SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________to__________________
Commission file number 1-7160
COACHMEN INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1101097
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
601 EAST BEARDSLEY AVENUE, ELKHART, INDIANA 46514
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 219-262-0123
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No _
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
At July 31, 1998:
Common Shares, without par value 17,429,058 shares outstanding
including an equivalent number of common share purchase rights.
<PAGE> 1
COACHMEN INDUSTRIES, INC.
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Financial Statements:
Condensed Consolidated Balance Sheets-
June 30, 1998 and December 31, 1997..................... 3-4
Condensed Consolidated Statements of Income-
Three and Six Months Ended June 30, 1998 and 1997....... 5
Condensed Consolidated Statements of Cash Flows-
Six Months Ended June 30, 1998 and 1997................. 6
Notes to Condensed Consolidated Financial Statements.... 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations........................ 8-11
PART II. OTHER INFORMATION....................................12-13
Item 4. Submission of Matters to a vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES..................................................... 14
This Report contains certain statements that are "forward-looking" statements
within the meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, as amended. Those statements may
include, but are not limited to statements related to the availability of
gasoline, which can impact sales of recreational vehicles; availability of
chassis, which are used in the production of many of the Company's recreational
vehicle products; interest rates, which affect the affordability of the
Company's products; and also on the state of the recreational vehicle and
modular housing industries in the United States. Other factors affecting
forward-looking statements include competition in these industries and the
Company's ability to maintain or increase gross margins which are critical to
the profitability whether there are or are not increased sales; and the
Company's ability to make its software compliant with the year 2000. At
times, the Company's actual performance differs materially from its
projections and estimates regarding the economy, the recreational vehicle and
housing industries and other key performance indicators. Readers of this
Report are cautioned that reliance on any forward-looking statements involves
risks and uncertainties. Although the Company believes that the assumptions
on which the forward-looking statements contained herein are based are
reasonable, any of those assumptions could prove to be inaccurate given the
inherent uncertainties as to the occurrence or nonoccurrence of future
events. There can be no assurance that the forward-looking statements
contained in this Report will prove to be accurate. The inclusion of a
forward-looking statement herein should not be regarded as a representation
by the Company that the Company's objectives will be achieved.
<PAGE> 2
COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1998 1997
ASSETS
CURRENT ASSETS
Cash and temporary cash investments $ 60,224,961 $71,427,918
Short-term investments 21,060,764 15,852,718
Trade receivables, less allowance for
doubtful receivables 1998 - $1,247,000
and 1997 - $1,354,000 26,668,316 25,212,595
Other receivables 1,983,303 2,980,257
Refundable income taxes 625,000 1,761,000
Inventories 81,020,613 68,416,006
Prepaid expenses and other 1,916,553 1,247,973
Deferred income taxes 3,040,000 3,040,000
Total current assets 196,539,510 189,938,467
PROPERTY AND EQUIPMENT, at cost
Land and improvements 10,830,475 9,041,817
Buildings and improvements 48,994,282 39,950,161
Machinery and equipment 18,378,103 16,874,788
Transportation equipment 13,244,326 10,159,168
Office furniture and fixtures 7,075,861 5,712,961
98,523,047 81,738,895
Less, Accumulated depreciation 38,327,771 35,137,268
Net property and equipment 60,195,276 46,601,627
OTHER ASSETS
Real estate held for sale 2,729,221 4,188,063
Rental properties 1,399,066 2,000,218
Intangibles, less accumulated amortization
1998 - $584,527 and 1997 - $516,469 4,859,749 4,927,807
Deferred income taxes 569,000 569,000
Other 10,410,244 10,836,844
Total other assets 19,967,280 22,521,932
TOTAL ASSETS $276,702,066 $259,062,026
The accompanying notes are part of the condensed consolidated
financial statements.
<PAGE> 3
COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (CONT'D)
JUNE 30, DECEMBER 31,
1998 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 2,125,175 $ 2,258,519
Accounts payable, trade 27,107,453 22,818,303
Accrued wages, salaries and commissions 5,247,507 4,876,790
Accrued dealer incentives 1,737,200 3,226,255
Accrued warranty expense 5,918,560 6,013,528
Accrued income taxes 1,246,282 1,529,543
Accrued insurance 3,186,177 2,319,518
Other accrued liabilities 7,247,688 6,633,762
Total current liabilities 53,816,042 49,676,218
LONG-TERM DEBT 10,799,874 12,591,144
OTHER 6,832,288 6,658,872
Total liabilities 71,448,204 68,926,234
SHAREHOLDERS' EQUITY
Common shares, without par value: authorized
60,000,000 shares; issued 1998 - 20,810,129
shares and 1997 - 20,689,214 shares 88,720,727 87,519,740
Additional paid-in capital 3,035,910 3,012,596
Retained earnings 129,869,579 115,984,289
Treasury shares, at cost:
1998 - 3,386,421 shares and
1997 - 3,387,648 shares (16,372,354) (16,380,833)
Total shareholders' equity 205,253,862 190,135,792
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $276,702,066 $259,062,026
The accompanying notes are part of the condensed consolidated
financial statements.
<PAGE> 4
COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
1998 1997 1998 1997
Net sales $201,069,322 $169,368,233 $376,706,781 $327,474,044
Cost of goods sold 170,874,432 146,128,835 323,135,502 283,899,275
Gross profit 30,194,890 23,239,398 53,571,279 43,574,769
Operating expenses:
Selling and delivery 8,823,223 7,680,881 17,889,502 16,011,760
General and administrative 8,035,179 6,522,400 14,810,277 12,530,299
Total operating expenses 16,858,402 14,203,281 32,699,779 28,542,059
Operating income 13,336,488 9,036,117 20,871,500 15,032,710
Nonoperating income
(expense):
Interest expense (337,514) (438,806) (802,674) (795,062)
Investment income 1,304,781 1,148,209 2,432,864 2,140,673
Gain (loss) on sale of
properties, net (49,243) 123,836 (44,209) 133,292
Other Income, net 61,512 97,273 934,958 191,050
Total nonoperating income 979,536 930,512 2,520,939 1,669,953
Income before
income taxes 14,316,024 9,966,629 23,392,439 16,702,663
Income taxes 4,993,000 3,537,000 7,770,000 5,854,000
Net income $ 9,323,024 $ 6,429,629 $ 15,622,439 $ 10,848,663
Earnings per common share:
Basic $ .54 $ .37 $ .90 $ .63
Diluted $ .53 $ .37 $ .89 $ .62
Number of common shares
used in the computation
of earnings per share:
Basic 17,400,688 17,242,047 17,370,323 17,222,144
Diluted 17,568,380 17,385,207 17,535,556 17,405,035
Cash dividends per
common share $ .05 $ .05 $ .10 $ .10
The accompanying notes are part of the condensed consolidated
financial statements.
