
Cash dividends declared per common share 0.125 0.125
The notes are an integral part of these
consolidated statements.
</TABLE>
<TABLE>
Brunswick Corporation
Consolidated Balance Sheets
As of March 31, 1998 and December 31, 1997
(in millions, except share data)
(unaudited)
March 31, December 31,
1998 1997
Assets
Current assets
Cash and cash equivalents, at cost,
<S> <C> <C>
which approximates market 82.7 85.6
Accounts and notes receivable,
less allowances of $21.7 and $20.7 570.1 434.9
Inventories
Finished goods 365.1 313.4
Work-in-process 145.9 139.4
Raw materials 138.9 113.5
Net inventories 649.9 566.3
Prepaid income taxes 211.1 210.7
Prepaid expenses 44.6 46.0
Income tax refund receivable 0.0 22.5
Current assets 1,558.4 1,366.0
Property
Land 76.3 68.7
Buildings 434.9 425.8
Equipment 851.8 830.8
Total land, buildings and equipment 1,363.0 1,325.3
Accumulated depreciation (669.1) (656.7)
Net land, buildings and equipment 693.9 668.6
Unamortized product tooling costs 108.8 114.4
Net property 802.7 783.0
Other assets
Goodwill 731.5 726.4
Other intangibles 115.3 115.8
Investments 78.5 87.5
Other long-term assets 166.2 162.7
Other assets 1,091.5 1,092.4
Total Assets 3,452.6 3,241.4
Liabilities and Shareholders' Equity
Current liabilities
Short-term debt, including
current maturities of long-term debt 296.2 109.3
Accounts payable 256.3 252.9
Accrued expenses 531.6 586.0
Income taxes payable 35.3 0.0
Current liabilities 1,119.4 948.2
Long-term debt
Notes, mortgages and debentures 645.5 645.5
Deferred items
Income taxes 137.7 144.3
Postretirement and postemployment benefits 138.2 137.3
Compensation and other 55.5 51.1
Deferred items 331.4 332.7
Common shareholders' equity
Common stock; authorized: 200,000,000 shares,
$.75 par value; issued: 102,538,000 shares 76.9 76.9
Additional paid-in capital 310.3 308.2
Retained earnings 1,098.7 1,052.2
Treasury stock, at cost:
3,039,000 and 3,057,000 shares (62.9) (59.0)
Unamortized ESOP expense and other (62.2) (63.1)
Accumulated other comprehensive income (4.5) (0.2)
Common shareholders' equity 1,356.3 1,315.0
Total liabilities and shareholders' equity 3,452.6 3,241.4
The notes are an integral part of these consolidated statements.
</TABLE>
<TABLE>
Brunswick Corporation
Consolidated Statements of Cash Flows
for the three months ended March 31
(dollars in millions)
(unaudited)
1998 1997
Cash flows from operating activities
<S> <C> <C>
Net earnings 58.9 52.7
Depreciation and amortization 39.5 37.1
Changes in noncash current assets and current
liabilities (255.1) (197.2)
Income taxes 58.9 30.2
Other, net (9.1) 8.1
Net cash used for operating activities (106.9) (69.1)
Cash flows from investing activities
Acquisitions of businesses (29.0) (151.6)
Unrestricted cash held for Igloo acquisition 0.0 143.0
Capital expenditures (36.8) (32.7)
Payments advanced for long-term
supply arrangements (5.5) 0.0
Other, net 7.8 0.0
Net cash used for investing activities (63.5) (41.3)
Cash flows from financing activities
Net proceeds from issuances of short-term
commercial paper and other short-term debt 186.2 0.0
Cash dividends paid (12.4) (12.3)
Stock repurchases (11.5) 0.0
Stock options exercised 4.4 5.4
Other, net 0.8 2.7
Net cash provided by (used for) financing activities 167.5 (4.2)
Net decrease in cash and cash equivalents (2.9) (114.6)
Cash and cash equivalents at January 1 85.6 238.5
Cash and cash equivalents at March 31 82.7 123.9
Supplemental cash flow disclosures:
Interest paid 18.9 10.6
Income tax refunds received, net 22.8 2.6
Treasury stock issued for compensation plans and other 9.5 11.5
The notes are an integral part of these consolidated statements.
</TABLE>
Brunswick Corporation
Notes to Consolidated Financial Statements
March 31, 1998, December 31, 1997 and March 31, 1997
(unaudited)
Note 1 - Accounting Policies
This unaudited financial data has been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission.
Accordingly, certain information and disclosures normally included
in financial statements and footnotes prepared in accordance with
generally accepted accounting principles have been condensed or
omitted. Brunswick Corporation (the "Company") believes that the
disclosures in these statements are adequate to make the
information presented not misleading. Certain previously reported
amounts have been reclassified to conform with the current period
presentation.
These financial statements should be read in conjunction with, and
have been prepared in conformity with, the accounting principles
reflected in the consolidated financial statements and related
notes included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997. These interim results include, in
the opinion of the Company, all normal and recurring adjustments
necessary to present fairly the results of operations for the
quarters ended March 31, 1998 and 1997. The 1998 interim results
are not necessarily indicative of the results which may be
expected for the remainder of the year.
Note 2 - Earnings Per Common Share
There is no difference in the earnings used to compute the
Company's basic and diluted earnings per share. The difference in
the weighted-average number of shares of common stock outstanding
used to compute basic and diluted earnings per share is caused by
potential common stock relating to employee stock options. The
weighted-average number of shares of potential common stock was
1.0 million for the quarters ended March 31, 1998 and 1997.
