FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
or the quarterly period ended September 30, 1995
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 1-6035
The Titan Corporation
(Exact name of registrant as specified in its charter)
Delaware 95-2588754
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3033 Science Park Road, San Diego, California 92121
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code) (619) 552-9500
____________________________________________________________________________
(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 of registrant's common stock outstanding at November 3,
1995, was 13,822,766.
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE TITAN CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(in thousands, except per share data)
Three months ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Revenues.................................$34,983 $29,541 $99,455 $98,034
Cost of revenues......................... 27,637 20,159 74,423 73,003
Gross profit............................. 7,346 9,382 25,032 25,031
Selling, general and administrative
expense............................... 5,723 5,460 17,544 16,033
Research and development expense......... 1,299 1,641 4,774 3,230
Other income, net........................ (773) - (773) (1,200)
Operating profit......................... 1,097 2,281 3,487 6,968
Interest expense......................... (371) (97) (840) (712)
Interest income.......................... 4 89 47 224
Income before income taxes............... 730 2,273 2,694 6,480
Income tax provision..................... 260 759 970 2,442
Net income............................... 470 1,514 1,724 4,038
Dividend requirement on preferred stock.. 174 174 521 521
Net income applicable to common stock....$ 296 $ 1,340 $ 1,203 $ 3,517
Average common shares outstanding........ 14,214 13,511 13,962 13,135
Net income per average common share......$ .02 $ .10 $ .09 $ .27
The accompanying notes are an integral part of these
consolidated financial statements.
THE TITAN CORPORATION
CONSOLIDATED BALANCE SHEET
(in thousands of dollars)
September 30, December 31,
1995 1994
Assets
Current assets:
Cash and cash equivalents.......................$ 2,677 $ 5,129
Accounts receivable - net....................... 39,344 36,164
Inventories..................................... 7,933 7,155
Prepaid expenses and other...................... 2,650 2,430
Deferred income taxes........................... 4,416 4,769
Total current assets......................... 57,020 55,647
Property and equipment - net....................... 17,128 12,932
Goodwill - net..................................... 3,700 4,103
Other assets....................................... 9,146 9,221
Total assets $ 86,994 $ 81,903
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable................................$ 8,195 $ 7,402
Line of credit.................................. 10,400 --
Current portion of long-term debt............... 594 556
Accrued compensation and benefits............... 8,393 11,000
Other accrued liabilities....................... 7,680 15,250
Total current liabilities.................... 35,262 34,208
Long-term debt..................................... 316 765
Other non-current liabilities...................... 7,910 8,162
Stockholders' equity:
Preferred stock; $1 par value; $13,897
liquidation preference; authorized 2,500,000
shares; issued and outstanding 694,872....... 695 695
Common stock; $.01 par value; authorized
30,000,000 shares; issued 14,980,750 and
14,632,458................................... 150 146
Capital in excess of par value.................. 30,409 27,860
Retained earnings............................... 15,874 14,671
Treasury stock (1,198,454 and 1,521,534 shares),
at cost...................................... (3,622) (4,604)
Total stockholders' equity................ 43,506 38,768
Total liabilities and stockholders' equity $ 86,994 $ 81,903
The accompanying notes are an integral part of these
consolidated financial statements.
THE TITAN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of dollars)
Nine months ended
September 30,
1995 1994
Cash Flows From Operating Activities:
Net income...........................................$ 1,724 $ 4,038
Adjustments to reconcile net income to net cash
provided by (used for) operations:
Other income................................... (773) (1,200)
Depreciation and amortization.................. 3,013 2,388
Deferred income taxes and other................ 663 (212)
Changes in assets and liabilities (net of
effects of sale of businesses):
Accounts receivable...................... (3,180) 10,422
Prepaid expenses and other assets........ 1,199 1,452
Inventories.............................. (820) (1,084)
Accounts payable......................... 793 (4,105)
Accrued compensation and benefits........ (2,707) (583)
Other liabilities........................ (7,603) (9,734)
Net cash provided by (used for) operating
activities........................................ (7,691) 1,382
Cash Flows From Investing Activities:
Proceeds, net of transaction costs, from sale
of businesses..................................... 252 16,766
Capital expenditures................................. (6,684) (3,498)
Other................................................ (874) 69
Net cash provided by (used for) investing
activities........................................ (7,306) 13,337
Cash Flows From Financing Activities:
Reductions of debt................................... (411) (16,740)
Additions to debt.................................... 10,400 --
Dividends paid....................................... (521) (521)
Proceeds from stock issuances........................ 3,077 2,128
Net cash provided by (used for) financing
activities........................................ 12,545 (15,133)
Net decrease in cash and cash equivalents............ (2,452) (414)
Cash and cash equivalents at beginning of period..... 5,129 5,374
Cash and cash equivalents at end of period...........$ 2,677 $ 4,960
The accompanying notes are an integral part of these
consolidated financial statements.
THE TITAN CORPORATION
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(in thousands of dollars, except per share data)
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Capital
in Excess
Preferred Common of Par Retained Treasury
Stock Stock Value Earnings Stock Total
Nine months ended September 30, 1995
Balances at December 31, 1994 $ 695 $ 146 $ 27,860 $ 14,671 $ (4,604) $ 38,768
Stock issuance 1,413 912 2,325
Exercise of stock options and other 4 1,136 (388) 752
Shares contributed to employee
benefit plans 458 458
Dividends on preferred stock -
$.75 per share (521) (521)
Net income 1,724 1,724
alances at September 30, 1995 $ 695 $ 150 $ 30,409 $ 15,874 $ (3,622) $43,506
Nine months ended September 30, 1994
Balances at December 31, 1993 $ 695 $ 138 $ 24,974 $ 9,413 $ (5,899) $29,321
Exercise of stock options 8 2,120 2,128
Shares contributed to employee
benefit plans 1,295 1,295
Dividends on preferred stock -
$.75 per share (521) (521)
Net income 4,038 4,038
Balances at September 30, 1994 $ 695 $ 146 $ 27.094 $ 12,930 $ (4,604) $ 36,261
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
THE TITAN CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1995
(Dollar amounts in thousands, except per share data)
Note (1) BASIS OF FINANCIAL STATEMENT PREPARATION
The accompanying consolidated financial information of The Titan
Corporation and its subsidiaries ("the Company" or "Titan") should be
read in conjunction with the Notes to Consolidated Financial
Statements contained in the Company's Annual Report on Form 10-K to
the Securities and Exchange Commission for the year ended December 31,
1994. The accompanying financial information includes all
subsidiaries on a consolidated basis and all normal recurring
adjustments which are considered necessary by the Company's management
for a fair presentation of the financial position and results of
operations for the periods presented. However, these results are not
necessarily indicative of results for a full year. Also, certain
prior year amounts have been reclassified to conform to the 1995
presentation.
Note (2) OTHER INCOME, NET
In September 1995, the Company sold its shaped-charged munitions
business unit, a part of the Applied Technologies segment, for $1,650
in cash, plus royalties on future sales of munitions. The sale
resulted in a pre-tax gain of $1,450 in other income. Other income
also included losses related to the Company's investment in certain
joint ventures.
Note (3) COMMON STOCK
In September 1995, the Company completed a private placement of
300,000 shares of its common stock, receiving net proceeds of $2,325.
The Company's shares were placed with offshore institutional investors
pursuant to Regulation S of the Securities Act of 1933, as amended.
On August 17, 1995, the Board of Directors adopted a Shareholder
Rights Agreement and subsequently distributed one preferred stock
purchase right ("Right") for each outstanding share of the Company's
common stock. Each Right entitles the registered holder to purchase
from the Company one one-hundredth of a share of Series A Junior
Participating Preferred Stock, par value $1.00 per share (the
"Preferred Shares") at a price of $42.00 per one one-hundredth of a
Preferred Share, subject to adjustment. The Rights become exercisable
if a person or group acquires, in a transaction not approved by the
Company's Board of Directors ("Board"), 15% or more of the Company's
common stock or announces a tender offer for 15% or more of the stock.
If a person or group acquires 15% or more of the Company's common
stock, each Right (other than Rights held by the acquiring person or
group which become void) will entitle the holder to receive upon
exercise a number of shares of Company common stock having a market
value of twice the Right's exercise price. If the Company is acquired
in a transaction not approved by the Board, each Right may be
exercised for common shares of the acquiring company having a market
value of twice the Right's exercise price. The Company may redeem the
Rights at $.01 per Right, subject to certain conditions. The Rights
expire on August 17, 2005.
Note (4) DEBT
In May 1995, the Company's bank line of credit agreement was amended
to increase available credit from $10,000 to $17,000 and to extend the
maturity date to May 31, 1997. Borrowings under this agreement were
$10,400 at September 30, 1995.
Note (5) SALE OF APPLICATIONS GROUP
In April 1994, the Company sold its Applications Group (the Company's
Army training and simulation service business) as part of the
Company's formal plan of restructure adopted in early 1994. Through
the date of sale in 1994, the Applications Group had revenues and
operating profit of $11,913 and $919, respectively.
Note (6) OTHER FINANCIAL DATA
September 30, December 31,
1995 1994
Inventories:
Materials $ 2,596 $ 2,921
Work-in-process 1,779 1,287
Finished goods 3,558 2,947
$ 7,933 $ 7,155
Supplemental disclosure of cash payments (receipts) is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
Interest $ 205 $ 39 $ 412 $ 638
Income taxes 29 635 (775) 603
During the nine month periods ended September 30, 1995 and 1994, the
Company utilized treasury stock of $458 and $1,295, respectively, for
benefit plan contributions.