<PAGE> 5
COACHMEN INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS
ENDED JUNE 30,
1998 1997
CASH FLOWS FROM OPERATING ACTIVITIES
Net cash provided by operating
activities $ 13,752,389 $23,925,255
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from:
Sale of short-term investments 68,129,470 512,250
Sale of properties
1,649,565 537,476
Acquisitions of:
Short-term investments (73,621,654) (9,521,908)
Property and equipment (10,678,966) (7,049,867)
Businesses (9,001,812) -
Other 342,321 169,527
Net cash (used in) investing
activities (23,181,076) (15,352,522)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of long-term debt (1,924,614) (1,591,349)
Issuance of common shares under stock
Option and stock purchase plans 1,200,987 615,242
Tax benefit from stock options exercised 686,506 330,546
Purchases of common shares for treasury - (827,500)
Cash dividends paid (1,737,149) (1,723,578)
Net cash (used in) financing activities (1,774,270) (3,196,639)
Increase (decrease)in cash and temporary
cash investments (11,202,957) 5,376,094
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 71,427,918 66,448,901
End of period $ 60,224,961 $ 71,824,995
Noncash investing and financing
activities:
Liabilities assumed in acquisitions
of businesses $ 795,000 $ -
The accompanying notes are part of the condensed consolidated
financial statements.
<PAGE> 6
COACHMEN INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet data as of December 31, 1997 was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
2. In the opinion of management, the information furnished herein
includes all adjustments of a normal and recurring nature necessary
to reflect a fair statement of the interim periods reported. The
results of operations for the three and six months ended June 30,
1998 are not necessarily indicative of the results to be expected
for the full year.
3. Inventories consist of the following:
June 30, December 31,
1998 1997
Raw material $ 26,795,394 $ 19,437,977
Work-in-process 10,424,839 9,327,308
Finished goods 43,800,380 39,650,721
Total $ 81,020,613 $ 68,416,006
4. The Company was contingently liable at June 30, 1998 to banks
and other financial institutions on repurchase agreements in
connection with financing provided by such institutions to most of
the Company's independent dealers in connection with their purchase
of the Company's recreational vehicle products. These agreements
provide for the Company to repurchase its products from the
financing institution in the event that they have repossessed them
upon a dealer's default. The risk of loss resulting from these
agreements is spread over the Company's numerous dealers and is
further reduced by the resale value of the products repurchased.
The Company is involved in various legal proceedings which are
ordinary litigations incidental to the industry and which are
covered in whole or in part by insurance. Management believes that
any liability which may result from these proceedings will not be
significant.
5. On February 3, 1998, the Company acquired certain assets and the
operations of three retail recreational vehicle dealerships, two located
in Florida and one in Georgia. The assets acquired consisted of new and
used unit inventories, real and personal property, parts inventories,
tools and supplies and other miscellaneous items. The purchase price,
which aggregated $9.8 million and approximated the fair value of the
acquired assets, consisted of $9.0 million in cash and the balance in the
assumption of certain liabilities of the sellers. The acquisitions were
accounted for as a purchase and the operating results of the acquired
businesses are included in the Company's consolidated financial statements
from the date of acquisition. Pro forma financial information has not
been presented as it is not materially different from the Company's
historical results.
<PAGE> 7
COACHMEN INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial condition, results of
operations and cash flows during the periods included in the accompanying
condensed consolidated financial statements.
A summary of the changes in the principal items included in the condensed
consolidated statements of income is shown below.
Comparison of
Three Months Six Months
Ended June 30, 1998 and 1997
Increases(Decreases)
Net sales $ 31,701,089 18.7% $ 49,232,737 15.0%
Cost of goods sold 24,745,597 16.9 39,236,227 13.8
Selling and
delivery expenses 1,142,342 14.9 1,877,742 11.7
General and
administrative expenses 1,512,779 23.2 2,279,978 18.2
Interest expense (101,292) (23.1) 7,612 1.0
Investment income 156,572 13.6 292,191 13.1
Gain (loss) on sale of
properties, net (173,079) * (177,501) *
Other income, net (35,761) * 743,908 *
Income before income taxes 4,349,395 43.6 6,689,776 40.1
Income taxes 1,456,000 41.2 1,916,000 32.7
Net income 2,893,395 45.0 4,773,776 44.0
* Not meaningful
<PAGE> 8
NET SALES
Consolidated net sales for the quarter ended June 30, 1998 were $201,069,322
an increase of 18.7% over the $169,386,233 reported for the corresponding
quarter last year. Net sales for the six months were $376,706,781
representing an increase of 15.0% over the $327,474,044 reported for the same
period in 1997. The Company's vehicle segment experienced net sales increases
of 20.1% and 16.3% for the quarter and six months, respectively. These
increases are attributed to the overall increases in the recreational vehicle
market. The Company's housing segment had a net sales increase for the 1998
quarter of 12.0% and 8.6% for the six months as demand for the Company's
modular housing products continued its upswing and also as the result of
increased capacity. Both the vehicle and housing segments experienced
increases in the number of units sold, as well as, in the average sales price
per unit.
COST OF GOODS SOLD
Cost of goods sold increased 16.9% or $24,745,597 for the three months and
13.8% or $39,236,227 for the six months ended June 30, 1998. The increase
for both periods is lower than the increase in net sales. As a percentage of
net sales, cost of goods sold decreased 1.3% and .9% for the quarter and six
months, respectively, from the comparable prior year periods. These
percentages reflect improvements over the higher 1997 expenses associated
with capacity start-up costs incurred in the vehicle segment and costs
associated with the implementation of a 7-day work week production schedule
at the Company's largest housing facility.
OPERATING EXPENSES
As a percentage of net sales, operating expenses, which include selling,
delivery, general and administrative expenses, were 8.4% for both the 1998
and 1997 quarter, and 8.7% for both of the comparable six-month periods.
Selling expenses, as a percentage of net sales, decreased by .1% for both the
quarter and six months while delivery expense stayed substantially the same
for both comparable periods. General and administrative expenses were 4.0%
of net sales for the second quarter compared to 3.9% for the 1997
corresponding quarter and 3.9% of net sales for the six-month period compared
to 3.8% for 1997. Administrative costs have increased for both periods due
to the higher administrative expenses associated with three acquired
dealerships and to the ongoing implementation of an enterprise computer
system. Many administrative resources are being utilized to resolve any
significant year 2000 issues with the Company's information systems.
