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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
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 1-3506
__________
GEORGIA-PACIFIC CORPORATION
(Exact Name of Registrant as Specified in its Charter)
GEORGIA 93-0432081
(State of Incorporation) (IRS Employer Id. Number)
133 PEACHTREE STREET, N.E., ATLANTA, GEORGIA 30303
(Address of Principal Executive Offices)
(404) 652-4000
(Telephone Number of Registrant)
__________
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 and (2) has been subject to such filing
requirements for the past 90 days. Yes x . No .
--- ---
As of the close of business on April 30, 1994, Georgia-Pacific Corporation had
90,353,471 shares of Common Stock outstanding.
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PART I - FINANCIAL INFORMATION
GEORGIA-PACIFIC CORPORATION
March 31, 1994
The following unaudited consolidated financial statements of
Georgia-Pacific Corporation and Subsidiaries as of and for the three-month
period ended March 31, 1994 (Exhibit 19 hereto), are incorporated herein by
reference:
Statements of Income
Statements of Cash Flows
Balance Sheets
Notes to Financial Statements
Sales and Operating Profits by Industry Segment
MANAGEMENT'S DISCUSSION AND ANALYSIS
THREE MONTHS ENDED MARCH 31, 1994 COMPARED WITH 1993
Georgia-Pacific reported net sales of $2.96 billion for the three months
ended March 31, 1994, a slight increase compared with net sales of $2.94
billion reported a year ago. Net income for the 1994 first quarter was $40
million (45 cents per share) which included a net, after-tax gain of $34
million (38 cents per share) primarily related to the sale of the Corporation's
envelope and roofing manufacturing businesses. In addition, net income
includes an $11 million (12 cents per share) after-tax loss on the early
retirement of debt and a $5 million (6 cents per share) one-time, after-tax
charge for the adoption of Financial Accounting Standard Number 112 (FAS 112),
"Employers' Accounting for Postemployment Benefits," effective January 1, 1994.
Net income for the 1993 first quarter was $41 million (47 cents per share)
which included a $3 million (3 cents per share) after-tax charge on the sale of
the Corporation's paper distribution business.
The remaining discussion refers to the "Sales and Operating Profits by
Industry Segment" table (included in Exhibit 19 hereto).
The building products segment reported net sales of $1.77 billion for
the 1994 first quarter, an increase of 10.7 percent from $1.60 billion a year
ago. Profits for this segment, however, decreased 20.1 percent to $247 million
for the three months ended March 31, 1994 from $309 million for the 1993
comparable period. Accordingly, the return on sales decreased to 14.0% in 1994
from 19.4% in 1993.
Affecting the 1994 results are increased wood costs and declining prices
for the Corporation's structural wood panels and lumber products. Average
plywood prices were approximately 7 percent lower in 1994 compared with the
same 1993 period, and average lumber prices were approximately 15 percent
higher compared with the 1993 first quarter. Average margins for both,
however, were adversely affected by wood costs that were between approximately
10 and 15 percent higher than 1993 first quarter levels. The result is a
significant decline in profit margins
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this quarter from a year ago in many of the Corporation's building products,
including those sold through this segment's distribution business. Profits for
the distribution business were significantly lower for the 1994 first quarter
compared with the 1993 first quarter because prices for lumber and structural
panels sold by this business declined during the 1994 first quarter compared
with the same 1993 period when prices rose. High 1994 first quarter inventory
levels at mills and wholesale establishments along with rising interest rates
exerted downward pressure on distribution business prices.
The pulp and paper segment reported net sales of $1.18 billion for the
1994 first quarter compared with $1.34 billion a year ago. The 11.9 percent
decrease is primarily attributed to the sale of the Corporation's paper
distribution business during the 1993 first quarter and its envelope business
during the 1994 first quarter. This segment also reported losses of $53
million and $67 million in the 1994 first quarter and 1993 first quarter,
respectively. Overall, weak market conditions continue to affect the pulp and
paper segment. Some price improvements, however, have been realized in this
segment's market pulp, containerboard and tissue businesses since year-end
1993. Although average pulp and containerboard prices for the first quarter of
1994 were relatively flat compared with the 1993 comparable period, prices in
both areas have increased since year-end 1993. In addition, average tissue
prices were higher than year-ago levels and higher than 1993 year-end levels.
Average communication paper prices for the first quarter of 1994, although
higher than 1993 first quarter averages, declined from end of year levels due
to industry capacity increases in both the 1993 fourth quarter and the 1994
first quarter with no appreciable increase in demand.
During the 1994 first quarter, the Corporation recorded other pretax
income of $57 million ($34 million after taxes), primarily resulting from the
sales of its roofing manufacturing and envelope businesses. The 1993 first
quarter results reflect a pretax loss of $36 million ($3 million after taxes)
on the sale of the Corporation's paper distribution business.
For the first quarter, the Corporation's interest expense and cost of
accounts receivable sale program were a combined $127 million, a decrease of
7.3 percent compared with $137 million a year ago. Lower expense in 1994 is
primarily the result of reduced levels of debt and the expiration of certain
higher-rate interest rate exchange agreements.
Excluding asset sales, the Corporation reported pretax income before
the extraordinary item and accounting change of $42 million and an income tax
provision of $20 million for the three months ended March 31, 1994. The actual
effective tax rate was higher than the federal statutory tax rate primarily
because of nondeductible goodwill amortization expense associated with past
business acquisitions.
Excluding asset sales, for the three months ended March 31, 1993, the
provision for income taxes was $34 million which was based on pretax income of
$78 million. The actual effective tax rate was higher than the federal
statutory tax rate primarily because of nondeductible goodwill amortization
expense associated with past business acquisitions.
The Corporation called for redemption approximately $204
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million of its outstanding debt during the 1994 first quarter. As a result, an
after-tax extraordinary loss of $11 million (12 cents per share) was recognized
during the quarter.
The Corporation adopted FAS 112 effective January 1, 1994 which
resulted in a one-time, after-tax charge of $5 million (6 cents per share).
FAS 112 requires recognition of benefits provided by an employer to former or
inactive employees after employment but before retirement.
Liquidity and Capital Resources
Operating Activities
Georgia-Pacific used cash for operations in the 1994 and 1993 first
quarters of $63 million and $52 million, respectively. The cash flows during
both first quarters include the result of normal, seasonal increases in working
capital requirements.
Tax payments to the Internal Revenue Service (IRS) of $37 million and
$155 million in 1994 and 1993, respectively, are included in cash used for
operations. The 1994 tax payment was to settle the 1989 through 1990 tax years
for Georgia-Pacific Corporation. The 1993 tax payment was to settle the 1984
through 1988 tax years for Georgia-Pacific Corporation.
Excluding the effects of these items, cash used for operations in 1994
was $26 million compared with cash provided by operations in 1993 of $103
million. This decrease is primarily the result of declining prices in the
Corporation's building products segment in the 1994 first quarter.
Investment Activities
During the 1994 first quarter the Corporation spent $152 million on
capital expenditures, including $76 million in the pulp and paper segment, $57
million in the building products segment, $14 million for timber and
timberlands and $5 million of other expenditures. The Corporation's 1994
projected capital spending is approximately $900 million.
As previously disclosed in the Corporation's Annual Report on Form
10-K for the year ended December 31, 1993, the sales of its roofing
manufacturing and envelope businesses were completed during the first quarter
of 1994. The Corporation received after-tax cash proceeds of approximately
$156 million from these transactions.
Financing Activities
For the three months ended March 31, 1994, total debt for the
Corporation, including the $700 million accounts receivable sale program, was
$5.81 billion, compared with $5.74 billion at December 31, 1993. This
increase, which is due primarily to the financing of a normal, seasonal
increase in working capital requirements, includes an increase in bank
overdrafts of $41 million and an increase in commercial paper and short-term
notes of $76 million, partially offset by a decrease in long-term debt of $44
million.