THE TITAN CORPORATION
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
(Dollar amounts in thousands,
except per share data)
RESULTS OF OPERATIONS
Revenues for the third quarter of 1995 were $34,983, up 18% from
revenues of $29,541 in the third quarter of 1994. The change was
primarily due to increases in the government satellite communications
business, the government services business and certain commercial
business areas. These increases were partially offset by a reduction
of revenues from a major telecommunications customer in the commercial
client server reengineering business. Management expects that the
Company will continue to experience reduced revenues in this business
during the remainder of 1995 and in 1996.
Gross margins were 21% of revenues in the third quarter of 1995
compared to 32% in the third quarter of 1994 principally reflecting a
change in revenue mix. This percentage decrease resulted in
approximately $2,000 less gross margin contribution. Although
government satellite communications and services revenues increased,
the contract mix in the third quarter of 1995 was not as favorable as
in the third quarter of 1994. In the client server business, although
margin percentages were stable, the reduction in revenue resulted in
less gross margin contribution. The delays in the anticipated award
of certain commercial contracts and increased support costs related to
the Company's emerging commercial business also affected margins.
Selling, general and administrative ("SG&A") expense increased
slightly from $5,460 in the third quarter of 1994 to $5,723 in the
third quarter of 1995, but decreased as a percentage of revenues from
18% in 1994 to 16% in 1995.
Research and development ("R&D") expense was $1,299 in the third
quarter of 1995 compared to $1,641 in the third quarter of 1994. The
change reflects a decrease of approximately $400 in the government
business area partially offset by an increase of approximately $100 in
the commercial business area.
Other income includes a pre-tax gain of $1,450 from the sale of
the Company's shaped-charged munitions business which was sold for
$1,650 in cash, plus royalties on future sales of munitions. Other
income also includes losses related to the Company's investment in
certain joint ventures.
Net interest expense increased from $8 in the third quarter of
1994 to $367 in the third quarter of 1995. During 1994, the Company
was substantially debt-free after the sale of its Applications Group
in early April 1994. Since December 31, 1994, the Company has
RESULTS OF OPERATIONS (Continued)
borrowed under its line of credit and, accordingly, net interest
expense has increased.
The income tax provision for the third quarter and nine months of
1995 was an effective rate of 36% compared to effective rates of 33%
and 38% for the third quarter and nine months of 1994, respectively.
The effective rates in both years reflect the combined federal and
state statutory rates less expected credits, primarily R&D credits.
Revenues for the first nine months of 1995 were $99,455 compared
to $98,034 for the same period a year ago. Excluding the impact of
the sale of the Applications Group in April 1994, revenues increased
15%. Commercial revenues increased approximately $9,000 and
government revenues, excluding the impact of the sale of the
Applications Group, increased approximately $4,000.
Gross margins for the first nine months of 1995 were stable at
25% of revenues compared to 26% of revenues in the first nine months
of 1994.
SG&A increased from $16,033 in the first nine months of 1994 to
$17,544 in the first nine months of 1995. The increase was
principally in selling and marketing expenses reflecting the Company's
commitment to growing its commercial businesses. In particular, the
Company continues to expand its sales and marketing efforts in the
Pacific Rim, Central America and Europe.
R&D increased from $3,230 in the first nine months of 1994 to
$4,774 in the first nine months of 1995, reflecting the Company's
commitment to developing and expanding new and existing technologies
for its businesses. Investment in R&D and sales and marketing combined
increased 44% between the comparable nine month periods.
Net interest expense for the first nine months of 1995 was $793
compared to $488 for the first nine months of 1994. The increase in
net interest expense in 1995 is a result of substantially lower
average investment income and slightly higher average line of credit
borrowings at an average line of credit interest rate of 8.3% in 1995
compared to 6.5% in 1994.
LIQUIDITY AND CAPITAL RESOURCES
In the first nine months of 1995, the Company utilized $10,400
under its $17,000 bank line of credit to provide cash needed for
operating activities, including business expansion in commercial
areas. Operating cash requirements were approximately $7,700 in the
first nine months, primarily reflecting an increase in accounts
receivable and inventory along with the timing of certain compensation
payments and funding of restructuring activities. In the first nine
months of 1995, the Company spent approximately $6,700 on capital
expenditures, with the majority spent in the commercial business area.
In September, the Company received $2,325 in cash through a private
placement of common stock to offshore institutional investors.
Management believes that its cash flow from operations combined with
its bank line of credit will be sufficient to fund planned investments
and working capital requirements through 1995. The Company continues
to evaluate its capital requirements and sources for providing
additional funds for growth in its key business areas.
THE TITAN CORPORATION
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a)(3) Bylaws of the Company, as amended October 18, 1995.
(a)(10) Executive severance plan entered into by the Company
with Gene W. Ray, John E. Koehler, Ronald Gorda,
David A. Hahn, Roger Hay, Cornelius L. Hensel,
Fredrick L. Judge and Stephen P. Meyer.
(a)(27) Financial Data Schedule
(b) The Company filed the following:
(1) Current report on Form 8-K dated September 7,
1995, to report the distribution of preferred
share purchase rights to the Company's common
stockholders.
(2) Current report on Form 8-K dated October 18, 1995,
to report an amendment to the Company's Bylaws.
THE TITAN CORPORATION
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: November 13, 1995
THE TITAN CORPORATION
/S/ ROGER HAY
By: Roger Hay
Senior Vice President,
Chief Financial Officer
/s/ JANE E. JUDD
By: Jane E. Judd
Vice President and
Corporate Controller
. (Principal Accounting Officer)
6. Exhibits
6. (a)(3) Bylaws of the Company, as amended October 18, 1995
6. (a)(10) Executive serverance plan entered into by the
Company with
Gene W. Ray, John E. Koehler, Ronald Gorda, David A.
Hahn,
Roger Hay, Cornelius L. Hensel, Fredrick L. Judge, and
Stephen P. Meyer
THE TITAN CORPORATION
(A Delaware Corporation)
BYLAWS
(As Amended through October 18, 1995)
ARTICLE I
OFFICES
SECTION 1.01 Registered Office. The registered office
of The
Titan Corporation (hereinafter called the Corporation) in the
State of
Delaware shall be at No. 100 West Tenth Street, City of
Wilmington, County
of New Castle, and the name of the registered agent in charge
thereof shall
be The Corporation Trust Company.
SECTION 1.02 Other Offices. The Corporation may also
have an
office or offices at such other place or places, either within or
without
the State of Delaware, as the Board of Directors (hereinafter
called the
Board) may from time to time determine or as the business of the
Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.01 Annual Meetings. The annual meeting of
the
stockholders of the Corporation for the purpose of electing
directors and
for the transaction of such other proper businesses as may come
before the
meeting shall be held at such time, date and place as the Board
shall
determine by resolution, and, if that day is a legal holiday,
then on the
next succeeding business day not a legal holiday at the same
hour. If the
election of directors shall not be held on the day designated for
any
annual meeting, or on the day of any adjourned session thereof,
the Board
shall cause the election to be held as soon thereafter as may be
convenient
at a special meeting of such stockholders.
SECTION 2.02 Special Meetings. A special meeting of
the
stockholders for the transaction of any proper business may be
called at
any time by the Board, the Chairman of the Board or by the
President.
SECTION 2.03 Place of Meeting. All meetings of the
stockholders shall be held at such places, within or without the
State of
Delaware, as may from time to time be designated in the
respective notices
or waivers of notice thereof.
SECTION 2.04 Notice of Meetings. Except as otherwise
required
by law, notice of each meeting of the stockholders, whether
annual or
special, shall, not less than ten (10) nor more than fifty (50)
days before
the date of the meeting, be given to each stockholder of record
entitled to
vote at such meeting by delivering a typewritten or printed
notice thereof
to him personally, or by depositing such notice in the United
States mail,
in a postage prepaid envelope, directed to him at his post-office
address
furnished by him to the Secretary of the Corporation for such
purpose or,
if he shall not have furnished to the Secretary of the
Corporation his
address for such purpose, then at his post-office address last
known to the
Secretary, or by transmitting a notice thereof to him at such
address by
telegraph, cable, or wireless. Except as otherwise expressly
required by
law, no publication of any notice of a meeting of the
stockholders shall be
required. Every notice of a meeting of the stockholders shall
state the
place, date and hour of the meeting, and, in the case of a
special meeting,
shall also state the purpose or purposes for which the meeting is
called.
Notice of any meeting of stockholders shall be deemed waived by
any
stockholder who shall attend such meeting in person or by proxy,
except a
stockholder who shall attend such meeting for the express purpose
of
objecting, at the beginning of the meeting, to the transaction of
any
business because the meeting is not lawfully called or convened.
Except as
otherwise expressly required by law, notice of any adjourned
meeting of the
stockholders need not be given if the time and place thereof are
announced
at the meeting at which the adjournment is taken.
SECTION 2.05 Quorum. Except in the case of any
meeting for
the election of directors summarily ordered as provided by law,
the holders
of record of a majority in voting interest of the shares of stock
of the
Corporation entitled to be voted thereat, present in person or by
proxy,
shall constitute a quorum for the transaction of business at any
meeting of
the stockholders of the Corporation or any adjournment thereof.
In the
absence of a quorum at any meeting or any adjournment thereof, a
majority
in voting interest of the stockholders present in person or by
proxy and
entitled to vote thereat or, in the absence therefrom of all the
stockholders, any officer entitled to preside at, or to act as
secretary
of, such meeting may adjourn such meeting from time to time. At
any such
adjourned meeting at which a quorum is present any business may
be
transacted which might have been transacted at the meeting as
originally
called.
