FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15(d) of the securities exchange
act of 1934
For the quarterly period ended DECEMBER 31, 1998
[ ] 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: 1-11754
PICCADILLY CAFETERIAS, INC.
(Exact name of registrant as specified in its charter)
LOUISIANA 72-0604977
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3232 SHERWOOD FOREST BLVD., BATON ROUGE, LOUISIANA 70816
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (504)293-9440
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of Common Stock, without par value, as of
February 1, 1999, was 10,528,368.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
PICCADILLY CAFETERIAS, INC.
<TABLE>
<CAPTION>
(Amounts in thousands)
except per-share data
Balances at December 31 June 30
1998 1998
<S> <C> <C>
ASSETS
CURRENT ASSETS
Accounts and notes receivable $ 1,236 $ 1,602
Inventories 12,290 12,489
Deferred income taxes 10,559 10,559
Other current assets 1,630 1,634
--------- ---------
TOTAL CURRENT ASSETS 25,715 26,284
PROPERTY, PLANT AND EQUIPMENT 336,034 332,918
Less allowances for depreciation and unit closings 135,555 129,053
--------- ---------
NET PROPERTY, PLANT AND EQUIPMENT 200,479 203,865
GOODWILL, net of $284 and $20 accumulated amortization at
December 31, 1998 and at June 30, 1998 13,995 12,447
OTHER ASSETS 13,838 11,264
--------- ---------
TOTAL ASSETS $ 254,027 $ 253,860
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 18,122 $ 18,359
Accrued interest 677 418
Accrued salaries, benefits and related taxes 19,741 24,869
Accrued rent 6,075 5,036
Other accrued expenses 7,167 11,455
--------- ---------
TOTAL CURRENT LIABILITIES 51,782 60,137
LONG-TERM DEBT 85,900 78,979
DEFERRED INCOME TAXES 2,017 1,417
RESERVE FOR UNIT CLOSINGS 19,572 20,104
ACCRUED EMPLOYEE BENEFITS, less current portion 12,955 12,787
SHAREHOLDERS' EQUITY
Preferred Stock, no par value; authorized 50,000,000
shares; issued and outstanding: none
Common Stock, no par value, stated value $1.82
per share; --- ---
authorized 100,000,000 shares; issued and
outstanding 10,528,368 shares at December 31,
1998 and at June 30, 1998 19,141 19,141
Additional paid-in capital 18,735 18,735
Retained earnings 44,205 42,810
--------- ---------
82,081 80,686
Less treasury stock at cost: 25,000 Common
Shares at December 31, 1998 and at June 30, 1998 280 250
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 81,801 80,436
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 254,027 $ 253,860
========= =========
</TABLE>
See Note to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Piccadilly Cafeterias, Inc.
<TABLE>
<CAPTION>
(Amounts in thousands - except per share data)
Three Months Ended Six Months Ended
December 31 December 31
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net sales $ 130,376 $ 79,189 $ 259,311 $ 158,141
Cost and expenses:
Cost of sales 78,644 46,083 155,647 92,151
Other operating expense 42,732 25,596 85,331 51,633
General and administrative expense 4,391 2,645 8,970 5,720
Interest expense 1,586 504 3,265 1,123
Other expense (income) (192) (127) (191) (269)
--------- --------- --------- ---------
127,161 74,701 253,022 150,358
INCOME BEFORE INCOME TAXES 3,215 4,488 6,289 7,783
Provision for income taxes 1,239 1,661 2,425 2,880
--------- --------- --------- ---------
NET INCOME $ 1,976 $ 2,827 $ 3,864 $ 4,903
========= ========= ========= =========
Weighted average number of shares outstanding 10,503 10,503 10,504 10,503
========= ========= ========= =========
Net income per share - basic and assuming dilution $ .19 $ .27 $ .37 $ .47
========= ========= ========= =========
Cash dividends per share $ .12 $ .12 $ .24 $ .24
========= ========= ========= =========
</TABLE>
See Note to Condensed Consolidated Financial Statements (Unaudited)
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Piccadilly Cafeterias, Inc.
<TABLE>
<CAPTION>
(Amounts in thousands)
Six Months Ended December 31 1998 1997
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 3,864 $ 4,093
Adjustments to reconcile net income to net cash
Provided by operating activities:
Depreciation and amortization 9,079 6,038
Costs associated with reserved units (244) (479)
Provision for deferred income taxes 600 400
Loss on sale of assets 175 50
Pension contributions in excess of expense (1,767) (1,433)
Change in operating assets and liabilities (3,471) 744
--------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES 8,236 10,223
INVESTING ACTIVITIES
Acquisition of business (6,802) ---
Purchase of property, plant and equipment (5,622) (6,259)
Proceeds from sale of property, plant and equipment 16 1,860
--------- ---------
CASH USED IN INVESTING ACTIVITIES (12,408) (4,399)
FINANCING ACTIVITIES
Proceeds from (payments on) long-term debt - net 6,921 (3,264)
Purchases of treasury stock (228) (33)
Dividends paid (2,521) (2,527)
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 4,172 (5,824)
--------- ---------
Increase (decrease) in cash and cash equivalents --- ---
Cash and cash equivalents at beginning of period --- ---
--------- ---------
Cash and cash equivalents at end of period $ --- $ ---
========= =========
</TABLE>
See Note to Condensed Consolidated Financial Statements (Unaudited)
<PAGE>
NOTE TO CONDENSED FINANCIAL STATEMENTS (Unaudited)
Piccadilly Cafeterias, Inc.
December 31, 1998
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Comparative results of operations by periods may be affected by the timing of
the opening of new units. Quarterly results are additionally affected by
seasonal fluctuations in customer volume. Customer volume at established units
is generally higher in the second quarter ended December 31 and lower in the
third quarter ending March 31 reflecting seasonal retail activity.
A fluctuation in customer volume has a disproportionate effect on operating
profit.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
1998 Second Quarter Compared to 1997 Second Quarter
In May 1998, the Company acquired 89% of the common stock of Morrison
Restaurants, Inc. (Morrison) for $5.00 per share. The merger was completed on
July 31, 1998 when the Company purchased the remaining outstanding Morrison
shares for $5.00 per share (the Morrison Acquisition). The aggregate purchase
price of the Morrison shares, including debt assumed, was approximately
$57,270,000. The Morrison Acquisition was financed through a syndicated loan
for which up to $125,000,000 could be borrowed. At December 31, 1998,
approximately $39,100,000 was available under this facility.
Total sales increased $51,187,000 or 64.6%, from 1997. Cafeteria sales
increased $52,094,000. Ralph & Kacoo's restaurant sales decreased $479,000.
Cafeteria sales for 1998 include $53,118,000 of Morrison sales.
The following table reconciles total cafeteria sales to same-store cafeteria
sales (units that were open for three full months in both periods) for the
quarters ended December 31, 1998 and 1997:
<TABLE>
<CAPTION>
(sales in thousands)
1998 1997
--------------------- -------------------- Sales
Sales Units Sales Units Change
--------------------- -------------------- --------
<S> <C> <C> <C> <C> <C>
Total cafeteria sales $ 124,097 $ 72,003 72.3%
Less new units 1,581 5(A) 329 2(A)
Less closed units 785 3(B) 1,687 6(B)
Less Morrison units 53,118 ---
--------- ---------
Net same-store cafeteria sales $ 68,613 121 $ 69,987 121 (2.0%)
</TABLE>
(A) Includes four cafeterias and one Piccadilly Express (Associated Grocers
Supermarkets) units opened since September 30, 1997.