The Corporation called for redemption approximately $204 million in
principal of its 10-1/4% Debentures Due September 15,
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2018 during the 1994 first quarter, which it redeemed in April 1994. During
the first quarter, the Corporation reported an after-tax extraordinary loss of
$11 million (12 cents per share) related to this early retirement.
The Corporation has a $1.5 billion unsecured revolving credit facility
which is used for direct borrowings and as support for commercial paper and
other short-term borrowings, including bid borrowings made under this
agreement. As of March 31, 1994, $774 million of committed credit was
available in excess of all short-term borrowings outstanding under or supported
by the facility.
At March 31, 1994, the Corporation had outstanding interest rate
exchange agreements which effectively converted $1.4 billion of floating rate
obligations with a weighted average interest rate of approximately 3.7% to
fixed rate obligations with an average effective interest rate of approximately
9.1%. On that date, the Corporation's total floating rate debt, including the
accounts receivable sale program, exceeded related interest rate exchange
agreements by approximately $645 million.
As previously reported in the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1993, approximately $800 million of the
interest rate exchange agreements outstanding at December 31, 1993 are due to
expire in 1994. As of March 31, 1994, $300 million of these agreements expired
and another $200 million expired in April 1994.
The Corporation's weighted average interest rate on total debt,
including the accounts receivable sale program and floating rate debt, at March
31, 1994 and 1993 was 8.3% and 9.0%, respectively. The lower interest rate in
1994 is primarily the result of the expiration of approximately $500 million of
higher-rate interest rate exchange agreements during the twelve-month period
ended March 31, 1994.
Georgia-Pacific's ratio of total debt to capital, assuming the
proceeds from the accounts receivable sale program will be replaced by debt at
the end of the program, was 57.4% at March 31, 1994 compared with 57.0% at
December 31, 1993.
The Corporation is currently in the process of negotiating a renewal
of its accounts receivable sale program agreement which is due to expire in
June 1994.
At March 31, 1994, the Corporation had registered for sale up to $500
million of debt securities under shelf registration statements filed with the
Securities and Exchange Commission.
In 1994, cash flow from operations, together with the Corporation's
available financing sources, is expected to be sufficient to make planned
capital investments, dividend payments and scheduled debt service.
Other
Refer to Note 8 of the Notes to Financial Statements for a discussion
of commitments and contingencies.
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PART II - OTHER INFORMATION
GEORGIA-PACIFIC CORPORATION
March 31, 1994
Item 1. Legal Proceedings
The information contained in Note 8 "Commitments and Contingencies" of the
Notes to Financial Statements filed as part of this Quarterly Report on Form
10-Q is incorporated herein by reference. Although the ultimate outcome of
these environmental matters and legal proceedings cannot be determined with
certainty, based on presently available information, management believes that
adequate reserves have been established for probable losses with respect
thereto and that such ultimate outcome, after taking such reserves into
account, will not have a material adverse effect on the consolidated financial
position of the Corporation.
ENVIRONMENTAL PROCEEDINGS
As previously reported in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1992 and its Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993, the Corporation has received and responded to two
comprehensive information requests from the EPA concerning about 30 of its
facilities which manufacture oriented strand board, medium density fiberboard,
plywood and particleboard. The Corporation has discussed with the EPA the
alleged non-compliance with the Clean Air Act at these facilities. Although
the EPA has taken no action, the Corporation understands that the EPA is
preparing to issue a Notice of Violation with respect to this matter. The
Corporation anticipates being able to negotiate a settlement of these issues
with the EPA, which may entail the payment of fines and the agreement by the
Corporation to install air emission control equipment at certain of its plants.
No negotiations with the EPA have yet been held.
As previously reported in the Corporation's Annual Report on Form 10-K for the
year ended December 31, 1993, the Western Environmental Law Center, on behalf
of the Oregon Natural Resources Council (ONRC), filed a citizen's suit against
the Corporation (ONRC v. Georgia-Pacific Corporation) in the U.S. District
Court in Oregon on February 16, 1994 alleging violations of wastewater
discharge permit limits at the Corporation's Toledo, Oregon plant. Although
the Corporation believes it is in compliance with all the requirements of the
permit, it currently is negotiating with the plaintiffs. The date by which the
Corporation must file an answer in this case has been extended to the earlier
of September 1, 1994, or thirty days after such settlement negotiations
terminate.
ASBESTOS LITIGATION
As most recently disclosed in its Annual Report on Form 10-K for the year ended
December 31, 1993, the Corporation and many other
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companies are defendants in suits brought in various courts around the nation
by plaintiffs who allege that they have suffered personal injury as a result of
exposure to asbestos containing products. As of April 29, 1994, the Corporation
was defending claims of approximately 25,200 such plaintiffs who have brought
suit against the Corporation.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 3.2 Bylaws as amended to date.
Exhibit 11. Statements of Computation of Per Share Earnings.
Exhibit 19. Unaudited consolidated financial statements
and related information as of and for the
three-month period ended March 31, 1994.
(b) Reports on Form 8-K
On March 1, 1994, the Corporation filed a Current Report
on Form 8-K in which it reported under Item 5,
"Other Events."
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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.
Date: May 3, 1994 GEORGIA-PACIFIC CORPORATION
(Registrant)
by /s/ John F. McGovern
-------------------------------
John F. McGovern,
Senior Vice President -
Finance and
Chief Financial Officer
by /s/ James E. Terrell
-------------------------------
James E. Terrell,
Vice President and
Controller (Chief Accounting
Officer)
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GEORGIA-PACIFIC CORPORATION
INDEX TO EXHIBITS
FILED WITH THE QUARTERLY REPORT
ON FORM 10-Q FOR THE
QUARTER ENDED MARCH 31, 1994
Number Description
- ------ -----------
3.2 Bylaws as amended to date. (1)
11 Statements of Computation of Per Share Earnings. (1)
19 Unaudited consolidated financial statements as of and for the
three-month period ended March 31, 1994. (1)
______________________
(1) Filed by EDGAR.
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EXHIBIT 3.2
Amended As of May 3, 1994
BYLAWS
OF
GEORGIA-PACIFIC CORPORATION
ARTICLE I
SHAREHOLDERS' MEETINGS
SECTION 1. Annual Meeting. The annual meeting of the shareholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such place, either within or
without the State of Georgia, on such date and at such time as the Board of
Directors may by resolution provide, or, if the Board of Directors fails to
provide, then such meeting shall be held at the principal executive office of
the Corporation at 11:00 A.M. on the first Tuesday in the month of May in each
year, or, if such date is a legal holiday, on the next following business day.
SECTION 2. Special Meetings. Special meetings of the shareholders may
be called at any time by the Chairman, any Vice Chairman, the President, the
Chief Executive Officer or the Board of Directors. In addition, special
meetings of shareholders shall be called by the Corporation as set forth in the
Corporation's Articles of Incorporation or upon written demand of the holders
of at least three quarters (75%) of the outstanding shares of the Corporation
entitled to vote in an election of directors, or upon the written demand of
shareholders as provided in Section 1(C) of Article II hereof, any such written
demand to be made in accordance with the requirements of applicable law. Each
special meeting shall be held at such place, either within or without the State
of Georgia, as the Board of Directors may by resolution provide, or, if the
Board of Directors fails to provide, then such meeting shall be held at the
principal executive office of the Corporation, on such date and at such time as
shall be fixed by the party calling the meeting.