INTEREST EXPENSE
Interest expense was $337,514 and $802,674 for the three and six-month
periods in 1998 compared to $438,806 and $795,062 in the same periods last
year. Interest expense varies with the amount of long-term debt and the
increase in cash surrender value for the Company's investment in life
insurance contracts. These life insurance contracts were purchased to fund
obligations under deferred compensation agreements with executives and other
key employees. The interest costs associated with deferred compensation
<PAGE> 9
obligations and with the borrowings against the cash value of the insurance
policies are partially offset by the increases in cash surrender values.
INVESTMENT INCOME
Investment income increased $156,572 and $292,191 respectively, for the 1998
three and six-month periods. Investment income is indicative of the amounts
of cash and temporary cash investments, as well as, short-term investment
activity in 1998 in comparison to 1997.
GAIN (LOSS) ON THE SALE OF PROPERTIES, NET
There was a net loss on the sale of properties for the second quarter of 1998
of $(49,243) compared with a gain of $123,836 in the same quarter of 1997.
The net gain (loss) on the sale of properties for the first six months was
$123,836 and $133,292 for 1998 and 1997, respectively. These amounts
represent the net result of gains or loses recognized upon the disposition of
various small properties. Assets are continually analyzed and every effort
is made to sell or dispose of properties that are determined to be
unproductive.
OTHER INCOME, NET
Other income, net, represents income of $61,512 for the second quarter and
$934,958 for the six months compared to income of $97,273 and $191,050 for
the 1997 second quarter and six months, respectively. The most significant
variance for the 1998 six-months was due to the receipt of nontaxable income
realized from corporate owned life insurance proceeds.
INCOME TAXES
For the second quarter ended June 30, 1998, the effective tax rate was 34.9%
and a year-to-date rate of 33.2% compared with a 1997 second quarter and
year-to-date effective tax rate of 35.5% and 35.0%, respectively. The Company's
effective tax rate fluctuates based upon the states where sales occur and
also with the level of export sales. The first six months of 1998 was also
impacted by the amount of nontaxable income realized from the recognition of
corporate owned life insurance proceeds.
LIQUIDITY AND CAPITAL RESOURCES
The Company generally relies on funds from operations as its primary source
of liquidity. In addition, the Company maintains an unsecured committed line
of credit, which totaled $30 million at June 30, 1998, to meet its seasonal
working capital needs. At June 30, 1998, there were no borrowings against
this line of credit. For the six months ended June 30, 1998, the major source
of cash was from operating activities. The significant items in operating
activities were net income, depreciation and an increase in trade accounts
payable. The positive cash flow from these items was partially offset by an
increase in inventories. Investing activities reflected a net cash use of
$23,181,076. The principal use of cash in investing activities was the
<PAGE> 10
acquisition of capital equipment and the acquisition of three businesses
(recreational vehicle retail stores). Property and equipment acquisitions
consumed cash primarily from the construction of an All American Homes
manufacturing facility in the state of Ohio and the purchase of an existing
recreational vehicle manufacturing facility in Indiana. Software and
additional hardware requirements in connection with the Company's
implementation of a new enterprise computer system were also significant uses of
cash for investing activities. The negative cash flow from financing
activities was primarily for cash dividends and repayment of long-term debt.
At June 30, 1998, working capital increased to $142.7 million from $140.3
million at December 31, 1997. The $6.6 million increase in current assets at
June 30, 1998 versus December 31, 1997, was primarily due to increased
inventories. The $4.1 million increase in current liabilities was
substantially due to increased trade accounts payable. The increases in
inventories and trade accounts payable are directly related to the increased
sales activity.
OTHER MATTERS
The Company has determined that certain of its computer software was
originally programmed using two digits rather than four to define the
applicable year. As a result, this software may be unable to process
transactions beyond December 31, 1999. The Company has devoted significant
resources to replace the affected software in a timely manner. The total
cost of the project, including hardware, software and training costs, is
estimated to be in excess of $2.5 million, of which $1.4 million has been
incurred as of June 30, 1998. Failure to successfully implement the new
systems, or delays in the implementation could cause disruptions in
operations, including, among other things, a temporary inability to process
transactions, send invoices or pay vendors and employees.
<PAGE> 11
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
a) The annual meeting of the shareholders of Coachmen Industries,
Inc. was held on April 13, 1998.
b) The following nominees were elected Directors for a one-year
term:
Claire C. Skinner
Thomas H. Corson
Keith D. Corson
Gary L. Groom
Philip C. Barker
R. James Harring
William P. Johnson
Philip G. Lux
Edwin W. Miller
c) The tabulation of votes for each Director nominee was as
follows:
For Withheld
Election of Directors:
Claire C. Skinner 16,193,231 499,705
Thomas H. Corson 16,189,031 503,905
Keith D. Corson 16,194,781 498,155
Gary L. Groom 16,203,031 489,905
Philip C. Barker 16,197,031 495,905
R. James Harring 16,195,206 497,730
William P. Johnson 16,199,231 493,705
Philip G. Lux 16,195,831 497,105
Edwin W. Miller 16,202,431 490,505
<PAGE> 12
Item 5. Other Information
On July 24, 1998, the Board of Directors approved various
amendments to the Company's By-laws. A complete copy of the
restated By-laws is attached to this Form 10-Q as Exhibit 3.
As one of the changes in the amended By-laws, the Board of
Directors approved a notice provision for stockholder
proposals. Stockholders wishing to bring a proposal before
the 1999 annual meeting of stockholders that is not to be
included in the Company's proxy statement, must cause written
notice of the proposal to be submitted to the Secretary of the
Corporation at its principal offices in Elkhart, Indiana not
later than January 21, 1999.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COACHMEN INDUSTRIES, INC.
(Registrant)
s/s: GARY L. GROOM
Date: August 13, 1998 _______________________________
Gary L. Groom, Executive Vice
President - Finance (Principal
Financial Officer)
s/s: WILLIAM M. ANGELO
Date: August 13, 1998 _______________________________
William M. Angelo, Corporate
Controller (Principal Accounting
Officer)
<PAGE> 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated statement of income and consolidated balance sheet and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000021212
<NAME> COACHMEN INDUSTRIES, INC.
