Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6807
FAMILY DOLLAR STORES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-0942963
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 1017, 10401 Old Monroe Road
Charlotte, North Carolina 28201-1017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 704-847-6961
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at June 30, 1997
Common Stock, $.10 par value 57,171,832 shares
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FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
INDEX
Page No.
Part I - Financial Information
Item 1 - Consolidated Condensed Financial Statements:
Consolidated Condensed Balance Sheets -
May 31, 1997 and August 31, 1996 2
Consolidated Condensed Statements of Income -
Three Months Ended May 31, 1997 and 1996 3
Consolidated Condensed Statements of Income -
Nine Months Ended May 31, 1997 and 1996 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended May 31, 1997 and 1996 5
Notes to Consolidated Condensed Financial
Statements 6-7
Computation of Net Income per Common Share -
Note 6 7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of
Operations 8-10
Part II - Other Information and Signatures
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 11
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<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION>
May 31, August 31,
1997 1996
Assets
<S> <C> <C>
Current assets:
Cash and cash equivalents (Note 2) $ 68,822,483 $ 18,844,839
Merchandise inventories 460,801,936 462,840,051
Deferred income taxes 22,202,129 20,372,129
Prepayments and other current assets 7,996,359 5,842,953
Total current assets 559,822,907 507,899,972
Property and equipment, net 211,699,376 184,607,229
Other assets 3,323,034 4,301,090
$774,845,317 $696,808,291
<PAGE>
<CAPTION>
Liabilities and Shareholders' Equity
<S> <C> <C>
Current liabilities:
Notes payable (Note 3) $ - $ 4,400,000
Accounts payable and accrued
liabilities 254,845,813 222,983,656
Income taxes payable 10,635,961 6,822,191
Total current liabilities 265,481,774 234,205,847
Deferred income taxes 18,020,325 17,645,325
Shareholders' equity (Notes 4, 5 and 6):
Preferred stock, $1 par; authorized
and unissued 500,000 shares
Common stock, $.10 par;
authorized 120,000,000 shares;
issued 60,620,074 shares at
May 31, 1997 (90,930,111 shares as
adjusted for 3 for 2 stock split - Note 4)
and 60,290,684 shares at August 31, 1996 6,062,007 6,029,068
Capital in excess of par 22,702,279 16,818,916
Retained earnings 473,928,200 433,458,403
502,692,486 456,306,387
Less common stock held in treasury,
at cost (3,452,822 shares at
May 31, 1997) (5,179,233 shares as
adjusted for 3 for 2 stock split - Note 4)
and 3,452,822 shares at August 31, 1996
(Notes 4 and 6) 11,349,268 11,349,268
Total shareholders' equity 491,343,218 444,957,119
$774,845,317 $696,808,291
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended
May 31, May 31,
1997 1996
<S> <C> <C>
Net sales $498,404,002 $427,941,427
Costs and expenses:
Cost of sales 330,671,792 283,931,798
Selling, general and
administrative expenses 130,317,446 113,522,290
460,989,238 397,454,088
Income before provision
for taxes on income 37,414,764 30,487,339
Provision for taxes on income 14,327,000 11,707,000
Net income $ 23,087,764 $ 18,780,339
Net income per common share (Note 6) $0.40 $0.33
Net income per common share as adjusted
for 3 for 2 stock split (Notes 4 and 6) $0.27 $0.22
Dividends per common share
As declared $0.12 $0.11
As adjusted for 3 for 2
stock split (Note 4) $0.08 $0.07
Weighted average number of
common shares outstanding (Note 6) 57,149,247 56,833,405
Weighted average number of
common shares outstanding as adjusted
for 3 for 2 stock split (Notes 4 and 6) 85,723,871 85,250,108
See notes to consolidated condensed financial statements.
</TABLE>
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<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Nine Months Ended
May 31, May 31,
1997 1996
<S> <C> <C>
Net sales $1,483,545,713 $1,272,380,057
Costs and expenses
Cost of sales 997,067,508 851,194,529
Selling, general and
administrative expenses 388,208,905 340,953,676
1,385,276,413 1,192,148,205
Income before provision for
taxes on income 98,269,300 80,231,852
Provision for taxes on income 37,820,000 31,007,000
Net income $ 60,449,300 $ 49,224,852
Net income per common share (Note 6) $1.06 $0.87
Net income per common share as adjusted
for 3 for 2 stock split (Notes 4 and 6) $0.71 $0.58
Dividends per common share
As declared $0.35 $0.32
As adjusted for 3 for 2
stock split (Note 4) $0.23 $0.21
Weighted average number of
common shares outstanding (Note 6) 57,017,017 56,805,405
Weighted average number of
common shares outstanding as adjusted
for 3 for 2 stock split
(Notes 4 and 6) 85,525,526 85,208,108
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
May 31, May 31,
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income $60,449,300 $49,224,852
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 21,824,339 18,230,932
Deferred income taxes (1,455,000) (1,525,001)
(Gain) Loss on disposition of property
and equipment (12,504) 290,477
Changes in operating assets and liabilities:
Inventories 2,038,115 10,517,721
Prepayments and other current assets (2,153,406) (411,626)
Other assets 978,056 1,275,659
Accounts payable and accrued
liabilities 31,254,340 (14,992,144)
Income taxes payable 3,813,770 2,812,480
116,737,010 65,423,350
Cash flows from investing activities:
Capital expenditures (50,013,047) (37,679,477)
Proceeds from dispositions of
property and equipment 1,109,065 1,208,297
(48,903,982) (36,471,180)
Cash flows from financing activities:
Net notes payable repayments (4,400,000) -
Exercise of employee stock options 5,916,302 1,002,608
Payment of dividends (19,371,686) (17,605,348)
(17,855,384) (16,602,740)
Net change in cash and cash equivalents 49,977,644 12,349,430
Cash and cash equivalents at beginning
of period 18,844,839 8,852,631
Cash and cash equivalents
at end of period $68,822,483 $21,202,061
Supplemental disclosure of
cash flow information:
Cash paid during the period for:
Interest $ 301,374 $ 505,389
Income taxes 30,869,321 29,511,105
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
FAMILY DOLLAR STORES, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited
consolidated condensed financial statements contain all
adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of
May 31, 1997, and the results of operations for the three and
nine months ended May 31, 1997, and 1996, and the cash flows
for the nine months ended May 31, 1997, and 1996.
The results of operations for the nine month period ended
May 31, 1997, are not necessarily indicative of the results to
be expected for the full year.
2. The Company considers all highly liquid investments with a
maturity of three months or less to be "cash equivalents."
3. The Company has two unsecured bank lines of credit for
short-term revolving borrowings of up to $50,000,000 each, or
$100,000,000 of total borrowing capacity. The lines of credit
expire on March 31, 1999 and March 29, 1998, respectively.
Borrowings under these lines of credit are at a variable
interest rate based on short-term market interest rates. The
Company may convert up to $50,000,000 of the line of credit
expiring March 31, 1999 into either a five or seven year term
loan at the bank's variable prime rate.
<PAGE>
4. The Board of Directors declared a 3 for 2 stock split on
June 25, 1997, effective July 31, 1997, in the form of a 50%
stock distribution to holders of record of common stock on
July 15, 1997. The proforma effect of the stock split on net
income and distribution per common share, and on weighted
average number of common shares outstanding, is presented in
the Consolidated Condensed Statements of Income (unaudited) for
the three and nine-month periods ended May 31, 1997, and 1996.
The proforma effect of the stock split on the summary of
transactions of the Company's non-qualified stock option plan
for the nine month period ended May 31, 1997, and 1996 is
presented in Note 5 to the consolidated condensed financial
statements. The effect of the stock split on shareholder's
equity will be the transfer of the par value for the additional
shares issued from the capital in excess of par account to the
common stock account.
5. The Company's non-qualified stock option plan provides for the
granting of options to key employees to purchase shares of
common stock at prices not less than the fair market value on
the date of grant. Options expire five years from the date of
grant and are exercisable to the extent of 40% after the second
anniversary of the grant and an additional 30% at each of the
following two anniversary dates on a cumulative basis.
<PAGE>
<TABLE>
The following is a summary of transactions under the plan during the
nine months ended May 31, 1997, and 1996.
<CAPTION>
Nine Months Ended
May 31, 1997 May 31, 1996
Number of Number of
shares Option price shares Option price
under option per share under option per share
<S> <C> <C> <C> <C>
Outstanding-beginning 1,002,300 $10.25-$21.25 1,114,960 $ 5.88-$21.25
Granted 552,400 $16.75-$26.25 80,050 $11.50-$18.75
Exercised (329,390) $10.50-$21.25 (94,020) $ 5.88-$17.25
Cancelled (125,105) (91,890)
Outstanding-ending 1,100,205 $10.25-$26.25 1,009,100 $10.25-$21.25
Exercisable options 306,174 $10.25-$21.25 434,725 $12.38-$21.25
</TABLE>
<TABLE>
The following is a summary of transactions under the plan during the
nine months ended May 31, 1997, and 1996 as adjusted for the
3 for 2 stock split - see Note 4.