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SECTION 3. Notice of Meeting. Except as may otherwise be
required or prohibited by law, written notice stating the place, day and hour
of the meeting of shareholders and, in case of a special meeting of
shareholders, the purpose or purposes for which the meeting is called, shall be
delivered in the case of an annual or special meeting of shareholders, not less
than ten (10) nor more than sixty (60) days before the date of the meeting
either personally or by mail, by the Corporation by or at the direction of the
Chairman, any Vice Chairman, the President, the Chief Executive Officer, the
Secretary or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail, addressed to
the shareholder at his address as it appears on the stock transfer books of the
Corporation, with first class postage thereon prepaid, or, if the Corporation
has more than 500 shareholders of record entitled to vote at the meeting and
the notice is mailed not less than thirty (30) days before the date of the
meeting, with postage thereon prepaid for any other class of United States
mail.
SECTION 4. Waivers. Notwithstanding anything herein to the contrary,
notice of a meeting of shareholders need not be given to any shareholder who
waives notice of such meeting in accordance with the Georgia Business
Corporation Code.
SECTION 5. Quorum; Required Shareholder Vote.
(A) Quorum Requirement. Subject to any special quorum requirements with
respect to any class or series of Preferred Stock and to any special
quorum requirements under the Articles of Incorporation or applicable
law, a quorum for the transaction of business at any annual or special
meeting of shareholders shall exist when the holders of a majority of
the outstanding shares entitled to vote are represented either in person
or by proxy at such meeting. When a quorum is once present to organize a
meeting, the shareholders present may continue to do business at the
meeting or at any adjournment thereof notwithstanding the withdrawal of
enough shareholders to leave less than a quorum, (unless a new record
date is or must be set for the adjourned meeting). The holders of a
majority of the voting shares represented at a meeting, whether or not a
quorum is present, may adjourn such meeting from time to time.
(B) Voting Requirement. If a quorum is present, the affirmative vote of
the majority of the shares represented at the meeting and entitled to
vote on the subject matter shall be the act of the shareholders, unless a
greater vote is required by law, by the Articles of Incorporation, by a
resolution of the Board of Directors or by any other provision of these
Bylaws.
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SECTION 6. Proxies. A shareholder who is entitled to attend a
shareholders' meeting, to vote thereat or to execute consents, waivers or
releases, may be represented at such meeting or vote thereat, and execute
consents, waivers or releases, and exercise any of his other rights, by one or
more agents, who may be either an individual or individuals or any domestic or
foreign corporation, authorized by a written proxy executed by such shareholder
or by his attorney-in-fact. No proxy shall be valid after the expiration of
eleven (11) months from the date thereof unless otherwise provided in the
proxy.
ARTICLE II
DIRECTORS
SECTION 1. Number, Election and Term of Office.
(A) Number of Directors. The business and affairs of the Corporation
shall be managed and controlled by its Board of Directors. The
number of directors shall be fourteen (14), but the number may be
increased or diminished by amendment of these Bylaws either by the
Board of Directors or by the affirmative vote of at least
seventy-five percent (75%) of the voting power of the outstanding
capital stock of the Corporation entitled to vote generally in the
election of directors, voting as a class. The directors shall be
divided into three (3) classes, each composed, as nearly as possible,
of one-third of the total number of directors. In the event that
the number of directors shall not be evenly divisible by three (3),
the Board of Directors shall determine in which class or classes the
remaining director or directors, as the case may be, shall be
included. The term of office of each director shall be three (3)
years; provided, that, of those directors initially elected in
classes, the term of office of directors of the first class shall
expire at the first annual meeting of the shareholders after their
election, that of the second class shall expire at the second annual
meeting after their election, and that of the third class shall
expire at the third annual meeting after their election. At each
annual meeting of shareholders subsequent to the initial election of
directors in classes, directors shall be elected for a full term of
three (3) years to succeed those whose terms expire. When the number
of directors is increased and any newly created directorships are
filled by the Board of Directors, there shall be no classification of
the additional directors until the next election of directors by the
shareholders.
(B) Special Voting Rights. Anything in this Section 1 to the contrary
notwithstanding, if and whenever any class or series of Preferred
Stock of the Corporation shall have the exclusive right, voting
separately as a class or series, to elect one or more directors of the
Corporation, the term of office of
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all directors in office when such voting rights shall vest in such
class or series of Preferred Stock (other than directors who were
elected by vote of another class or series of Preferred Stock) shall
terminate upon the election of any new directors at any meeting of
shareholders called for the purpose of electing directors; and, while
such voting rights are vested in any class or series of Preferred
Stock, the directors shall not be divided into classes, and the term
of office of each director elected shall extend only until the next
succeeding annual meeting of shareholders.
(C) Election of Directors Following Termination of Special Voting Rights.
Upon the termination of the exclusive right of all classes and series
of Preferred Stock, voting separately as a class or series, to vote
for directors, the term of office of all directors then in office
shall terminate upon the election of any new directors at a meeting of
the shareholders then entitled to vote for directors, which meeting
may be held at any time after the termination of such exclusive right
and which meeting, if not previously called, shall be called by the
Secretary of the Corporation upon written request of the holders of
record of ten percent (10%) of the aggregate number of outstanding
shares of such class or classes of stock then entitled to vote for
directors. At such election and thereafter, unless and until a class
or series of Preferred Stock shall again have the exclusive right,
voting separately as a class or series, to vote for directors, the
directors shall again be divided into three (3) classes, as
hereinabove provided, the term of office of each to be three (3)
years; provided, that the terms of office of those initially elected
in classes shall be as hereinabove provided.
(D) Nominations for Election of Directors.
(a) Subject to the rights of holders of any series of Preferred Stock
or any other class of capital stock of the Corporation (other than the
Common Stock) then outstanding, nominations for the election of directors
may be made by the affirmative vote of a majority of the entire Board of
Directors or by any shareholder of record entitled to vote generally in
the election of directors. However, any shareholder of record entitled to
vote generally in the election of directors may nominate one or more
persons for election as directors at a meeting only if written notice of
such shareholder's intent to make such nomination or nominations has been
given, either by personal delivery or by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than 60 days
nor more than 75 days prior to the meeting; provided, that in the event
that less than 70 days' notice or prior public disclosure of the date of
the meeting is given or made to shareholders, notice by the shareholder to
be timely must be so received not later than the close of business on the
10th day following the day on which such notice of the date of meeting was
mailed or such public disclosure was made, whichever first occurs.
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(b) Each notice to the Secretary under subsection (a) shall
set forth: (i) the name and address of record of the shareholder who
intends to make the nomination; (ii) a representation that the
shareholder is a holder of record of shares of the Corporation's capital
stock entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in
the notice; (iii) the class and number of shares of common stock held of
record, owned beneficially, and represented by proxy, by the shareholder,
and each proposed nominee, as of the date of the notice; (iv) the name,
age, business and residence addresses, and principal occupation or
employment of each proposed nominee; (v) a description of all arrangements
or understandings between the shareholder and each proposed nominee and
any other person or persons (naming such person or persons) pursuant to
which the nomination or nominations are to be made by the shareholder;
(vi) such other information regarding each proposed nominee as would be
required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission; and (vii) the written
consent of each proposed nominee to serve as a director of the
Corporation if so elected. The Corporation may require any proposed
nominee to furnish such other information as may reasonably be required by
the Corporation to determine the eligibility of such proposed nominee to
serve as a director of the Corporation.
(c) The Chairman of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so determine,
he shall so declare to the meeting and the defective nomination shall be
disregarded.
SECTION 2. Term. Subject to the provisions of the Articles of
Incorporation and of Section 1 of this Article II, each director shall hold
office until the election and qualification of his successor or until his death
or until he shall resign or be removed from office as hereinafter provided.
SECTION 3. Place of Meeting. Meetings of the Board of Directors or of
any committee thereof may be held either within or without the State of
Georgia.