(B) Includes five cafeterias and one Piccadilly Express (Associated Grocers
Supermarkets) unit closed since September 30, 1997.
The decrease in same-store sales of 2.0% is the result of a 2.0% decline in
customer traffic.
During 1998 and 1997, operating income (net sales less cost of sales and other
operating expenses) as a percentage of net sales was 6.9% and 9.5%,
respectively. Food costs as a percentage of net sales increased 1.1% as a
result of inflationary pressures. Labor costs as a percentage of net sales
increased 1.1%, reflecting higher wage rates. Other operating expenses as a
percentage of net sales increased 0.5% as a result of higher advertising costs.
General and administrative expense as a percentage of net sales was unchanged.
Interest expense increased $1,082,000 in 1998 reflecting the increased debt
levels associated with the Morrison Acquisition. The Company's effective
income tax rate impacted by the nondeductability of goodwill amortization,
resulting in a higher effective rate than in the prior year.
Six Months Ended December 31, 1998 Compared to Six Months Ended December 31,
1997
Total sales increased $101,170,000 or 64.0% from 1997. Cafeteria sales
increased $102,285,000. Ralph & Kacoo's restaurant sales decreased $584,000.
Cafeteria sales for 1998 include $104,035,000 of Morrison sales.
The following table reconciles total cafeteria sales to same store cafeteria
sales (units that were open for six full months in both periods) for the six
months ended December 31, 1998 and 1997.
<TABLE>
<CAPTION>
(Sales in thousands)
1998 1997
--------------------- -------------------- Sales
Sales Units Sales Units Change
--------------------- --------------------
<S> <C> <C> <C> <C> <C>
Total cafeteria sales $ 246,480 $ 144,195 70.9%
Less new units 3,547 6(A) 459 3(A)
Less closed units 1,703 3(B) 3,734 6(B)
Less Morrison units 104,035 ---
--------- ---------
Net same-store cafeteria sales $ 137,195 120 $ 140,002 120 (2.0%)
</TABLE>
(A) Includes four cafeterias and two Piccadilly Express (Associated
Grocers supermarkets) units opened since June 30, 1997.
(B) Includes five cafeterias and one Piccadilly Express (Associated
Grocers supermarkets) units closed since June 30, 1997.
The decrease in same-store sales of 2.0% is the net result of a 3.2% decline in
customer traffic and a 1.3% increase in check average.
During 1998 and 1997, operating income (net sales less cost of sales and other
operating expenses) as a percentage of net sales was 7.1% and 9.1%,
respectively. Food costs as a percentage of net sales increased 0.5% due to
inflationary pressures. Labor costs as a percentage of net sales increased
1.2% reflecting higher wage rates. Other operating expenses as a percentage of
net sales increased 0.3% due to higher advertising costs. Interest expense
increased $2,142,000 in 1998 reflecting the increased debt levels associated
with the Morrison Acquisition. The Company's effective income tax rate
impacted by the nondeductability of goodwill amortization, resulting in a
higher effective rate than in the prior year.
Net cash provided by operating activities decreased $1,987,000. Net changes in
operating assets and liabilities decreased cash flow $3,471,000 reflecting
the timing of payments in the ordinary course of business and acquisition
related costs, including $1,175,000 of severance costs. Prior year investing
activities include proceeds from the sale of a cafeteria, closed in November,
1996.
In January, 1999, the Company announced the execution of a definitive agreement
to sell the Ralph & Kacoo's seafood restaurants and related commissary business
to Cobb Investment Company for approximately $21 million in cash. Management
expects to close the transaction before the end of the third fiscal quarter.
The proceeds will be used to pay down a portion of the debt incurred in the
Morrison's Acquisition.
<PAGE>
Year 2000 Impact
Some of the Company's older computer programs were written using two digits
rather than four to define the applicable year. As a result, those computer
programs have time-sensitive code which treat a date ending in "00" as the year
1900 rather than the year 2000. This could cause a system failure or
miscalculations causing disruptions, including, among other things, a temporary
inability to process transactions, process reports, or engage in similar normal
business activities (Year 2000 Issues).
During fiscal 1996, the Company began migrating its information technology (IT)
from internally developed systems to commercially available products. The
decision to invest in updated technology was made for a number of reasons
including Year 2000 Issues. The Company has completed an assessment of its
year 2000 Issues and believes that previously scheduled replacements of its IT,
will function properly with respect to dates in the Year 2000 and thereafter.
The related projects of migrating the Company's IT and addressing Year 2000
issues are hereinafter collectively referred to as the Year 2000 Project.
The total cost of the Year 2000 Project is estimated to be approximately
$700,000, primarily for the purchases of new software, which will be
capitalized. To date, the Company has incurred and capitalized approximately
$650,000 of such costs. The Company believes these costs would have been
incurred notwithstanding the Year 2000 Issues.
With respect to the acquisition of Morrison, it is the Company's intent to
absorb the IT requirements of Morrison into the Company's systems during fiscal
1999. Accordingly, no additional Year 2000 Issues are anticipated as a result
of the acquisition of Morrison. The acquisition of Morrison has the effect of
delaying completion of the Year 2000 Project to not later than June 30, 1999,
which is prior to any anticipated impact on its operating systems.
The Company believes that with conversions to new IT, Year 2000 Issues will not
pose significant operational problems for its computer systems. As of December
31, 1998, the Company has completed the conversion for all systems for which
Year 2000 Issues could have a material impact on the operations of the Company.
The Company has no contingency plan, nor does it intend to create one, in the
event that Year 2000 Issues are not fully addressed in time. The Company
believes that the likelihood of such an occurrence having a material impact on
the Company's operations is remote.
Forward-Looking Statements
Forward-looking statements regarding management's present plans or expectations
for new unit openings, remodels, other capital expenditures, the financing
thereof, and disposition of impaired units involve risks and uncertainties
relative to return expectations and related allocation of resources, and
changing economic or competitive conditions, as well as the negotiation of
agreements with third parties, which could cause actual results to differ from
present plans or expectations, and such differences could be material.
Similarly, forward-looking statements regarding management's present
expectations for operating results involve risks and uncertainties relative to
these and other factors, such as advertising effectiveness and the ability to
achieve cost reductions, which also would cause actual results to differ from
present plans. Such differences could be material. Management does not expect
to update such forward-looking statements continually as conditions change, and
readers should consider that such statements speak only as the date hereof.
<PAGE>
PART II -- Other Information
Item 1. Legal proceedings
None.
Item 2. Changes in securities
None.
Item 3. Defaults upon senior securities
None.
Item 4. Submission of matters to vote of security holders
The Annual Meeting of the shareholders of Piccadilly (the "Meeting") was held
on November 2, 1998 and 9,439,057 shares were represented. The voting
tabulation follows:
Proposal one: The election of the following to the Board of Directors
For Withheld
----- ----------
Norman C. Francis 9,376,037 639
Dale E. Redman 9,373,333 639
C. Ray Smith 9,322,882 639
The following director's terms of office continued after the Meeting. Ralph P.
Erben, Robert P. Guyton, Ronald A. LaBorde, Edward M. Simmons, Sr., Christel C.
Slaughter, and Paul W. Murrill.
Proposal two: The approval of the Amended and Restated Piccadilly Cafeterias,
Inc. 1993 Incentive Compensation Plan.
For Against Abstain
----- --------- ---------
7,914,176 1,497,882 26,999
Item 5. Other information
None.
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits
3. (a) Articles of Incorporation of the Company, as amended through
November 2, 1998.
(b) By-laws of the Company, as amended through November 2, 1998.