<CAPTION>
Nine Months Ended
May 31, 1997 May 31, 1996
Number of Number of
shares Option price shares Option price
under option per share under option per share
<S> <C> <C> <C> <C>
Outstanding-beginning 1,503,450 $ 6.83-$14.17 1,672,440 $ 3.92-$14.17
Granted 828,600 $11.17-$17.50 120,075 $ 7.67-$12.50
Exercised (494,085) $ 7.00-$14.17 (141,030) $ 3.92 $11.50
Cancelled (187,657) (137,835)
Outstanding-ending 1,650,308 $ 6.83-$17.50 1,513,650 $ 6.83-$14.17
Exercisable options 459,261 $ 6.83-$14.17 652,088 $ 8.25-$14.17
</TABLE>
<PAGE>
6. Net income per common share is based on the weighted average
number of shares outstanding during each reporting period.
Exercise of outstanding stock options would have no material
dilutive effect on net income per common share.
7. The Company will adopt Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" for the year ending
August 31, 1998. For the quarter ended May 31, 1997, the
Company is required to continue following the computation
requirements of Accounting Principles Board Opinion No. 15,
"Earnings Per Share." The adoption of the new standard would
not have had a material effect on the Company's net income per
common share for the quarter ended May 31, 1997.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION
The Company's working capital increased by $20.6 million, from
$273.7 million at August 31, 1996 to $294.3 million at May 31,
1997. The principal source of new working capital continued to be
the earnings of the Company. The Company had $68.8 million of cash
and cash equivalents and no short-term borrowings at May 31, 1997,
compared to $18.8 million of cash and cash equivalents and $4.4
million of short-term borrowings at August 31, 1996. During the
nine months ended May 31, 1997, the increase in earnings, coupled
with improved inventory turnover compared with the nine months
ended May 31, 1996, produced $116.7 million cash flow from
operating activities compared with $65.4 cash flow from operating
activities in the first nine months of fiscal 1996.
Capital expenditures for the nine months ended May 31, 1997,
were approximately $50 million, and are currently planned to be
approximately $80 million for fiscal 1997. The majority of capital
expenditures for fiscal 1997 is related to the Company's retail
store expansion program, existing store renovation and to the
construction of a new full-service distribution center currently
planned to be completed in January 1998. The Company occupies most
of its stores under operating leases. The Company currently plans
to open approximately 235 stores and close approximately 50 stores
for a net addition of approximately 185 stores in fiscal 1997,
compared with the opening of 223 stores and closing of 58 stores
for a net addition of 165 stores in fiscal 1996. The Company also
currently plans to expand or relocate approximately 100 stores in
fiscal 1997, compared with the expansion or relocation of 34 stores
in fiscal 1996. All stores opening in fiscal 1996 and 1997 have a
<PAGE>
new interior layout featuring wider aisles, lower fixtures and
updated signage. In the first nine months of fiscal 1997, the
Company opened 166 stores, closed 41 stores and expanded or
relocated 74 stores. In addition, approximately 380 of the
Company's existing stores were renovated during the first nine
months of fiscal 1997 with some or all of the features of the new
layout. During fiscal 1998, the Company is planning capital
expenditures of approximately $80 million to $90 million. The
majority of these expenditures relate to the planned opening of 300
new stores, expansion or relocation of approximately 150 existing
stores, renovation of an additional 200 to 400 existing stores and
completion of a third distribution center. Forty to fifty stores
will be closed. Management expects to meet these expenditures with
internally generated funds. Store opening, closing, expansion,
relocation,and renovation plans, as well as overall capital
expenditure plans, are continuously reviewed and are subject to
change.
RESULTS OF OPERATIONS
NET SALES
Net sales increased 16.5% in the quarter ended May 31, 1997,
as compared with the quarter ended May 31, 1996, and increased
16.6% in the nine month period ended May 31, 1997, as compared with
the nine month period ended May 31, 1996. The increases were
attributable to increased sales in existing stores and sales from
new stores opened as part of the Company's store expansion program.
Sales in existing stores increased 9.9% in both the quarter and the
nine month period ended May 31, 1997, as compared with the same
periods in the prior fiscal year. Sales of hardlines merchandise
increased approximately 14% and sales of softlines merchandise
increased approximately 3% in both the quarter and the nine month
period ended May 31, 1997, as compared to the same periods in the
prior fiscal year. Hardlines as a percentage of total sales
increased to approximately 65% in the third quarter of fiscal 1997
compared to approximately 63% in the third quarter of fiscal 1996,
and increased to approximately 66% in the first nine months of
fiscal 1997 compared to approximately 64% in the first nine months
of fiscal 1996. Customers continue to respond favorably to the
Company's everyday low price strategy. Hardlines merchandise
includes primarily household chemical and paper products, health
and beauty aids, candy and snack food, electronics, housewares and
giftware, toys, hardware and automotive supplies. Softlines
merchandise includes men's, women's, boy's girl's and infant's
clothing, shoes, and domestic items such as blankets, sheets and
towels.
The average number of stores open during the first nine months
of fiscal 1997 was 7.0% more than during the first nine months of
fiscal 1996. The Company had 2,706 stores in operation at May 31,
1997, as compared with 2,523 stores in operation at May 31, 1996,
representing an increase of approximately 7.3%.
<PAGE>
COST OF SALES
Cost of sales increased 16.5% in the quarter ended May 31,
1997, as compared with the quarter ended May 31, 1996, and
increased 17.1% in the nine months ended May 31, 1997, as compared
to the nine months ended May 31, 1996. These increases primarily
reflected the additional sales volume between years. Cost of
sales, as a percentage of net sales, was 66.3% in both the quarter
ended May 31, 1997, and the quarter ended May 31, 1996, and was
67.2% in the nine months ended May 31, 1997, compared with 66.9% in
the nine months ended May 31, 1996. The shift in the sales mix
more toward hardlines merchandise referred to in "Net sales" above
and the everyday low pricing strategy contributed to the increase
in the cost of sales percentage for the nine months ended May 31,
1997. For the quarter ended May 31, 1997, this effect was
mitigated by a reduction in the level of promotional markdowns.
For fiscal 1998, the Company's plan is for the cost of sales
percentages to be at approximately the same level as for fiscal
1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased 14.8%
in the quarter ended May 31, 1997, as compared with the quarter
ended May 31, 1996, and increased 13.9% in the nine months ended
May 31, 1997, as compared with the nine months ended May 31, 1996.
The increases in these expenses were due primarily to additional
costs arising from the continued growth in the number of stores in
operation and increases in distribution costs associated with sales
volume increases. Selling, general and administrative expenses, as
a percentage of net sales, were 26.2% in the quarter ended May 31,
1997, as compared with 26.5% in the quarter ended May 31, 1996, and
were 26.2% in the nine months ended May 31, 1997, as compared with
26.8% in the nine months ended May 31, 1996. The decreases in
percentages for the quarter and nine months ended May 31,1997 were
due primarily to the leverage provided by the increases in existing
store sales. The Company estimates that during fiscal 1997 store
labor costs will increase approximately $3.6 million due to the
federal minimum wage increase that was effective on October 1,
1996. The federal minimum wage will increase again on September 1,
1997, and the Company estimates that store labor costs will
increase approximately $4 million in fiscal 1998 due to this
minimum wage increase. Selling, general and administrative
expenses also will increase in fiscal 1998 due to the costs of the
new full-service distribution center. Notwithstanding these
increases, the Company is not currently planning for selling,
general, and administrative expenses in fiscal 1998 to increase as
a percentage of net sales.
<PAGE>
PROVISION FOR TAXES ON INCOME
The provision for taxes on income for the quarter ended
May 31, 1997, increased 22.4%, as compared with the quarter ended
May 31, 1996, and increased 22.0% in the nine months ended May 31,
1997, as compared with the nine months ended May 31, 1996. The
variance between the periods is primarily due to the increase in
income before the provision for income taxes. The effective tax
rate was 38.3% for the quarter ended May 31, 1997, as compared to
38.4% for the quarter ended May 31, 1996, and was 38.5% for the
nine months ended May 31, 1997, as compared to 38.6% for the nine
months ended May 31, 1996. The decreases in the percentages for
the quarter and nine months ended May 31, 1997 were due primarily
to the implementation of the federal Work Opportunity Tax Credit
program.