SECTION 2.06 Voting. (a) Each stockholder shall, at
each
meeting of the stockholders, be entitled to vote in person or by
proxy each
share or fractional share of the stock of the Corporation having
voting
rights on the matter in question and which shall have been held
by him and
registered in his name on the books of the Corporation:
(i) on the date fixed pursuant to Section 6.05 of
these
Bylaws as the record date for the determination of stockholders
entitled to notice of and to vote at such meeting, or
(ii) if no such record date shall have been so fixed,
then (a) at the close of business on the day next preceding the
day
on which notice of the meeting shall be given or (b) if notice of
the
meeting shall be waived, at the close of business on the day next
preceding the day on which the meeting shall be held.
(b) Shares of its own stock belonging to the
Corporation
shall not be entitled to vote. Persons holding in a fiduciary
capacity
stock of the Corporation shall be entitled to vote such stock so
held. A
person whose stock is pledged shall be entitled to vote such
stock, unless
in the transfer by the pledgor on the books of the Corporation he
shall
have expressly empowered the pledgee to vote thereon, in which
case only
the pledgee, or his proxy, may represent such stock and vote
thereon.
Stock having voting power standing of record in the names of two
or more
persons, whether fiduciaries, members of a partnership, joint
tenants in
common, tenants by the entirety or otherwise, or with respect to
which two
or more persons have the same fiduciary relationship, shall be
voted in
accordance with the provisions of the General Corporation Law of
the State
of Delaware.
(c) Any such voting rights may be exercised by the
stockholder entitled thereto in person or by his proxy appointed
by an
instrument in writing, subscribed by such stockholder or by his
attorney
thereunto authorized and delivered to the secretary of the
meeting;
provided, however, that no proxy shall be voted or acted upon
after three
years from its date unless said proxy shall provide for a longer
period.
The attendance at any meeting of a stockholder who may
theretofore have
given a proxy shall not have the effect of revoking the same
unless he
shall in writing so notify the secretary of the meeting prior to
the voting
of the proxy. At any meeting of the stockholders all matters,
except as
otherwise provided in these Bylaws or by law, shall be decided by
the vote
of a majority in voting interest of the stockholders present in
person or
by proxy and entitled to vote thereat and thereon, a quorum being
present.
The vote at any meeting of the stockholders on any question need
not be by
ballot, unless so directed by the chairman of the meeting. On a
vote by
ballot each ballot shall be signed by the stockholder voting, or
by his
proxy, if there be such proxy, and it shall state the number of
shares
voted.
SECTION 2.07 Judges. If at any meeting of the
stockholders a
vote by written ballot shall be taken on any questions, the
chairman of
such meeting may appoint a judge or judges to act with respect to
such
vote. Each judge so appointed shall first subscribe an oath
faithfully to
execute the duties of a judge at such meeting with strict
impartiality and
according to the best of his ability. Such judges shall decide
upon the
qualification of the voters and shall report the number of shares
represented at the meeting and entitled to vote on such question,
shall
conduct and accept the votes, and, when the voting is completed,
shall
ascertain and report the number of shares voted respectively for
and
against the question. Reports of judges shall be in writing and
subscribed
and delivered by them to the Secretary of the Corporation. The
judges need
not be stockholders of the Corporation, and any officer of the
Corporation
may be a judge on any question other than a vote for or against a
proposal
in which he shall have a material interest.
SECTION 2.08 Notice of Stockholder Business and
Nominations
(a) Annual Meeting of Stockholders.
(i) Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to
be considered
by the stockholders may be made at an annual meeting of
stockholders (a)
pursuant to the Corporation's notice of meeting, (b) by or at
the
direction of the Board of Directors or (c) by any stockholder
of the
Corporation who was a stockholder of record at the time of
giving of
notice provided for in this By-Law, who is entitled to vote at
the
meeting and who complies with the notice procedures set forth
in this By-
Law,
(ii) For nominations or other business to be properly
brought
before an annual meeting by a stockholder pursuant to clause
(c) of
paragraph (a) (i) of this By-Law, the stockholder must have
given timely
notice thereof in writing to the Secretary of the Corporation
and such
other business must otherwise be a proper matter for
stockholder action.
To be timely, a stockholder's notice shall be delivered to
the Secretary
at the principal executive offices of the Corporation not
later than the
close of business on the 60th day nor earlier than the close
of
business on the 90th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in
the event
that the date of the annual meeting is more than 30 days before
or
more than 60 days after such anniversary date, notice by the
stockholder to be timely must be so delivered not earlier than
the close
of business on the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day
prior
to such annual meeting or the 10th day following the day on
which public
announcement of the date of such meeting is first made by the
Corporation.
In no event shall the public announcement of an adjournment
of an annual
meeting commence a new time period for the giving of a
stockholder's
notice as described above. Such stockholder's notice shall
set forth (a)
as to each person whom the stockholder proposes to nominate
for election
or re-election as a director all information relating to such
person
that is required to be disclosed in solicitations of proxies for
election
of directors in an election contest, or is otherwise required,
in each
case pursuant to Regulation 14A under the Securities Exchange
Act of
1934, as amended (the "Exchange Act") and Rule 14a-11
thereunder
(including such person's written consent to being named in
the proxy
statement as a nominee and to serving as a director if
elected); (b)
as to any other business that the stockholder proposes to bring
before
the meeting, a brief description of the business desired to
be brought
before the meeting, the reasons for conducting such business
at the
meeting and any material interest in such business of such
stockholder and
the beneficial owner, if any, on whose behalf the proposal is
made, and
(c) as to the stockholder giving the notice and the beneficial
owner, if
any, on whose behalf the nomination or proposal is made (i) the
name and
address of such stockholder, as they appear on the
Corporation's
books, and of such beneficial owner and (ii) the class and
number of
shares of the Corporation which are owned beneficially and of
record by
such stockholder and such beneficial owner.
(iii) Notwithstanding anything in the second
sentence of
paragraph (A) (2) of this By Law to the contrary, in the
event that the
number of Directors to be elected to the Board of Directors
of the
Corporation is increased and there is no public announcement by
the
Corporation naming all of the nominees for director or
specifying the
size of the increased Board of Directors at least 70 days
prior to the
first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this By-Law shall also be
considered
timely, but only with respect to nominees for any new positions
created
by such increase, if it shall be delivered to the Secretary at
the
principal execution offices of the Corporation not later
than the close
of business on the 10th day following the day on which such
public
announcement is first made by the Corporation.
(b) Special Meetings of Stockholders. Only such
business
shall be conducted at a special meeting of stockholders as shall
have been
brought before the meeting pursuant to the Corporation's notice
of meeting.
Nominations of persons for election to the Board of Directors may
be made
at a special meeting of stockholders at which directors are to be
elected
pursuant to the Corporation's notice of meeting (a) by or at the
direction
of the Board of Directors at (b) provided that the Board of
Directors has
determined that directors shall be elected at such meeting, by
any
stockholder of the Corporation who is a stockholder of record at
the time
of giving of notice provided for in this By-Law, who shall be
entitled to
vote at the meeting and who complies with the notice procedures
set forth
in this By-Law. In the event the Corporation calls a special
meeting of
stockholders for the purpose of electing one or more directors to
the Board
of Directors, any such stockholder may nominate a person or
persons (as the
case may be), for election to such position(s) as specified in
the
Corporation's notice of meeting, if the stockholder's notice
required by
paragraph (a) (ii) of this By-Law shall be delivered to the
Secretary at
the principal executive offices of the Corporation not earlier
than the
close of business on the 90th day prior to such special meeting
and not
later than the close of business on the later of the 60th day
prior to such
special meeting or the 10th day following the day on which public
announcement is first made of the date of the special meeting and
of the
nominees proposed by the Board of Directors to be elected at such
meeting.
In no event shall the public announcement of an adjournment of a
special
meeting commence a new time period for the giving of a
stockholder's notice
as described above.
(c) General.
(i) Only such persons who are nominated in accordance
with the
procedures set forth in this By-Law shall be eligible to
serve as
director; and only such business shall be conducted at a meeting
of
stockholders as shall have been brought before the meeting in
accordance with the procedures set forth in this By-Law.
Except as
otherwise provided by law, the Certificate of Incorporation
or these By-
Laws, the Chairman of the meeting shall have the power and duty
to
determine whether a nomination or any business proposed to be
brought
before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this By-Law and,
if any
proposed nomination or business is not in compliance with this
By-Law,
to declare that such defective proposal or nomination shall
be
disregarded.
(ii) For purposes of the By-Law, "public announcement"
shall
mean disclosure in a press release reported by the Dow Jones
News Service,
Associated Press or comparable national news service or in a
document
publicly filed by the Corporation with the Securities and
Exchange
Commission pursuant to Section 13, 14 or 15(d) of the
Exchange Act.
(iii) Notwithstanding the foregoing provisions of
this By-Law,
a stockholder shall also comply with all applicable
requirements of the
Exchange Act and the rules and regulations thereunder with
respect to
the matters set forth in this By-Law. Nothing in this By-Law
shall be
deemed to affect any rights (1) of stockholders to request
inclusion of proposals in the Corporation's proxy statement
pursuant to
Rule 14a-8 under the Exchange Act or (2) of the holders of any
series
of Preferred Stock to elect directors under specified
circumstances.
SECTION 2.09 Record Date for Action by Written
Consent.