Note 3 - Acquisitions
On January 30, 1998, the Company acquired the assets of ParaBody,
Inc. a manufacturer and marketer of a leading consumer line of
multistation gyms, benches and racks. ParaBody is part of the
Life Fitness division in the Recreation segment. The Company also
acquired the assets of certain bowling centers in the first
quarter of 1998.
Note 4 - Debt
During the first quarter of 1998, commercial paper outstanding
increased to $272.5 million at March 31, 1998, versus $86.3
million at December 31, 1997, to fund working capital
requirements, acquisitions and capital expenditures.
Note 5 - Litigation
There have been no significant changes in the status of the items
set forth in Note 6: "Commitments and Contingencies," in the 1997
Annual Report to Shareholders.
Note 6 - Segment Data
The following table sets forth net sales and operating earnings of
each of the Company's industry segments for the quarters ended
March 31, 1998 and 1997 (in millions):
Quarter Ended March 31,
1998 1997
Net Operating Net Operating
Sales Earnings Sales Earnings
Marine $582.9 $81.5 $568.6 $67.0
Recreation 321.3 34.6 273.0 36.8
Corporate - (8.0) - (10.4)
Consolidated $904.2 $108.1 $841.6 $93.4
Marine segment operating earnings for the quarter ended March 31,
1998, include $7.5 million of income recorded in connection with a
settlement with certain boat dealers.
Note 7 - Strategic Charge
During the third quarter of 1997, the Company announced a
strategic initiative to streamline its operations and improve
global manufacturing costs. The initiative includes the
termination of development efforts on a line of personal
watercraft; closing boat plant manufacturing facilities in Cork,
Ireland and Miami, Oklahoma; centralizing European marketing and
customer service in the Marine segment; outsourcing the
manufacture of certain components in the Company's bowling
division; consolidating fishing reel manufacturing; and other
actions directed at manufacturing rationalization, product
profitability improvements and general and administrative expense
efficiencies. Management anticipates that these actions will be
substantially completed by the end of 1998. In the third quarter
of 1997, the Company recorded a pretax charge of $98.5 million
($63.0 million after tax) to cover exit costs related to these
actions. The charge consisted of $74.7 million recorded in the
Marine segment and $23.8 million recorded in the Recreation
segment. The components of the charge included $32.6 million for
severance costs, $42.0 million for asset disposition costs and
$23.9 million for other incremental costs related to exit
activities.
The Company's accrued expense balance relating to these
initiatives as of March 31, 1998, and December 31, 1997, were as
follows (in millions):
March 31, December 31,
1998 1997
Severance $20.7 $23.2
Other 16.9 17.2
Total $37.6 $40.4
The Company has completed approximately 70 percent of the employee
reduction program included in the charge. The balance of the
severance-related accruals at March 31, 1998, covers future
payments to be made for severance actions.
Note 8 - Comprehensive Income
As of January 1, 1998, the Company adopted Financial Accounting
Standards Board Statement No. 130, "Reporting Comprehensive
Income." Statement No. 130 requires reporting certain
transactions that result in a change in equity, such as currency
translation, unrealized gains and losses and minimum pension
liability adjustments, as components of comprehensive income. The
adoption of this Statement had no impact on the Company's net
income or shareholders' equity. During the first quarter of 1998
and 1997, total comprehensive income amounted to $54.6 million and
$47.4 million, respectively. Accumulated other comprehensive
income includes cumulative translation and minimum pension
liability adjustments.
Item 2. - Management's Discussion and Analysis
Overview
The Company's financial results in the first quarter of 1998
continue to reflect the favorable effect of strategic initiatives,
which include acquiring active recreation businesses, expanding
existing brands through effective marketing programs and product
innovations, and managing costs to improve operating margins.
Several acquisitions affect the comparison of the Company's first
quarter 1998 results to the prior year. These acquisitions
include Hoppe's hunting accessories acquired on March 7, 1997;
Mongoose bicycles acquired on April 28, 1997; Life Fitness
cardiovascular and strength training equipment on July 9, 1997;
Hammer Strength plate-loaded strength training equipment on
November 13, 1997; DBA Products bowling lane supplies on November
20, 1997; and ParaBody multistation gyms, benches and racks on
January 30, 1998.
Results of Operations
Consolidated
The following table sets forth certain ratios and relationships
calculated from the consolidated statements of income for the
quarters ended March 31:
1998 1997
Percentage increase versus the prior year in
Net sales 7.4% 13.9%
Operating earnings 15.7% 21.9%
Net earnings from continuing operations 11.8% 13.6%
Diluted earnings per share from
continuing operations 11.3% 12.8%
Expressed as a percentage of net sales
Gross Margin 28.3% 28.6%
Selling, general and administrative
expense 16.3% 17.5%
Operating margin 12.0% 11.1%
Sales increased by $62.6 million to $904.2 million in the first
quarter of 1998 compared with $841.6 million in 1997. In 1998,
the Marine segment recorded a sales increase of $14.3 million, and
the Recreation segment added $48.3 million. These increases
primarily reflect growth in sales of higher-priced large boats and
the effect of revenues from the companies acquired in 1997 and
1998.