FORWARD-LOOKING STATEMENTS
Certain statements contained herein and elsewhere in this Form
10-Q which are not historical facts are forward-looking statements
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking
statements address activities or events which the Company expects
will or may occur in the future, such as future capital
expenditures, store openings, closings, renovations, expansions and
relocations, additional distribution facilities, and other aspects
of the Company's future business and operations. The Company
cautions that a number of important factors could cause actual
results to differ materially from those expressed in any forward-
looking statements, whether written or oral, made by or on behalf
of the Company. Such factors include, but are not limited to,
competitive factors and pricing pressures, general economic
conditions, changes in consumer demand, inflation, merchandise
supply constraints, changes in tariffs and freight rates,
availability of real estate, construction and start-up of a new
distribution center, and the effects of legislation on wage levels
and entitlement programs. Consequently, all of the forward-looking
statements made are qualified by these and other factors, risks and
uncertainties.
<PAGE>
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits filed herewith:
3 (b) Bylaws, as amended as of April 29, 1997
*10 (i) Employment Agreement dated April 29, 1997,
between the Company and Howard R. Levine
11 Statements Re: Computations of Per Share Earnings
27 Financial Data Schedule
(b) Reports on Form 8-K - None
* Exhibit represents a management contract or compensatory
plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FAMILY DOLLAR STORES, INC.
(Registrant)
Date: July 9, 1997 R. JAMES KELLY
R. JAMES KELLY
Vice Chairman
Date: July 9, 1997 C. MARTIN SOWERS
C. MARTIN SOWERS
Senior Vice President-Finance
Principal Financial Officer
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<CAPTION>
EXHIBIT 11
PAGE 1 of 2
FAMILY DOLLAR STORES, INC.
STATEMENT RE COMPUTATIONS OF PER SHARE EARNINGS
THREE MONTHS ENDED THREE MONTHS ENDED
MAY 31, 1997 MAY 31, 1996
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
AS PRESENTED
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING FOR
THE THREE MONTHS ENDED 57,149,247 57,149,247 56,833,405 56,833,405
NET INCOME $23,087,764 $23,087,764 $18,780,339 $18,780,339
EARNINGS PER SHARE $ .40 $ .40 $ .33 $ .33
EARNINGS PER SHARE AS ADJUSTED
FOR 3 FOR 2 STOCK SPLIT $ .27 $ .27 $ .22 $ .22
PRO FORMA DILUTION IMPACT OF COMMON STOCK EQUIVALENTS
ADDITIONAL WEIGHTED AVERAGE
SHARES FROM ASSUMED EXERCISE AT
THE BEGINNING OF THE YEAR OF
DILUTIVE STOCK OPTIONS 1,052,235 1,093,235 397,840 788,200
WEIGHTED AVERAGE SHARES ASSUMED
REPURCHASED FROM ASSUMED PROCEEDS
OF EXERCISES USING TREASURY STOCK
METHOD (AVERAGE MARKET PRICE FOR
PRIMARY AND, IF GREATER, ENDING
MARKET PRICE FOR FULLY DILUTED) (841,863) (873,857) (355,131) (721,723)
<PAGE>
<CAPTION>
<S> <C> <C> <C> <C>
NET PRO FORMA COMMON STOCK
EQUIVALENT INCREMENTAL SHARES 210,372 219,378 42,709 66,477
PERCENTAGE DILUTION FROM PRO FORMA
COMMON STOCK EQUIVALENT
INCREMENTAL SHARES 0.37% 0.38% 0.08% 0.12%
TOTAL COMMON STOCK AND COMMON
STOCK EQUIVALENTS 57,359,619 57,368,625 56,876,114 56,899,882
NET INCOME $23,087,764 $23,087,764 $18,780,339 $18,780,339
PRO FORMA EARNINGS PER SHARE (INCLUDING
DILUTIVE COMMON STOCK EQUIVALENTS) $ .40 $ .40 $ .33 $ .33
PRO FORMA EARNINGS PER SHARE (INCLUDING
DILUTIVE COMMON STOCK EQUIVALENTS)
AS ADJUSTED FOR 3 FOR 2 STOCK SPLIT $ .27 $ .27 $ .22 $ .22
</TABLE>
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<TABLE>
<CAPTION>
EXHIBIT 11
PAGE 2 OF 2
FAMILY DOLLAR STORES, INC.
STATEMENT RE COMPUTATIONS OF PER SHARE EARNINGS
NINE MONTHS ENDED NINE MONTHS ENDED
AS PRESENTED MAY 31, 1997 MAY 31, 1996
PRIMARY FULLY DILUTED PRIMARY FULLY DILUTED
<S> <C> <C> <C> <C>
AVERAGE SHARES OUTSTANDING FOR THE
NINE MONTHS ENDED 57,017,017 57,017,017 56,805,405 56,805,405
NET INCOME $60,449,300 $60,449,300 $49,224,852 $49,224,852
EARNINGS PER SHARE $1.06 $1.06 $ .87 $ .87
EARNINGS PER SHARE AS ADJUSTED FOR 3 FOR 2 STOCK SPLIT $ .71 $ .71 $ .58 $ .58
PRO FORMA DILUTION IMPACT OF COMMON STOCK EQUIVALENTS
ADDITIONAL WEIGHTED AVERAGE SHARES FROM
ASSUMED EXERCISE AT THE BEGINNING
OF THE YEAR OF DILUTIVE STOCK OPTIONS 1,105,175 1,128,952 394,612 785,039
WEIGHTED AVERAGE SHARES ASSUMED REPURCHASED FROM
ASSUMED PROCEEDS OF EXERCISES USING TREASURY STOCK
METHOD (AVERAGE MARKET PRICE FOR PRIMARY AND, IF
GREATER, ENDING MARKET PRICE FOR FULLY DILULTED) (961,505) (884,761) (343,534) (711,790)
NET PRO FORMA COMMON STOCK
EQUIVALENT INCREMENTAL SHARES 143,670 244,191 51,078 73,249
PERCENTAGE DILUTION FROM PRO FORMA COMMON
STOCK EQUIVALENT INCREMENTAL SHARES 0.25% 0.43% 0.09% 0.13%
TOTAL COMMON STOCK AND COMMON
STOCK EQUIVALENTS 57,160,687 57,261,208 56,856,483 56,878,654
NET INCOME $60,449,300 $60,449,300 $49,224,852 $49,224,852
PRO FORMA EARNINGS PER SHARE (INCLUDING DILUTIVE
COMMON STOCK EQUIVALENTS) $1.06 $1.06 $ .87 $ .87
PRO FORMA EARNINGS PER SHARE (INCLUDING DILUTIVE
COMMON STOCK EQUIVALENTS)
AS ADJUSTED FOR 3 FOR 2 STOCK SPLIT $ .71 $ .71 $ .58 $ .58
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF FAMILY DOLLAR STORES, INC.
AND SUBSIDIARIES FOR THE PERIOD ENDED MAY 31, 1997, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000034408
<NAME> FAMILY DOLLAR STORES, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> MAY-31-1997
<EXCHANGE-RATE> 1
<CASH> 68,822,483
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 460,801,936
<CURRENT-ASSETS> 559,822,907
<PP&E> 341,641,054
<DEPRECIATION> 129,941,678
<TOTAL-ASSETS> 774,845,317
<CURRENT-LIABILITIES> 265,481,774
<BONDS> 0
0
0
<COMMON> 6,062,007
<OTHER-SE> 485,281,211
<TOTAL-LIABILITY-AND-EQUITY> 774,845,317
<SALES> 1,483,545,713
<TOTAL-REVENUES> 1,483,545,713
<CGS> 997,067,508
<TOTAL-COSTS> 1,385,276,413
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 98,269,300
<INCOME-TAX> 37,820,000
<INCOME-CONTINUING> 60,449,300
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 60,449,300
<EPS-PRIMARY> 1.06
<EPS-DILUTED> 1.06
</TABLE>
EXHIBIT 10(i)
STATE OF NORTH CAROLINA
EMPLOYMENT AGREEMENT
COUNTY OF MECKLENBURG
THIS AGREEMENT, made and entered into effective the 29th day
of April 1997, by and between FAMILY DOLLAR STORES, INC., a
Delaware corporation (hereinafter referred to as the "Company");
and Howard R. Levine (hereinafter referred to as the "Employee");
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee and the
Employee desires to be employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants
herein contained, the Company and the Employee agree as follows:
1. DEFINITIONS. When used in this Agreement, these words
shall be defined as follows:
1.01 "Affiliate" - Any corporation directly or
indirectly controlling, controlled by or under the common control
of or with the Company.