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997<F1>
<PERIOD-END> JUN-30-1998 JUN-30-1997
<CASH> 60,225 81,335
<SECURITIES> 21,061 0
<RECEIVABLES> 30,524 28,198
<ALLOWANCES> 1,247 1,069
<INVENTORY> 81,021 64,580
<CURRENT-ASSETS> 196,540 178,085
<PP&E> 98,523 76,208
<DEPRECIATION> 38,328 32,102
<TOTAL-ASSETS> 276,702 245,886
<CURRENT-LIABILITIES> 53,816 49,425
<BONDS> 10,800 13,261
<COMMON> 72,348 70,477
0 0
0 0
<OTHER-SE> 132,905 103,796
<TOTAL-LIABILITY-AND-EQUITY> 276,702 245,886
<SALES> 376,707 327,474
<TOTAL-REVENUES> 376,707 327,474
<CGS> 323,136 283,899
<TOTAL-COSTS> 355,835 312,441
<OTHER-EXPENSES> (2,521) (1,670)
<LOSS-PROVISION> 181 175
<INTEREST-EXPENSE> 803 795
<INCOME-PRETAX> 23,392 16,703
<INCOME-TAX> 7,770 5,854
<INCOME-CONTINUING> 15,622 10,849
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 15,622 10,849
<EPS-PRIMARY> .90 .63
<EPS-DILUTED> .89 .62
<FN>
<F1>RESTATED
</FN>
</TABLE>
BY-LAWS
OF
COACHMEN INDUSTRIES, INC.
ARTICLE I
OFFICES
Principal Offices. The principal office of the Corporation shall be in
the City of Elkhart, Indiana, and the Corporation may have such other
offices, either within or without the State of Indiana, as it may require
from time-to-time.
ARTICLE II
SHAREHOLDERS
Section 2.1. Place of Meetings. All meetings of the shareholders for
the election of directors shall be held at the offices of the Corporation in
the City of Elkhart, State of Indiana, or elsewhere as the Board of Directors
may designate. Meetings of shareholders for any purpose may be held at such
place as shall be stated in the notice of the meeting, or in a duly executed
waiver of notice thereof.
Section 2.2. Annual Meetings. An annual meeting of the shareholders,
commencing with the year 1983, shall be held at 10:00 a.m. on the fifth
Thursday after the end of the first quarter, but if a legal holiday, then on
the next secular day following, or at such other time as the Board of
Directors shall determine, at which they shall elect a Board of Directors and
transact such other business as may properly be brought before such meeting.
Section 2.3. Special Meetings. Special meetings of the shareholders
may be called by the Chairman, or by a majority of the Board of Directors.
Section 2.4. Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting of shareholders, and in case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten days nor more than sixty days before the meeting,
either personally or by mail, by or at the direction of the Chairman, the
President, or the Secretary, or the officer or persons calling the meeting.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his address as it appears
on the records of the Corporation, with postage thereon prepaid. No business
may be transacted at a special meeting other than that described in the
notice thereof.
Section 2.5. Shareholders Entitled to Vote. The Board of Directors may
fix a date as the record date in order to determine the shareholders entitled
to notice of a shareholders' meeting, to demand a special meeting, to vote,
or to
<PAGE> 1
take any other action, such date in any case to be not more than
seventy days before the meeting or action requiring a determination of
shareholders.
Section 2.6. Voting Lists. The officer or agent who has charge of the
transfer books for shares of the Corporation shall make, at least five
business days before each meeting of shareholders, a complete list of the
shareholders entitled to vote at such meeting, arranged in alphabetical
order, with the address of and the number of shares held by each, which list,
for a period beginning five business days prior to such meeting and
continuing through the meeting, shall be kept on file at the principal office
of the Corporation and shall be subject to inspection of any shareholder in
accordance with applicable law during the whole time of the meeting. The
original share ledger or transfer book, or a duplicate thereof kept in this
state, shall be prima facie evidence as to who are the shareholders entitled
to examine such list or share ledger or transfer book or to vote at any
meeting of shareholders. Failure to comply with the requirements of this
Section 2.6 shall not affect the validity of any action taken at a
shareholders' meeting.
Section 2.7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote at any meeting represented in person or by
proxy, shall constitute a quorum at any meeting of shareholders; provided,
that if less than such quorum is present, the meeting may be adjourned in
accordance with Section 2.9 of this Article, until a quorum is present.
Section 2.8 Manner of Acting. Every decision (other than the election
of directors) with respect to which the votes cast in favor exceed the votes
cast in opposition shall be approved as a corporate act unless a larger
affirmative vote is required by statute, the Articles of Incorporation of the
Corporation, these by-laws or the Board of Directors. Directors are elected
by a majority of the votes cast by shares entitled to vote in the election at
a meeting at which a quorum is present, unless otherwise provided in the
Articles of Incorporation of the Corporation.
Section 2.9. Adjournment. If an annual or special shareholders'
meeting is adjourned to a different date, time, or place, notice thereof need
not be given if the new time, date or place is announced at the meeting
before the adjournment. A new record date need not be set if the
adjournment is within one hundred twenty (120) days of the original meeting
date.
Section 2.10. Proxies. At all meetings of shareholders, a shareholder
may vote either in person or by proxy executed in writing by the shareholder
or by his duly authorized attorney in fact. Such proxy shall be filed with
the meeting. No proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy.
Section 2.11. Voting of Shares. At every such meeting, each
shareholder shall be entitled to cast one vote in person or proxy for each
voting share of stock held in his name upon each matter submitted to vote.
<PAGE> 2
Shares of its own stock belonging to this Corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but
shares of its own stock held by it in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding shares at any
given time.
Section 2.12. Voting of Shares by Certain Holders. Shares standing in
the name of another corporation, domestic or foreign, may be voted by such
officer, agent or proxy as the Board of Directors of such corporation may
appoint or as the by-laws of such corporation may prescribe.
Share standing in the name of a deceased person, a minor ward or an
incompetent person, may be voted by his administrator, executor, court
appointed guardian or conservator, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor, court
appointed guardian or conservator. Share standing in the name as a trustee
may be voted by him, either in person or by proxy.
Shares standing in the name of a receiver or trustee in bankruptcy may
be voted by such receiver or trustee in bankruptcy, and shares held by or
under the control of a receiver or trustee in bankruptcy may be voted by such
receiver or trustee in bankruptcy without the transfer thereof into his name
if authority so to do be contained in an appropriate order of the court by
which such receiver or trustee in bankruptcy was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote shares so transferred.
Section 2.13. Voting by Ballot. Voting on any question may be via
voice unless the presiding officer shall order that voting be by written
ballot, and except that voting in elections shall be by written ballot, if a
shareholder so requests.
Section 2.14. Notice of Director Nominations and Shareholder Proposals.
(a) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for theelection of
directors. Such nomination shall be made by notice in writing, delivered or
mailed by first class United States mail, postage prepaid, to the Secretary
of the Corporation not less than sixty days prior to the month and day of the
last meeting of the stockholders called for the election of directors.
Notice of nominations which are proposed by the Board of Directors shall be
given by the Chairman on behalf of the Board.