SECTION 4. Regular Meetings. The Board of Directors may, by resolution
adopted by vote of a majority of the whole Board, from time to time, appoint
the time and place for holding regular meetings of the Board, if deemed
advisable by the Board; and such regular meetings shall, thereupon, be held at
the time and place so appointed, without the giving of any notice with regard
thereto. In case the day appointed for the regular meeting shall fall on a
legal holiday, such meeting shall be held on the next following business day,
at the regular appointed hour.
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SECTION 5. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman, by any Vice Chairman, by the
President, by the Chief Executive Officer, by the Chief Operating Officer, or
by any two directors. Notice of any such meeting shall be mailed to each
director, addressed to him at his residence or usual place of business, not
later than three (3) days before the day on which the meeting is to be held,
or shall be sent to him at such place by telegram, telex or cablegram, or
be delivered personally, or by telephone, not later than the day before the day
on which the meeting is to be held. Notice of a meeting of the Board of
Directors need not be given to any director who signs a waiver of notice either
before or after the meeting (in addition to any other form of waiver, such
waiver may be evidenced by a telegram, telex or cablegram from a director).
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any such
objection or objections to the transaction of business. Neither the business
to be transacted at, nor the purpose of, any special meeting of the Board of
Directors need be specified in the notice or waiver of notice of such meeting.
Except as is otherwise indicated in the notice thereof, any and all business
may be transacted at any special meeting of the Board of Directors.
SECTION 6. Quorum and Manner of Acting. Except as herein otherwise
provided, two-fifths of the whole Board of Directors at a meeting duly
assembled shall constitute a quorum for the transaction of business, except
that, if the Chairman or the President is not present at any such meeting, a
majority of the whole Board of Directors shall be necessary to constitute a
quorum; and, except as otherwise required by statute or by the Bylaws, the act
of a majority of the directors present at any such meeting at which a quorum is
present shall be the act of the Board of Directors. In the absence of a
quorum, a majority of the directors present may adjourn the meeting from time
to time, until a quorum is present. No notice of any adjourned meeting need be
given.
SECTION 7. Resignations. Any director of the Corporation may resign
at any time by giving written notice thereof to the Board of Directors, the
Chairman or the Corporation. Such resignation shall take effect at the time
the notice is delivered unless the notice specifies a later effective date;
and, unless otherwise specified with respect thereto, the acceptance of such
resignation shall not be necessary to make it effective.
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SECTION 8. Removal of Directors. At any shareholders' meeting with
respect to which notice of such purpose has been given, the entire Board of
Directors or any individual director may be removed, with or without cause, by
the affirmative vote of the holders of three-quarters (75%) of the shares
entitled to vote at an election of directors. Whenever the holders of the
shares of any class or series are entitled to elect one or more directors by
the provisions of the Articles of Incorporation, the provisions of this Section
shall apply, in respect of the removal of a director or directors so elected,
to the vote of the holders of the outstanding shares of that class or series
and not to the vote of the outstanding shares as a whole.
SECTION 9. Vacancies.
(A) Director Elected by All Shareholders. Except as provided in
Subsection (B) below, any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining
directors though less than a quorum of the Board of Directors, or by
the sole remaining director, as the case may be, or, if the vacancy is
not so filled, or if no director remains, by the holders of the shares
of stock who are entitled to vote for the director with respect to
which the vacancy is being filled.
(B) Director Elected by Particular Class or Series. If a vacancy occurs
with respect to a director elected by a particular class or series of
shares voting as a class or series, the vacancy may be filled by the
remaining director or directors elected by that class or series, or,
if the vacancy is not filled by such remaining director or directors,
or if no such director remains, by the shareholders of that class or
series.
(C) Term of New Director. A director elected to fill a vacancy shall be
elected for the unexpired term of his predecessor in office. Any
directorship to be filled by reason of an increase in the number of
directors may be filled by the Board of Directors, but only for a term of
office continuing until the next election of directors by the shareholders
and the election and qualification of his successor.
SECTION 10. Directors' Fees. In consideration of a director serving
in such capacity, each director of the Corporation, other than directors who
are officers of the Corporation or any of its subsidiary companies, shall be
entitled to receive an annual fee in such amount and payable in such
installments, as the Board of Directors, by vote of a majority of the whole
Board, may from time to time determine. The Board of Directors shall also have
the authority to determine, from time to time, the amount of compensation which
shall be paid to its members for attendance at any meeting of the Board or any
committee thereof.
-7-
<PAGE> 8
ARTICLE III
EXECUTIVE COMMITTEE
SECTION 1. Constitution and Powers. The Board of Directors may, by
resolution adopted by vote of a majority of the whole Board, designate from
among its members an Executive Committee, to consist of the Chairman, the Chief
Executive Officer (provided he is also a director), and one or more other
directors, which Executive Committee shall have and may exercise all the powers
of the Board of Directors in the management of the business, affairs and
property of the Corporation and the exercise of its corporate powers, including
the power to authorize the seal of the Corporation to be affixed to all papers
which may require it. So far as practicable, members of the Executive
Committee shall be designated at the organization meeting of the Board, in each
year, and, unless sooner discharged by vote of a majority of the whole Board of
Directors, shall hold office until the organization meeting of the Board in the
next subsequent year and until their respective successors are appointed. The
Board shall designate one member of the Committee as Chairman of the Executive
Committee, but such designee shall not be considered to be an officer of the
Corporation by reason of such designation. Anything herein to the contrary
notwithstanding, the Executive Committee shall not exercise the authority of
the Board of Directors in reference to: (1) approving or proposing to
shareholders any action required by applicable law to be approved by the
shareholders of the Corporation; (2) the filling of vacancies on the Board of
Directors or any of its committees; (3) amending the Articles of Incorporation
of the Corporation; (4) the adoption, amendment or repeal of any Bylaws of the
Corporation; (5) adopting a plan of merger or consolidation; (6) the sale,
lease, exchange or other disposition of all or substantially all the property
and assets of the Corporation; or (7) a voluntary dissolution of the
Corporation or a revocation thereof.
SECTION 2. Meetings. Regular meetings of the Executive Committee, of
which no notice shall be necessary, shall be held on such days and at such
places as shall be fixed, from time to time, by resolution adopted by vote of a
majority of the Committee and communicated to all the members thereof. Special
meetings of the Executive Committee may be called by the Chairman of the
Committee at any time. Notice of each special meeting of the Committee shall
be sent to each member of the Committee by mail to his residence or usual place
of business not later than three (3) days before the day on which the meeting
is to be held, or shall be sent to him at such place by telegram, telex or
cablegram, or be delivered personally, or by telephone, to each member of the
Committee not later than the day before the day on which the meeting is to be
held. Notice of any such meeting need not be given to any member who signs a
waiver of notice either before or after the meeting (in addition to any other
form of waiver, such waiver may be evidenced by a telegram, telex or cablegram
from a member). Attendance of a member at a meeting shall
-8-
<PAGE> 9
constitute a waiver of notice of such meeting and waiver of any and all
objections to the place of the meeting, the time of the meeting or the manner
in which it has been called or convened, except when a member states, at the
beginning of the meeting, any such objection or objections to the transaction
of business. Neither the business to be transacted at, nor the purpose of, any
meeting of the Committee need be specified in the notice or waiver of notice of
such meeting. A majority of the Executive Committee shall constitute a quorum
for the transaction of business, and the act of a majority of those present at
a meeting, at which a quorum is present, shall be the act of the Executive
Committee. The members of the Executive Committee shall act only as a
committee, and the individual members shall have no power as such.