1.02. "Group" - The Company and all Affiliates.
1.03. "Confidential Information" - Any information
(including, without limitation, any method of operation,
source of supply, organizational details, personnel information,
information regarding real estate activities, including
landlords, prospective landlords and lease data, business
secret, or any formula, pattern, patent, device, plan, process
or compilation of information) which (a) is, or is designed to
be, used in the business of any member of the Group, (b) is
private or confidential in that it is not generally known or
available to the public, and (c) gives any member of the Group an
opportunity to obtain an advantage over competitors who do not
know or use it.
1.04. "Present Territory" - All counties, towns and
cities in North Carolina, Virginia, Georgia, South Carolina, West
Virginia, Maryland, Pennsylvania, Kentucky, Tennessee,
Mississippi, Alabama, Florida, Louisiana, Arkansas, Ohio, Texas,
Delaware, Indiana, New Jersey, Missouri, Oklahoma, Illinois,
Michigan, Kansas, Iowa, New York, Wisconsin, Massachusetts,
Connecticut, Rhode Island, Vermont, New Hampshire, Minnesota,
Nebraska, South Dakota, Colorado, New Mexico and Maine.
1.05. "Future Territory" - All counties, towns and
cities in States other than those listed in the definition of
Present Territory in which the Company does business while the
Employee is employed by the Company.
<PAGE>
1.06. "Competitive Company" - A corporation,
partnership, proprietorship or any other legal entity operating
discount retail stores in the Present Territory or the Future
Territory, the majority of which stores each have 50,000 square
feet or less of total space, including non-selling areas, and
that sell or offer for sale merchandise similar or identical to
the merchandise sold by the Group.
1.07. "Cause" -
(a) Willful failure of the Employee to comply with
reasonable written directives of the Chairman of the Board or
Executive Committee or Board of Directors of the Company.
(b) Chronic absenteeism not resulting from Medical
Disability.
(c) Willful misconduct or gross negligence.
(d) Willful violation of substantive Company
policies, practices or procedures.
(e) Indictment of or conviction of the Employee of a
crime involving an act of moral turpitude.
(f) Should the Employee become an alcoholic or become
addicted to habit-forming drugs.
1.08. "Medical Disability" - An illness or medical
condition preventing the Employee from being able to actively and
regularly perform his duties and responsibilities under this
Agreement for period of ninety (90) work days or longer during
any fiscal year of the Company.
2. EMPLOYMENT. The Employee shall be employed by the
Company and any Affiliate in the capacity provided for in
Paragraph 3 for the period commencing April 29, 1997, (the
"Commencement Date"), and ending on August 31, 1998, or upon the
termination of this Agreement as provided in Paragraph 6.
3. DUTIES AND RESPONSIBILITIES. The Employee shall be
employed as President and Chief Operating Officer of the Company
and shall perform such reasonable duties and responsibilities as
the Chairman of the Board of the Company or Board of Directors of
the Company or the Executive Committee of the Board of Directors
of the Company may, from time to time, assign to the Employee.
The Employee agrees to accept this employment and to devote his
full time and attention and his best efforts, ability and
fidelity to the performance of the duties attaching to such
employment. In addi-tion, the Employee shall serve as a director
and officer of the Company and any corporation in the Group, if
appropriately elected. During the period of his employment, the
Employee shall not, for remuneration or profit, directly or
indirectly, render any service to, or undertake any employment
for, any other person, firm or corporation, whether in an
advisory or consulting capacity or otherwise, without first
obtaining the written consent of the Company.
<PAGE>
4. COVENANT NOT TO COMPETE AND DISCLOSE CONFIDENTIAL
INFORMATION.
4.01. The Employee will not, directly or indirectly,
for a period of one (1) year from the date of the termination of
his employment with the Company, whether such termination is
voluntary or involuntary or due to the expiration of the term of
this Agreement, (a) engage in competition with the Company, any
Affiliates, or their successors or assigns, for or on behalf of
any Competitive Company, or (b) provide information to, or
travel, canvass, advertise, solicit or sell for, or acquire an
interest in, become employed by, act as agent for, or in any
manner assist, any Competitive Company; provided that the
Employee may become employed by or act as agent or consultant
for, in any capacity, a Competitive Company when his duties and
responsibilities with the Competitive Company do not, directly or
indirectly, involve any business activity in the Present
Territory or the Future Territory; or (c) directly or indirectly
approach, solicit, offer employment to or in any manner induce or
seek to induce any employee of the Group to become employed by a
Competitive Company or to otherwise interfere with the Company's
relationship with any employee in the Group.
The foregoing provisions, however, shall not
prohibit the Employee from making investments in any securities
listed on the New York or American Stock Exchanges or actively
traded in the over-the-counter market in amounts not exceeding 1%
of any single class of such securities outstanding, nor prohibit
the Employee from making investments of any nature in any
securities of the Company.
4.02. The Employee acknowledges that the signing of
this Agreement is a condition of employment and understands
that in the performance of his services hereunder, he may have
access to and obtain knowledge of Confidential Information (as
hereinbefore defined) relating to the business and activities of
the Group. The Employee shall not, without the written consent
of the Company, either during the period of his employment or
thereafter (a) use or disclose any Confidential Information
outside the Group, (b) publish any article with respect thereto,
or (c) except in the performance of his services hereunder,
remove or aid in the removal from the premises of the members of
the Group any such Confidential Information or any property or
material which relates thereto.
5. COMPENSATION.
5.01. In consideration of the services to be
rendered by the Employee pursuant to this Agreement, the Company
shall pay, or cause to be paid, to the Employee a weekly base
salary from the Commencement Date to August 31, 1998 of $5,769.24
($300,000.00 per annum).
<PAGE>
The salary shall be payable at such intervals
in conformity with the Company's prevailing practice as such
practice shall be established or modified from time to time.
5.02. In addition, the Employee shall be entitled to:
(a) Participate in the Company's Target Bonus
Plan, as it may be amended or modified in any respect, including
achievement of established goals, as President, for the fiscal
years commencing September 1, 1996, and September 1, 1997. The
Target Bonus Plan generally will give the Employee the
opportunity to earn a bonus of up to fifty (50%) percent of the
Employee's base salary actually received for services on and
after April 29, 1997, through August 31, 1997, for the fiscal
year ending August 31, 1997, and up to fifty (50%) percent of the
Employee's base salary actually received for services on and
after September 1, 1997, through August 31, 1998, for the fiscal
year ending August 31, 1998, subject to the Company's achievement
of certain financial goals to be established, the Employee's
performance, and all terms and conditions of the Target Bonus
Plan as in effect for each such fiscal year; provided that the
amount of bonus paid may not be increased by the annual
individual performance rating of the Employee by the Chairman of
the Board. The Employee acknowledges that he has received a copy
of the form of the Target Bonus Plan and Bonus Conditions and is
familiar with the terms and conditions thereof. Nothing
contained herein shall limit the Company's right to alter, amend
or terminate the Target Bonus Plan at any time for any reason.
The Employee further acknowledges that, as provided in the Target
Bonus Plan, in the event the Employee is not employed by the
Company, for whatever reason, at the time the bonus for the
fiscal year is customarily paid in December or January following
the end of the fiscal year, the Employee will not be entitled to
receive the bonus.
(b) Take fifteen days (exclusive of Saturdays,
Sundays and paid Company holidays) of vacation during the twelve
month period commencing May 1, 1997. For the period from May 1,
1998, through the end of the term of this Agreement on August 31,
1998, five days of vacation may be taken. Vacation time will
accrue ratably during the course of said periods and cannot be
accumulated from year to year.
(c) Additional benefits and/or compensation in
such form and in such manner and at such times as the Board of
Directors of the Company, in the exercise of its absolute
discretion, shall determine. It is understood and agreed that
any additional salary, benefits and compensation shall only be
paid by the Company upon the approval of the Board of Directors
and not by any officer or any other person acting on behalf of
the Company.
<PAGE>
(d) All insurance and other fringe benefits
afforded to the Company employees pursuant to any plan adopted by
the Company in accordance with the terms of the plan and his
position in the Company.
6. TERMINATION.
6.01. It is agreed that either party may terminate
this Agreement for any reason at any time upon three (3) days'
prior written notice to the other party, whereupon (except as
provided in Paragraph 4), this Agreement shall no longer be of
any force and effect (the expiration date of this notice period
is herein called the "Termination Date"). If either party
terminates this Agreement, the Company may relieve the Employee
of all duties and responsibilities effective on the date of the
notice. The Company may also terminate this Agreement should the
Employee experience a Medical Disability, which termination shall
be effective upon the Company's giving written notice to the
Employee following the expiration of the Medical Disability
period. Upon the death of the Employee, the Company shall pay to
his widow if he is married or his estate if he is not married or
his widow predeceases him only such amount as was due and payable
to the Employee at the time of his death. The Company may
terminate this Agreement at any time, without notice, for Cause.