The Company's gross margin percentage decreased slightly from last
year due to the effects of volume declines in the bowling
equipment business. The decline was partially offset by an
improved sales mix and the favorable impact of the recently
acquired Life Fitness business. Selling, general and
administrative expenses as a percent of sales decreased to 16.3
percent in the first quarter of 1998 from 17.5 percent in the
first quarter of 1997 as a result of income recorded in 1998 in
connection with the settlement reached with certain of the
Company's boat dealers, MarineMax, Inc., along with increased
economies of scale and effective cost management designed to keep
the growth in costs at rates below the growth in revenues. Under
the terms of the aforementioned settlement, MarineMax has agreed
to pay Brunswick $15.0 million at December 31, 1998, of which $7.5
million was recognized as income in the first quarter. The
Company expects to recognize the remainder of this gain during
1998.
Operating margins in the first quarter of 1998 improved 0.9 points
to 12.0 percent compared with 1997. Operating earnings increased
15.7 percent in the first quarter of 1998, while net earnings
increased 11.8 percent to $58.9 million. Interest expense
increased by $3.8 million, or 34.2 percent, in the first quarter
of 1998 compared with the same period in 1997 due to increased
debt levels related to the funding of acquisitions.
The Company's effective tax rate was at 38.0 percent in the first
quarter of 1998 and 1997. Diluted earnings per share increased
11.3 percent to $0.59 in the first quarter of 1998 from $0.53 in
1997. Weighted common shares outstanding used to calculate
diluted earnings per share increased to 100.5 million in 1998 from
99.7 million in 1997 reflecting stock issued under compensation
plans and the effect of stock appreciation on employee stock
options.
Recreation Segment
The following table sets forth Recreation segment results for the
quarters ended March 31 (dollars in millions):
1998 1997
Net sales $321.3 $273.0
Percentage increase versus the
prior year 17.7% 41.9%
Operating earnings $ 34.6 $ 36.8
Percentage increase (decrease)
versus the prior year (6.0)% 69.6%
Operating margin 10.8% 13.5%
Capital expenditures $ 16.7 $ 12.6
In 1998, Recreation segment sales increased 17.7 percent to $321.3
million. The sales gain reflects the contribution of the
aforementioned businesses acquired in 1997 and 1998 along with
improvements in sales of ice chests and beverage coolers. These
gains were partially offset by weakness in revenues from bowling
equipment as credit restrictions in China led to significantly
lower sales into that market.
Operating earnings in 1998 decreased 6.0 percent from 1997 to
$34.6 million and operating margins for the segment were 10.8
percent during the first quarter of 1998, a decrease of 2.7 points
from 13.5 percent in 1997. The decline in operating margins
reflects the impact of lower bowling equipment sales and weak
markets for bicycles and camping equipment during a period of
adverse weather conditions. These factors were partially offset
by productivity gains primarily in fishing equipment.
Marine Segment
The following table sets forth Marine segment results for the
quarters ended March 31 (dollars in millions):
1998 1997
Net sales $582.9 $568.6
Percentage increase versus
the prior year 2.5% 4.0%
Operating earnings $ 81.5 $ 67.0
Percentage increase versus
the prior year 21.6% 4.2%
Operating margin 14.0% 11.8%
Capital expenditures $ 19.7 $ 19.3
The Marine segment posted a sales gain of 2.5 percent as a result
of successful marketing programs and an improved sales mix of
larger, higher-margin boats.
Operating earnings for the segment were $81.5 million in the first
quarter of 1998, compared with $67.0 million in the same period
last year, and operating margins improved to 14.0 percent from
11.8 percent. Operating margins benefited from $7.5 million of
income recorded in 1998 in connection with the aforementioned
MarineMax settlement along with higher sales of larger boats and
the benefits of cost management actions. Excluding the $7.5
million settlement, operating earnings increased 10.4 percent and
operating margins improved to 12.7 percent.
Cash Flow, Liquidity and Capital Resources
Cash generated from operating activities, available cash balances
and selected borrowings are the Company's major sources of funds
for investments and dividend payments.
Cash and cash equivalents totaled $82.7 million at March 31, 1998,
down $2.9 million from the end of 1997.
Cash used for operating activities totaled $106.9 million in 1998,
versus $69.1 million in 1997. The primary components of cash used
for operating activities include the Company's net earnings
adjusted for noncash expenses; the timing of cash flows relating
to operating expenses, sales and income taxes; and the management
of inventory levels. The increase in cash used for operating
activities between 1997 and 1998 is due to the increase in cash
used to fund working capital investments versus the prior year,
primarily related to inventory and the timing of expense payments,
partially offset by stronger operating results.
During the first quarter of 1998, the Company invested $36.8
million in capital expenditures, compared with $32.7 million in
1997. The 1998 capital expenditure budget is approximately $200
million, principally for growth and productivity initiatives. A
significant portion of the 1998 capital expenditures budget is
dedicated to substantially upgrading information system
capabilities company wide.
Investments in acquisitions of businesses totaled $29.0 million in
the first quarter of 1998.
Total debt at March 31, 1998, increased to $941.7 million versus
$754.8 million at the end of 1997 due to increased commercial
paper borrowings to fund working capital requirements,
acquisitions and capital expenditures. Debt-to-capitalization
ratios at these dates were 41.0 percent and 36.5 percent,
respectively.
During the first quarter of 1998, the Company repurchased 370,000
shares of its common stock for $11.5 million in open market
transactions under the repurchase program announced in 1997.