(b) Each notice under subsection (a) must contain certain information
about each proposed nominee, including his age, business and
<PAGE> 3
residence addresses, principal occupation, the number of shares of Common
Stock beneficially owned by him, and such other information as would be
required to be included in a proxy statement soliciting proxies for the
election of such proposed nominee.
(c) Stockholders wishing to bring a proposal before a meeting of
stockholders, whether or not it is to be inclded in a proxy statement, must
submit it to the Secretary in writing, delivered or mailed by first class
United States mail, postage prepaid, to the Secretary of the Corporation not
less than sixty days prior to the month and day of mailing of the prior
year's proxy statement, together with identification and address of the
proposing stockholder and such other information as would be required to
determine the appropriateness of including the proposal in a proxy statement.
The Secretary, in conjunction with the Chairman and such professional advisors
as they deem necessary, shall determine whether and in what form to include
the stockholder proposal in proxy materials.
(d) If the Chairman of the meeting of stockholders determines that a
nomination or a proposal was not made in accordance with the foregoing
procedure, such nomination is void and such proposal shall not be submitted
for consideration at the meeting.
ARTICLE III
DIRECTORS
Section 3.1. General Powers. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors.
Section 3.2. Number, Tenure and Qualifications. The number of
directors of the Corporation shall be not less than seven (7) nor more than
twelve(12), the exact number of directors to be determined from time to time
by resolution of the Board of Directors. Each director shall hold office
until the next annual meeting of shareholders or until his successor shall
have been elected and qualified. Directors need not be residents of Indiana
or shareholders of the Corporation. No person shall be eligible for election
of the Board of Directors who will have attained the full age of seventy-five
(75) years prior to the beginning of the term for which said person is to
serve as a director.
Directors may be removed in any manner provided in the Articles of
Incorporation of the Corporation. In addition, unless the Articles of
Incorporation of the Corporation provide otherwise, a director may be removed
with or without cause by the shareholders or directors in the manner provided
by statute or the Articles of Incorporation of the Corporation.
Section 3.3. Committees. The Board of Directors, by resolution,
adopted by a majority of directors, may create one or more committees and
<PAGE> 4
appoint members of the Board to serve on the committee or committees. Each
committee shall have one or more members, who serve at the pleasure of the
Board.
To the extent specified by the Board of Directors or in the Articles of
Incorporation or these by-laws, each committee may exercise the authority of
the Board of Directors under the Indiana Business Corporation Law; provided,
however, a committee may not : (l) authorize distributions, except a
committee may authorize or approve a reacquisition of shares if done
according to a formula or method prescribed by the Board of Directors; (2)
approve or propose to shareholders action that requires shareholders;
approval under the Indiana Business Corporation Law; (3) fill vacancies on
the Board of Directors or on any of its committees; (4) amend the Articles of
Incorporation of his Corporation; (5) adopt, amend or repeal these by-laws; or
(6) approve a plan of merger not requiring shareholder approval.
Section 3.4. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this by-law, immediately
after, and at the same place as, the annual meeting of shareholders. If such
meeting is not held as above provided, the election of officers may be held
at any subsequent meeting of the Board of Directors specifically called in
the manner hereinafter provided. The Board of Directors may provide, by
resolution, the time and place, either within or without the State of
Indiana, for the holding of additional regular meetings without other notice
than such resolution.
Section 3.5. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman or any three
directors. The person or persons authorized to call special meetings of the
Board of Directors may fix any place, either within or without the State of
Indiana, as the place for holding any special meeting of the Board of
Directors called by them.
Section 3.6. Notice. Notice of any special meeting of Directors shall
be given to be effective at least three (3) days prior to the meeting. Notice
shall include the date, time and place of the meeting, but need not describe
the purpose of the meeting, except as may be otherwise required in these
Bylaws of the Articles of Incorporation. Written notice of any special
meeting of directors shall be given as follows: by mail (which includes U.S.
mail and private carrier service); or, by electronic mail or facsimile to an
address or number provided by the Director(s) for such purposes; or, by
personal delivery, telegram, teletype or other form of wire or wireless
communication; in all cases, to each director at his/her business address
or, in the event delivery is to be made on a Saturday, Sunday or legal
holiday, then to the resident address of each director. Written notice is
effective at the earliest of the following: When received; five (5) days
after the date of mailing, as evidenced by the postmark or private carrier
receipt, if correctly addressed to the address listed in the most current
records of the corporation; or, on the date shown on the return receipt of
a mailing, if the receipt is signed by or on behalf of the addressee. If
sent by electronic mail or faxsimile,
<PAGE> 5
such notice will be presumed and determined to be delivered when the
electronic records indicate that a good transmission was made unless proven
otherwise. For purposes of dealing with an emergency situation, as
conclusively determined by the director(s) calling the meeting, notice may be
given in person, orally or by any means that reasonably may be expected to
provide notice under the circumstances, not less than two (2) hours prior to
the meeting. If the secretary fails or refuses to give such notice, then the
notice may be given by the director(s) calling the meeting. Any director may
waive notice of any meeting. The attendance of a director at any meeting
shall constitute a waiver of notice of such meeting, except where a director
attends and announces that the express purpose of his/her attendance at the
beginning of the meeting is to object to the holding of the meeting or the
transaction of any business because the meeting is not lawfully called or
convened, and provided that such Director does not thereafter participate in
any way, vote for or assent or dessent to or on the record abstain from
voting on any action taken at the meeting. Neither the business to be
transacted at, nor the purpose of, any regular or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of
such meeting.
Section 3.7. Quorum. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for the transaction of business at
any meeting of the Board of Directors, provided, that if less than a majority
of such directors are present at said meeting, a majority of the directors
present may adjourn the meeting from time to time without further notice.
Section 3.8. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
Section 3.9. Vacancies. Any vacancy occurring in the Board of
Directors and any directorship to be filled by reason of an increase in the
number of directors, may be filled by the remaining directors, though less
than a quorum, at an annual or special meeting thereof.
Section 3.10. Compensation. By resolution of the Board of Directors,
irrespective of any personal interest of any of the members, the directors
may be compensated for their services to the Corporation in any reasonable
manner, including but not limited to payment of their expenses, if any, of
attendance at each meeting of the Board, or any duly organized Committee of
the Board of which they are members, and/or payment of a fixed sum for
attendance at such meeting, and/or payment of stated periodic amount for
serving on the Board and/or any committee thereof. Alternatively and
additionally, the Directors may be paid either by issuance of a fixed number
of shares of the Corporation, or payment of the fixed sums may be made by
issuance of shares of the Corporation of an equivalent value as the amount
due, as determined by the Board. No such payment shall preclude any director
from serving the Corporation in any other capacity and receiving compensation
therefor.
<PAGE> 6
Section 3.11. Presumption of Assent. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action taken.