6.02. Upon termination of this Agreement by the
Company, other than for Cause, except for the provisions of
Paragraph 4, the Employee's employment under the terms of this
Agreement and all other agreements and contracts between the
Employee, the Company and the Company's Affiliate and subsidiary
corporations, shall be terminated effective on the Termination
Date. Should the Company terminate this Agreement prior to the
end of the term of this Agreement, for reasons other than for
Cause or Medical Disability, it shall pay to the Employee, one
hundred eighty (180) days of the base salary set forth in
Paragraph 5.01 above in effect on the date of the notice (which
shall constitute payment in full of the compensation due to the
Employee hereunder). Any such payments shall be made in six (6)
equal monthly installments with the first such installment due
and payable not later than thirty (30) days after the Termination
Date. Such payments made by the Company to the Employee are
herein called "Termination Compensation." In the event the
Employee accepts or begins other employment as an employee,
consultant or in any other capacity prior to the date on which
the sixth monthly installment of Termination Compensation is due
and payable, the monthly payments of any unpaid balance of the
Termination Compensation as of the date of such new employment
shall be (i) eliminated if the monthly base salary and all other
monthly remuneration and compensation from the new employment
exceeds the monthly base salary of the Employee in effect on the
date of the notice, or (ii) reduced to the amount by which the
monthly base salary of the Employee in effect on the date of the
<PAGE>
notice exceeds the monthly base salary and all other monthly
remuneration and compensation from the new employment. The
Employee agrees to pursue reasonable, good faith efforts to
obtain other employment in a position suitable to his background
and experience.
6.03. On the Termination Date and at the end of the
term of this Agreement, the Employee agrees that the Company, its
Affiliates, and their officers, directors, members of the
Executive Committee, and employees, and their successors, heirs
and assigns, shall be fully released and discharged from any and
all expenses, claims, considerations, liabilities, obligations
and causes of action of every kind and nature arising out of or
in any manner related to this Agreement, and any and all previous
agreements, contracts and other rights, claims and obligations
between the parties, to the Employee's employment with the
Company, its Affiliate and subsidiary corporations, and to the
Employee's association or relationship with the Company and its
Affiliates, including but not limited to, all compensations,
salaries, bonuses (including Target Bonus Plan bonuses and
guarantees of bonuses thereunder), director's pay, vacation pay,
stock options, stockholder's claims or suits, loans and other
similar liabilities or related claims; provided, that nothing
herein contained shall qualify or in any manner restrict the
right of the Employee to realize his Termination Compensation, if
any, and his interests in any of the fringe benefits (such as
insurance, 401(k) plan and stock options) of the Company to which
he has become legally entitled.
6.04. On the Termination Date or at the end of
the term of this Agreement, the Employee agrees that he will
resign as an officer, director and member of the Executive
Committee of the Company, its Affiliate and subsidiary
corporations (if and when elected), and from any other
positions, which resignations shall become effective on the
Termination Date.
6.05. After the Termination Date or the end of the
term of this Agreement, the Employee covenants to render further
advice and assistance to the Company as may be required from time
to time, and to provide all information available to him on
matters handled by and through him while employed by the Company
or of which he has personal knowledge, and by making available to
the Company at reasonable times and circumstances, upon request
by the Company, information pertinent to its operations in his
possession; and, to the extent that it is necessary, to cooperate
with and assist the Company to conclude any matters that are
pending and which may require his assistance; provided, that he
shall be paid reasonable compensation by the Company in the event
he is required to expend time in the performance of such
services; and provided further, that the Employee may perform
such services in a manner that does not unreasonably interfere
<PAGE>
with other employment obtained by the Employee. The Employee
shall be reimbursed for any expenses incurred by him in
the performance of the covenants herein set forth in this
Section 6.05.
6.06. After the Termination Date or the end of the
term of this Agreement, the Employee agrees that he will not
discuss his employment and resignation or termination or
Termination Compensation, if any, with any representatives of the
media, either directly or indirectly, without the written consent
and approval of the Company.
7. SPECIAL PROVISIONS. This Agreement shall inure to the
benefit of any successor to or assignee of the Company, and the
Employee specifically agrees on demand to execute any and all
necessary documents in connection with the performance of this
Agreement. No waiver by either party of any breach by the other
of any provision hereof shall be deemed to be a waiver of any
later or other breach thereof or as a waiver of any such or other
provision of this Agreement. If any provision of this Agreement
shall be declared invalid or unenforceable as a matter of law,
such invalidity or unenforceability shall not affect the validity
or enforceability of any other provision of this Agreement or of
the remainder of this Agreement as a whole.
This Agreement sets forth all of the terms of the
understanding between the parties with reference to the subject
matter set forth herein and may not be waived, changed,
discharged or terminated orally or by any course of dealing
between the parties, but only by an instrument in writing signed
by the party against whom any waiver, change, discharge or
termination is sought.
8. NORTH CAROLINA LAW APPLIES. This Agreement shall be
governed by and construed in accordance with the laws of the
State of North Carolina.
<PAGE>
9. NOTICES. Any notice or other communications to be
given hereunder shall be deemed to have been given or delivered
when delivered by hand to the individuals named below or when
deposited in United States mail, registered or certified, with
proper postage and registration or certification fees prepaid,
addressed to the parties as follows (or to such other address as
one party shall give the other in the manner provided herein):
Family Dollar Stores, Inc. Post Office Box 1017
Charlotte, NC 28201-1017
Attention: Mr. Leon Levine
With copy to: George R. Mahoney, Jr.
Family Dollar Stores, Inc.
Post Office Box 1017
Charlotte, NC 28201-1017
Howard R. Levine: Family Dollar Stores, Inc.
Post Office Box 1017
Charlotte, NC 28201-1017
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement in triplicate, all as of the day and year first above
written.
FAMILY DOLLAR STORES, INC.
By LEON LEVINE
LEON LEVINE
Chairman of the Board
Attest:
GEORGE R. MAHONEY, JR.
GEORGE R. MAHONEY, JR.
Secretary
(Corporate Seal)
HOWARD R. LEVINE (SEAL)
HOWARD R. LEVINE
Witness:
JANICE B. BURRIS
JANICE B. BURRIS
EXHIBIT 3(b)
Amended on
April 29, 1997
BYLAWS
OF
FAMILY DOLLAR STORES, INC.
ARTICLE I
Offices
Section 1. DELAWARE OFFICE. The registered office of
the Corporation in the State of Delaware shall be in the City of
Wilmington, County of New Castle, State of Delaware, and the name
of the registered agent in charge thereof is The Prentice-Hall
Corporation System, Inc.
Section 2. OTHER OFFICES. The Corporation may have
an office or offices at such other places in the United States
or elsewhere as the Board of Directors may from time to time
determine or the business of the Corporation may require.
ARTICLE II
Meetings of Stockholders
Section 1. ANNUAL MEETING. Commencing with the year
1971, the annual meeting of stockholders of the Corporation for
the election of directors and for the transaction of such other
business as may properly come before said meeting shall be held
on the third Thursday in January of each year, if not a legal
holiday and if a legal holiday, then on the next succeeding full
business day, at such hour and at such place, within or without
the State of Delaware, as shall be designated by the Board of
Directors and stated in the notice of said meeting.
Section 2. SPECIAL MEETINGS. Special meetings of
stockholders for any purpose or purposes may, except as otherwise
prescribed by law or in the Certificate of Incorporation, be
called at any time by the Chairman of the Board or by resolution
of the Board of Directors, to be held at such time and place,
within or without the State of Delaware, as may be designated in
the notice thereof, and the Chairman of the Board, the Vice
Chairman, the President or a Vice President or the Secretary
shall call such a meeting whenever stockholders, holding not
less than a majority of all of the outstanding stock of the
Corporation entitled to vote at such meeting, shall make written
application therefor, stating the purpose or purposes of the
meeting applied for.
<PAGE>
Section 3. NOTICE OF MEETING. Except as otherwise
provided or permitted by law or in the Certificate of
Incorporation or in these Bylaws, written notice of all meetings
of stockholders, stating the place, date and hour and in general
terms only, the purpose or purposes thereof, shall be given by
the Chairman of the Board, the Vice Chairman, the President or a
Vice President or the Secretary or an Assistant Secretary to each
stockholder of record having voting power in respect of the
business to be transacted thereat, either by serving such notice
upon him or her personally or by mailing the same to his or her
address as it appears on the records of the Corporation, at least
ten days but not more than sixty days prior to the date of the
meeting, and the Secretary or an Assistant Secretary or the
transfer agent or agents of the Corporation shall make affidavit
as to the giving of such notice.