The Company's financial flexibility and access to capital markets
result from its strong balance sheet, investment-grade credit
ratings and ability to generate significant cash from operating
activities. The Company has a $400 million long-term credit
agreement with a group of banks and $150 million available under a
universal shelf registration filed in 1996 with the Securities and
Exchange Commission for the issuance of equity and/or debt
securities.
The Company uses its cash balances and other sources of liquidity
to invest in its current businesses to promote innovation and new
product lines, and to acquire complementary businesses. These
investments, along with other actions taken to improve the profit
margins of current businesses, are designed to continue
improvement in the Company's financial performance and enhance
shareholder value.
New Accounting Pronouncements
In 1997, the Financial Accounting Standards Board issued
Statements No. 130, "Reporting Comprehensive Income, " and No.
131, "Disclosures About Segments of an Enterprise and Related
Information," which require adoption in 1998. Statement No. 130
requires companies to report certain transactions that result in a
change in equity, such as foreign currency translation, unrealized
gains and losses and minimum pension liability adjustments, as
components of comprehensive income as part of the financial
statements. This statement, which was adopted effective January
1, 1998, had no impact on the Company's net income or
shareholders' equity. During the first quarter of 1998 and 1997,
total comprehensive income amounted to $54.6 million and $47.4
million, respectively.
Statement No. 131 requires companies to report segment information
based on how management disaggregates its businesses for
evaluating performance and making operating decisions. The
Company intends to adopt this statement by December 31, 1998.
Year 2000
The Company continues to assess and address the impact of the Year
2000 issue on its businesses. This issue affects computer systems
that have date-sensitive programs that may not properly recognize
the year 2000. The Company uses software and related technologies
throughout its businesses and in its products that will be
affected by this issue. The Company has completed its review of
the information systems used in its internal business operations
and its production processes. An assessment of the technology
incorporated into the Company's products and of the information
systems of its customers and suppliers is continuing and is
scheduled to be substantially completed by mid-1998. If changes
addressing the Year 2000 issue are not made on a timely basis
prior to the year 2000, the Company's internal financial and
production operations may be hindered by the miscalculation of
information and certain products may not function properly. This
could have a material adverse effect on the Company's results of
operations and financial condition.
The Company is aggressively pursuing a Year 2000 compliance plan
that combines remediating existing software and replacing systems
as part of a company-wide systems upgrade project. A Year 2000
Project Office is leading the initiatives that address areas with
the potential of major business impact. The total cost of
modifying existing software and related technologies has not been
determined; however, based on preliminary information, the cost is
currently not expected to be material to the Company's results of
operations or financial condition. Costs associated with the
company-wide systems upgrade are included in the Company's capital
expenditures budget.
Forward Looking Statements
Certain statements in this Form 10-Q are forward looking as
defined in the Private Securities Litigation Reform Act of 1995.
These statements involve certain risks and uncertainties that may
cause actual results to differ materially from expectations as of
the date of this filing. These risks include, but are not limited
to, the ability to complete the planned strategic initiatives,
Year 2000 actions and information systems initiatives within the
time and cost estimated; the effect of economic conditions in
Asia; adverse weather conditions retarding sales of outdoor
recreation products; inventory adjustments by major retailers;
competitive pricing pressures; the ability to integrate
acquisitions; the success of marketing and cost-management
programs; and shifts in market demand for the Company's products.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the April 22, 1998, Annual Meeting of Shareholders of the
Company (the "1998 Annual Meeting"), Messrs. Nolan D. Archibald,
Jeffrey L. Bleustein and Kenneth Roman were elected directors of
the Company for terms expiring at the 2001 Annual Meeting, and Ms.
Bettye Martin Musham was elected director of the Company for a
term expiring at the 1999 Annual Meeting. The numbers of shares
voted with respect to these directors were:
Nominees For Withheld
Nolan D. Archibald 80,910,128 983,741
Jeffrey L. Bleustein 80,888,604 1,005,265
Kenneth Roman 80,523,569 1,370,300
Bettye Martin Musham 80,839,029 1,054,840
At the 1998 Annual Meeting, the Board of Directors' appointment of
Arthur Andersen LLP as auditors for the Company and its
subsidiaries for the year 1998 was ratified pursuant to the
following vote:
Number of Shares
For 81,306,310
Against 316,255
Abstain 271,304
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
3. By-Laws of the Company.
(b) Reports on Form 8-K.
The Company filed no reports on Form 8-K during the three
months ended March 31, 1998.
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.
BRUNSWICK CORPORATION
May 15, 1998 By: /s/ Victoria J. Reich
Victoria J. Reich,
Vice President and Controller*
*Ms. Reich is signing this report both as a duly authorized
officer and as the principal accounting officer.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 82,700
<SECURITIES> 0
<RECEIVABLES> 591,800
<ALLOWANCES> 21,700
<INVENTORY> 649,900
<CURRENT-ASSETS> 1,558,400
<PP&E> 1,471,800
<DEPRECIATION> 669,100
<TOTAL-ASSETS> 3,452,600
<CURRENT-LIABILITIES> 1,119,400
<BONDS> 645,500
0
0
<COMMON> 76,900
<OTHER-SE> 1,279,400
<TOTAL-LIABILITY-AND-EQUITY> 3,452,600
<SALES> 904,200
<TOTAL-REVENUES> 904,200
<CGS> 647,900
<TOTAL-COSTS> 647,900
<OTHER-EXPENSES> 148,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,900
<INCOME-PRETAX> 95,000
<INCOME-TAX> 36,100
<INCOME-CONTINUING> 58,900
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58,900
<EPS-PRIMARY> 0.59
<EPS-DILUTED> 0.59
</TABLE>
EXHIBIT 3
BRUNSWICK CORPORATION
BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. The corporation may also have offices in the City
of Lake Forest, State of Illinois, and at such other places as the
board of directors may from time to time determine or the business
of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Meetings of stockholders may be held at such time
and place, within or without the State of Delaware, as shall be
stated in the notice of the meeting or in a duly executed waiver of
notice thereof.