In order that the Corporation may determine the
stockholders
entitled to consent to corporate action in writing without a
meeting, the
Board of Directors may fix a record date, which record date shall
not
precede the date upon which the resolution fixing the record date
is
adopted by the Board of Directors, and which date shall not be
more than 10
days after the date upon which the resolution fixing the record
date is
adopted by the Board of Directors. Any stockholder of record
seeking to
have the stockholders authorize or take corporate action by
written consent
shall, by written notice to the Secretary, request the Board of
Directors
to fix a record date. The Board of Directors shall promptly, but
in all
events within 10 days after the date on which such a request is
received,
adopt a resolution fixing the record date. If no record date has
been
filed by the Board of Directors within 10 days of the date on
which such a
request is received, the record date for determining stockholders
entitled
to consent to corporate action in writing without a meeting, when
no prior
action by the Board of Directors is required by applicable law,
shall be
the first date on which a signed written consent setting forth
the action
taken or proposed to be taken is delivered to the Corporation by
delivery
to its registered office in Delaware, its principal place of
business or to
any officer or agent of the Corporation having custody of the
book in which
proceedings of meetings of stockholders are recorded. Delivery
made to the
Corporation's registered office shall be by hand or by certified
or
registered mail, return receipt requested. If no record date has
been
fixed by the Board of Directors and prior action by the Board of
Directors
is required by applicable law, the record date for determining
stockholders
entitled to consent to corporate action in writing without a
meeting shall
be at the close of business on the date on which the Board of
Directors
adopts the resolution taking such prior action.
SECTION 2.10 Inspectors of Written Consent
In the event of the delivery, in the manner provided by
Section
2.09, to the Corporation of the requisite written consent or
consents to
take corporate action and/or any related revocation or
revocations, the
Corporation shall engage nationally recognized independent
inspectors of
elections for the purpose of promptly performing a ministerial
review of
the validity of the consents and revocations. For the purpose of
permitting the inspectors to perform such review, no action by
written
consent without a meeting shall be effective until such date as
the
independent inspectors certify to the Corporation that the
consents
delivered to the Corporation in accordance with Section 2.09
represent at
least the minimum number of votes that would be necessary to take
the
corporate action. Nothing contained in this paragraph shall in
any way be
construed to suggest or imply that the Board of Directors or any
stockholder shall not be entitled to contest the validity of any
consent or
revocation thereof, whether before or after such certification by
the
independent inspectors, or to take any other actions (including,
without
limitation, the commencement, prosecution or defense of any
litigation with
respect thereto, and the seeking of injunctive relief in such
litigation.)
SECTION 2.11 Effectiveness of Written Consent.
Every written consent shall bear the date of signature
of each
stockholder who signs the consent and no written consent shall be
effective
to take the corporate action referred to therein unless, within
60 days of
the date the earliest dated written consent was received in
accordance with
Section 2.09, a written consent or consents signed by a
sufficient number
of holders to take such action are delivered to the Corporation
in the
manner prescribed in Section 2.09.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.01 General Powers. The property, business,
and
affairs of the Corporation shall be managed by the Board.
SECTION 3.02 Number, Qualification, and Term of
Office. The
number of directors shall be seven (7); provided, however, that
the number
of directors may be increased in the event of certain specified
arrearages
in the payment of dividends on the $1.00 Cumulative Convertible
Preferred
Stock of the Corporation, such increases to be in the number, for
the
period of time effected in the manner, prescribed in the
Certificate of
Incorporation. Directors need not be stockholders. Each of the
directors
of the Corporation shall hold office until the annual meeting of
stockholders held next after his election and until his successor
shall
have been duly elected and shall qualify, or until his death in
office, or
until he shall resign or shall have been removed in the manner
hereinafter
provided.
SECTION 3.03 Election of Directors. At each meeting
of the
stockholders for the election of directors at which a quorum is
present the
persons receiving the greatest number of votes, up to the number
of
directors to be elected, shall be the directors.
SECTION 3.04 Resignations. Any director of the
Corporation
may resign at any time by giving written notice to the Chairman
of the
Board or to the Secretary of the Corporation. Any such
resignation shall
take effect at the time specified therein, or, if the time be not
specified, it shall take effect immediately upon its receipt;
and, unless
otherwise specified therein, the acceptance of such resignation
shall not
be necessary to make it effective.
SECTION 3.05 Vacancies. Except as otherwise provided
in the
Certificate of Incorporation, any vacancy in the Board, whether
because of
death, resignation, disqualification, an increase in the number
of
directors, or any other cause, may be filled by vote of the
majority of the
remaining directors, although less than a quorum, except in the
case of a
vacancy caused by removal, in which event a successor must be
elected by
the stockholders of the Corporation at a special meeting called
for that
purpose. Each director so chosen to fill a vacancy shall hold
office until
the next annual meeting of stockholders and until his successor
shall have
been elected and shall qualify, or until his death in office, or
until he
shall resign or shall have been removed in the manner hereinafter
provided.
SECTION 3.06 Place of Meeting, etc. The Board may
hold any of
its meetings at such place or places within or without the State
of
Delaware as the Board may from time to time by resolution
designate or as
shall be designated by the person or persons calling the meeting
or in the
notice or a waiver of notice of any such meeting.
SECTION 3.07 First Meeting. As soon as practicable
after each
annual election of directors, the Board shall meet for the
purpose of
organization, the election of officers of the Corporation, and
the
transaction of other business. Notice of such first meeting
shall be given
in the manner hereinafter provided in Section 3.09 unless as
therein
provided such notice shall not be required.
SECTION 3.08 Regular Meetings. Regular meetings of
the Board
may be held at such times as the Board shall from time to time by
resolution determine. There shall be not less than four such
regular
meetings held in each calendar year. If any day fixed for a
regular
meeting shall be a legal holiday at the place where the meeting
is to be
held, then the meeting shall be held at the same hour and place
on the next
succeeding business day not a legal holiday. Except as provided
by law,
notice of regular meetings need not be given.
SECTION 3.09 Special Meetings. Special meetings of
the Board
shall be held whenever called by the Chairman of the Board or the
President
or any two of the directors. Except as otherwise provided by law
or by
these Bylaws, notice of the time and place of each such special
meeting
shall be mailed to each director, addressed to him at his
residence or
usual place of business, at least five (5) day before the day on
which the
meeting is to be held, or shall be sent to him at such place by
telegraph
or cable or be delivered personally not less than forty-eight
(48) hours
before the time at which the meeting is to be held. Except where
otherwise
required by law or by these Bylaws, notice of the purpose of a
special
meeting need not be given. Notice of any meeting of the Board
shall not be
required to be given to any director who shall have waived such
notice and
such notice shall be deemed to have been waived by any director
who is
present at such meeting.
SECTION 3.10 Quorum and Manner of Acting. Except as
otherwise
provided in these Bylaws, or by law, the presence of four (4)
members of
the Board (but in any event not less than one-third of the number
of
directors then authorized) shall be required to constitute a
quorum for the
transaction of business at any meeting of the Board, and all
matters shall
be decided at any such meeting, a quorum being present, by the
affirmative
votes of a majority of the directors present. In the absence of
a quorum,
a majority of directors present at any meeting may adjourn the
same from
time to time until a quorum shall be present. Notice of any
adjourned
meeting need not be given. The directors shall act only as a
Board, and
the individual directors shall have no power as such.
SECTION 3.11 Action by Consent. Any action required or
permitted to be taken at any meeting of the Board or of any
committee
thereof may be taken without a meeting if prior to such action a
written
consent thereto is signed by all members of the Board or of such
committee,
as the case may be, and such written consent is filed with the
minutes of
proceedings of the Board or committee.
SECTION 3.12 Removal of Directors. Subject to the
provisions
of the Certificate of Incorporation, any director may be removed
at any
time, either with or without cause, by the affirmative vote of
the
stockholders having a majority of the voting power of the
Corporation,
given at a special meeting of the stockholders called for the
purpose; and
the vacancy in the Board caused by any such removal may be filled
at such
meeting or otherwise as provided in Section 3.05.
SECTION 3.13 Compensation. The directors shall
receive only
such compensation for their services as may be allowed by a
resolution of
the Board either as an annual fee or as compensation for his
attendance at
each meeting of the Board or of such committee. The Board may
also provide
that the Corporation shall reimburse each such director or member
of such
committee for any expense incurred by him on account of his
attendance at
any such meeting. Neither the payment of such compensation nor
the
reimbursement of such expenses shall be construed to preclude any
director
from serving the Corporation or its subsidiaries in any other
capacity and
receiving compensation therefor.
SECTION 3.14 Executive Committee. The Board may, in
its
discretion, by resolution adopted by a majority of the whole
Board,
designate an Executive Committee consisting of three directors of
the
Corporation, which Committee shall have and may exercise, when
the Board is
not in session, the powers of the Board in management of the
business and
affairs of the Corporation, and shall have power to authorize the
issuance
of the stock of the Corporation and to authorize the seal of the
Corporation to be affixed to all papers which may require it.
Each member
of the Executive Committee may designate another member of the
Board to act
as his alternate at any meeting of the Executive Committee. The
Board
shall name the Chairman of the Executive Committee and shall have
the power
at any time to change the membership of the Executive Committee,
to fill
all vacancies in it and to dissolve it. The Executive Committee
may make
rules for the conduct of its business and may appoint such
committees and
assistants as it shall from time to time deem necessary. Two
members of
said Committee shall constitute a quorum, and any action taken by
the
Executive Committee shall require the approval of at least two of
the
members thereof. The Executive Committee shall keep written
minutes of its
transactions and report such minutes to the Board at the next
regular
meeting of the Board.
SECTION 3.15 Other Committees. The Board may in its
discretion appoint other committees which shall have and may
exercise such
powers in the management of the business and affairs of the
Corporation as
may be granted by resolutions of the Board. Any such committee
shall
consist of two or more directors of the Corporation, and a
majority of any
such committee may determine its action and fix the time and
place of its
meetings unless the Board shall provide otherwise. The Board
shall have
power at any time to fill vacancies in, to change the membership
of and to
dissolve any such committee. The Board may designate one or more
directors
as alternate members of any committee who may replace any absent
or
disqualified member of any meeting of the committee.
ARTICLE IV
OFFICERS
SECTION 4.01 Number. The officers of the Corporation
shall be
a Chairman of the Board, a President, one or more Vice Presidents
(the
number thereof and their respective titles to be determined by
the Board),
a Secretary, a Treasurer and a Controller.