4. Rights Agreement, dated November 2, 1998, including (i) as Exhibit
A - The Form of Articles of Amendment, (ii) as Exhibit B - the
Forms of Rights Certificate, Assignment and Election to
Purchase, and (iii) as Exhibit C - the Summary Description of the
Shareholder Rights Plan.(1)
10. Amended and Restated Piccadilly Cafeterias, Inc. 1993 Incentive
Compensation Plan (2)
27. Financial Data Schedule
**FOOTNOTES**
(1) Incorporated by reference to Exhibits 1, 2 , 3 and 4 of the Company's
Registration Statement on Form 8-A filed with the Commission on
November 19, 1998.
(2) Incorporated by reference from Appendix A of the Company's definitive
Proxy Statement filed with the Commission on September 23, 1998.
(b)Reports on Form 8-K - On November 19, 1998, the Company filed a report on
Form 8-K related to its adoption of a Rights Agreement dated November 2,
1998 between the Company and Wachovia Bank, N.A., as Rights Agent.
<PAGE>
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.
PICCADILLY CAFETERIAS, INC.
(Registrant)
By: /s/ Ronald A. LaBorde
Ronald A. LaBorde
President and Chief
Executive Officer
02/08/98
/s/ Ronald A. LaBorde 02/08/99
Ronald A. LaBorde, President, Chief Executive Date
Officer, and Director
/s/ J. Fred Johnson 02/08/99
J. Fred Johnson, Executive Vice President, Chief Financial Date
Officer and Treasurer (Principal Financial Officer)
/s/ Mark L. Mestayer 02/08/99
Mark L. Mestayer, Executive Vice President, Date
Secretary & Director of Finance(Principal Accounting Officer)
EXHIBIT 3(A)
STATE OF LOUISIANA
PARISH OF EAST BATON ROUGE
CITY OF BATON ROUGE
Composite
Articles of Incorporation of
Piccadilly Cafeterias, Inc.
ARTICLE I. "Name". The Name of this Corporation is
PICCADILLY CAFETERIAS, INC.
ARTICLE II. "Objects and Purposes." The objects and purposes for which
this corporation is organized and the nature of the business and/or businesses
to be carried on by it are stated and declared to be as follows, to-wit:
(a) To engage in the business of operating, conducting and maintaining
a cafeteria or cafeterias, with authority to own, lease and operate all
plants, equipment and facilities necessary, incident or pertaining
thereto.
(b) to engage in the business of operating, constructing, leasing and
acquiring restaurants, eating establishments, factories, plants,
warehouses and supply houses for all types of products and equipment and
to sell same at retail or wholesale.
(c) To engage in the business of constructing, leasing and operating
shopping centers, all types of rental property, and to engage in joint
ventures of all types with others.
(d) To do all other things related to and necessary to carry on the
above purposes, to endorse notes and to guarantee obligations of others.
ARTICLE III. "Duration". The duration of this Corporation shall be
perpetual.
ARTICLE IV. "Registered Office". [omitted intentionally]
ARTICLE V. "Registered Agents". [omitted intentionally]
ARTICLE VI. "Authorized Shares, etc.". The aggregate number of shares that
the corporation shall have the authority to issue is one hundred fifty million
(150,000,000) shares, without par value, of which one hundred million
(100,000,000) shall be Common Stock and fifty million (50,000,000) shall be
Preferred Stock. Shareholders shall have no preemptive rights.
The Preferred Stock may be divided into and issued in one or more
series, and the preferences, limitations and relative rights of such
shares may vary between series in any and all respects but shall not vary
within a series. The Board of Directors of the corporation is hereby
expressly vested with the authority to amend these Articles of
Incorporation to fix the preferences, limitations, and relative rights,
including without limitation, voting rights, of the shares of Preferred
Stock, and to establish and fix variations in relative rights as between
any established and designated series thereof, to the fullest extent
permitted by the Louisiana Business Corporation Law, as now or hereafter
in force, and to increase or decrease the number of shares within each
such series; provided, however, that the Board of Directors may not
decrease the number of shares within a series below the number of shares
within such series that is then issued. The designations, preferences,
limitations and relative rights, including voting rights, of any
Preferred Stock to be issued shall be fixed by adoption by the Board of
Directors of an amendment to these Articles of Incorporation.
Series A Preferred Stock
Section 1. Designation and Number of Shares. The shares of such series shall
be designated as "Series A Participating Cumulative Preferred Stock" (the
"Series A Preferred Stock"), and the number of shares constituting such series
shall be 500,000. Such number of shares of the Series A Preferred Stock may be
increased or decreased by resolution of the Board of Directors; provided that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares issuable upon exercise or conversion of outstanding rights, options or
other securities issued by the Corporation.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable on September 30,
December 31, March 31 and June 30 of each year (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of any share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $1.00 and (ii)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends or other distributions and 100
times the aggregate per share amount of all non-cash dividends or other
distributions (other than (A) a dividend payable in shares of Common Stock of
the Corporation, no par value, (any such Common Stock, the "Common Stock") or
(B) a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise)), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. If the Corporation
shall at any time after November 6, 1998 (the "Rights Declaration Date") pay
any dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the amount to which holders of shares
of Series A Preferred Stock were entitled immediately prior to such event under
clause 2(a)(ii) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph 2(a) above immediately after
it declares a dividend or distribution on the Common Stock (other than as
described in clauses 2(a)(ii)(A) and 2(a)(ii)(B) above); provided that if no
dividend or distribution shall have been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date (or, with respect to the first Quarterly
Dividend Payment Date, the period between the first issuance of any share or
fraction of a share of Series A Preferred Stock and such first Quarterly
Dividend Payment Date), a dividend of $1.00 per share on the Series A Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend
Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding shares
of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is on or before the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue and be cumulative from the date of issue of such shares, or
unless the date of issue is a date after the record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive a
quarterly dividend and on or before such Quarterly Dividend Payment Date, in
which case dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on shares of Series A Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall not be more than 60 days prior to the date fixed for
the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights required by
law, the holders of shares of Series A Preferred Stock shall have the following
voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of shareholders of the Corporation. If
the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as a single class on all matters submitted to a vote of shareholders
of the Corporation.
(c) (i) If at any time dividends on any Series A Preferred Stock shall be
in arrears in an amount equal to six quarterly dividends thereon, the
occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Preferred Stock
then outstanding shall have been declared and paid or set apart for payment.
During each default period, all holders of Preferred Stock and any other series
of Preferred Stock then entitled as a class to elect directors, voting together
as a single class, irrespective of series, shall have the right to elect two
Directors.
(ii) During any default period, such voting right of the holders of
Series A Preferrd Stock may be exercised initially at a special meeting called
pursuant to subparagraph 3(c)(iii) hereof or at any annual meeting of
shareholders, and thereafter at annual meetings of shareholders; provided that
neither such voting right nor the right of the holders of any other series
of Preferred Stock, if any, to increase, in certain cases, the authorized
number of Directors shall be exercised unless the holders of 10% in number of
shares of Preferred Stock outstanding shall be present in person or by proxy.