Section 3.12. Informal Action by Directors. Any action required to be
taken at a meeting of the Board of Directors, or any other action which may
be taken at a meeting of the Board of Directors, or any duly organized
committe thereof acting within the scope of its delegated authority, may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the directors entitled to vote with respect
to the subject matter thereof or by all the members of such committee, as the
case may be, and such consent is included in the minutes or filed with the
corporate records reflecting the action taken.
ARTICLE IV
OFFICERS
Section 4.1. Number. The officers of the Corporation shall be a
Chairman, a President, a Treasurer and a Secretary, all of whom shall be
elected by the Board of Directors.
The board of Directors may appoint such other officers as they deem
necessary which may include various levels of Vice Presidents, a Controller,
a Chief Financial Officer, a General Counsel, and others who shall have such
authority and shall perform such duties as from time to time may be
prescribed by the Board of Directors. Any two or more offices may be held by
the same person.
The officers of the Corporation shall have such powers and authority in
the control and management of the property and business of the Corporation as
is usual and proper in the case of, and incident to, such corporate offices,
except insofar as such power and authority is limited by these by-laws or by
resolution of the Board of Directors. Officers shall report as designated by
the Board of Directors or by these Bylaws, or if there is no such designation,
then as designated by the Chairman.
Section 4.2. Election and Term of Office. The officers of the
Corporation shall be elected annually by the Board of Directors at the first
meeting of the Board of Directors held after each annual meeting of
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently may be.
Vacancies may be filled or new
<PAGE> 7
offices filled at any meeting of the Board of Directors. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign or shall have been
removed in the manner hereinafter provided.
Section 4.3. Removal. Any officer or agent of the Corporation may be
removed at any time by the Chairman, the Chairman's designee, or by the Board
of Directors whenever in his/its judgment the best interests of the
Corporation would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed; and, any
such removal by the Chairman (or the Chairman's designee) shall be subject to
ratification by the Board of Directors, provided that such ratification shall
be effective retroactive in effect to the date of removal.
Section 4.4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
Section 4.5. Bonds. If the Board of Directors by resolution shall so
require, any officer or agent of the Corporation shall give bond to the
Corporation in such amount and with such surety as the Board of Directors may
deem sufficient, conditioned upon the faithful performance of their
respective duties and offices.
Section 4.6. Chairman. The Chairman shall be chosen from the Board of
Directors and shall be the chief executive officer of the Corporation. The
Chairman shall have executive authority to see that all orders and resolutions
of the Board of Directors are carried into effect and, subject to the control
vested in the Board of Directors by statute, by the Articles of
Incorporation or by these by-laws, shall administer and be responsible for
the overall management of the business and affairs of the Corporation. The
Chairman shall preside at all meetings of the shareholders and of the Board
of Directors, and in general shall perform all duties incident to the office
of the Chairman of the Board and such other duties as from time to time may
be assigned to him by the Board of Directors.
Section 4.7. President. The President shall be chosen by the Board of
Directors, shall be directly responsible to the Chairman and directly in
charge of all of the Corporation's operations. He may sign with the
Secretary or any other proper officer of the Corporation thereunto authorized
by the Board of Directors, certificates for shares of the Corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the signing
and execution thereof shall be expressly delegated by the Board of Directors
or by these by-laws to some other officer or agent of the Corporation, or
shall be required by law to be otherwise signed or executed; and in general
shall perform all duties as may be prescribed by the Board of Directors from
time to time.
<PAGE> 8
Section 4.8. Vice Presidents and Other Officers. Any Vice President
may sign with the Secretary or an Assistant Secretary, certificates for
shares of the Corporation. Vice Presidents and othe Officers shall have such
authority within an appointed area as determined by the Board of Directors,
and shall perform such other duties as from time to time may be assigned to
them by the President, the Chairman, or the Board of Directors.
Section 4.9. Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such
sum and with such surety or sureties as the Board of Directors shall
determine. He shall: (a) have charge and custody of and be responsible for
all funds and securities of the Corporation; receive and give receipts for
moneys due and payable to the Corporation from any source whatsoever, and
deposit all such moneys in the name of the Corporation in such banks, trust
companies or other depositories as shall be selected in accordance with the
provisions of Article V of these by-laws; (b) in general, perform all duties
incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Chairman, the President or the Board of
Directors.
Section 4.10. Secretary. The Secretary shall: (a) keep the minutes of
the shareholders' and of the Board of Directors' meetings in one or more
books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these by-laws or as required by law; (c) be
custodian of the corporate records and of the seal of the Corporation and see
that the seal of the Corporation is affixed to all documents, the execution
of which on behalf of the Corporation under its seal is duly authorized in
accordance with the provisions of these by-laws; (d) keep a register of the
post office address of each shareholder; (e) have general charge of the share
transfer books of the Corporation; (f) in general, perform all duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Chairman, the President or by the Board of
Directors.
Section 4.11. Assistant Treasurers and Assistant Secretaries. The
Assistant Treasurers shall, respectively, if required by the Board of
Directors, give bonds for the faithful discharge of their duties in such
sums and with such sureties as the Board of Directors shall determine. The
Assistant Secretaries as thereunto authorized by the Board of Directors may
sign with the President or a Vice President certificates for shares of the
Corporation, the issue of which shall have been authorized by a resolution of
the Board of Directors. The Assistant Treasurers and Assistant Secretaries,
in general, shall perform such duties as shall be assigned to them by the
Treasurer or the Secretary, respectively, or by the Chairman, the President
or the Board of Directors.
Section 4.12. Compensation. The compensation of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such compensation by reason of the fact that he is
also a director of the Corporation.
<PAGE> 9
Section 4.13. Succession.
In case of the unexplained absence of, or inability to reach, the
Chairman for a period of forty-eight (48) hours, or in the event of the
Chairman's inability to at or his refusal to act in accordance with the law
or the directives of the Board of Directors, the President shall perform the
duties of the Chairman.
In case of the unexplained absence of, or inability to reach, the
President for a period of forty-eight (48) hours, or in the event of the
President's inability to act or his refusal to act in accordance with the law
or the directives of the Board off Directors, the Chairman or any other
officer whon the Chairman shall designate shall perform the duties of the
President.
In case of the Unexplained absence of, or inability to reach, both the
President and the Chairman for a period of forty-eight (48) hours, or the
inability to act of both the Chairman and the President, then the officer:
in the order previously designated by the Board of Directors; or, in the
absence of any designation by the Board of Directors, in the order previously
designated by the Chairman; or, in the absence of any designation by either
of them, first the Executive Vice President(s), then the Senior Vice
President(s) and then the Vice President(s), each in the order of their last
appointment, shall temporarily perform the duties of President and Chairman
until action by the Board of Directors. Such officer shall call a Special
Meeting of the Board of Directors within seven (7) days of assuming the
duties of President and Chairman, for the express purpose of filing those
vacancies and appointing new officers, as appropriate, unless the President
and the Chairman resume their duties in the interim.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 5.1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Corporation,
and such authority may be general or confined to specific instances.