SECTION 4.02 Election, Term of Office and
Qualifications. The
officers of the Corporation, except such officers as may be
appointed in
accordance with Section 4.03, shall be elected annually by the
Board at the
first meeting thereof held after the annual meeting of
stockholders for the
election of directors. If any officers are not elected at an
annual
meeting, such officers may be elected at any subsequent regular
or special
meeting of the Board. Each officer shall hold office until his
successor
shall have been duly elected and shall qualify, or until his
death in
office, or until his resignation or removal in the manner
hereinafter
provided.
SECTION 4.03 Assistants, Agents and Employees, etc.
In
addition to the officers specified in Section 4.01, the Board may
appoint
other assistants, agents, and employees as it may deem necessary
or
advisable, including one or more Assistant Secretaries, and one
or more
Assistant Treasurers, each of whom shall hold office for such
period,
having such authority, and perform such duties as the Board or
the chief
executive officer may from time to time determine. The Board may
delegate
to any officer of the Corporation or any committee of the Board
the power
to appoint, remove and prescribe the duties of any such
assistants, agents
or employees.
SECTION 4.04 Removal. Any officer, assistant, agent
or
employee of the Corporation may be removed, with or without
cause, at any
time: (i) in the case of an officer, assistant, agent or
employee
appointed by the Board, only by resolution of the Board; and (ii)
in the
case of any other officer, assistant, agent or employee, by an
officer of
the Corporation or committee of the Board upon whom or which such
power of
removal may be conferred by the Board.
SECTION 4.05 Resignations. Any officer of assistant
may
resign at any time by giving written notice of his resignation to
the
Board, the Chairman of the Board, the chief executive officer, or
the
Secretary of the Corporation. Any such resignation shall take
effect at
the time specified therein or, if the time be not specified, upon
receipt
thereof by the Board, the Chairman of the Board, the chief
executive
officer, or the Secretary, as the case may be; and, unless
otherwise
specified therein, the acceptance of such resignation shall not
be
necessary to make it effective.
SECTION 4.06 Vacancies. A vacancy in any office
because of
death, resignation, removal, disqualification, or other cause,
may be
filled for the unexpired portion of the term thereof in the
manner
prescribed in these Bylaws for regular appointments or elections
to such
office.
SECTION 4.07 The Chairman of the Board. The Chairman
of the
Board of the Corporation shall be an officer of the Corporation.
He shall
preside at all meetings of the Board and of the stockholders at
which he is
present, and shall exercise and perform such other duties as may
from time
to time be assigned to him by the Board.
SECTION 4.08 The President. The President shall be
the chief
executive officer of the Corporation and shall have, subject to
the control
of the Board, general and active supervision and management over
the
business of the Corporation and over its several officers,
assistants,
agents and employees other than the Chairman of the Board, and he
shall
perform such other duties incident to the office as may from time
to time
be assigned to him by the Board. In case of the absence or
inability of
the Chairman of the Board to act, the President shall perform the
duties of
the Chairman of the Board.
SECTION 4.09 The Vice Presidents. Each Vice President
shall
have such powers and perform such duties as the Board or the
chief
executive officer may from time to time prescribe. At the
request of the
President, or in case of the President's absence or inability to
act upon
the request of the Board or the Chairman of the Board, a Vice
President
shall perform the duties of the President and, when so acting,
shall have
all the powers of, and be subject to all the restrictions upon,
the
President.
SECTION 4.10 The Secretary. The Secretary shall, if
present,
record the proceedings of all meetings of the Board, of the
stockholders,
and of all committees of which a secretary shall not have been
appointed in
one or more books provided for that purpose; he shall see that
all notices
are duly given in accordance with these Bylaws and as required by
law; he
shall be custodian of the seal of the Corporation and shall affix
and
attest the seal to all documents to be executed on behalf of the
Corporation under its seal; and, in general, he shall perform all
the
duties incident to the office of Secretary and such other duties
as may
from time to time be assigned to him by the Board or by the chief
executive
officer.
SECTION 4.11 The Treasurer. The Treasurer shall have
the
general care and custody of the funds and securities of the
Corporation,
and shall deposit all such funds in the name of the Corporation
in such
banks, trust companies or other depositories as shall be selected
by the
Board. He shall receive, and give receipts for, moneys due and
payable to
the Corporation from any source whatsoever. He shall exercise
general
supervision over expenditures and disbursements made by officers,
agents
and employees of the Corporation and the preparation of such
records and
reports in connection therewith as may be necessary or desirable.
He
shall, in general, perform all other duties incident to the
office of
Treasurer and such other duties as from time to time may be
assigned to him
by the chief executive officer or the Board. If required by the
Board, 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 shall
determine.
SECTION 4.12 The Controller. The Controller shall,
subject
the direction of a designated Vice President, establish,
coordinate and
administer an adequate plan for the control of operations, which
plan shall
include profit planning, programs for capital investing and for
financing,
sales forecasts, expense budgets and cost standards, together
with the
necessary procedures to effectuate the plan. He shall compare
performance
with operating plans and standards and shall report and interpret
the
results of operations to all levels of management. The function
includes
the formulation of accounting policy, the coordination of systems
and
procedures, the preparation of operating data and of special
reports as
required. He shall establish and administer tax policies and
procedures,
assure protection for assets of the company through internal
control and
auditing, and insurance coverage, and shall in general, perform
all other
duties incident to the office of Controller and such other duties
as from
time to time may be assigned to him by the chief executive
officer or the
Board.
SECTION 4.13 Compensation. The compensation of the
officers
of the Corporation shall be fixed from time to time by the Board.
None of
such officers shall be prevented from receiving such compensation
by reason
of the fact that he is also a director of the Corporation.
Nothing
contained herein shall preclude any officer from serving the
Corporation,
or any subsidiary corporation, in any other capacity and
receiving proper
compensation therefor.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 5.01 Execution of Contracts. The Board of
Directors,
except as in these Bylaws otherwise provided, may authorize any
officer or
officers, agent or agents, to enter into any contract or execute
any
instrument in the name of and on behalf of the Corporation, and
such
authority may be general or confined to specific instances; but
absent any
limitation imposed by the Board of Directors or by these Bylaws,
the
officers of this Corporation shall have all the usual powers and
may
exercise the authority incident to their respective offices and
relating to
the conduct of the business and affairs of the Corporation in the
ordinary
course.
SECTION 5.02 Checks, Drafts, Etc. All checks, drafts
or other
orders for payment of money, notes or other evidences of
indebtedness,
issued in the name of or payable to the Corporation, shall be
signed or
endorsed by such person or persons and in such manner as, from
time to
time, shall be determined by resolution of the Board. Each such
officer,
assistant, agent or attorney shall give such bond, if any, as the
Board may
require.
SECTION 5.03 Deposits. All funds of the Corporation
not
otherwise employed shall be deposited from time to time to the
credit of
the Corporation in such banks, trust companies or other
depositories as the
Board may select, or as may be selected by any officer or
officers,
assistant or assistants, agent or agents, or attorney or
attorneys of the
Corporation to whom such power shall have been delegated by the
Board. For
the purpose of deposit and for the purpose of collection for the
account of
the Corporation, the Chairman of the Board, the President, any
Vice
President, the Treasurer or an Assistant Treasurer (or any other
officer or
officers, assistant or assistants, agent or agents, or attorney
or
attorneys of the Corporation who shall from time to time be
determined by
the Board) may endorse, assign and deliver checks, drafts and
other orders
for the payment of money which are payable to the order of the
Corporation.
SECTION 5.04 General and Special Bank Accounts. The
Board may
from time to time authorize the opening and keeping of general
and special
bank accounts with such banks, trust companies, or other
depositories as
the Board may select or as may be selected by any officer or
officers,
assistant or assistants, agent or agents, or attorney or
attorneys of the
Corporation to whom such power shall have been delegated by the
Board. The
Board may make such special rules and regulations with respect to
such bank
accounts, not inconsistent with the provisions of these Bylaws,
as it may
deem expedient.
SECTION 5.05 Proxies. Unless otherwise provided by
resolution
of the Board, the Chairman of the Board may from time to time
appoint any
officer or officers, assistant or assistants, agent or agents,
attorney or
attorneys of the Corporation to exercise, in the name and on
behalf of the
Corporation, the powers and rights which the Corporation may be
entitled to
exercise as the holder of the stock or other securities in any
other
corporation, including the right to vote or consent in respect of
such
stock or other securities at meetings of the holders of such
stock or other
securities or to consent in writing, in the name of the
Corporation, to any
action by such other corporation. Unless otherwise provided by
resolution
of the Board, the Chairman of the Board may instruct the person
or persons
so appointed as to the manner of exercising such right to vote or
giving
such consent, and may execute or cause to be executed in the name
and on
behalf of the Corporation and under its corporate seal, or
otherwise, all
such written proxies or other instruments as he may deem
necessary or
proper.