Section 4. QUORUM. The holders of a majority of the
stock issued and outstanding and entitled to vote thereat,
present in person or by proxy, shall be required to and shall
constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by law, by
the Certificate of Incorporation or by these Bylaws. If, how
- -ever, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote
thereat, present in person or by proxy, shall have power to
adjourn the meeting from time to time, without notice other than
announcement at the meeting of the time and place of the
adjourned meeting, until a quorum shall be present or repre-
sented. At such adjourned meeting any business may be transacted
which might have been transacted at the original meeting. If any
adjournment, whether a quorum is present or not, is for more than
thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to
vote at the meeting. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting
power present in person or by proxy shall decide any question
brought before such meeting, unless the question is one upon
which by express provision of law or of the Certificate of
Incorporation or of these Bylaws a larger or different vote is
required, in which case such express provision shall govern and
control the decision of such question. The stockholders present
or represented at any duly called and held meeting at which a
quorum is present or represented may continue to do business
until adjournment, notwithstanding the withdrawal of such number
as to leave less than a quorum.
Section 5. ORGANIZATION. Each meeting of stockholders
shall be presided over by the Chairman of the Board, or in his or
her absence, by the Vice Chairman or the President or a Vice
President thereunto designated by the Chairman of the Board or by
the Board of Directors, or in the absence of the Chairman of the
Board, Vice Chairman, President, and a Vice President so
<PAGE>
designated, by any other person selected to preside by vote of
the holders of a majority of the outstanding stock present in
person or by proxy and entitled to vote at the meeting. The
Secretary, or in his or her absence an Assistant Secretary, or in
the absence of both the Secretary and an Assistant Secretary any
person designated by the Chairman of the Board or other person
presiding at the meeting, shall act as secretary of the meeting.
Section 6. PROXIES AND VOTING OF SHARES. At any
meeting of stockholders, each stockholder entitled to vote any
shares on any matter to be voted upon at such meeting may
exercise such voting right either in person or by proxy appointed
by an instrument in writing, which shall be filed with the
Secretary of the meeting before being voted. Such proxies shall
entitle the holders thereof to vote at any adjournment of such
meeting, but shall not be valid after the final adjournment
thereof. All questions regarding the qualification of voters,
the validity of proxies, and the acceptance or rejection of
voters, the validity of proxies, and the acceptance or rejection
of votes shall be decided by two inspectors of election who shall
be appointed by the Board of Directors or if not so appointed,
then by the presiding officer of the meeting. No proxy shall be
voted on after three years from its date unless said proxy
provides for a longer period. Except as otherwise expressly
required by statute, the vote on any question need not be by
written ballot.
Section 7. VOTING LIST OF STOCKHOLDERS. The officer
who shall have charge of the stock ledger of the Corporation
shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at said meeting, arranged in alphabetical order and showing
the address and the number of shares registered in the name of
each such stockholder. Such list shall be open to the examina-
tion of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days
prior to the meeting, either at a place within the city where
said meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced
and kept at the time and place of the meeting during the whole
time thereof and may be inspected by any stockholder who is
present. The stock ledger shall be the only evidence as to who
are the stockholders entitled to examine the stock ledger or the
list of stockholders referred to above or the books of the
Corporation, or to vote in person or by proxy at the meeting of
stockholders.
Section 8. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING.
Any action, except election of directors, which may be taken by
the vote of the stockholders at a meeting, may be taken without a
meeting if authorized by the written consent of stockholders
holding at least a majority of the voting power, unless by
<PAGE>
express provision of law or of the Certificate of Incorporation
or of these Bylaws a greater proportion of voting power is
required to authorize such action, in which case such greater
proportion of written consents shall be required.
ARTICLE III
Directors
Section 1. POWER AND DUTIES OF THE BOARD OF DIRECTORS.
The Board of Directors shall have the general management of the
affairs, property and business of the Corporation and they may
adopt such rules and regulations for that purpose and for the
conduct of their meetings as they may deem proper. The Board may
exercise and shall be vested with the powers of the Corporation
insofar as not inconsistent with law, the Certificate of
Incorporation or these Bylaws.
Section 2. NUMBER AND QUALIFICATIONS. The Board upon
the adoption of these Bylaws shall consist of three directors.
Thereafter the authorized number of directors shall be determined
by the affirmative vote of a majority of the whole Board given at
a regular or special meeting of the Board of Directors; provided
that, if the number so determined is to be increased or
decreased, notice of the proposed increase or decrease shall be
included in the notice of such meeting unless all of the
directors at the time in office be present at such meeting or
those not present shall at any time waive or have waived notice
thereof in writing; and provided further, that the number of
directors which shall constitute the whole Board shall not be
reduced to a number less than the number of directors then in
office unless such reduction shall become effective only at and
after the next ensuing meeting of stockholders for the election
of directors or upon the resignation of an incumbent director.
Directors need not be stockholders of the Corporation.
Section 3. ELECTION AND TERM. Except as otherwise
provided by law or by these Bylaws, the directors of the
Corporation elected after the adoption of these Bylaws shall be
elected at the annual meeting of stockholders in each year.
Each director shall be elected to serve until the next annual
meeting of stockholders and until a successor shall have been
duly elected and shall qualify, subject to the provisions of
ARTICLE V hereof.
Section 4. REGULAR MEETINGS. Regular meetings of the
Board of Directors shall be held at such time and place, either
within or outside of the State of Delaware, as may be determined
by resolution of the Board. No notice of a regular meeting need
be given (any practice or custom at any time to the contrary
notwithstanding) and any business may be transacted at a regular
<PAGE>
meeting, held as aforesaid, subject only to the requirements of
Section 2 of ARTICLE III and clause (b) in ARTICLE XIV hereof.
Section 5. SPECIAL MEETINGS. Special meetings of the
Board of Directors may, unless otherwise expressly provided by
law, be called from time to time by the Chairman of the Board or
the Vice Chairman or the President, or by a written call signed
by any two or more directors and filed with the Secretary. Each
special meeting of the Board shall be held at such place, either
within or outside of the State of Delaware, as shall be desig-
nated in the notice of such meeting.
Section 6. NOTICE OF SPECIAL MEETINGS. Notice of a
special meeting of the Board of Directors, stating the place,
date and hour thereof, shall, except as otherwise expressly
provided by law or as provided in Section 2 of ARTICLE VII
hereof, be given by mailing or telecopying the same to each
director at his or her residence or business address at any time
on or before the second day before the day of the meeting or by
delivering the same to him or her personally or telephoning the
same to him or her personally at his or her residence or business
address not later than the day before the day of the meeting,
unless, in case of exigency, the Chairman of the Board, or in the
absence of the Chairman of the Board, the Vice Chairman, the
President, a Vice President or the Secretary, shall prescribe a
shorter notice to each director at his or her residence or
business address. Except as otherwise required by statute or the
Bylaws, no notice or waiver of notice of a special meeting of the
Board need state the purpose or purposes of such meeting, and any
business may be transacted thereat, any practice or custom at any
time to the contrary notwithstanding.
Section 7. QUORUM. A majority of the directors at the
time in office shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors. If less than
a quorum be present at a meeting, the directors present may
adjourn the meeting and the meeting may be held as adjourned
without further notice. If a quorum be present at a meeting and
the meeting is adjourned to reconvene at a later time and/or
date, no notice need be given other than announcement at the
meeting. Except as otherwise provided by law, by the Certificate
of Incorporation or by these Bylaws, when a quorum is present
at any meeting of the Board of Directors, a majority of the
directors present at such meeting shall decide any question
brought before such meeting and the action of such majority shall
be deemed to be the action of the Board. The directors present
at any duly called and held meeting at which a quorum is present
or represented may continue to do business until adjournment,
notwithstanding the withdrawal of such number as to leave less
than a quorum.
Section 8. ORGANIZATION. Each meeting of the Board of
Directors shall be presided over by the Chairman of the Board,
<PAGE>
or, in the absence of the Chairman of the Board, by any director
selected to preside by vote of a majority of the directors
present. The Secretary, or in his or her absence an Assistant
Secretary, or in the absence of both the Secretary and an
Assistant Secretary, any person desginated by the chairman of
the meeting shall act as secretary of the meeting.
Section 9. COMPENSATION OF DIRECTORS. The directors
may be paid their expenses of attendance at each meeting of the
Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as
director. The Board of Directors shall have the authority to
fix the compensation of the directors. No such payment shall
preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like reimbusement and
compensation for attending committee meetings.