Section 5.2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances.
Section 5.3. Checks, Drafts, etc. All checks, drafts or other order
for the payment of money, notes or other evidences of indebtedness issued in
the name of the Corporation, shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as shall from time to
time be determined by resolution of the Board of Directors.
Section 5.4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in
<PAGE> 10
such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI
SHARES, CERTIFICATES FOR SHARES AND TRANSFER OF SHARES
Section 6.1. Regulation. The Board of Directors may make such rules
and regulations as it may deem expedient concerning the issuance, transfer
and registration of certificates for shares of the Corporation, including the
appointment of transfer agents and registrars.
Section 6.2. Certificates for Shares. Certificates representing shares
of the Corporation shall be respectively numbered serially for each class of
shares, or series thereof, as they are issued, may be impressed with the
corporate seal or a facsimile thereof, and shall be signed by the Chairman,
President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary; provided that such signatures may
be facsimile if the certificate is countersigned by a transfer agent, or
registered by a registrar other than the Corporation itself or its employee.
Each certificate shall state the name of the Corporation, the fact that the
Corporation is organized or incorporated under the laws of the State of
Indiana, the name of the person to whom issued, the date of issue, the class
(or series of any class), the number of shares thereby or a statement that
such shares are without par value. If the Articles of Incorporation of the
Corporation authorize the issuance of more than one class of shares, a
statement of the designations, preferences, qualifications, limitations,
restrictions and special or relative rights of the shares of each class shall
be set forth in full or summarized on the face or back of the certificates
which the Corporation shall issue or in lieu thereof, the certificate may set
forth that such a statement or summary will be furnished to any shareholder
upon request without charge. Each certificate shall be otherwise in such
form as may be prescribed by the Board of Directors and as shall conform to
the rules of any stock exchange on which the shares may be listed.
The Corporation shall not issue certificates representing fractional
shares and shall not be obligated to make any transfers creating a fractional
interest in a share of stock. The Corporation may, but shall not be obligated
to, issue script in lieu of any fractional shares, such script to have terms
and conditions specified by the Board of Directors.
Section 6.3. Cancellation of Certificates. All certificates
surrendered to the Corporation for transfer shall be canceled and no new
certificates shall be issued in lieu thereof until the former certificate for
a like number of shares shall have been surrendered and canceled, except
as herein provided with respect to lost, stolen or destroyed certificates.
Section 6.4. Lost, Stolen or Destroyed Certificates. Any shareholder
claiming that his certificate for shares is lost, stolen or destroyed may
make an
<PAGE> 11
affidavit or affirmation of that fact and lodge the same with the Secretary
of the Corporation, accompanied by a signed application for a new
certificate. Thereupon, and upon the giving of a satisfactory bond of
indemnity to the Corporation not exceeding in amount double the value of the
shares represented by such certificate, such value to be determined by the
Chairman and Treasurer of the Corporation, a new certificate may be issued of
the same tenor and representing the same number, class and series of shares
as were represented by the certificate alleged to be lost, stolen or destroyed.
Section 6.5. Transfer of Shares. Shares of the Corporation shall be
transferable on the books of the Corporation by the holder thereof in person
or by his duly authorized attorney, upon the surrender and cancellation of
a certificate or certificates for a like number of shares. Upon presentation
and surrender of a certificate for shares properly endorsed and payment of
all taxes therefor, the transferee shall be entitled to a new certificate or
certificates in lieu thereof. As against the Corporation, a transfer of
shares can be made only on the books of the Corporation and in the manner
hereinabove provided, and the Corporation shall be entitled to treat the
holder of record of any share as the owner thereof and 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, save as expressly provided by the statutes of the State of
Indiana.
ARTICLE VII
FISCAL YEAR
The fiscal year of the Corporation shall end on the last day of
December in each calendar year.
ARTICLE VIII
DIVIDENDS
The Board of Directors may from time to time fix a record date,
declaration date and payment date with respect to any share dividend or
distribution to shareholders in the manner and upon the terms and conditions
provided by law and its Articles of Incorporation.
ARTICLE IX
SEAL
The Board of Directors shall provide a corporate seal which shall be in
the form of a circle and shall have inscribed thereon the name of the
Corporation and the words "Corporate Seal, Indiana."
ARTICLE X
<PAGE> 12
WAIVER OF NOTICE
Whenever any notice is required to be given under the provisions of
these by-laws or under the provisions of the Articles of Incorporation or
under the provisions of the Indiana Business Corporation Law, or otherwise,
a waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time started therein, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting, in
person or by proxy, shall constitute a waiver of notice of such meeting,
unless the person or persons entitled to such notice at the beginning of the
meeting objects to holding the meeting.
ARTICLE XI
INDEMNIFICATION
Section 11.1. General. The Corporation shall, to the fullest extent to
which it is empowered to do so by the Indiana Business Corporation Law, or
any other applicable laws, as from time to time in effect, indemnify any
Indemnified Officer 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 and whether formal
or informal, by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or who, while serving as such director,
officer, employee or agent of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, trustee, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, whether for profit or not, against judgments,
settlements, penalties and fines (including excise taxes assessed with
respect to employee benefit plans) and reasonable expenses (including counsel
fees) incurred by him in accordance with such action, suit or proceeding, if
he acted in good faith and in a manner he reasonably believed, in the case of
conduct in his official capacity, was in the best interests of the
Corporation, and in all other cases, was not opposed to the best interests of
the Corporation, and, with respect to any criminal action or proceeding, he
either had reasonable cause to believe his conduct was lawful or no reasonable
cause to believe his conduct was unlawful.
Any other person may be so indemnified if it is determined by the Board
of Directors by a majority vote of a quorum none of whom were at the time
parties to such action that such indemnification is in the interest of the
Corporation, subject to the provisions of this Article.
The termination of any action, suit or proceeding by judgment, order,
settlement or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did
not meet the prescribed standard of conduct.
<PAGE> 13
Section 11.2. Authorization of Indemnification. To the extent that an
Indemnified officer of the Corporation has been successful, on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
Section 11.1 of this Article, or in the defense of any claim, issue or matter
therein, the Corporation shall indemnify such person against reasonable
expenses (including counsel fees) incurred by such person in connection
therewith. Any other indemnification under Section 11.1 of this Article
(unless ordered by a court) shall be made by the Corporation only as
indemnification of the person to be indemnified is permissible in the
circumstances because he has met the applicable standard of conduct, and as
authorized as provided below.