ARTICLE VI
SHARES AND THEIR TRANSFER
SECTION 6.01 Certificates for Stock. Every owner of
stock of
the Corporation shall be entitled to have a certificate or
certificates, to
be in such form as the Board shall prescribe, certifying the
number and
class of shares of stock of the Corporation owned by him. The
certificates
representing shares of such stock shall be numbered in the order
in which
they shall be issued and shall be signed in the name of the
Corporation by
the Chairman of the Board or the Vice Chairman of the Board of
the
President or a Vice President, and by the Secretary or an
Assistant
Secretary or by the Treasurer or an Assistant Treasurer;
provided, however,
that if any such certificate is countersigned by a transfer agent
other
than the Corporation or its employee, or by a registrar other
than the
Corporation or its employee, if the Board shall by resolution so
authorize,
the signatures of such Chairman f the Board or Vice Chairman of
the Board
or President or Vice President and of such Secretary or Assistant
Secretary
or Treasurer or Assistant Treasurer may be facsimiles. In case
any officer
or assistant of the Corporation who shall have signed, or whose
facsimile
signature shall have been placed upon, any such certificate,
shall
thereafter have ceased to hold such office, such certificate may
nevertheless be issued by the Corporation with the same effect as
though
the person who signed such certificate, or whose facsimile
signature shall
have been paced thereupon, were such officer or assistant at the
date of
issue. A record shall be kept of the respective names of the
persons,
firms or corporations owning stock represented by such
certificates,
respectively, and the respective dates thereof, and in case of
cancellation, the respective dates of cancellation. Every
certificate
surrendered to the Corporation for exchange or transfer shall be
cancelled,
and no new certificate or certificates shall be issued in
exchange for any
existing certificate until such existing certificate shall have
been so
cancelled, except in cases provided for in Section 6.04.
SECTION 6.02 Transfers of Stock. Transfers of shares
of the
stock of the Corporation shall be made only on the books of the
Corporation
by the registered holder thereof, or by his attorney thereunto
authorized
by power of attorney duly executed and filed with the Secretary,
or with a
transfer clerk or a transfer agent appointed as provided in
Section 6.03,
and upon surrender of the certificate or certificates for such
shares
properly endorsed and the payment of all taxes thereon. The
person in
whose name shares of stock stand on the books of the Corporation
shall be
deemed the owner thereof for all purposes as regards the
Corporation.
Whenever any transfer of shares shall be made for collateral
security, and
not absolutely, such fact shall be so expressed in the entry of
transfer
if, when the certificate or certificates shall be presented to
the
Corporation for transfer, both the transferor ad the transferee
request the
Corporation to do so.
SECTION 6.03 Regulations. The Board may make such
rules and
regulations as it may deem expedient, not inconsistent with these
Bylaws,
concerning the issue, transfer and registration of certificates
for shares
of the stock of the Corporation. It may appoint, or authorize
any officer
or officers to appoint, one or more transfer clerks or one or
more transfer
agents and one or more registrars, and may require all
certificates for
stock to bear the signature or signatures of any of them.
SECTION 6.04 Lost, Stolen, Destroyed, and Mutilated
Certificates. In any case of loss, theft, destruction, or
mutilation of
any certificate of stock, another may be issued in its place upon
proof of
such loss, theft, destruction, or mutilation and upon the giving
of a bond
of indemnity to the Corporation in such form and in such sum as
the Board
may direct; provided, however, that a new certificate may be
issued without
requiring any bond when, in the judgment of the Board, it is
proper so to
do.
SECTION 6.05 Fixing Date for Determination of
Stockholders of
Record. In order that the Corporation may determine the
stockholders
entitled to notice of or to vote at any meeting of stockholders
or any
adjournment thereof, or entitled to receive payment of any
dividend or
other distribution or allotment of any rights, or entitled to
exercise any
rights in respect of any other change, conversion or exchange of
stock or
for the purpose of any other lawful action, the Board may fix, in
advance,
a record date, which shall not be more than 60 nor less than 10
days before
the date of such meeting, nor more than 60 days prior to any
other action.
If in any case involving the determination of stockholders for
any purpose
other than notice of or voting at a meeting of stockholders the
Board shall
not fix such a record date, the record date for determining
stockholders
for such purpose shall be the close of business on the day on
which the
Board shall adopt the resolution relating thereto. A
determination of
stockholders entitled to notice of or to vote at a meeting of
stockholders
shall apply to any adjournment of such meeting; provided,
however, that the
Board may fix a new record for date for the adjourned meeting.
ARTICLE VII
DIVIDENDS, SURPLUS, ETC.
SECTION 7.01 Dividends. Subject to the provisions of
law, of
the Certificate of Incorporation and of these Bylaws, the Board
may declare
and pay dividends upon the shares of its stock either (a) out of
its
surplus as defined in and computed in accordance with the
provisions of law
or (b) in case it shall not have any such surplus, out of its net
profits
for the fiscal year in which the dividend is declared and/or the
preceding
fiscal year, whenever and in such amounts as, in the opinion of
the Board,
the condition of the affairs of the Corporation shall render it
advisable.
SECTION 7.02 Surplus, Reserves. Before payment of any
dividend, the Board may in its discretion use or apply any of
such surplus
or such net profits as a reserve fund to meet contingencies, or
for
equalizing dividends, or for repairing or maintaining any
property of the
Corporation, or for such other purposes as the Board shall think
conducive
to the best interests of the Corporation, and the Board may
modify or
abolish any such reserve in the manner in which it was created.
All such
surplus or such net profits, until actually declared in
dividends, or used
and applied as aforesaid, shall be deemed to have been so set
aside by the
Board for one or more of said purposes.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.01 Indemnification of Directors and
Officers. The
Corporation shall, to the fullest extent permitted by law,
indemnify any
person who was or is a party or is threatened to be made a party
to any
threatened, pending or completed action, suit or proceeding,
whether civil,
criminal, administrative or investigative (including without
limitation an
action by or in the right of the Corporation) by reason of the
fact that he
is or was a director, officer, employee or agent of the
Corporation, or is
or was serving at the request of the Corporation as a director,
officer,
employee or agent of another corporation, partnership, joint
venture, trust
or other enterprise, against expenses (including attorneys'
fees),
judgments, fines 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 Corporation, and, with
respect to any
criminal action or proceeding, had no reasonable cause to believe
his
conduct was unlawful. The termination of any action, suit or
proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere
or its equivalent, shall not, of itself, create a presumption
that the
person did not act in good faith and in a manner which he
reasonably
believed to be in or not opposed to the best interests of the
Corporation,
and, with respect to any criminal action or proceeding, that he
had
reasonable cause to believe that his conduct was unlawful. The
right of
indemnity provided herein shall not be exclusive, and the
Corporation may
provide indemnification to any person, by agreement or otherwise,
on such
terms and conditions as the Board of Directors may approve. Any
agreement
for indemnification of any director, officer, employee or other
person may
provide indemnification rights which are broader or otherwise
different
from those set forth herein.
SECTION 8.02 Other Rights and Remedies. The
indemnification
provided by this Article shall not be deemed exclusive of any
other rights
to which those seeking indemnification may be entitled under any
Bylaws,
agreement, vote of stockholders or disinterested directors or
otherwise,
both as to action in his official capacity and as to action in
another
capacity while holding such office, and shall continue as to a
person who
has ceased to be a director, officer, employee, or agent and
shall inure to
the benefit of the heirs, executors and administrators of such a
person.
SECTION 8.03 Insurance. Upon resolution passed by the
Board,
the Corporation may purchase and maintain insurance on behalf of
any person
who is or was a director, officer, employee, or agent of the
Corporation,
or is or was serving at the request of the Corporation as a
director,
officer, employee, or agent of another corporation, partnership,
joint
venture, trust or other enterprise against any liability asserted
against
him and incurred by him in any such capacity, or arising out of
his status
as such, whether or not the Corporation would have the power to
indemnify
him against such liability under the provisions of this Article.
SECTION 8.04 Certain Definitions. For purposes of
this
Article, (1) references to "the Corporation" shall include, in
addition to
the resulting corporation, any constituent corporation (including
any
constituent of a constituent) absorbed in a consolidation or
merger which,
if its separate existence had continued, would have had power and
authority
to indemnify its directors, officers, and employees or agents, so
that any
person who is or was a director, officer, employee or agent or
such
constituent corporation, or is or was serving at the request of
such
constituent corporation as a director, officer, employee or agent
of
another corporation, partnership, joint venture, trust or other
enterprise,
shall stand in the same position under the provisions of this
Article with
respect to the resulting or surviving corporation as he would
have with
respect to such constituent corporation if its separate existence
had
continued; (2) references to "other enterprises" shall include
employee
benefit plans; (3) references to "fines" shall include any excise
taxes
assessed on a person with respect to an employee benefit plan;
(4)
references to "serving 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; and (5) a person who acted in
good faith
and in a manner he reasonably believed to be in the interest of
the
participants and beneficiaries of an employee benefit plan shall
be deemed
to have acted in a manner "not opposed to the best interests of
the
Corporation" as referred to in this Article.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Seal. The Board shall provide a
corporate seal,
which shall be in the form of a circle and shall bear the name of
the
Corporation and words and figures showing that it was
incorporated in the
State of Delaware in the year 1969.
SECTION 9.02 Waiver of Notices. Whenever notice is
required
to be given by these Bylaws or the Certificate of Incorporation
or by law,
the person entitled to said notice may waive such notice in
writing, either
before or after the time stated herein, and such waiver shall be
deemed
equivalent to notice.
SECTION 9.03 Amendments. These Bylaws, or any of
them, may be
altered, amended or repealed, and new Bylaws may be made, (i) by
the Board,
by vote of a majority of the number of directors then in office
as
directors, acting at any annual or regular meeting of the Board,
without
previous notice, or at any special meeting of the Board, provided
that
notice of such proposed amendment, modification, repeal or
adoption of new
Bylaws is given in the notice of such special meeting, or (ii) by
the
stockholders, at any annual meeting of stockholders, without
previous
notice, or at any special meeting of stockholders, provided that
notice of
such proposed amendment, modification, repeal or adoption is
given in the
notice of special meeting. Any Bylaws made or altered by the
stockholders
may be altered by the Board or may be altered or repealed by the
stockholders.
Exhibit (a)(10)
The Company has entered into an executive severance plan in the
following form with the
following senior executive officers of the Company - Gene W. Ray,
John E. Koehler, Ronald
Gorda, David A. Hahn, Roger Hay, Cornelius L. Hensel, Fredrick L.
Judge and Stephen P.
Meyer.