Section 2. An annual meeting of stockholders shall be held at
such time and on such day in the month of April or in such other
month as the board of directors may specify by resolution. At the
annual meeting the stockholders shall elect by a plurality vote of
those stockholders voting at the meeting, by ballot, a board of
directors, and transact such other business as may properly be
brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of meeting shall be given not less than ten
nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting.
Section 4. At least ten days before every election of
directors, a complete list of the stockholders entitled to vote at
said election arranged in alphabetical order, shall be prepared or
caused to be prepared by the secretary. Such list shall be open at
the place where the election is to be held for said ten days, to
the examination of any stockholder, and shall be produced and kept
at the time and place of election during the whole time thereof,
and subject to the inspection of any stockholder who may be
present.
Section 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by
the certificate of incorporation, may be called by the chairman of
the board and shall be called by the president or secretary at the
request in writing of a majority of the board of directors. Such
request shall state the purpose or purposes of the proposed
meeting.
Section 6. Written notice of a special meeting of
stockholders stating the place, date and hour of meeting, and the
purpose or purposes for which the meeting is called shall be given
not less than ten nor more than sixty days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the shares of the
capital stock of the corporation, 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 or by the 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
represented 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 or represented. At such
adjourned meeting at which a quorum shall be present or represented
any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 9. When a quorum is present or represented at any
meeting, the vote of the holders of a majority of the stock having
voting power present in person or represented by proxy shall decide
any question brought before such meeting, unless the question is
one upon which by express provision of the statutes or of the
certificate of incorporation or of these by-laws, a different vote
is required, in which case such express provisions shall govern and
control the decision of such question.
Section 10. At any meeting of the stockholders every
stockholder having the right to vote shall be entitled to vote in
person, or by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than
three years prior to said meeting, unless said instrument provides
for a longer period. Each stockholder shall have one vote for each
share of stock having voting power, registered in his name on the
books of the corporation. Except where the transfer books of the
corporation shall have been closed or a date shall have been fixed
as a record date for the determination of its stockholders entitled
to vote, no share of stock shall be voted on at any election for
directors which shall have been transferred on the books of the
corporation within twenty days next proceeding such election of
directors.
ARTICLE III
DIRECTORS
Section 1. The number of directors shall be eleven, but the
number of directors may, from time to time, be altered by amendment
of these by-laws in accordance with the certificate of
incorporation.
Section 2. Subject to the rights of holders of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation, nominations for the election of
directors may be made by the board of directors or a committee
appointed by the board of directors or by any stockholder entitled
to vote in the election of directors generally. However, any
stockholder entitled to vote in the election of directors generally
may nominate one or more persons for election as directors at a
meeting only if written notice of such stockholder's intent to make
such nomination or nominations has been given, either by personal
delivery or by United States mail, postage prepaid, to the
secretary of the corporation not later than (a) with respect to an
election to be held at an annual meeting of stockholders, ninety
days prior to the anniversary date of the immediately preceding
annual meeting, and (b) with respect to an election to be held at a
special meeting of stockholders for the election of directors, the
close of business on the tenth day following the date on which
notice of such meeting is first given to stockholders. Each such
notice shall set forth: (i) the name and address of the stockholder
who intends to make the nomination and of the person or persons to
be nominated; (ii) a representation that the stockholder is the
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;
(iii) a description of all arrangements or understandings between
the stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (iv) such other
information regarding each nominee proposed by such stockholder as
would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission; and (v) the consent of each nominee to serve as a
director of the corporation if so elected. The presiding officer
of the meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
Section 3. The property and business of the corporation shall
be managed by its board of directors, which may exercise all such
powers of the corporation and do all such lawful acts and things as
are not by statute or by the certificate of incorporation or by
these by-laws directed or required to be exercised or done by the
stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the
State of Delaware.
Section 5. The first meeting of each newly elected board
shall be held immediately after, and at the same place as, the
annual meeting of stockholders at which such board shall have been
elected, for the purpose of electing officers, and for the
consideration of any other business that may properly be brought
before the meeting. No notice of such meeting shall be necessary
to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present.
Section 6. Regular meetings of the board of directors shall
be held on such dates, not less often than once each calendar
quarter, as may be fixed from time to time by resolution of the
board of directors. No notice need be given of such meetings,
provided that notice of such resolution has been furnished to each
director. Such meetings shall be held at the Lake Forest office of
the corporation or at such other place as is stated in the notice
of the meeting. Upon the assent, given either verbally or in
writing, of a majority of the whole board, any regular meeting may
be cancelled, the time changed, or may be held at such other place
and time, as a majority of the whole board may designate, either
verbally or in writing, upon reasonable notice given to each
director, either personally or by mail or by telegram.