The absence of a quorum of holders of Common Stock shall not affect the
exercise by holders of Preferred Stock of such voting right. At any meeting
at which holders of Preferred Stock shall exercise such voting right initially
during an existing default period, they shall have the right, voting as a
class, to elect Directors to fill such vacancies, if any, in the Board of
Directors as may then exist up to two Directors or, if such right is exercised
at an annual meeting, to elect two Directors. If the number which may be so
elected at any special meeting does not amount to the required number, the
holders of the Preferred Stock shall have the right to make such increase in
the number of Directors as shall be necessary to permit the election by them
of the required number. After the holders of the Preferred Stock shall have
exercised their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall not be increased
or decreased except by vote of the holders of Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking senior to
or pari passu with the Series A Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect Directors, the
Board of Directors may order, or any shareholder or shareholders owning in the
aggregate not less than 10% of the total number of shares of Preferred
Stock outstanding, irrespective of series, may request, the calling of a
special meeting of holders of Preferred Stock, which meeting shall thereupon
be called by the President and Chief Executive Officer or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which holders
of Preferred Stock are entitled to vote pursuant to this paragraph 3(c)(iii)
shall be given to each holder of record of Preferred Stock by mailing a copy
of such notice to him at his last address as the same appears on the books of
the Corporation. Such meeting shall be called for a time not earlier than 20
days and not later than 60 days after such order or request or in default of
the calling of such meeting within 60 days after such order or request, such
meeting may be called on similar notice by any shareholder or shareholders
owning in the aggregate not less than 10% of the total number of shares of
Preferred Stock outstanding, irrespective of series. Notwithstanding the
provisions of this paragraph 3(c)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding the date fixed
for the next annual meeting of shareholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two Directors voting as a
class, after the exercise of which right (x) the Directors so elected by
the holders of Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the default
period, and (y) any vacancy in the Board of Directors may (except as provided
in paragraph 3(c)(ii) hereof) be filled by vote of a majority of the remaining
Directors theretofore elected by the holders of the class of stock which
elected the Director whose office shall have become vacant. References in
this paragraph 3(c) to Directors elected by the holders of a particular class
of stock shall include Directors elected by such Directors to fill vacancies
as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)the right
of the holders of Preferred Stock as a class to elect Directors shall cease,
(y) the term of any Directors elected by the holders of Preferred Stock as a
class shall terminate, and (z) the number of Directors shall be such number as
may be provided for in the articles of incorporation or bylaws irrespective
of any increase made pursuant to the provisions of paragraph 3(c)(ii) hereof
(such number being subject, however, to change thereafter in any manner
provided by law or in the articles of incorporation or bylaws). Any vacancies
in the Board of Directors effected by the provisions of clauses (y) and (z) in
the preceding sentence may be filled by a majority of the remaining Directors.
(d) The Articles of Incorporation of the Corporation shall not be amended
in any manner (whether by merger or otherwise) so as to adversely affect the
powers, preferences or special rights of the Series A Preferred Stock without
the affirmative vote of the holders of a majority of the outstanding shares of
Series A Preferred Stock, voting separately as a class.
(e) Except as otherwise provided herein, holders of Series A Preferred
Stock shall have no special voting rights, and their consent shall not be
required for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on outstanding shares of Series A
Preferred Stock shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions on,
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
other parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
(iv) redeem, purchase or otherwise acquire for value any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution
or winding up) to the Series A Preferred Stock; provided that the C orporation
may at any time redeem, purchase or otherwise acquire shares of any such
junior stock in exchange for shares of stock of the Corporation ranking junior
(as to dividends and upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(v) redeem, purchase or otherwise acquire for value any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of Series A Preferred Stock and all such other parity stock upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for value any shares of stock of the Corporation
unless the Corporation could, under paragraph 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock without designation as to series and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors as permitted by the Articles of Incorporation or as
otherwise permitted under Louisiana Law.
Section 6. Liquidation, Dissolution and Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $0.01 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment; provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of Common Stock, or
(2) to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
other parity stock in proportion to the total amounts to which the holders of
all such shares are entitled upon such liquidation, dissolution or winding up.
If the Corporation shall at any time after the Rights Declaration Date pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the aggregate amount to which holders of
shares of Series A Preferred Stock were entitled immediately prior to such
event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. If the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
or any other property, then in any such case the shares of Series A Preferred
Stock shall at the same time be similarly exchanged for or changed into an
amount per share, subject to the provision for adjustment hereinafter set
forth, equal to 100 times the aggregate amount of stock, securities, cash or
any other property, as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Corporation shall at any time
after the Rights Declaration Date pay any dividend on Common Stock payable in
shares of Common Stock or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. No Redemption. The Series A Preferred Stock shall not be
redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank junior (as to
dividends and upon liquidation, dissolution and winding up) to all other series
of the Corporation's preferred stock except any series that specifically
provides that such series shall rank junior to the Series A Preferred Stock.
Section 10. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
ARTICLE VII. "Paid-in Capital". The amount of paid-in capital with which the
corporation shall begin business is One Thousand and no/100 ($1,000.00)
Dollars, which will be paid in cash.
ARTICLE VIII. "Directors".
(A) The property, business and affairs of the corporation shall be
managed and controlled by the Board of Directors. The number
of directors of the corporation (exclusive of directors to be
elected by the holders of any one or more classes or series of
preferred stock of the corporation or any other class or series
of stock of the corporation other than the common stock, which
may at some time be outstanding, voting separately as a class
or classes) shall be determined as provided in the bylaws of
the corporation.
(B) The Board of Directors (exclusive of directors to be elected by
the holders of any one or more classes or series of preferred
stock of the corporation or any other class or series of stock
of the corporation other than the common stock, which may at
some time be outstanding, voting separately as a class or
classes) shall be divided into three classes, as nearly equal
in number as possible, with the term of office of one class
expiring each year. At the annual meeting of shareholders in
1988, three directors of the first class shall be elected to
hold office for a term expiring at the next succeeding annual
meeting, three directors of the second class shall be elected
to hold office for a term expiring at the second succeeding
annual meeting and four directors of the third class shall be
elected to hold office for a term expiring at the third
succeeding annual meeting. At each annual meeting of
shareholders, the respective successors to the class of
directors whose term shall then expire shall be elected to hold
office for a term expiring at the third succeeding annual
meeting.
(C) Any vacancies in the Board of Directors, for any reason, and
any newly created directorships resulting from any increase in
the number of directors shall be filled by the Board of
Directors, acting by not less than a majority of the directors
then in office, although less than a quorum. Any directors so
chosen to fill any such vacancies or newly created
directorships shall hold office until the next election of the
class for which such directors shall have been chosen and until
their respective successors shall be duly elected and
qualified. Notwithstanding the foregoing, and except as
otherwise required by law, whenever the holders of any one or
more classes or series of preferred stock of the corporation or
any other class or series of stock of the corporation other
than the common stock, which may at some time be outstanding,
shall have the right, voting separately as a class or classes,
to elect one or more directors of the corporation, the
provisions of this section ( C ) of this Article VIII shall
not apply with respect to the director or directors elected by
such holders of preferred stock or other stock. No decrease in
the number of directors shall shorten the term of any incumbent
director.
(D) Notwithstanding any other provision of these Articles of
Incorporation or the bylaws of the corporation (and
notwithstanding the fact that some lesser percentage may be
specified by law, these Articles of Incorporation or the bylaws
of the corporation), any director or the entire Board of
Directors of the corporation may be removed only with cause and
only by the affirmative vote of the holders of two-thirds
(2/3rds) of all shares of capital stock of the corporation
entitled to vote generally in the election of directors, voting
together as a single class. Notwithstanding the foregoing, and
except as otherwise required by law, whenever the holders of
any one or more classes or series of preferred stock of the
corporation or any other class or series of stock of the
corporation other than the common stock, which may at some
time be outstanding, shall have the right, voting separately as
a class or classes, to elect one or more directors of the
corporation, the election, term of office, filling of vacancies
and other features of such directorships shall be governed by
the terms of these Articles of Incorporation applicable
thereto, and such directors so elected shall not be divided
into classes pursuant to this Article VIII unless expressly
provided by such terms.