Determination as to whether indemnification is permissible shall be made
(1) by the Board of Directors by a majority vote of a quorum none of whom
were at the time parties to such action, suit or proceeding; or (2) if a
quorum cannot be obtained under subdivision (1), by majority vote of a
committee duly designated by the Board of Directors (in which designation
directors who are parties may participate), consisting solely of two or more
directors not at the time parties to such action, suit or proceeding; or
(3) by special legal counsel: (A) selected by the Board of Directors or its
committee in the manner prescribed in subdivision (1) or (2), or (B) if a
quorum of the Board of Directors cannot be obtained under subdivision (1) and
a committee cannot be designated under subdivision (2), selected by majority
vote of the full Board of Directors; or (4) by the shareholders, but shares
owned by or voted under the control of directors who are at the time parties
to such action, suit or proceeding may not be voted on the determination.
Authorization of indemnification, the extent of indemnification and
evaluation as to reasonableness of expenses shall be made in the same manner
as the determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be made
by those entitled under sub-section (3) to select counsel.
Section 11.3. Good Faith Defined. For purposes of any determination
under this Article XI, a person shall be deemed to have acted
in good faith and to have otherwise met the applicable standard of conduct set
forth in Section 11.1 if his action is based on information, opinions,
reports, or statements, including financial statements and other financial
data if prepared or presented by (1) one or more other Directors, officers or
employees of the Corporation or another enterprise whom he reasonably
believes to be reliable and competent in the matters presented; (2) legal
council, public accountants, appraisers or other persons as to matters he
reasonably believes are within the person's professional or expert
competence; or (3) a committee of the Board of Directors of the Corporation
or another enterprise of which the person is not a member if he reasonably
believes the committee merits confidence. The term "another enterprise" as
used in this Section 11.3 shall mean any other corporation or any
partnership, joint venture, trust, employee benefit plan or other enterprise
of which such a person is or was serving at the request of the Corporation as
a director, officer, partner, trustee, employee or agent. The provisions of
this
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Section 11.3 shall not be deemed to be exclusive or to limit in any way
the circumstances in which a person may be deemed to have met the applicable
standards of conduct set forth in Section 11.1 of this Article XI.
Section 11.4. Payment of Expenses in Advance. Reasonable expenses
incurred in connection with any civil or criminal action, suit or proceeding
may be paid for or reimbursed by the Corporation in advance of the final
disposition of such action, suit or proceeding, as authorized in the specific
case in the same manner described in Section 11.2 of this Article, upon
receipt of a written affirmation of the person to be indemnified's good faith
belief that he has met the standard of conduct described in Section 11.1 of
this Article and upon receipt of a written undertaking by or on behalf of the
said person to repay such amount if it shall ultimately be determined that he
did not meet the standard of conduct set forth in this Article XI, and a
determination is made that the facts then known to those making the
determination would not preclude indemnification under this Article XI.
Section 11.5. Provisions Not Exclusive. The indemnification provided
by this Article shall not be deemed exclusive of any other rights to which a
person seeking indemnification may be entitled under the Articles of
Incorporation of this Corporation, any other authorization, whenever adopted,
after notice, by a majority vote of all voting shares then outstanding, or
any contract, both as to action in this official capacity and as to action in
another capacity while holding such office.
Section 11.6. Vested Right to Indemnification. The right of any
individual to indemnification under this Article shall vest at the time of
occurrence or performance of any event, act or omission giving rise to any
action, suit or proceeding of the nature referred to in Section 11.1 of this
Article and, once vested, shall not later be impaired as a result of any
amendment, repeal, alteration or other modification of any or all of these
by-laws, or by a change in his employment status or other capacity entitling
him to indemnification and shall inure to the benefit of the heirs, executors
and administrators of such an individual. Notwithstanding the foregoing, the
indemnification afforded under this Article shall be applicable to all
alleged prior acts or omissions of any individual seeking indemnification
hereunder, regardless of the fact that such alleged acts or omissions may
have occurred prior to the adoption of this Article, and to the extent such
prior acts or omissions cannot be deemed to be covered by this Article XI,
the right of any individual to indemnification shall be governed by the
indemnification provisions in effect at the time of such prior acts or
omissions.
Section 11.7. Insurance. 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 who is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise, against any liability asserted against or incurred by
the individual in
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that capacity or arising from the individual's status as a director, officer,
employee or agent, whether or not the Corporation would have power to
indemnify the individual against the same liability.
Section 11.8. Additional Definitions. For purposes of this Article,
references to "the Corporation" shall include any domestic or foreign
predecessor entity of the Corporation in a merger or other transaction in
which the predecessor's existence ceased upon consummation of the transaction.
For purposes of this Article, serving an employee benefit plan at the
request of the Corporation shall include any service as a director, officer,
employee or agent of the Corporation which imposes duties on, or involves
services by such director, officer, employee, or agent with respect to
an employee benefit plan, its participants, or beneficiaries. A person who
acted in good faith and in a manner he reasonably believed to be in the best
interests of the participants and beneficiaries of any employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interest of the Corporation" referred to in this Article.
For purposes of this Article, "party" includes any individual who is or
was a plaintiff, defendant, or respondent in any action, suit or proceeding,
or who is threatened to be made a named defendant or respondent in any
action, suit or proceeding.
For purposes of this Article, "official capacity," when used with
respect to a director, shall mean the office of director of the Corporation;
and when used with respect to an individual other than a director, shall mean
the office in the Corporation held by the officer or the employment or agency
relationship undertaken by the employee or agent on behalf of the
Corporation. "Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise, whether for profit or not.
For the purpose of this Article, "Indemnified Officer" means any Officer
or Director of the Corporation, any member of the Management Group (as
hereafter defined) of a division of the Corporation, and any Officer or
Director of any wholly owned subsidiary of the Corporation.
For the purpose of this Article, "Management Group" means the Division
or General Manager of the division, and those employees who have division-
wide responsibility whose titles are or include President, (Executive/Senior/
Assistant) Vice President, or (Assistant) Controller.
Section 11.9. Payments as Business Expense. Any payments made to any
indemnified party under these by-laws or under any other right to
indemnification shall be deemed to be an ordinary and necessary business
expense of the Corporation, and payment thereof shall not subject any person
<PAGE> 16
responsible for the payment, or the Board of Directors, to any action for
corporate waste or to any similar action.
ARTICLE XII
AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted by a majority of the directors present at any meeting of the Board of
Directors of the Corporation at which a quorum is present.
By-laws as amended effective July 24, 1998