Section 7. Special meetings of the board of directors may be
called by the chairman of the board, or by the secretary on the
written request of two directors, to be held either at the Lake
Forest office of the corporation or at such other place as may be
convenient and may be designated by the officer calling the
meeting. Reasonable notice of such special meeting shall be given
to each director, either personally or by mail or telegram;
provided, that a majority of the whole board of directors present
at a meeting called by any of said officers, in matters requiring
prompt attention by the board, may hold a valid meeting and
transact business without the giving of notice to each director as
above provided.
Section 8. At all meetings of the board the presence of a
majority of the whole board shall be necessary and sufficient to
constitute a quorum for the transaction of business and the act of
a majority of the directors present at any meeting at which there
is a quorum shall be the act of the board of directors, except as
may be otherwise specifically provided by statute or by the
certificate of incorporation or by these by-laws. If a quorum
shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until
a quorum shall be present.
EXECUTIVE COMMITTEE
Section 9. (a) The board of directors of the corporation at
the annual or any regular or special meeting may, by resolution
adopted by a majority of the whole board, designate three or more
directors, one of whom shall be either the chairman of the board or
the president of the corporation, to constitute an executive
committee. Vacancies in the executive committee may be filled at
any meeting of the board of directors. Each member of the
executive committee shall hold office until his successor shall
have been duly elected, or until his death, or until he shall
resign or shall have been removed from office or shall cease to be
a director. Any member of the executive committee may be removed
by resolution adopted by a majority of the whole board of directors
whenever in its judgment the best interests of the corporation
would be served thereby. The compensation, if any, of members of
the executive committee shall be established by resolution of the
board of directors.
(b) The executive committee shall have and may exercise all
of the authority of the board of directors in the management of the
corporation, provided such committee shall not have the authority
of the board of directors in reference to amending the certificate
of incorporation, adopting a plan of merger or consolidation with
another corporation or corporations, recommending to the
stockholders the sale, lease, exchange, mortgage, pledge or other
disposition of all or substantially all of the property and assets
of the corporation if not made in the usual and regular course of
its business, recommending to the stockholders a voluntary
dissolution of the corporation or a revocation thereof, amending,
altering or repealing the by-laws of the corporation, electing or
removing officers of the corporation or members of the executive
committee, fixing the compensation of officers, directors, or any
member of the executive committee, declaring dividends, amending,
altering or repealing any resolution of the board of directors
which by its terms provides that it shall not be amended, altered
or repealed by the executive committee, the acquisition or sale of
companies, businesses or fixed assets where the fair market value
thereof or the consideration therefor exceeds $10,000,000,
authorizing the issuance of any shares of the corporation, or
authorizing the creation of any indebtedness for borrowed funds, in
excess of $2,000,000.
(c) The executive committee shall have power to authorize the
seal of the corporation to be affixed to all papers which may
require it. Minutes of all meetings of the executive committee
shall be submitted to the board of directors of the corporation at
each meeting following a meeting of the executive committee. The
minute books of the executive committee shall at all times be open
to the inspection of any director.
(d) The executive committee shall meet at the call of the
chairman of the executive committee, chairman of the board, the
president, or any two members of the executive committee. Three
members of the executive committee shall constitute a quorum for
the transaction of business and the act of a majority of those
present shall constitute the act of the committee.
AUDIT AND FINANCE COMMITTEE
Section 10. (a) The board of directors of the corporation at
the annual or any regular or special meeting shall, by resolution
adopted by a majority of the whole board, designate three or more
independent directors to constitute an audit and finance committee
and appoint one of the directors so designated as the chairman of
the audit and finance committee. Membership on the audit and
finance committee shall be restricted to those directors who are
independent of the management of the corporation and are free from
any relationship that, in the opinion of the corporation's board of
directors, would interfere with the exercise of independent
judgment as a member of the committee. Vacancies in the committee
may be filled at any meeting of the board of directors. Each
member of the committee shall hold office until his successor shall
have been duly elected, or until his death, or until he shall
resign or shall have been removed from the audit and finance
committee by the board or shall cease to be a director. Any member
of the audit and finance committee may be removed from the
committee by resolution adopted by a majority of the whole board of
directors whenever in its judgment (1) such person is no longer an
independent director or free from any relationship with the
corporation or any of its officers prohibited by this section, or
(2) the best interests of the corporation would be served thereby.
The compensation, if any, of members of the committee shall be
established by resolution of the board of directors.
(b) The audit and finance committee shall be responsible for
recommending to the board of directors the appointment or discharge
of independent auditors, reviewing with management and the
independent auditors the terms of engagement of independent
auditors, including the fees, scope and timing of the audit and any
other services rendered by such independent auditors; reviewing
with independent auditors and management the corporation's policies
and procedures with respect to internal auditing, accounting and
financial controls, and dissemination of financial information;
reviewing with management, the independent auditors and the
internal auditors, the corporation's financial statements, audit
results and reports and the recommendations made by the auditors
with respect to changes in accounting procedures and internal
controls; reviewing the results of studies of the corporation's
system of internal accounting controls; and performing any other
duties or functions deemed appropriate by the board of directors.
The committee shall have such powers and rights as may be necessary
or desirable to fulfill these responsibilities including, the power
and right to consult with legal counsel and to rely upon the
opinion of such legal counsel. The audit and finance committee is
authorized to communicate directly with the corporation's financial
officers and employees, internal auditors and independent auditors
on such matters as it deems desirable and to have the internal
auditors and independent auditors perform such additional
procedures as it deems appropriate. The audit and finance
committee shall periodically report to the board of directors on
its activities.
(c) Minutes of all meetings of the audit and finance
committee shall be submitted to the board of directors of the
corporation. The minute books of the committee shall at all times
be open to the inspection of any director.