AGREEMENT
This AGREEMENT, dated ____ ____, 1995, is made by and
between
_______________ (hereinafter referred to as the "Executive") and
THE TITAN
CORPORATION, a Delaware corporation.
RECITALS
A. The Company considers it essential to the best interests
of
its stockholders to foster the recruitment and continuous
employment of key
management personnel.
B. The Board of Directors of the Company (the "Board of
Directors") recognizes that, as is the case with many publicly-
held
corporations, the possibility of a Change in Control may exist
and that such
possibility, and the uncertainty and questions which it may raise
among
management, may result in the departure or distraction of
management personnel
to the detriment of the Company and its stockholders or interfere
with the
ability of the Company to recruit qualified executives.
C. The Board of Directors has determined that it is in
the best
interest of the Company's stockholders that appropriate steps be
taken to
reinforce and encourage the continued dedication of the Executive
to the
Executive's assigned duties without distraction in case of
potentially
disturbing circumstances arising from the possibility of a Change
in Control
of the Company.
D. In order to induce the Executive to continue to
provide his
services to the Company and to induce the Executive to give the
Executive's
continued attention and dedication to the Executive's assigned
duties, the
Company desires to provide the Executive with certain benefits
and
inducements, as set forth herein.
E. The Executive covenants to perform the Executive's
assigned
duties with continued attention, zeal and dedication.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual
covenants herein
contained and other good and valuable consideration, receipt of
which is
hereby acknowledged, the Company and the Executive do hereby
agree as follows:
ARTICLE I
DEFINITIONS
Whenever the following terms are used below in this
Agreement,
they shall have the meaning specified below, and no other, unless
the context
clearly indicates to the contrary. The masculine pronoun shall
include the
feminine and neuter, and the singular the plural, where the
context so
indicates.
Section 1.1 - Auditors.
"Auditors" shall mean Arthur Andersen LLP, or an
independent
certified public accounting firm that is duly selected by the
Board of
Directors and is acceptable to the Executive.
Section 1.2 - Board of Directors.
"Board of Directors" shall have the meaning provided in
the second
recital of this Agreement.
Section 1.3 - Cause.
"Cause" shall mean termination of Executive's
employment with the
Company because of (i) conviction of a felony, (ii) theft or
embezzlement of
property from the Company or (iii) willful misconduct or willful
failure
substantially to perform the duties of his or her position,
provided that the
Executive shall have received written notice from the Board of
the specific
acts of misconduct or failures to perform and such acts or
failure shall have
continued after receipt of such notice.
Section 1.4 - Change in Control.
A "Change in Control" shall be deemed to have occurred
in the
event of (i) the acquisition by any Person, together with its
affiliates, of
beneficial ownership of capital stock of the Company possessing
25% or more of
the combined voting power of the Company's outstanding capital
stock, (ii)
within any two-year period, the majority of the members of the
Board were to
be comprised of individuals other than those who were members at
the beginning
of such period, unless the new members elected during such period
were
approved by two-thirds of the members of the Board still in
office who were
members of the Board at the beginning of such two-year period,
(iii) all or
substantially all of the Company's assets are sold as an entirety
to any
Person or related group of Persons or (iv) the Company is merged
with or into
another corporation or another corporation is merged into the
Company with the
effect that immediately after such transaction the stockholders
of the Company
immediately prior to such transaction hold less than a majority
in interest of
the total voting power entitled to vote in the election of
directors, managers
or trustees of the entity surviving such transaction.
Section 1.5 - Code.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
Section 1.6- Company.
"Company" shall mean The Titan Corporation, a Delaware
corporation, its subsidiaries and affiliates, and any successor
to its
business, whether direct or indirect, by purchase of securities,
merger,
consolidation, purchase of all or substantially all of the
Company's assets or
otherwise.
Section 1.7 - Date of Termination.
"Date of Termination" shall mean (i) in the case of
termination of
the Executive's employment by the Company for Disability, thirty
days after
Notice of Termination is given, provided that the Executive shall
not have
returned to the performance of the Executive's assigned duties on
a full-time
basis during such thirty-day period; or (ii) in the case of
termination of the
Executive's employment by the Company for Cause or termination by
the
Executive for Good Reason or termination for any other reason,
the date
specified in the Notice of Termination, which date shall not be
less than
thirty days after the date such Notice of Termination is given.
Section 1.8 - Disability.
"Disability" shall mean absence from performance of
assigned
duties for the Company on a full-time basis for six consecutive
calendar
months as a result of incapacity due to medically documented
physical or
mental illness.
Section 1.9 - Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as
amended.
Section 1.10 - Executive.
"Executive" shall have the meaning provided in the
first paragraph
of this Agreement.
Section 1.11 - Good Reason.
"Good Reason" shall mean the occurrence of any of the
following
events without the Executive's express written consent:
(a) the assignment to the Executive of duties
inconsistent
with the Executive's position and status as an executive of the
Company
immediately prior to a Change in Control or a substantial
adverse
alteration in the nature or status of the Executive's title,
position,
duties, functions, working conditions or responsibilities as
_________________________ of the Company from those in effect
immediately prior to a Change in Control;
(b) relocation of Executive's principal office
more than
thirty miles from that in existence immediately prior to a Change
in
Control;
(c) a reduction by the Company in the Executive's
base
salary or targeted bonuses under the Company's Incentive Plan or
other
executive compensation or bonus plan or arrangement as in effect
immediately prior to the occurrence of a Change in Control or as
the
same may be increased from time to time during the term of this
Agreement;
(d) the failure by the Company to continue to
provide the
Executive with benefits substantially similar to those enjoyed by
the
Executive under any of the Company's pension, life insurance,
medical,
health and accident, or disability plans in which the Executive
was
participating at the time of the Change in Control, the taking of
any
action by the Company which would directly or indirectly
materially
reduce any of such benefits or deprive the Executive of any
material
fringe benefit enjoyed by the Executive at the time of the Change
in
Control, or the failure by the Company to provide the Executive
with the
number of paid days of personal time to which the Executive is
entitled
on the basis of years of service with the Company in accordance
with the
Company's normal personal time policy in effect at the time of
the
Change in Control;
(e) the continuation or repetition, after written
notice of
objection from the Executive, of harassing or denigrating
treatment
inconsistent with the Executive's position the Company; or
(f) any purported termination of the Executive's
employment
by the Company which is not effected according to the
requirements of a
Notice of Termination as defined in Section 1.12 herein.
Section 1.12 - Notice of Termination.
"Notice of Termination" shall mean a notice, in
writing, to the
Executive from the Company or to the Company from the Executive,
which
indicates the specific termination provision enumerated in this
Agreement
relied upon, and which sets forth in reasonable detail the facts
and
circumstances alleged to provide a basis for termination of the
Executive's
employment relationship by the Company or by the Executive. Such
notice must
be communicated to the Executive in accordance with Section 4.3
herein.
Section 1.13 - Person.
"Person" shall have the same meaning as it does in Section
3(a)(9)
of the Exchange Act (including the definition of "company" under
Section
3(a)(19) of the Exchange Act), including a group and any other
arrangement
included as a "Person" under Section 13(d)(3) of the Exchange
Act.
Section 1.14 - Potential Change in Control.
"Potential Change in Control" shall be deemed to have
occurred if
the
Company enters into an agreement, the consummation of which would
result in
the occurrence of a Change in Control.
Section 1.15 - Tax Counsel.
"Tax Counsel" shall mean legal counsel, selected by the
Auditors,
and which is acceptable to the Executive, for the purpose of
rendering legal
advice and services on tax issues arising under this Agreement.
Section 1.16 - Termination Period.
"Termination Period" shall mean the period beginning
fifteen days
prior to the occurrence of a Change in Control and ending twenty-
four (24)
months following a Chane in Control.
ARTICLE II
TERM
This Agreement shall be effective commencing on ____
__, 1995 and
shall continue in effect through____ ___, 1998 and thereafter
shall be
extended annually for additional periods of twelve (12) months
unless the
Company provides the Executive with written notice of its
intention not to
renew the Agreement no later than ninety (90) days prior to the
expiration of
the then existing term; provided, however, if a Change in Control
shall have
occurred during the term of this Agreement, then this Agreement
shall continue
in effect through the Termination Period.
ARTICLE III
BENEFITS AND COMPENSATION
Section 3.1 - When Benefits Payable.
No benefits shall be payable under this Agreement and
the
provisions of this Agreement shall be of no force or effect
unless there shall
have been a Change in Control or a Potential Change in Control
(as provided in
Section 3.4), and the Executive's employment with the Company
shall have been
terminated during the Termination Period. If a Change in Control
or a
Potential Change in Control (as provided in Section 3.4) has
occurred and the
Executive's employment with the Company is terminated during the
Termination
Period unless such termination is (i) because of the death of the
Executive,
or (ii) by the Executive other than for Good Reason (in which
cases, no
benefits are payable under this Agreement), the Executive shall
be entitled to
the benefits enumerated in this Article 3, under the conditions
imposed
herein.
Section 3.2 - Benefits Upon Disability.
During any period within the term of this Agreement
that the
Executive is or becomes subject to a Disability, the Executive
shall continue
to receive the Executive's full base compensation and other
benefits at the
rate then in effect until the Executive's employment is
terminated pursuant to
Section 1.12 herein. After termination for Disability, benefits
accruing to
the Executive shall be determined in accordance with the
Company's disability
policy as in effect immediately prior to any Change in Control.
Section 3.3 - Benefits Upon Termination for Cause.
In the event that the Executive's employment with the
Company is
terminated for Cause, the Executive shall receive the Executive's
full base
compensation as earned through the Date of Termination at the
rate in effect
at the time Notice of Termination is given. Following payment of
said amount,
the Company shall have no further obligations to the Executive
under this
Agreement.