(E) Except as otherwise provided in these Articles of
Incorporation, the number, classification, qualifications,
terms of office, manner of election, times and places of
meetings, and the powers and duties of the directors shall be
as, from time to time, fixed by the bylaws.
(F) Any director absent from a meeting may be represented by any
other director or shareholder who may cast the vote of the
absent director according to the written instructions, general
or special, of said absent director, filed with the secretary.
(G) Notwithstanding any other provision of these Articles of
Incorporation or the bylaws of the corporation to the contrary
(and notwithstanding the fact that some lesser percentage may
be specified by law, these Articles of Incorporation or the
bylaws of the corporation) and in addition to any other
requirements of the provisions of any class or series of stock
of the corporation which may be outstanding, no amendment to
these Articles of Incorporation shall amend, alter, change or
repeal any provision of paragraphs ( A ) through ( D ) of the
Article VIII unless the amendments effecting such amendment,
alteration, change or repeal shall receive the affirmative vote
of the holders of not less than eighty percent (80%) of all
shares of stock of the corporation entitled to vote generally
in the election of directors, voting together as a single
class, provided that this paragraph ( G ) shall not apply to,
and only such vote as shall be required by statute shall,
subject to the provisions of any class or series of stock of
the corporation which may at the time be outstanding, be
required for any amendment, alteration, change or repeal
recommended to the shareholders pursuant to a resolution of the
Board of Directors of the corporation, provided that
affirmative votes for such resolution shall have been cast by
not less than a majority of the "Continuing Directors," as
defined below, then in office. For the purposes of the
immediately preceding sentence, the term "Continuing Directors"
means any members of the Board of Directors of the corporation
who held the office of director on August 15, 1988 or who
thereafter was elected director either (1) by a resolution
adopted by the Board of Directors, provided that affirmative
votes for such resolution shall have been cast by not less than
a majority of the Continuing Directors then in office, or (2)
by a vote of the shareholders of the corporation after his or
her nomination as a director was recommended for submission to
the shareholders of the corporation by a resolution adopted by
the Board of Directors, provided that affirmative votes for
such resolution shall have been cast by not less than a
majority of the Continuing Directors then in office.
ARTICLE IX. "Incorporators." [omitted intentionally]
ARTICLE X. "Right to Purchase and/or Redeem Shares." The corporation may
purchase and/or redeem its own shares in the manner and under the conditions
provided in Section 23 and 43 of the Business Corporations Law. Such shares as
purchased (unless it is desired that such shares shall be cancelled) shall be
considered treasury shares, and may be re-issued and disposed of as authorized
by law or may be cancelled and the capital stock reduced, as the board of
directors may, from time to time, determine.
ARTICLE XI. "Compromise Arrangements." This corporation claims, and shall
have the benefit of the provisions of Section 63 of the Business Corporations
Law.
ARTICLE XII. "Dividends." If at any time this corporation should own existing
assets intended for sale in the ordinary course of business, or shall own
property having a limited life, it may pay dividends from the net profits
arising from such assets, without deduction or depreciation or depletion of
assets thereby sustained.
ARTICLE XIII. "Voluntary Transfer of Corporation Assets." If at any time when
the corporation is able to meet its liabilities then matured, pursuant to the
affirmative vote of the holders of at least a majority of the shares having
voting power, given at a general or special shareholders' meeting called for
that purpose, the board of directors shall have power and authority, by
resolution adopted at any regular or special meeting called for that purpose,
to sell, lease or exchange, or make any other disposition of all of the assets
of the corporation. including its good will, franchise, and/or other rights,
upon such terms and conditions as it deems expedient, including an exchange for
shares and/or securities of another corporation, domestic or foreign and if the
corporation is unable to meet its liabilities then matured, the board of
directors by a majority vote of the whole board shall have power and authority
to make such sale, lease, exchange or other disposition, as aforesaid, without
the vote or consent aforesaid, of the shareholders.
Article XIV. No director or officer shall be personally liable to the
Corporation or any of its shareholders for monetary damages for any breach of
fiduciary duty by such director or officer as a director or officer.
Notwithstanding the foregoing sentence, a director or officer shall be liable
to the extent provided by applicable law (a) for breach of the director's or
officer's duty of loyalty to the Corporation or its shareholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) for liability under R.S. 12:92(D), or (d) for any
transaction from which the director or officer derived an improper personal
benefit. If the Louisiana Business Corporation Law hereafter is amended to
authorize the further elimination or limitation of the liability of directors
or officers, then the liability of a director or officer of the Corporation, in
addition to the limitation on personal liability of a director or officer
provided herein, shall be limited to the fullest extent permitted by the
amended Louisiana Business Corporation Law. No amendment to or repeal of this
Article XIV shall apply to or have any effect or omissions of such director or
officer occurring prior to such amendment.
<PAGE>
COMPOSITE
BYLAWS OF
PICCADILLY CAFETERIAS, INC.
(The "Company")
ARTICLE I
OFFICES
SECTION 1.1. OFFICES. The principal business office of the Company shall
be at Baton Rouge, Louisiana. The Company may have such other business offices
within or without the State of Louisiana as the board of directors may from
time to time establish.
ARTICLE II
CAPITAL STOCK
SECTION 2.1. CERTIFICATE REPRESENTING SHARES. Shares of the capital stock
of the Company shall be represented by certificates in such form or forms as
the board of directors may approve, provided that such form or forms shall
comply with all applicable requirements of law or of the articles of
incorporation. Such certificates shall be signed by the chief executive
officer, or an executive vice president, and by the secretary or an assistant
secretary, of the Company and may be sealed with the seal of the Company or
imprinted or otherwise marked with a facsimile of such seal. In the case of
any certificate countersigned by any transfer agent or registrar, provided such
countersigner is not the Company itself or an employee thereof, the signature
of any or all of the foregoing officers of the Company may be represented by a
printed facsimile thereof. If any officer whose signature, or a facsimile
thereof, shall have been set upon any certificate shall cease, prior to the
issuance of such certificate, to occupy the position in right of which his
signature, or facsimile thereof, was so set upon such certificate, the Company
may nevertheless adopt and issue such certificate with the same effect as if
such officer occupied such position as of such date of issuance; and issuance
and delivery of such certificate by the Company shall constitute adoption
thereof by the Company. The certificates shall be consecutively numbered, and
as they are issued, a record of such issuance shall be entered in the books of
the Company.
SECTION 2.2. STOCK CERTIFICATE BOOK AND SHAREHOLDERS OF RECORD. In the
absence of a duly appointed transfer agent or registrar, the secretary of the
Company shall maintain, among other records, a stock certificate book, the
stubs in which shall set forth the names and addresses of the holders of all
issued shares of the Company, the number of shares held by each, the number of
certificates representing such shares, the date of issue of such certificates,
and whether or not such shares originate from original issue or from transfer.
The names and addresses of shareholders as they appear on the stock certificate
book shall be the official list of shareholders of record of the Company for
all purposes. The Board of Directors may appoint a transfer agent or registrar
to maintain the stock register and to record transfer of shares thereon. The
Company shall be entitled to treat the holder of record of any shares as the
owner thereof for all purposes, and shall not be bound to recognize any
equitable or other claim to, or interest in, such shares or any rights deriving
from such shares on the part of any other person, including, but without
limitation, a purchaser, assignee, or transferee, unless and until such other
person becomes the holder of record of such shares, whether or not the Company
shall have either actual or constructive notice of the interest of such other
person.