(d) The audit and finance committee shall meet at the call of
its chairman or any two members of the committee. Two members of
the audit and finance committee shall constitute a quorum for the
transaction of business and the act of a majority of those present,
but no less than two members, shall constitute the act of the
committee.
HUMAN RESOURCE AND COMPENSATION COMMITTEE
Section 11. (a) The board of directors of the corporation at
the annual or any regular or special meeting shall, by resolution
adopted by a majority of the whole board, designate three or more
directors to constitute a human resource and compensation committee
and appoint one of the directors so designated as the chairman of
the human resource and compensation committee. Membership on the
human resource and compensation committee shall be restricted to
disinterested persons which for this purpose shall mean any
director, who, during the time he is a member of the human resource
and compensation committee is not eligible, and has not at any time
within one year prior thereto been eligible, for selection to
participate in any of the compensation plans administered by the
human resource and compensation committee. Vacancies in the
committee may be filled at any meeting of the board of directors.
Each member of the committee shall hold office until his successor
shall have been duly elected, or until his death or resignation, or
until he shall have been removed from the committee by the board of
directors, or until he shall cease to be a director or a
disinterested person. Any member of the human resource and
compensation committee may be removed by resolution adopted by a
majority of the whole board of directors whenever in its judgment
the best interests of the corporation would be served thereby. A
majority of the human resource and compensation committee shall
constitute a quorum and an act of the majority of the members
present at any meeting at which a quorum is present, or an act
approved in writing by each of the members of the committee without
a meeting, shall be the act of the human resource and compensation
committee.
(b) The human resource and compensation committee shall
administer the Brunswick Performance Plan, Strategic Incentive
Plan, 1991 Stock Plan, and Supplemental Pension Plan. The human
resource and compensation committee shall have the power and
authority vested in it by any plan of the corporation, which the
committee administers. The human resource and compensation
committee shall from time to time recommend to the board of
directors the compensation of the officers of the corporation
except for assistant officers whose compensation shall be fixed by
the officers of the corporation.
CORPORATE GOVERNANCE COMMITTEE
Section 12. (a) The board of directors of the corporation at
the annual or any regular or special meeting shall, by resolution
adopted by a majority of the whole board, designate three or more
directors to constitute a corporate governance committee of the
board of directors and appoint one of the directors so designated
as its chairman. Members on the corporate governance committee of
the board of directors shall be restricted to disinterested persons
which for this purpose shall mean any director who, during the time
the director is a member of the corporate governance committee of
the board of directors, is neither an officer or employee of the
corporation. Vacancies in the committee may be filled at any
meeting of the board of directors. Each member of the committee
shall hold office until his successor shall have been duly elected,
or until his death or resignation, or until he shall have been
removed from the committee by the board of directors, or until he
shall cease to be a director. Any member of the corporate
governance committee of the board of directors may be removed by
resolution of the whole board of directors whenever in its judgment
the best interests of the corporation would be served thereby. A
majority of the corporate governance committee of the board of
directors shall constitute a quorum and an act of the majority of
the members present at any meeting at which a quorum is present, or
an act approved in writing by each of the members of the committee
without a meeting, shall be the act of the corporate governance
committee. The compensation, if any, of members of the committee
shall be established by resolution of the board of directors.
(b) The corporate governance committee of the board of
directors shall be responsible for all matters of corporate
governance and director affairs including, but not limited to:
(i) considering and making recommendations to the board
with regard to changes in the size of the board;
(ii) developing and maintaining appropriate
criteria for the composition of the board of directors
and its nominees;
(iii) overseeing the selection of and making
recommendations to the board regarding nominees for
election as directors to be submitted to the
stockholders and nominees to fill vacancies on the
board of directors as they occur;
(iv) coordinating an annual evaluation by the
board, with input from senior management, of the
structure of the board and its committees and the
processes employed in their deliberations; and
(v) periodically evaluating the performance of members of
the board.
(c) Nothing in this by-law is intended to prevent any
individual director from making a recommendation of a person to be
a director of the corporation either to the corporate governance
committee or to the board.
OTHER COMMITTEES
Section 13. The board of directors may from time to time
create and appoint such committees in addition to the executive,
audit and finance, human resource and compensation and corporate
governance committees as it deems desirable. Each additional
committee shall bear such designation, shall have such powers and
shall perform such duties, not inconsistent with these by-laws or
with law, as may be assigned to it by the board of directors;
provided that no such additional committee may exercise the powers
of the board of directors in the management of the business and
affairs of the corporation except such as shall be expressly
delegated to it. The board of directors shall have the power to
change the members of any such additional committee at any time, to
fill vacancies, and to discharge any such additional committee at
any time. The compensation, if any, of members of any such
committee shall be established by resolution of the board of
directors.
COMPENSATION OF DIRECTORS
Section 14. Directors shall receive such fees and
reimbursement of reasonable expenses as may be fixed from time to
time by resolution of the board. Members of special or standing
committees shall also be allowed such fees and reimbursements for
reasonable expenses in connection with service on such committees
as may from time to time be fixed by resolution of the board. Such
fees may be fixed on the basis of meetings attended or on an annual
basis or both and may be payable currently or deferred.
ACTION BY WRITTEN CONSENT
Section 15. Any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof
may be taken without a meeting if all members of the board or
committee, as the case may be, consent thereto in writing and the
writing or writings are filed with the minutes of proceedings of
the board or committee.