Section 10. COMMITTEES. The Board of Directors may,
by resolution or resolutions adopted by a majority of the whole
Board, designate one or more committees, each committee to con-
sist of two or more of the directors of the Corporation, which,
to the extent provided in said resolution or resolutions, shall
have and may exercise the powers of the Board in the management
of the business and affairs of the Corporation, and may have the
power to authorize the seal of the Corporation to be affixed to
all papers which may require it, but no such committee shall have
power or authority in reference to amending the Certificate of
Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of
all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, or amending the
Bylaws of the Corporation. Such committee or committees shall
have such name or names as may be determined from time to time by
resolution adopted by the Board. The committees shall keep
regular minutes of their proceedings and report the same to the
Board when required.
Section 11. WRITTEN CONSENTS. Any action required or
permitted to be taken at any meeting of the Board of Directors or
by any committee thereof may be taken without a meeting, if all
members of the Board or of such committee, as the case may be,
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.
Section 12. TELEPHONIC PARTICIPATION. Members of the
Board of Directors or any committee thereof may participate in a
meeting of the Board of Directors or such committee by means of a
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other, and participation in a meeting in such manner shall
constitute presence in person at such meeting.
<PAGE>
ARTICLE IV
Officers
Section 1. NUMBER AND ELECTION. The officers of the
Corporation shall be elected by the Board of Directors and shall
be a Chairman of the Board, a Vice Chairman, a President, a
Secretary and a Treasurer. The Board of Directors may also elect
one or more Vice Presidents, a Comptroller and one or more
Assistant Vice Presidents, Assistant Comptrollers, Assistant
Secretaries and Assistant Treasurers. Any number of offices
may be held by the same person but no officer shall execute,
acknowledge or verify any instrument in more than one capacity.
Section 2. TERM OF OFFICE AND QUALIFICATION. The
officers shall be elected by the Board at the first meeting
thereof after each annual meeting of stockholders. A meeting of
the directors may be held without notice for this purpose, as
well as for the transaction of any other business, immediately
after the annual meeting of stockholders of the Corporation and
at the same place. In the event of the failure so to elect any
such officer, such officer may be elected at any subsequent
meeting (regular or special) of the Board. Each officer, except
such officers as may be appointed in accordance with the provi-
sions of Section 3 of this ARTICLE IV, shall hold office until
the next annual election of officers and until his or her
successor shall have been duly elected and qualified, subject,
however, to the provisions of ARTICLE V hereof. None of the
officers of the Corporation need be directors.
Section 3. OTHER OFFICERS. The Board of Directors may
also appoint such other officers and agents as it may deem
necessary for the transaction of the business of the Corporation.
Such officers and agents shall hold office for such period, have
such authority and perform such duties as shall be determined
from time to time by the Board.
Section 4. THE CHAIRMAN OF THE BOARD. The Chairman
of the Board shall be the chief executive officer of the
Corporation, and shall preside at all meetings of the stock-
holders and of the Board of Directors. The Chairman of the Board
shall have general and active supervision of the business of the
Corporation. The Chairman of the Board shall perform such other
duties and have such other powers as the Board of Directors may
from time to time prescribe.
Section 5. THE VICE CHAIRMAN. The Vice Chairman
shall be the chief financial and administrative officer of the
Corporation and shall see that all orders of the Chairman of the
Board and orders and resolutions of the Board of Directors are
carried into effect. The Vice Chairman shall perform such other
duties and have such other powers and responsibilities as the
<PAGE>
Board of Directors or the Chairman of the Board may from time to
time prescribe.
Section 6. THE PRESIDENT. The President shall be the
chief operating officer of the Corporation. The President shall
manage the regular business of the Corporation, and shall see
that all orders of the Chairman of the Board and orders and
resolutions of the Board of Directors are carried into effect.
The President shall perform such other duties and have such other
powers and responsibilities as the Board of Directors or the
Chairman of the Board may from time to time prescribe.
Section 7. VICE PRESIDENTS. Each Vice President shall
perform such duties as from time to time may be assigned to him
or her by the Board of Directors, the Chairman of the Board, the
Vice Chairman, the President or as may be prescribed by the
Bylaws. A Vice President may be designated as the chief
accounting officer of the Corporation who shall have general
supervision over the Corporation's accounting division and the
Treasurer's department, subject to the control of the Board of
Directors and the Chairman of the Board and the Vice Chairman and
the President.
Section 8. THE SECRETARY. The Secretary shall record
or cause to be recorded in books provided for the purpose all the
proceedings of the meetings of the Corporation including those of
the stockholders, the Board of Directors and all committees
thereof; shall see that all notices are duly given in accordance
with the provisions of these Bylaws and as required by law; shall
be custodian of the records (other than financial) and of the
seal of the Corporation and see that the seal is affixed to all
documents the execution of which on behalf of the Corporation
under its seal is duly authorized in accordance with the provi-
sions of these Bylaws; shall see that the books, reports,
statements, certificates and all other documents and records
required by law are properly kept and filed; and in general, the
Secretary shall perform all duties incident to the office of
Secretary and such other duties as may, from time to time, be
assigned to him or her by the Board of Directors, the Chairman of
the Board, the Vice Chairman or the President.
Section 9. ASSISTANT SECRETARIES. In the absence of
the Secretary, or in case of his or her inability to act, an
Assistant Secretary designated by the Chairman of the Board, the
Vice Chairman, the President or the Board of Directors shall
perform all duties of the Secretary and, when so acting, shall
have all the powers of the Secretary. The Assistant Secretaries
shall perform such other duties as from time to time shall be
assigned to them by the Board of Directors, the Chairman of the
Board, the Vice Chairman, the President or the Secretary.
Section 10. THE TREASURER. The Treasurer shall have
charge and custody of and be responsible for all funds and
<PAGE>
securities of the Corporation, and deposit all such funds in the
name of the Corporation in such banks, trust companies or other
depositories as shall be selected in accordance with the provi-
sions of these Bylaws; receive, and give receipts for, monies due
and payable to the Corporation from any source whatsoever; and in
general, perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be
assigned to him or her by the Board of Directors, the Chairman of
the Board, the Vice Chairman, the President or the Vice President
designated as the chief accounting officer of the Corporation.
Section 11. ASSISTANT TREASURERS. In the absence of
the Treasurer, or in case of his or her inability to act, an
Assistant Treasurer designated by the Chairman of the Board, the
Vice Chairman, the President or the Board of Directors shall
perform all the duties of the Treasurer and, when so acting,
shall have all the powers of the Treasurer. The Assistant
Treasurers shall perform such other duties as from time to time
may be assigned to them by the Board of Directors, the Chairman
of the Board, the Vice Chairman, the President, the Treasurer or
the Vice President designated as the chief accounting officer of
the Corporation.
Section 12. COMPENSATION. The compensation of all
officers, agents and employees of the Corporation shall be fixed
from time to time by the Board of Directors, or pursuant to
authority of general or special resolutions of the Board. No
officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the Corporation
or a member of any committee.
ARTICLE V
Resignations and Removals
Section 1. RESIGNATIONS. Any director, officer or
agent of the Corporation may, subject to contrary provision in
any applicable contract, resign at any time by giving written
notice to the Board of Directors or to the Chairman of the Board
or to the Vice Chairman or to the President or to the Secretary
of the Corporation, and any member of any committee may resign at
any time by giving notice either as aforesaid or to the committee
of which he or she is a member or to the chairman thereof. Any
such resignation shall take effect at the time specified therein
or, if the time be not specified, upon receipt thereof; and
unless otherwise specified herein, acceptance of such resignation
shall not be necessary to make it effective.
Section 2. REMOVALS. The stockholders at any meeting
called for the purpose, by vote of the majority of the outstand-
ing stock entitled to vote, may remove from office either for or
<PAGE>
without cause any director and elect his or her successor. The
Board of Directors by vote of not less than a majority of the
whole Board may remove from office any officer, agent or member
of any committee, elected or appointed by it.
ARTICLE VI
Vacancies
Section 1. AMONG DIRECTORS. If the office of any
director becomes vacant at any time by reason of death, resigna-
tion, retirement, disqualification, removal from office or
otherwise, or if any new directorship is created by any increase
in the authorized number of directors, a majority of the
directors then in office, although less than a quorum, or the
sole remaining director, may choose a successor or fill the newly
created directorship, and the director so chosen shall hold
office, subject to the provisions of these Bylaws, until the next
annual election of directors and until his or her successor shall
be duly elected and shall qualify. In the event that a vacancy
arising as aforesaid shall not have been filled by the Board of
Directors, such vacancy may be filled by the stockholders at any
meeting therof after such office becomes vacant. If one or more
directors shall resign from the Board, effective at a future
date, a majority of the directors then in office, including those
who have so prospectively resigned, shall have the power to fill
such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective, and each
director so chosen shall hold office as herein provided in the
filling of other vacancies.