SECTION 2.3. SHAREHOLDER'S CHANGE OF NAME OR ADDRESS. Each shareholder
shall promptly notify the secretary of the Company, at its principal business
office, by written notice sent by certified mail, return receipt requested, of
any change in name or address of the shareholder from that as it appears upon
the official list of shareholders of record of the Company. The secretary of
the Company shall then enter such changes into all affected Company records,
including, but not limited to, the official list of shareholders of record.
SECTION 2.4. TRANSFER OF STOCK. The shares represented by any certificate
of the Company are transferable only on the books of the Company by the holder
of record thereof or by his duly authorized attorney or legal representative
upon surrender of the certificate for such shares, properly endorsed or
assigned. The board of directors may make such rules and regulations
concerning the issue, transfer, registration and replacement of certificates as
they deem desirable or necessary.
SECTION 2.5. TRANSFER AGENT AND REGISTRAR. The board of directors may
appoint one or more transfer agents or registrars of the shares, or both and
may require all share certificates to bear the signature of a transfer agent or
registrar, or both.
SECTION 2.6. LOST, STOLEN OR DESTROYED CERTIFICATES. The Company may issue
a new certificate for shares of stock in the place of any certificate
theretofore issued and alleged to have been lost, stolen or destroyed, but the
board of directors may require the owner of such lost, stolen or destroyed
certificate, or his legal representative, to furnish an affidavit as to such
loss, theft, or destruction and to give a bond in such form and substance, and
with such surety or sureties, with fixed or open penalty, as the board may
direct, in order to indemnify the Company and its transfer agents and
registrars, if any, against any claim that may be made on account of the
alleged loss, theft or destruction of such certificate.
SECTION 2.7. FRACTIONAL SHARES. Only whole shares of the stock of the
Company shall be issued. In case of any transaction by reason of which a
fractional share might otherwise be issued, the directors, or the officers in
there exercise of powers delegated by the directors, shall take such measures
consistent with the law, the articles of incorporation and these bylaws,
including (for example, and not by way of limitation) the payment in cash of an
amount equal to the fair value of any fractional share, as they may deem proper
to avoid the issuance of any fractional share.
ARTICLE III
SHAREHOLDERS MEETINGS
SECTION 3.1. ANNUAL MEETING. Commencing in the calendar year 1979, the
annual meeting of the shareholders, for the election of directors and for the
transaction of such other business as may properly come before the meeting,
shall be held at the principal office of the Company, at 10:00 a.m. local time,
on the first Monday in November of each year unless such day is a legal
holiday, in which case such meeting shall be held at such hour on the first day
thereafter which is not a legal holiday; or at such other place and time as may
be designated by the board of directors. Failure to hold any annual meeting or
meetings shall not work a forfeiture or dissolution of the Company.
SECTION 3.2. SPECIAL MEETING. Special meetings of shareholders may be
called at any time by the chief executive officer or the board of directors.
At any time, upon written request of any shareholder or shareholders holding in
the aggregate one-tenth of the total voting power, the secretary shall call a
special meeting of shareholders to be held at the registered office at such
time as the secretary may fix, not less than fifteen nor more than sixty days
after the receipt of said request, and if the secretary shall neglect or refuse
to fix such time or to give notice of the meeting, the shareholder or
shareholders making the request may do so.
<PAGE>
ARTICLE IV
THE BOARD OF DIRECTORS
SECTION 4.1. NUMBER, QUALIFICATIONS AND TERM. The business and affairs of
the Company shall be managed and controlled by the board of directors; and,
subject to any restrictions imposed by law, by the articles of incorporation,
or by these bylaws, the board of directors may exercise all the powers of the
Company. The board of directors shall consist of that number of members fixed
in a resolution of the board of directors. Such number may be increased or
decreased by a subsequent resolution, provided that no decrease shall effect a
shortening of the term of any incumbent director. Except as otherwise
contemplated by Section 4.10 hereof, no person who is seventy years of age or
older may be nominated, elected, or appointed to serve as a member of the board
of directors, nor may a person who is or will be seventy years of age or older
at the beginning of the term of office of a class of the board of directors be
eligible to serve as a member of that class for such term. Directors need not
be residents of Louisiana or shareholders of the Company absent provision to
the contrary in the articles of incorporation or laws of the State of
Louisiana. The term of office of directors and the method of removing
directors and appointing persons to fill vacancies on the board of directors,
shall be as set forth in the articles of incorporation. Directors need not be
residents of Louisiana or shareholders of the Company absent provision to the
contrary in the articles of incorporation or laws of the State of Louisiana.
The term of office of directors and the method of removing directors and
appointing persons to fill vacancies on the board of directors, shall be as set
forth in the articles of incorporation.
SECTION 4.2. REGULAR MEETINGS. Regular meetings of the board of directors
shall be held immediately following each annual meeting of shareholders, at the
place of such meeting, and at such other times and places as the board of
directors shall determine. No notice of any kind of such regular meetings
needs to be given to either old or new members of the board of directors.
SECTION 4.3. SPECIAL MEETINGS. Special meetings of the board of directors
shall be held at any time by call of the chief executive officer, president,
the secretary or by a majority of the directors. The secretary shall give
notice of each special meeting to each director at his usual business or
residence address by mail at least three days before the meeting or by
telegraph or telephone at least one day before such meeting. Except as
otherwise provided by law, by the articles of incorporation, or by these
bylaws, such notice need not specify the business to be transacted at, or the
purpose of, such meeting. No notice shall be necessary for any adjournment of
any meeting. The signing of a written waiver of notice, of any special meeting
by the person or persons entitled to such notice, whether before or after the
time stated therein, shall be equivalent to the receiving of such notice.
Attendance of a director at a meeting shall also constitute a waiver of notice
of such meeting, except where a director attends a meeting for the express and
announced purpose of objecting to the transaction of any business on the ground
that the meeting is not lawfully called or convened.
SECTION 4.4. QUORUM. A majority of the number of directors fixed by these
bylaws shall constitute a quorum for the transaction of business and act of not
less than a majority of such quorum of the directors shall be required in order
to constitute the act of the board of directors, unless the act of a greater
number shall be required by law, by the articles of incorporation or by these
bylaws.
SECTION 4.5. PROCEDURE AT MEETINGS. The board of directors, at each
regular meeting held immediately following the annual meeting of shareholders,
shall appoint one of their number as chairman of the board of directors. The
chairman of the board shall preside at meetings of the board. In his absence
at any meeting, any officer authorized by these bylaws or any member of the
board selected by the members present shall preside. The secretary of the
Company shall act as secretary at all meetings of the board. In his absence,
the presiding officer of the meeting may designate any person to act as
secretary. At meetings of the board of directors, the business shall be
transacted in such order as the board may from time to time determine.
SECTION 4.6. PRESUMPTION OF ASSENT. Any director of the Company who is
present at a meeting of the board of directors at which action on any corporate
matter is taken shall be 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 Company immediately after adjournment
of the meeting. Such right to dissent shall not apply to a director who voted
in favor of such action.
SECTION 4.7. ACTION WITHOUT A MEETING. Any action required by statute to
be taken at a meeting of the directors of the Company, or which may be taken at
such meeting, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by each director entitled to vote at
such meeting, and such consent shall have the same force and effect as a
unanimous vote of the directors. Such signed consent, or a signed copy
thereof, shall be placed in the minute book of the Company.
SECTION 4.8. COMPENSATION. Directors, by resolution of the board of
directors, shall receive such compensation and reimbursement for expense as the
board of directors may establish. Nothing herein shall preclude any director
from serving the Company in any other capacity or receiving compensation
therefor.