ACTION BY TELEPHONE OR OTHER COMMUNICATIONS EQUIPMENT
Section 16. Directors may participate in a meeting of the
board or any committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and participation
in a meeting pursuant to this section shall constitute presence in
person at such meeting.
ALTERNATE COMMITTEE MEMBERS
Section 17. The board of directors may designate one or more
directors as alternate members of any committee, any of whom may be
selected by the chairman of a committee to replace any absent or
disqualified member at any meeting of a committee. In the absence
or disqualification of a member of a committee and of the alternate
members of such committee, the member or members thereof present at
any meeting and not disqualified from voting, whether or not such
member or members constitutes a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in
place of any such absent or disqualified member.
ARTICLE IV
NOTICES
Section 1. Except as may be otherwise provided for in these
by-laws, whenever under the provisions of the statutes or of the
certificate of incorporation or 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 mail, addressed to such director or stockholder at
such address as appears on the books of the corporation, and such
notice shall be deemed to be given at the time when the same shall
be mailed. Notice to directors may also be given by telegram or
telex.
Section 2. Whenever any notice is required to be given under
the provisions of the statutes or of the certificate of
incorporation, or of these by-laws, a waiver thereof in writing
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE V
OFFICERS
Section 1. The Board of Directors shall elect a Chairman of
the Board from among its members. The Board of Directors shall
also elect a Chief Executive Officer and such other officers as the
Board of Directors determines, none of whom need to be members of
the Board of Directors.
Section 2. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer of the
corporation may be removed at any time by the affirmative vote of a
majority of the whole board of directors.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. The corporation may indemnify to the fullest
extent that is lawful, 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 (including an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or
was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines, taxes, penalties and
amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding.
Section 2. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust
or other enterprise against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status
as such, whether or not he would be entitled to indemnity against
the same liability under the provisions of this article.
Section 3. The corporation may enter into an indemnity
agreement with any director, officer, employee or agent of the
corporation, upon terms and conditions that the board of directors
deems appropriate, as long as the provisions of the agreement are
not inconsistent with this article.
ARTICLE VII
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the
corporation by the chairman of the board, the president or a vice
president and the treasurer or an assistant treasurer, or the
secretary or an assistant secretary of the corporation, certifying
the number of shares owned by him in the corporation. If the
corporation shall be authorized to issue more than one class of
stock or more than one series of any class, designations,
preferences and relative, participating, optional and other special
rights of each class of stock or series thereof and the
qualifications, limitations or restrictions or such preferences and
rights shall be set forth in full or summarized on the face or back
of the certificate which the corporation shall issue to represent
such class or series of stock; provided, however, that, to the full
extent allowed by law, in lieu of the foregoing requirements, there may be
set forth on the face or back of the certificate which the
corporation shall issue to represent such class or series of stock,
a statement that the corporation will furnish without charge to
each stockholder who so requests the 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 rights.
Section 2. If such certificate is countersigned (1) by a
transfer agent, or (2) by a registrar, any other signature on the
certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate shall have ceased to be such
officer, transfer agent, or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as
if he were such officer, transfer agent, or registrar at the date
of issue.
LOST CERTIFICATES
Section 3. The board of directors may authorize the transfer
agents and registrars of the corporation to issue and register,
respectively, new certificates in place of any certificates alleged
to have been lost, stolen or destroyed, and in its discretion and
as a condition precedent to the issuance thereof, may prescribe
such terms and conditions as it deems expedient, and may require
such indemnities as it deems necessary to protect the corporation
and said transfer agents and registrars.
TRANSFERS OF STOCK
Section 4. 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
Section 5. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to
corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a
record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, 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
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of
shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books
as the owner of shares, and shall not be bound to recognize any
equitable or other claim to or interest in such share or shares on
the party of any other person, whether or not it shall have express
or other notice thereof, except as otherwise provided by the laws
of Delaware.
ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the 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,
subject to the provisions of the certificate of incorporation.
Section 2. 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 or reserves to meet
contingencies, or for equalizing dividends, 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 modify or abolish any such
reserve in the manner in which it was created.
Section 3. The board of directors shall present at each
annual meeting and when called for by vote of the stockholders at
any special meeting of the stockholders, a full and clear statement
of the business and condition of the corporation.
CHECKS
Section 4. 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. The board of directors, in its
discretion, may delegate its responsibilities contained in this
section to any officer or officers of the corporation.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall begin on
the first day of January, and terminate on the thirty-first day of
December, in each year.
SEAL
Section 6. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Incorporated Delaware". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE IX
TENNESSEE AUTHORIZED CORPORATION PROTECTION ACT
Section 1. This corporation shall be subject to Section
404(a) of the Tennessee Authorized Corporation Protection Act.
ARTICLE X
AMENDMENTS
Section 1. The holders of shares of capital stock of the
corporation entitled at the time to vote for the election of
directors shall have the power to adopt, alter, amend, or repeal
the by-laws of the corporation by vote of such percentage of such
shares as is required by the Certificate of Incorporation, or if no
percentage is specified by the Certificate of Incorporation, by
vote of not less than 66-2/3% of such shares. The board of
directors shall also have the power to adopt, alter, amend or
repeal the by-laws of the corporation by vote of such percentage of
the entire board as is required by the Certificate of
Incorporation, or if no percentage is specified by the Certificate
of Incorporation, by vote of not less than a majority of the entire
board.