Section 3. 4 - Benefits Upon Termination Other Than For
Cause or
Disability; or Termination For
Good Reason.
In the event that the employment of the Executive
shall be
terminated during the Termination Period (i) by the Company for
any reason
other than for Cause or Disability or (ii) by the Executive for
Good Reason,
then the Executive shall be entitled to receive: (I) the
Executive's full
base compensation as earned through the Date of Termination at
the rate in
effect at the time Notice of Termination is given plus the pro-
rata amount of
the maximum bonus payable to the Executive under the Company's
Incentive Plan
or other Executive Bonus Plan then in effect for the fiscal year
of the
Notice of Termination; (II) for a 24 month period after such
termination
group health insurance coverage for the Executive and his or her
dependents
substantially the same as that in effect immediately prior to the
Change in
Control but increased to the extent that such benefits were
increased
following the Change in Control; and (III) a lump sum payment
(the "Lump Sum
Payment") from the Company to the Executive of a dollar amount
equal to 200%
of the sum of (x) base salary of the Executive for the twelve-
month period
immediately preceding the Change in Control (if the Executive has
not been
employed by the Company for twelve months, the applicable amount
under this
clause (x) shall be equal to 100% of the annualized base
compensation of the
Executive during the period for which the Executive has been
employed with
the Company) and (y) 100% of the maximum bonus payable to the
Executive under
the Company's Incentive Plan or other executive bonus plan then
in effect for
the fiscal year of the Notice of Termination. For purposes of
this Section
3.4, if a termination of the Executive's employment occurs prior
to
commencement of the Termination Period, but following a Potential
Change in
Control in which a Person has entered into an agreement with the
Company the
consummation of which will constitute a Change in Control, such
termination
shall be deemed to be within the Termination Period and to have
been (I) by
the Company without Cause, if the Executive's employment is
terminated at the
direction of such Person, or (ii) by the Executive with Good
Reason, if the
Executive terminates his employment and the act (or failure to
act) which
constitutes Good Reason occurs following such Potential Change in
Control and
at the direction of such Person.
Section 3.5 - Tax Deductibility of Benefit Payments.
In the event that any payment or benefit received or to
be
received by the Executive in connection with the Change in
Control or the
termination of the Executive's employment would not be deductible
(in whole or
in part) by the Company as a result of the operation of Section
280G of the
Code, the amount of the Lump Sum Payment and other benefits set
forth in
Section 3.4 shall be reduced (but not below zero) until no
portion of such
payments or benefits is not deductible as a result of Section
280G of the
Code. For purposes of this section, the value of any non-cash
benefit or any
deferred cash payment to which the Executive is entitled
hereunder shall be
determined by the Auditors in accordance with Sections 280G(d)(3)
and
280G(d)(4) of the Code. If such a reduction is deemed necessary,
the nature
and extent of such reductions shall be determined by the Auditors
with the
advice and assistance of the Tax Counsel, and such determination
shall be
binding and conclusive, provided that the Auditors and Tax
Counsel consult
with the Executive prior to the final determination, and use
their best
efforts to ensure that the final determination comports with the
Executive's
wishes to the greatest extent possible. In connection with such
determinations, the Executive shall be entitled to waive any
benefit the
receipt of which otherwise would require a reduction in the
amount of other
payments or benefits under this Section 3.5.
Section 3.6 -Mechanics.
The payments and distributions provided for in Section
3.4 shall
be made no later than the fifth day following the Date of
Termination;
provided, however, that if the amounts of such payments, and the
limitation on
such payments set forth in Section 3.5, cannot be finally
determined on or
before such day, the Company shall pay to the Executive on such
day an
estimate, as determined in good faith by the Auditors, of the
minimum amount
of such payments and shall pay the remainder of such payments
(together with
interest at the rate provided in Section 1274(d) of the Code,
compounded
quarterly) as soon as the amount thereof can be determined but in
no event
later than the thirtieth day after the Date of Termination. In
the event that
the amount of the estimated payments exceeds the amount
subsequently
determined to have been due, such excess shall constitute a loan
by the
Company to the Executive, repayable of the fifth day after demand
by the
Company (together with interest at the rate provided in Section
1274(d) of the
Code, compounded quarterly).
Section 3.7 - Legal Fees and Expenses.
If, following termination of the Executive's
employment, the
Executive shall incur any legal fees or expenses in contesting or
disputing
any such termination or in seeking to obtain or enforce any right
or benefit
provided by this Agreement or in connection with any tax audit or
proceeding
relating thereto, the Company shall pay or reimburse the
Executive for all
such fees and expenses.
Section 3.8 - No Mitigation.
The Executive shall not be required to mitigate the
amount of any
payment provided for in this Agreement by seeking other
employment or
otherwise, nor shall the amount of any payment or benefit
provided for in this
Agreement be reduced or offset by any compensation earned by the
Executive as
a result of employment by another employer or by retirement
benefits after the
Date of Termination or otherwise.
ARTICLE IV
MISCELLANEOUS
Section 4.1 - Successors; Binding Agreement.
The Company will require any successor (whether direct
or
indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business and/or assets of the Company to
expressly
assume and agree to perform this Agreement in the same manner and
to the same
extent that the Company would be required to perform it if no
such succession
had taken place. The failure of the Company to obtain such
assumption
agreement prior to the effectiveness of any such succession shall
be a breach
of this Agreement and shall entitle the Executive to compensation
from the
Company in the same amount and on the same terms as the Executive
would be
entitled to hereunder if the Executive had terminated the
Executive's
employment for Good Reason, except that for purposes of
implementing the
foregoing, the date on which any such succession becomes
effective shall be
deemed the Date of Termination.
Section 4.2 - Successors and Assigns.
This Agreement shall inure to the benefit of, and be
enforceable
by, the personal or legal representatives, executors,
administrators,
successors, heirs, distributees, devisees and legatees of the
Executive. If
the Executive should die within two years after a Change in
Control and during
the term of this Agreement and while any amount would still be
payable to the
Executive hereunder if the Executive had continued to live, all
such amounts,
unless otherwise provided herein, shall be paid in accordance
with the terms
of this Agreement to the Executive's devisee, legatee or other
designee or if
there is no such designee, to the Executive's estate.
Section 4.3 - Notice.
Notices and all communications provided for in this
Agreement
shall be in writing and shall be deemed to have been received
when delivered
or mailed by United States registered mail, return receipt
requested, postage
prepaid, addressed to the respective addresses set forth at the
end of this
Agreement, provided that all notices to the Company shall be
directed to the
attention of the Board of Directors with a copy to the Secretary
of the
Company, or to such other address as either party may have
furnished to the
other in writing in accordance herewith, except that notice of
change of
address shall be effective only upon receipt.
Section 4.4 - No Waiver.
No provision of this Agreement may be modified, waived
or
discharged unless in writing and signed by the Executive and such
officer of
the Company as may be specifically designated or authorized by
the Board of
Directors or by a Committee of the Board of Directors. No waiver
by either
party hereto at any time of any breach by the other party hereto
of, or
compliance with, any condition or provision of this Agreement to
be performed
by such other party shall be deemed a waiver of similar or
dissimilar
provisions or conditions at the same or at any prior or
subsequent time.
Section 4.5 - Entire Agreement.
No agreements or representations, oral or otherwise,
express or
implied, with respect to the subject matter hereof have been made
by either
party which are not expressly set forth in this Agreement and
this Agreement
constitutes the entire agreement of the parties.
Section 4.6 - Controlling Law.
The validity, interpretation, construction and
performance of this
Agreement shall be governed by the laws of the State of
California.
Section 4.7 - Invalid Provision.
The invalidity or unenforceability of any provision of
this
Agreement shall not affect the validity or enforceability of any
other
provision of this Agreement, which shall remain in full force and
effect.
Section 4.8 - Counterparts.
This Agreement may be executed in several counterparts,
each of
which shall be deemed to be an original, and all such
counterparts together
shall constitute but one and the same instrument.
Section 4.9 - The Executive's Relationship with the Company.
Nothing contained in this Agreement (i) obligates the
Company or
any subsidiary of the Company to employ the Executive in any
capacity
whatsoever, or (ii) prohibits or restricts the Company (or any
such
subsidiary) from terminating the employment of the Executive at
any time or
for any reason whatsoever, with or without cause.
IN WITNESS WHEREOF, the parties hereto have executed
this
Agreement as of the date first set forth above.
THE TITAN CORPORATION, a Delaware
corporation
By:
President
By:
Secretary
Address:
3033 Science Park Road
San Diego, California 92121
[EXECUTIVE]
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from The Titan
Corporation Consolidated Balance Sheet as of September 30, 1995, and the related
Consolidated Statement of Income and Consolidated Statement of Cash Flows for
the nine months ended September 30, 1995, and the accompanying notes, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 2,677
<SECURITIES> 0
<RECEIVABLES> 39,344
<ALLOWANCES> 0
<INVENTORY> 7,933
<CURRENT-ASSETS> 57,020
<PP&E> 34,365
<DEPRECIATION> 17,237
<TOTAL-ASSETS> 86,994
<CURRENT-LIABILITIES> 35,262
<BONDS> 316
<COMMON> 150
0
695
<OTHER-SE> 42,661
<TOTAL-LIABILITY-AND-EQUITY> 86,994
<SALES> 99,328
<TOTAL-REVENUES> 99,455
<CGS> 74,423
<TOTAL-COSTS> 74,423
<OTHER-EXPENSES> 21,545
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 840
<INCOME-PRETAX> 2,694
<INCOME-TAX> 970
<INCOME-CONTINUING> 1,724
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,724
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
<FN>
<F1>Due to use of condensed financial statements for interim reporting, this
information is not compiled on a quarterly basis.
</FN>
</TABLE>