SECTION 4.9. EXECUTIVE COMMITTEE. The board of directors, by resolution
adopted by a authority of the number of directors fixed by these bylaws, may
designate an executive committee, which committee shall consist of two or more
of the directors of the Company. Such executive committee may exercise such
majority of the board of directors in the business and affairs of the Company
as the board of directors may by resolution duly delegate to it except as
prohibited by law. The designation of such committee and the delegation
thereto of authority shall not operate to relieve the board of directors, or
any member thereof, of any responsibility imposed upon it or him by law. Any
member of the executive committee may be removed by the board of directors by
the affirmative vote of a majority of the number of directors fixed by the
bylaws whenever in the judgment of the board the best interests of the Company
will be served thereby.
The executive committee shall keep regular minutes of its proceedings and
report the same to the board of directors when required. The minutes of the
proceedings of the executive committee shall be placed in the minute book of
the Company.
SECTION 4.10. ADVISORY DIRECTORS. The board of directors may for its
convenience, and at its discretion, appoint from time to time one or more
advisory directors. The term of office of an advisory director shall be one
year from the date of appointment, although a person may be re-appointed for
additional one-year terms. Any advisory director may be removed by the board
of directors whenever in its judgment the best interests of the Company are
served thereby. Appointment of an advisory director shall not of itself create
any contractual rights. An advisory director may be furnished with notice, if
any, of each regular and special meeting of the board of directors, together
with copies of any board materials provided to the members of the board of
directors before or during such meetings, and may attend such board meetings,
provided that the chairman of the board of directors shall have the power not
to provide any such material to the advisory directors as he in good faith
believes should only be made available to the voting members of the board.
Solely in the discretion of the board of directors, an advisory director may
also be furnished with notice of a meeting of any committee of the board of
directors, together with copies of any committee materials provided to the
members of such committee before or during such meetings, and may attend such
committee meetings. Notwithstanding the foregoing, an advisory director shall
not be counted for purposes of determining whether a quorum of the board of
directors or any committee thereof exists for transacting business, nor may an
advisory director vote or execute a written consent of directors or committee
members on any matter that may come before the board of directors or any
committee thereof. An advisory director shall not have responsibility for the
management or control of the business and affairs of the Company. Each
advisory director shall be reimbursed for reasonable and necessary expenses
actually incurred by such advisory director in connection with attending a
board or committee meeting and shall receive an attendance fee for each meeting
attended in the same amount as is paid to non-officer members of the board of
directors for attending such meetings. Notwithstanding the foregoing, an
advisory director shall not be entitled to any monthly or annual fee or
retainer for serving as an advisory director or attending any board or
committee meeting.
ARTICLE V
OFFICERS
SECTION 5.1. NUMBER. The officers of the Company shall consist of a
chairman of the board of directors, a chief executive officer, a president, one
or more senior executive vice presidents, executive vice presidents, and vice
presidents, a secretary and a treasurer; and, in addition, such other officers
and assistant officers and agents as may be deemed necessary or desirable.
Officers shall be elected or appointed by the board of directors. Any two or
more offices may be held by the same person except that the president and
secretary shall not be the same person. In its discretion, the board of
directors may leave unfilled any office except those of chief executive
officer, president, treasurer and secretary.
SECTION 5.2. ELECTION; TERM; QUALIFICATION. Officers shall be chosen by
the board of directors annually at the meeting of the board of directors
following the annual shareholders' meeting. Each officer shall hold office
until his successor has been chosen and qualified, or until his death,
resignation, or removal.
SECTION 5.3. REMOVAL. Any officer or agent elected or appointed by the
board of directors may be removed by the board of directors whenever in its
judgment the best interests of the Company will be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent shall not of
itself create any contract rights.
SECTION 5.4. VACANCIES. Any vacancy in any office for any cause may be
filled by the board of directors at any meeting.
SECTION 5.5. DUTIES. The officers of the Company shall have such powers
and duties, except as modified by the board of directors, as generally pertain
to their offices, respectively, as well as such powers and duties as from time
to time shall be conferred by the board of directors and by these bylaws.
SECTION 5.6A. THE CHAIRMAN OF THE BOARD. The directors may elect from
their number a Chairman of the Board who shall be an officer of the Company and
who shall preside at all meetings of the Board of Directors. He shall perform
such duties as the Board of Directors may prescribe.
SECTION 5.6B. THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of
the Company shall have general direction of the operations of the Company and
general supervision over its officers, subject, however, to the control of the
board of directors. He shall at each annual meeting, and from time to time,
report to the shareholders and to the board of directors all matters within his
knowledge which, in his opinion, the interest of the Company may require to be
brought to the notice of such persons. He may sign, with the secretary, any or
all certificates of stock of the Company. Without in any way limiting powers
otherwise granted to him or to any other officer, he shall be authorized to
sign and execute in the name of the Company all contracts or other instruments
in the usual and regular course of business, pursuant to section 6.2 hereof,
and to execute leases, sales, easements, servitudes, restrictive covenants,
mortgages and other encumbrances on behalf of the corporation containing such
terms and conditions as he may deem appropriate and in the best interest of the
corporation. The chief executive officer in general shall perform all duties
incident to the office of the chief executive officer and such other duties
from time to time may be assigned to him by the board of directors or as are
prescribed by these bylaws.
SECTION 5.6C. THE PRESIDENT. At the request of the chief executive
officer, or in his absence or disability, the president shall perform the
duties of the chief executive officer, and, when so acting, shall have all the
powers of, and be subject to all restrictions upon, the chief executive
officer. Any action taken by the president in the performance of the duties of
the chief executive officer shall be conclusive evidence of the absence or
inability to act of the chief executive officer at the time such action was
taken. The president shall perform such other duties as may, from time to
time, be assigned him by the board of directors, the chairman of the board or
the chief executive officer. The president may sign, with the secretary,
certificates of stock of the Company.
SECTION 5.7A. THE SENIOR EXECUTIVE VICE PRESIDENTS. At the request of the
chief executive officer, or in his and the president's absence or disability,
the senior executive vice presidents, in the order of their election, shall
perform the duties of the chief executive officer, or, if so requested by the
chief executive officer, the duties of the president, and, when so acting,
shall have all the powers of, and be subject to all restrictions upon, such
office. Any action taken by a senior executive vice president in the
performance of the duties of the chief executive officer or president shall be
conclusive evidence of the absence or inability to act of the chief executive
officer or president at the time such action was taken. The senior executive
vice presidents shall perform such other duties as may, from time to time, be
assigned to them by the board of directors, the chairman of the board of
directors or the president. A senior executive vice president may sign, with
the secretary, certificates of stock of the Company.
SECTION 5.7B. EXECUTIVE VICE PRESIDENTS. The executive vice presidents
shall perform such duties and have such powers as the board of directors may
prescribe and as the chief executive officer, president or a senior executive
vice president may assign or authorize by delegation, subject to the general
supervision of such delegating officer.
SECTION 5.7C. VICE PRESIDENTS. The vice presidents shall perform such
duties and have such powers as the board of directors may prescribe and as the
chief executive officer, president, a senior executive vice president or an
executive vice president may assign or authorize by delegation, subject to the
general supervision of such delegating officer.
SECTION 5.8. SECRETARY. The secretary shall keep the minutes of all
meetings of the shareholders, of the board of directors, and of the executive
committee, if any, of the board of directors, in one or more books provided for
such purpose and shall see that all notices are duly given in accordance with
the provisions of these bylaws or as required by law. He shall be custodian of
the corporate records and of the seal of the Company and see that the seal of
the Company is affixed to all documents the execution of which on behalf of the
Company under its seal is duly authorized; shall have general charge of the
stock certificate books, transfer books and stock ledgers, and such other books
and papers of the Company as the board of directors may direct, all of which
shall, at all reasonable times, be open to the examination of any director,
upon application at the office of the Company during business hours; and in
general shall perform all duties and exercise all powers incident to the office
of the secretary and such other duties and powers as the board of directors,
the chief executive officer or the president from time to time may assign to or
confer on him.