SECTION 3. Records. The Executive Committee shall keep a record of
its acts and proceedings and shall report the same promptly to the Board of
Directors. Such acts and proceedings shall be subject to review by the Board
of Directors, but no rights of third parties shall be affected by such review.
The Secretary of the Corporation, or, in his absence, an Assistant Secretary,
shall act as secretary to the Executive Committee; or the Committee may, in its
discretion, appoint its own secretary.
SECTION 4. Vacancies. Any vacancy in the Executive Committee shall be
filled by vote of a majority of the whole Board of Directors.
ARTICLE IV
OTHER COMMITTEES
The Board of Directors, by resolution adopted by a majority of the whole
Board, may designate from among its members other committees in addition to
the Executive Committee, each consisting of two (2) or more directors and
each of which, to the extent provided in such resolution, shall have and may
exercise all the authority of the Board of Directors, provided that no such
committee shall have the authority of the Board of Directors in reference to:
(1) approving or proposing to shareholders any action required by applicable
law to be approved by the shareholders of the Corporation; (2) the filling of
vacancies on the Board of Directors or any of its committees; (3) amending the
Articles of Incorporation of the Corporation; (4) the adoption, amendment or
repeal of any Bylaws of the Corporation; (5) the adoption of a plan of merger
or consolidation; (6) the sale, lease, exchange or other disposition of all or
substantially all of the property and assets of the Corporation; or (7) a
voluntary dissolution of the Corporation or a revocation thereof.
-9-
<PAGE> 10
ARTICLE V
OFFICERS AND AGENTS; POWERS AND DUTIES
SECTION 1. Officers. The Board of Directors shall elect a Chairman
(who shall be a director), a President, a Secretary and a Treasurer. The Board
of Directors may also elect one or more Vice Chairmen, one or more Vice
Presidents (one or more of whom may be designated an Executive Vice President
and one or more of whom may be designated a Senior Vice President and one or
more of whom may be designated a Group Vice President), a Controller and such
other officers and agents of the Corporation as from time to time may appear to
be necessary or advisable in the conduct of the affairs of the Corporation.
The Board shall designate from among such elected officers a Chief Executive
Officer and may designate from among such elected officers a Chief Operating
Officer. Any two or more offices may be held by the same person, except that
the office of President and the office of Secretary shall be held by separate
persons.
SECTION 2. Term of Office. So far as practicable, all officers shall
be elected at the organization meeting of the Board of Directors, in each year,
and, subject to the provisions of Section 3 of this Article V, each officer
shall hold office until the organization meeting of the Board of Directors in
the next subsequent year and until his successor has been elected and has
qualified, or until his earlier resignation, removal from office or death.
SECTION 3. Removal of Officers. Any officer elected by the Board of
Directors may be removed at any time, either with or without cause, by the
Board at any meeting.
SECTION 4. Vacancies. If any vacancy occurs in any office, the Board
of Directors may elect a successor to fill such vacancy for the remainder of
the term.
SECTION 5. Chief Executive Officer. The Chief Executive Officer shall,
under the direction of the Board of Directors, have general direction of the
Corporation's business, policies and affairs. He shall preside, when present,
at all meetings of the shareholders and, in the absence of the Chairman of the
Executive Committee, at all meetings of the Executive Committee. He, the Vice
Chairmen, the President and the Chief Operating Officer shall each have
general power to execute
-10-
<PAGE> 11
bonds, deeds and contracts in the name of the Corporation and to affix the
corporate seal; to sign stock certificates; and to remove or suspend such
employees or agents as shall not have been appointed by the Board of Directors.
In the absence or disability of the Chief Executive Officer, his duties shall
be performed and his powers may be exercised by the Chief Operating Officer or
by such other officer as shall be designated by the Board of Directors.
SECTION 6. Chief Operating Officer. The Chief Operating Officer shall,
under the direction of the Chief Executive Officer, have direct
superintendence of the Corporation's business, policies, properties and
affairs. He shall have such further powers and duties as from time to time may
be conferred upon, or assigned to, him by the Board of Directors or the Chief
Executive Officer. In the absence or disability of the Chief Executive
Officer, the Chief Operating Officer shall perform his duties and may exercise
his powers.
SECTION 7. Chairman. The Chairman shall preside, when present, at all
meetings of the Board of Directors and shall have such other powers and duties
as from time to time may be conferred upon, or assigned to, him by the Board of
Directors or the Chief Executive Officer (if the Chairman is not the Chief
Executive Officer).
SECTION 8. Vice Chairmen. Each of the several Vice Chairmen shall have
such powers and duties as from time to time may be conferred upon, or assigned
to, him by the Board of Directors or the Chief Executive Officer (if such Vice
Chairman is not the Chief Executive Officer).
SECTION 9. President. The President shall have such powers and duties
as from time to time may be conferred upon, or assigned to, him by the Board of
Directors or the Chief Executive Officer (if the President is not the Chief
Executive Officer).
SECTION 10. Vice Presidents. The several Vice Presidents shall perform
all such duties and services as shall be assigned to or required of them, from
time to time, by the Board of Directors, the Chief Executive Officer or the
Chief Operating Officer.
-11-
<PAGE> 12
SECTION 11. Secretary. The Secretary shall attend to the giving of
notice of all meetings of shareholders and of the Board of Directors and shall
keep and attest true records of all proceedings thereat. He shall have the
responsibility of authenticating records of the Corporation. He shall have
charge of the corporate seal and have authority to attest any and all
instruments or writings to which the same may be affixed. He shall keep and
account for all books, documents, papers and records of the Corporation, except
those which are hereinafter directed to be in the charge of the Treasurer or
the Controller. He shall have authority to sign stock certificates and shall
generally perform all the duties usually appertaining to the office of
secretary of a corporation. In the absence of the Secretary, an Assistant
Secretary or Secretary pro tempore shall perform his duties.
SECTION 12. Treasurer. The Treasurer shall have the care and custody
of all moneys, funds and securities of the Corporation and shall deposit or
cause to be deposited all funds of the Corporation in and with such
depositaries as shall, from time to time, be designated by the Board of
Directors or by such officers of the Corporation as may be authorized by the
Board of Directors to make such designation. He shall have power to sign stock
certificates; to endorse for deposit or collection, or otherwise, all checks,
drafts, notes, bills of exchange or other commercial paper payable to the
Corporation; and to give proper receipts or discharges therefor.
SECTION 13. Controller. The Controller shall keep complete and
accurate books of account relating to the business of the Corporation,
including records of all assets, liabilities, commitments, receipts,
disbursements and other financial transactions of the Corporation, and its
divisions and subsidiaries. He shall render a statement of the Corporation's
financial condition whenever required to do so by the Board of Directors, the
Chief Executive Officer, the Chief Operating Officer or the Executive Vice
President - Finance.
SECTION 14. Attorneys. The Board of Directors may, from time to
time, appoint one or more attorneys-in-fact to act for and in representation of
the Corporation, either generally or specially, judicially or extra-judicially,
and may delegate to any such attorney or attorneys-in-fact all or any powers
which, in the judgment of the Board of Directors, may be necessary, advisable,
convenient or suitable for exercise in any country or jurisdiction in the
administration or management of the business of the Corporation, or the defense
or enforcement of its rights, even though such powers be herein provided or
directed to be exercised by a designated officer of the Corporation, or by the
Board of Directors. The act of the Board of Directors in conferring any such
powers upon, or delegating the same to, any attorney-in-fact shall be
conclusive evidence in favor of any third person of the
-12-
<PAGE> 13
right of the Board of Directors so to confer or delegate such powers; and the
exercise by any attorney-in-fact of any powers so conferred or delegated shall
in all respects be binding upon the Corporation.