Section 2. AMONG OFFICERS, ETC. If the office of the
Chairman of the Board, Vice Chairman, President, any Vice
President, the Secretary or the Treasurer, or of any other
officer or agent or member of any committee, becomes vacant at
any time by reason of death, resignation, retirement, disquali-
fication, removal from office, or otherwise, such vacancy or
vacancies shall be filled by the Board of Directors or as
authorized by it.
ARTICLE VII
Notices
Section 1. MANNER OF GIVING. Whenever under the
provisions of the laws of the State of Delaware, the Certificate
of Incorporation or these Bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given by mailing or
<PAGE>
telecopying the same to each such director or stockholder at
such address as appears on the books or in the records of the
Corporation, and such notice shall be deemed to be given at the
time when the same is thus mailed or telecopied.
Section 2. WAIVER OF NOTICE. Whenever under the
provisions of these Bylaws, or of the Certificate of
Incorporation, or of any of the laws of the State of Delaware,
the stockholders or directors are authorized to hold any meeting
or take any action after notice or after the lapse of any pre-
scribed period of time, a waiver thereof, in writing, signed by
the person or persons entitled to such notice or lapse of time,
whether before or after the time of meeting or action stated
therein, shall be deemed equivalent thereto. The presence at any
meeting of a person or persons entitled to notice thereof shall
be deemed a waiver of such notice as to such person or persons.
ARTICLE VIII
Capital Stock
Section 1. FORM AND ISSUANCE. Certificates of stock
shall be issued in such form as may be approved by the Board of
Directors and shall be signed by, or in the name of the
Corporation by, the Chairman of the Board, or the Vice Chairman,
or the President or a Vice President, and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of
the Corporation; provided, however, that if such certificate is
countersigned (1) by a transfer agent other than the Corporation
or its employee, or, (2) by a registrar other than the
Corporation or its employee, the signatures of the officers of
the Corporation may be facsimiles. In case any officer who has
signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer before such
certificate is issued, it may be issued by the Corporation with
the same effect as if he or she were such officer at the date
of issue.
Section 2. TRANSFERS OF STOCK. The Board of Directors
shall have power and authority to make such rules and regulations
or amendments thereto as they may deem expedient concerning the
issue, registration and transfer of certificates of stock and may
appoint transfer agents and registrars thereof.
Section 3. LOST, STOLEN AND DESTROYED CERTIFICATES.
The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon satisfactory proof of
that fact by the person claiming the certificate or certificates
for shares to be lost, stolen or destroyed. When authorizing
<PAGE>
such issue of a new certificate or certificates, the Board of
Directors may, at its discretion, and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his or her legal
representative, to give the Corporation and its agents a bond in
such sum as the Board of Directors may direct as indemnity
against any claim that may be made against the Corporation or any
of its agents with respect to the certificate or certificates
alleged to have been lost, stolen or destroyed.
Section 4. FIXING OF RECORD DATE. In order that the
Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
therof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other
action. Only such stockholders as shall be stockholders of
record on the date so fixed shall be entitled to such notice of,
and to vote at, such meeting and any adjournment thereof, or to
receive payment of such dividend or other distribution, or to
receive such allotment of rights, or to exercise such rights in
respect of any such change, conversion or exchange of stock, or
to participate in such other action, or to give such consent, as
the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any such record date fixed as
aforesaid. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to
any adjournment of the meeting; provided however, that the Board
of Directors may fix a new record date for the adjourned meeting.
ARTICLE IX
Negotiable Instruments, Contracts, Etc.
Section 1. SIGNATURES ON CHECKS, ETC. All checks,
drafts, bills of exchange, notes or other instruments or orders
for the payment of money or evidences of indebtedness shall be
signed for or in the name of the Corporation by such officer or
officers, person or persons, as the Board of Directors may from
time to time designate by resolution.
Section 2. EXECUTION OF CONTRACTS, DEEDS, ETC. The
Board of Directors may authorize any officer or officers, agent
or agents, in the name of and on behalf of the Corporation, to
enter into or execute and deliver any and all deeds, bonds,
<PAGE>
mortgages, contracts and other obligations or instruments, and
such authority may be general or confined to specific instances.
ARTICLE X
Corporate Seal
The seal of the Corporation shall have inscribed
thereon the name of the Corporation, the year of its organization
and the words "Corporate Seal - Delaware". Said seal may be used
by causing it or a facsimile thereof to be impressed or affixed
or reproduced in any manner whatsoever.
ARTICLE XI
Fiscal Year
The fiscal year of the Corporation shall be determined
by the Board of Directors.
ARTICLE XII
Voting of Stock Held
Unless otherwise provided by resolution of the Board of
Directors, the Chairman of the Board, or any officer designated
by the Chairman of the Board, may from time to time appoint an
attorney or attorneys or agent or agents of the Corporation, in
the name and on behalf of the Corporation to cast the votes which
the Corporation may be entitled to cast as a stockholder or
otherwise in any other corporation or association, any of whose
stock or securities may be held by the Corporation, at meetings
of the holders of the stock or other securities of such other
corporations or associations, or to consent in writing to any
action by any such other corporation or association, and may
instruct the person or persons so appointed as to the manner of
casting such votes or giving such consent, and may execute or
cause to be executed on behalf of the Corporation and under its
corporate seal, or otherwise, such written proxies, consents,
waivers or other instruments as he or she may deem necessary or
proper in the premises; or the Chairman of the Board, or any
officer designated by the Chairman of the Board, may attend any
meeting of the holders of stock or other securities of any such
other corporation or association and thereat vote or exercise any
or all other powers of the Corporation as the holder of such
stock or other securities of such other corporation or
association, or may consent in writing to any action by any such
other corporation or association.
<PAGE>
ARTICLE XIII
Indemnification and Insurance
Section 1. INDEMNIFICATION. The Corporation shall
indemnify each director, officer, employee and agent of the
Corporation, his or her heirs, executors, administrators and all
other persons whom the Corporation is authorized to indemnify
under the provisions of the General Corporation Law of the State
of Delaware, to the fullest extent permitted by law, (a) against
all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
him or her in connection with any action, suit or proceeding,
whether civil, criminal, administrative or investigative, or in
connection with any appeal therein, or otherwise, and (b) against
all expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection with the defense or settle-
ment of any action or suit by or in the right of the Corporation,
or in connection with any appeal therein, or otherwise; and no
provision of the Bylaws is intended to be construed as limiting,
prohibiting, denying or abrogating any of the general or specific
powers or rights conferred under the General Corporation Law of
the State of Delaware upon the Corporation to furnish, or upon
any court to award, such indemnification, or indemnification as
otherwise authorized pursuant to the General Corporation Law of
the State of Delaware or any other law now or hereafter in
effect.
Section 2. INSURANCE. The Board of Directors of the
Corporation may, in its discretion, authorize the Corporation to
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 or her or incurred by him or her
in any such capacity, or arising out of his or her status as
such, whether or not the Corporation would have the power to
indemnify him or her against such liability under the provisions
of Section 1 of ARTICLE XIII.
ARTICLE XIV
Amendments
All Bylaws of the Corporation shall be subject to
alteration or repeal, and new Bylaws may be made, either
(a) by the affirmative vote of the holders of record of
a majority of the outstanding stock of the Corporation entitled
to vote, given at an annual meeting or at any special meeting of
such stockholders, or
<PAGE>
(b) by the affirmative vote of a majority of the whole
Board of Directors at any regular or special meeting of the Board
provided that reference is made in the notice or waiver of notice
of such Board meeting to the fact that a proposed alteration or
repeal of the Bylaws or the adoption of proposed new Bylaws is to
be considered and acted on at such meeting, in any such case
without it being necessary to set forth or describe the Bylaw
proposed to be altered or repealed or the new Bylaws proposed to
be adopted, or
(c) without any such Board meeting, by written consent
signed by all members of the Board in accordance with Section 11
of ARTICLE III of these Bylaws.
ARTICLE XV
Shareholder Protection Act
The provisions of NORTH CAROLINA GENERAL STATUTES,
Chapter 55, Sections 55-75 through 55-79, as amended, shall not
be applicable to the Corporation.
ARTICLE XVI
The North Carolina Control
Share Acquisition Act
To the extent otherwise deemed applicable, if any, the
provisions of Article 7A of Chapter 55 of the NORTH CAROLINA
GENERAL STATUTES entitled The North Carolina Control Share
Acquisition Act shall not be applicable to the Corporation.