SECTION 5.9. TREASURER. The treasurer shall keep complete and accurate
records of account, showing at all times the financial condition of the
Company. He shall be the legal custodian of all money, notes, securities and
other valuables which may from time to time come into the possession of the
Company. He shall furnish at meetings of the board of directors, or whenever
requested, a statement of the financial condition of the Company, and shall
perform such other duties as these bylaws may require or the board of directors
may prescribe.
<PAGE>
SECTION 5.10. ASSISTANT OFFICERS. Any assistant secretary or assistant
treasurer appointed by the board of directors shall have power to perform, and
shall perform, all duties incumbent upon the secretary or treasurer of the
Company, respectively, subject to the general direction of such respective
officers, and shall perform such other duties as these bylaws may require or
the board of directors may prescribe.
SECTION 5.11. SALARIES. The salaries or other compensation of the officers
shall be fixed from time to time by the board of directors. No officer shall
be prevented from receiving such salary or other compensation by reason of the
fact that he is also a director of the Company.
SECTION 5.12. BONDS OF OFFICERS. The board of directors may secure the
fidelity of any officer of the Company by bond or otherwise, on such terms and
with such surety or sureties, conditions, penalties or securities as shall be
deemed proper by the board of directors.
SECTION 5.13. DELEGATION. The board of directors may delegate temporarily
the powers and duties of any officer of the Company, in case of his absence or
for any other reason, to any other officer, and may authorize the delegation by
any officer of the Company of any of his powers and duties to any agent or
employee, subject to the general supervision of such officer.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. DIVIDENDS. Dividends on the outstanding shares of the
Company, subject to the provisions of the articles of incorporation, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid by the Company in cash, in property, or in the
Company's own shares, but only out of the unreserved and unrestricted earned
surplus of the Company, except as otherwise allowed by law.
Subject to limitations upon the authority of the board of directors
imposed by law or by the articles of incorporation, the declaration of and
provision for payment of dividends shall be at the discretion of the board of
directors.
SECTION 6.2. CONTRACTS. The chief executive officer shall have the power
and authority to execute, on behalf of the Company, contracts or instruments in
the usual and regular course of business, and in addition the board of
directors, chairman or the chief executive officer may authorize any officer or
officers, agent or agents, of the Company to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the Company, and
such authority may be general or confined to specific instances. Unless so
authorized by the board of directors or the chief executive officer, or by
these bylaws, no officer, agent or employee shall have any power or authority
to bind the Company by any contract or engagement, or to pledge its credit or
to render it pecuniarily liable for any purpose or in any amount.
SECTION 6.3. CHECKS, DRAFTS, ETC. All checks, drafts, or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the Company shall be signed by such officers or employees of the
Company as shall from time to time be authorized pursuant to these bylaws or by
resolution of the board of directors.
SECTION 6.4. DEPOSITORIES. All funds of the Company shall be deposited
from time to time to the credit of the Company in such banks or other
depositories as the board of directors may from time to time designate, and
upon such terms and conditions as shall be fixed by the board of directors.
The board of directors may from time to time authorize the opening and
maintaining within any such depository as it may designate, of general and
special accounts, and may make such special rules and regulations with respect
thereto as it may deem expedient.
SECTION 6.5. ENDORSEMENT OF STOCK CERTIFICATES. Subject to the specific
directions of the board of directors, any share or shares of stock issued by
any corporation and owned by the Company, including required shares of the
Company's own stock, may for sale or transfer, be endorsed in the name of the
Company by the chief executive officer, president or any senior executive vice
president; and such endorsement may be attested or witnessed by the secretary
or any assistant secretary either with or without the affixing thereto of the
corporate seal.
SECTION 6.6. CORPORATE SEAL. The corporate seal shall be in such form as
the board of directors shall approve, and such seal, or a facsimile thereof,
may be impressed on, affixed to, or in any manner reproduced upon, instruments
of any nature required to be executed by officers of the Company.
SECTION 6.7. FISCAL YEAR. The fiscal year of the Company shall begin and
end on such dates as the board of directors at any time shall determine.
SECTION 6.8. BOOKS AND RECORDS. The Company shall keep correct and
complete books and records of account and shall keep minutes of the proceedings
of its shareholders and board of directors, and shall keep at its registered
office or principal place of business, or at the office of its transfer agent
or registrar, a record of its shareholders, giving the names and addresses of
all shareholders and the number and class of the shares held by each.
SECTION 6.9. RESIGNATIONS. Any director or officer may resign at any time.
Such resignations shall be made in writing and shall take effect at the time
specified therein, or, if no time is specified, at the time of its receipt by
the chief executive officer or secretary. The acceptance of a resignation
shall not be necessary to make it effective, unless expressly so provided in
the resignation.
SECTION 6.10. INDEMNIFICATION OF OFFICERS AND DIRECTORS. The Company shall
indemnify any person who was or is a party or is threatened to be made a party
to any action, suit or proceeding, whether civil, criminal, administrative or
investigative (including any action by or in the right of the Company), by
reason of the fact that he is or was a director or officer of the Company
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; however, in case of
action by or in the right of the Company, the indemnity shall be limited to
expenses (including attorneys' fees and amounts paid in settlement not
exceeding, in the judgment of the board of directors, the estimated expense of
litigating the action to conclusion) actually and reasonably incurred in
connection with the defense or settlement of such action and no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be liable for
willful or intentional misconduct in the performance of his duty to the Company
unless and only to the extent that the court shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, he is fairly and reasonably entitled to indemnity
for such expenses which the court shall deem proper. The indemnification
provided by or granted pursuant to this Section 6.10 shall not be deemed
exclusive of any other rights to which the person indemnified is entitled under
any law, statute, by-law, agreement, authorization of shareholders or
directors, regardless of whether directors authorizing such indemnification are
beneficiaries thereof, or otherwise, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of his heirs and legal representatives. If any indemnification which
would otherwise be granted by this section 6.10 shall be disallowed by any
competent court or administrative body as illegal or against public policy,
then any director or officer with respect to whom such adjudication was made,
and any other officer or director, shall be indemnified to the fullest extent
permitted by law and public policy, it being the express intent of the Company
to indemnify its officers and directors to the fullest extent possible in
conformity with these bylaws, all applicable laws, and public policy.
SECTION 6.11. MEETINGS BY TELEPHONE. Subject to the provisions required or
permitted by these bylaws or the laws of the State of Louisiana for notice of
meetings, shareholders, members of the board of directors, or members of any
committee designated by the board of directors may participate in and hold any
meeting required or permitted under these bylaws by telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting pursuant to this
section shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
SECTION 6.12. CONTROL SHARE ACQUISITION STATUTE. The Company expressly
waives the benefits of La. R.S. 12:135-140.2, as they may be amended from time
to time.
ARTICLE VII
AMENDMENTS
SECTION 7.1. AMENDMENTS. These bylaws may be altered, amended, or
repealed, or new bylaws may be adopted, by a majority of the board of directors
at any duly held meeting of directors or by the holders of a majority of the
shares represented at any duly held meeting of shareholders; provided that
notice of such proposed action shall have been contained in the notice any such
meeting.
<PAGE>
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<PERIOD-END> DEC-31-1998
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0
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