SECTION 15. Additional Powers and Duties. In addition to the foregoing
especially enumerated duties and powers, the several officers of the
Corporation shall perform such other duties and exercise such further powers as
may be provided by these Bylaws or as the Board of Directors may, from time to
time, determine, or as may be assigned to them by any competent superior
officer.
SECTION 16. Compensation. The compensation of all officers of the
Corporation shall be fixed, from time to time, by the Board of Directors.
SECTION 17. Appointed Officers. The Board of Directors, the Chief
Executive Officer or the Chief Operating Officer may, from time to time,
appoint individuals ("appointed officers") to serve in such designated
capacities for the Corporation and to hold such nominal titles (such as a
designated officer of a division or of another area of the business affairs of
the Corporation) as the Board of Directors, the Chief Executive Officer or the
Chief Operating Officer may deem appropriate. No appointed officer shall, by
reason of such appointment, become an officer of the Corporation. Each
appointed officer shall perform such duties and shall have such authority as
shall be delegated to him from time to time by the officer of the Corporation
then responsible for the particular area in which such appointed officer is
working. Any title granted to any appointed officer pursuant to this Section
17 may be withdrawn, with or without cause, at any time by the Board of
Directors, the Chief Executive Officer or the Chief Operating Officer, and any
duty or authority delegated to any appointed officer pursuant to this Section
17 may be withdrawn, with or without cause, at any time by the Board of
Directors, the Chief Executive Officer, the Chief Operating Officer or the
officer who delegated such duty or authority to the appointed officer.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 1. Indemnified Parties. Every person (and the heirs and
personal representatives of such person) who is or was a director, officer,
employee or agent of the Corporation, or of any other corporation, partnership,
joint venture, trust or other enterprise in which he served as such at the
request of the Corporation, shall be indemnified by the Corporation in
accordance with the provisions of this Article VI
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<PAGE> 14
against any and all liability and expense (including, without limitation,
counsel fees and disbursements, and amounts of judgments, fines or penalties
against, or amounts paid in settlement by, a director, officer, employee or
agent) actually and reasonably incurred by him in connection with or resulting
from any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative, or investigative or in connection with
any appeal relating thereto, in which he may become involved, as a party or
otherwise, or with which he may be threatened, by reason of his being or having
been a director, officer, employee or agent of the Corporation or such other
corporation, partnership, joint venture, trust or other enterprise, or by
reason of any action taken or omitted by him in his capacity as such director,
officer, employee or agent whether or not he continues to be such at the time
such liability or expense shall have been incurred.
SECTION 2. Indemnification As of Right. Every person (and the heirs
and personal representatives of such person) referred to in Section 1 of this
Article VI, to the extent that such person has been successful on the merits or
otherwise with respect to any claim, action, matter, suit or proceeding of the
character described in Section 1, shall be entitled to indemnification as of
right for expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith.
SECTION 3. Indemnification Based on Review. Except as provided in
Section 2 of this Article VI, upon receipt of a claim for indemnification
hereunder, the Corporation shall proceed as follows, or as otherwise permitted
by applicable law: If the claim is made by a director or officer of the
Corporation, the Board of Directors, by a majority vote of a quorum consisting
of directors who were not parties to the applicable action, suit or proceeding,
shall determine whether the claimant met the applicable standard of conduct as
set forth in Subsections (A) and (B) below. If such quorum is not obtainable
or, even if obtainable, a quorum of disinterested directors so directs, such
determination shall be made by independent legal counsel (who may be the
regular inside or outside counsel of the Corporation) in a written opinion. If
such determination has not been made within 90 days after the claim is
asserted, the claimant shall have the right to require that the determination
be submitted to the shareholders at the next regular meeting of shareholders by
vote of a majority of the shares entitled to vote thereon. If a claim is made
by a person who is not a director or officer of the Corporation, the Chief
Executive Officer and the general counsel of the Corporation shall determine,
subject to applicable law, the manner in which there shall be made the
determination as to whether the claimant met the applicable standard of conduct
as set forth in Subsections (A) and (B) below. In the case of each claim for
indemnification, the Corporation shall pay the claim to the extent the
determination is favorable to the person making the claim.
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<PAGE> 15
(A) In the case of a claim, action, suit or proceeding other than by
or in the right of the Corporation to procure a judgment in its
favor, the director, officer, employee or agent must have acted
in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, in addition, in any
criminal action or proceeding, had no reasonable cause to
believe that his conduct was unlawful. In addition, any
director seeking indemnification must not have been adjudged
liable on the basis that any personal benefit was received by
him. For the purpose of this Subsection (A), the termination of
any claim, action, suit or proceeding, civil, criminal or
administrative, by judgment, order, settlement (either with or
without court approval) or conviction, or upon a plea of guilty
or nolo contendere or its equivalent, shall not create a
presumption that a director, officer, employee or agent did not
meet the standards of conduct set forth in this Subsection.
(B) In the case of a claim, action, suit or proceeding by or in the
right of the Corporation to procure a judgment in its favor, the
director, officer, employee or agent must have acted in good
faith in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation; provided, however,
that no indemnification under this Subsection (B) shall be made
(1) with regard to any claim, issue or matter as to which such
director, officer, employee or agent shall have been adjudged to
be liable to the Corporation unless and only to the extent that
the court in which such action or suit was brought shall
determine that, despite the adjudication of liability but in
view of all the circumstances of the case, such director,
officer, employee or agent is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper,
or (2) for amounts paid, or expenses incurred, in connection
with the defense or settlement of any such claim, action, suit
or proceeding, unless a court of competent jurisdiction has
approved indemnification with regard to such amounts or expenses.
SECTION 4. Advances. Expenses incurred with respect to any claim,
action, suit or proceeding of the character described in Section 1 of this
Article VI shall be advanced by the Corporation prior to the final disposition
thereof upon receipt of an undertaking by or on behalf of the recipient to
repay such amount if it shall be ultimately determined that he is not entitled
to indemnification under this Article VI.
SECTION 5. General. The rights of indemnification and advancement of
expenses provided in this Article VI shall be in addition to any rights to
which any such director, officer, employee or other person may otherwise be
entitled by contract or as a matter of law. Each person who shall act as a
director, officer,
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<PAGE> 16
employee or agent of the Corporation or of any other corporation referred to in
Section 1 of this Article VI, shall be deemed to be doing so in reliance upon
the right of indemnification provided for in this Article VI, and this Article
VI constitutes a contract between the Corporation and each of the persons from
time to time entitled to indemnification hereunder, and the rights of each such
person hereunder may not be modified without the consent of such person.
ARTICLE VII
STOCK AND TRANSFER OF STOCK
SECTION 1. Stock Certificates. Every shareholder shall be entitled to
a certificate signed by the Chairman, the President or a Vice President and the
Secretary or an Assistant Secretary or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him in the Corporation and that those
shares are fully paid and non-assessable. Where any such certificate is
countersigned by either a Transfer Agent or a Registrar (other than the
Corporation or one of its employees) designated by the Corporation for that
purpose, any other signature on such certificate may be a facsimile, engraved,
stamped or printed. In case any person who served as any such officer shall
have signed any such certificate or whose facsimile signature shall have been
placed thereon shall have ceased to hold such office prior to the issue of such
certificate, such certificate may be issued at the direction of the Corporation
with the same effect as if such person held such office at the date of the
issue of such certificate.
SECTION 2. Transfer Agents and Registrars. The Board of Directors may,
in its discretion, appoint responsible banks or trust companies in such city
or cities as the Board may deem advisable, from time to time, to act as
Transfer Agents and Registrars of the stock of the Corporation; and, upon such
appointments being made, no stock certificate shall be valid until
countersigned by one of such Transfer Agents and registered by one of such
Registrars.
SECTION 3. Transfer of Stock. Shares of stock may be transferred by
delivery of the certificates therefor, accompanied either by an assignment in
writing on the back of the certificates or by written power of attorney to
sell, assign and transfer the same, signed by the record holder thereof; but no
transfer shall affect the right of the Corporation to pay any dividend upon the
stock to the holder of record thereof, or to treat the holder of record as the
holder in fact thereof for all purposes, and no transfer shall be valid, except
between the parties thereto, until such transfer shall have been made upon the
books of the Corporation.
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<PAGE> 17
SECTION 4. Lost Certificates. In case any certificate of stock shall
be lost, stolen or destroyed, the Board of Directors or the Executive
Committee, in its discretion, may authorize the issue of a substitute
certificate in place of the certificate so lost, stolen or destroyed, and may
cause such substitute certificate to be countersigned by the appropriate
Transfer Agent and registered by the appropriate Registrar; provided, that, in
each such case, the applicant for a substitute certificate shall furnish to the
Corporation, or to its Transfer Agents and Registrars, satisfactory evidence of
the loss, theft or destruction of such certificate and of the ownership
thereof, and also such security or indemnity as may be required by any of such
parties.
SECTION 5. Closing of Transfer Books and Fixing Record Date. For the
purpose of determining shareholders entitled to notice of a shareholders'
meeting, to demand a special meeting, to vote at any meeting of shareholders or
any adjournment thereof, or to take any other action, or entitled to receive
payment of any dividend, or in order to make a determination of shareholders
for any other proper purpose, the Board of Directors may fix in advance a date
as the record date for any such determination of shareholders, such date in any
case to be not more than seventy (70) days and, in case of a meeting of
shareholders, not less than ten (10) days prior to the date on which the
particular action, requiring such determination of shareholders is to be taken.
ARTICLE VIII
MISCELLANEOUS
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall be the
calendar year.
SECTION 2. Surety Bonds. Such officers or agents of the Corporation
as the Board of Directors may direct, from time to time, shall be bonded for
the faithful performance of their duties, in such amounts and by such surety
companies as the Board of Directors may determine. The premiums on such bonds
shall be paid by the Corporation, and the bonds so furnished shall be in the
custody of the Secretary.
SECTION 3. Signature of Negotiable Instruments. All bills, notes, checks
or other instruments for the payment of money shall be signed or countersigned
by such officers and in such manner as, from time to time, may be prescribed
by resolution (whether general or special) of the Board of Directors.
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<PAGE> 18
SECTION 4. Election of Certain Provisions of Georgia Business Corporation
Code. All requirements and provisions of Parts 2 and 3 of Article 11 of the
Georgia Business Corporation Code (such provisions being the successor
provisions to Articles 11 and 11A of the Georgia Business Corporation Code as
in effect prior to the 1989 revisions thereto and recodification thereof), as
may be in effect from time to time, including any successor statutes, shall be
applicable to any "business combinations" (as respectively defined in Parts 2
and 3 of Article 11) of the Corporation.
ARTICLE IX
AMENDMENTS
Subject to the provisions of the Georgia Business Corporation Code, the
Board of Directors shall have the power to alter, amend or repeal these Bylaws
or to adopt new bylaws, but any bylaws adopted by the Board of Directors
may be altered, amended or repealed, and new bylaws adopted, by the
shareholders. The shareholders may prescribe that any bylaw or bylaws adopted
by them shall not be altered, amended or repealed by the Board of Directors.
Action by the directors with respect to the Bylaws shall be taken by an
affirmative vote of a majority of all of the directors then in office. Except
as provided in the Articles of Incorporation, action by the shareholders with
respect to the Bylaws shall be taken by an affirmative vote of a majority of
all shares then outstanding and entitled to elect directors.
_________________________
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<PAGE> 1
EXHIBIT 11
GEORGIA-PACIFIC CORPORATION AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF PER SHARE EARNINGS (Unaudited)
(Thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
--------------------------
1994 1993
------------ ------------
<S> <C> <C>
Income (Loss)
Income before extraordinary
item and accounting change $ 56,000 $ 41,000
Extraordinary item - loss from
early retirement of debt,
net of taxes (11,000) -
Cumulative effect of accounting
change, net of taxes (5,000) -
--------- ---------
Net income $ 40,000 $ 41,000
========= =========
Weighted Average Shares
Common shares outstanding, net of
restricted stock 88,701 86,561
Add - shares assumed to be issued
under long-term incentive
(restricted stock),
stock option and stock
purchase plans at the
average market price 919 1,664
--------- ---------
Primary shares 89,620 88,225
--------- ---------
Add - additional shares assumed to be
issued under long-term incentive
(restricted stock), stock option
and stock purchase plans at
quarter-end market price (if
higher than average market
price) - -
--------- ---------
Fully diluted shares 89,620 88,225
========= =========
Income (Loss) Per Share
Income before extraordinary
item and accounting change $ .63 $ .47
Extraordinary item - loss from
early retirement of debt,
net of taxes (.12) -
Cumulative effect of accounting
change, net of taxes (.06) -
--------- ---------
Net income $ .45 $ .47
========= =========
Income (Loss) Per Share - Primary and
Fully Diluted
Income before extraordinary
item and accounting change $ .63 $ .46
Extraordinary item - loss from
early retirement of debt,
net of taxes (.12) -
Cumulative effect of accounting
change, net of taxes (.06) -
--------- ---------
Net income $ .45 $ .46
========= =========
</TABLE>
A single presentation of income (loss) per share is made on the Statements of
Income because the effects of assuming issuance of common shares under
long-term incentive, stock option and stock purchase plans are either
antidilutive or insignificant.
<PAGE> 1
Exhibit 19
<TABLE>
<CAPTION>
STATEMENTS OF INCOME (Unaudited) Georgia-Pacific Corporation and Subsidiaries
Three months
ended March 31,
------------------------
(MILLIONS, EXCEPT PER SHARE AMOUNTS) 1994 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
NET SALES $2,955 $2,944
- ---------------------------------------------------------------------------------------------
Costs and expenses
Cost of sales 2,346 2,268
Selling, general and administrative 261 281
Depreciation and depletion 185 188
Interest 121 129
Other (income) expense (57) 36
- ----------------------------------------------------------------------------------------------
Total costs and expenses 2,856 2,902
- ---------------------------------------------------------------------------------------------
Income before income taxes,
extraordinary item and
accounting change 99 42
Provision for income taxes 43 1
- ---------------------------------------------------------------------------------------------
Income before extraordinary item
and accounting change 56 41
Extraordinary item - loss from early
retirement of debt, net of taxes (11) -
Cumulative effect of accounting
change, net of taxes (5) -
- ---------------------------------------------------------------------------------------------
NET INCOME $ 40 $ 41
- -----------------------------------------------------------------============================
Per share:
Income before extraordinary item
and accounting change $ .63 $ .47
Extraordinary item - loss from early
retirement of debt, net of taxes (.12) -
Cumulative effect of accounting
change, net of taxes (.06) -
- ---------------------------------------------------------------------------------------------
Net income $ .45 $ .47
- -----------------------------------------------------------------============================
Average number of shares outstanding 88.7 86.6
- -----------------------------------------------------------------============================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 2
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS (unaudited) Georgia-Pacific Corporation and Subsidiaries
Three months
ended March 31,
-----------------------
(MILLIONS) 1994 1993
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided by (used for) operations
Net income $ 40 $ 41
Adjustments to reconcile net income
to cash (used for) operations:
Depreciation 175 178
Depletion 10 10
Deferred tax (benefit) (7) (27)
Amortization of goodwill 15 14
Cumulative effect of accounting
change, net of taxes 5 -
Stock compensation programs (6) 5
(Gain) on sale of capital assets (7) (15)
Other (income) expense (57) 36
(Increase) in receivables (116) (52)
(Increase) in inventories (100) (138)
Change in other working capital (45) (3)
Increase (decrease) in taxes payable 28 (92)
(Decrease) in deferred income taxes (25) -
Change in other assets and other
long-term liabilities 27 (9)
- ----------------------------------------------------------------------------------------------
CASH (USED FOR) OPERATIONS (63) (52)
- ----------------------------------------------------------------------------------------------
Cash provided by (used for)
investment activities
Capital expenditures
Property, plant and equipment (138) (72)
Timber and timberlands (14) (27)
- ----------------------------------------------------------------------------------------------
Total capital expenditures (152) (99)
Proceeds from sales of assets 208 23
Other (2) 13
- ----------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED FOR)
INVESTMENT ACTIVITIES 54 (63)
- ----------------------------------------------------------------------------------------------
Cash provided by (used for)
financing activities
Repayments of long-term debt (53) (46)
Additions to long-term debt 4 248
Fees paid to issue debt - (2)
Increase in bank overdrafts 41 6
Increase (decrease) in commercial paper and other
short-term notes 76 (52)
Cash dividends paid (36) (35)
- ----------------------------------------------------------------------------------------------
CASH PROVIDED BY FINANCING ACTIVITIES 32 119
- ----------------------------------------------------------------------------------------------
Increase in cash 23 4
Balance at beginning of period 41 55
- ----------------------------------------------------------------------------------------------
BALANCE AT END OF PERIOD $ 64 $ 59
- -----------------------------------------------------------------------=======================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 3
<TABLE>
<CAPTION>
BALANCE SHEETS Georgia-Pacific Corporation and Subsidiaries
March 31, December 31,
(MILLIONS EXCEPT SHARES AND PER SHARE AMOUNTS) 1994 1993
- ---------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
Assets
CURRENT ASSETS
Cash $ 64 $ 41
Receivables, less allowances of $33 and $32 466 377
Inventories 1,264 1,202
Other current assets 19 26
- ---------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 1,813 1,646
- ---------------------------------------------------------------------------------------------
TIMBER AND TIMBERLANDS, NET 1,382 1,381
- ---------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land, buildings, machinery and equipment, at cost 10,940 10,986
Accumulated depreciation (5,619) (5,538)
- ---------------------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, NET 5,321 5,448
- ---------------------------------------------------------------------------------------------
GOODWILL 1,817 1,832
- ---------------------------------------------------------------------------------------------
OTHER ASSETS 220 238
- ---------------------------------------------------------------------------------------------
TOTAL ASSETS $10,553 $10,545
- ---------------------------------------------------------------------========================
Liabilities and shareholders' equity
CURRENT LIABILITIES
Bank overdrafts, net $ 214 $ 173
Commercial paper and other short-term notes 726 650
Current portion of long-term debt 239 57
Taxes payable 60 35
Accounts payable 517 582
Accrued compensation 155 184
Accrued interest 104 114
Other current liabilities 303 269
- ---------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 2,318 2,064
- ---------------------------------------------------------------------------------------------
LONG-TERM DEBT, EXCLUDING CURRENT PORTION 3,931 4,157
- ---------------------------------------------------------------------------------------------
OTHER LONG-TERM LIABILITIES 828 827
- ---------------------------------------------------------------------------------------------
DEFERRED INCOME TAXES 1,063 1,095
- ---------------------------------------------------------------------------------------------
Commitments and contingencies
Shareholders' equity
Common stock, par value $.80; 150,000,000 shares
authorized; 90,355,000 and 90,269,000 shares
issued 71 71
Additional paid-in capital 1,200 1,202
Retained earnings 1,221 1,217
Long-term incentive plan deferred compensation (45) (56)
Other (34) (32)
- ---------------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 2,413 2,402
- ---------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $10,553 $10,545
- ---------------------------------------------------------------------========================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE> 4
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
GEORGIA-PACIFIC CORPORATION
MARCH 31, 1994
1. PRINCIPLES OF PRESENTATION. The interim financial information included
herein is unaudited; however, such information reflects all adjustments
which are, in the opinion of management, necessary for a fair
presentation of the financial position, results of operations and cash
flows for the interim periods. All such adjustments are of a normal,
recurring nature. Certain 1993 amounts have been reclassified to
conform with the 1994 presentation.
2. INCOME (LOSS) PER SHARE. Income (loss) per share is computed based on
net income (loss) and the weighted average number of common shares
outstanding, net of restricted shares. The effects of assuming
issuance of common shares under long-term incentive, stock option and
stock purchase plans were either insignificant or antidilutive.
3. ACCOUNTING CHANGE. Effective January 1, 1994 the Corporation adopted
Financial Accounting Standard Number 112 (FAS 112), "Employers'
Accounting for Postemployment Benefits." FAS 112 requires recognition
of benefits provided by an employer to former or inactive employees
after employment but before retirement. The adoption of FAS 112
resulted in a one-time, after-tax charge of $5 million (6 cents per
share) which was recognized in the 1994 first quarter.
4. OTHER (INCOME) LOSS. During the 1994 first quarter, the Corporation
completed the sales of its roofing manufacturing and envelope
businesses. The sale of the roofing manufacturing business resulted
in an after-tax gain of $14 million ($24 million before taxes). The
sale of the envelope business resulted in an after-tax gain of $24
million ($39 million before taxes). The Corporation received after-tax
cash proceeds of approximately $156 million from these transactions.
During the 1993 first quarter, the Corporation recorded an after-tax
loss of $3 million ($36 million before taxes) on the sale of its paper
distribution business. The large tax benefit resulted from the loss on
the sale as well as the fact that the tax basis of capital stock
included in the assets sold in the transaction was significantly
greater than its financial basis.
<PAGE> 5
5. SUPPLEMENTAL DISCLOSURES - STATEMENTS OF CASH FLOWS. The cash impact
of interest and income taxes is reflected in the table below. The
effect of foreign currency exchange rate changes on cash was not
material in either period.
Three months
ended March 31,
-------------------
(Millions) 1994 1993
--------------------------------------------------------
Total interest costs $ 122 $ 130
Interest capitalized (1) (1)
--------------------------------------------------------
Interest expense $ 121 $ 129
----------------------------------------================
Interest paid $ 130 $ 139
---------------------------------------=================
Income taxes paid, net of refunds $ 40 $ 153
---------------------------------------=================
6. INVENTORY VALUATION. Inventories include costs of materials, labor
and plant overhead. The major components of inventories (at average
cost) were as follows at March 31, 1994 and December 31, 1993: $337
million and $367 million for raw materials, $876 million and $786
million for finished goods and $267 million and $262 million for
supplies. The Corporation uses the dollar value pool method for
computing LIFO inventories. The excess of average cost over LIFO
amounted to $216 million and $213 million at March 31, 1994 and
December 31, 1993, respectively.
7. PROVISION FOR INCOME TAXES. Excluding asset sales, the Corporation
reported pretax income before the extraordinary item and accounting
change of $42 million and an income tax provision of $20 million for
the three months ended March 31, 1994. For the three months ended
March 31, 1993, the Corporation reported pretax income of $78 million
and an income tax provision of $34 million, excluding asset sales.
The actual effective tax rate for both periods was higher than the
federal statutory rate primarily because of nondeductible goodwill
amortization expense associated with past business acquisitions.
8. COMMITMENTS AND CONTINGENCIES. The Corporation is a party to various
legal proceedings incidental to its business and is subject to a
variety of environmental and pollution control laws and regulations in
all jurisdictions in which it operates. As is the case with other
companies in similar industries, the Corporation faces exposure from
actual or potential claims and legal proceedings involving environmental
matters. The Corporation is self-insured for general liability claims
up to $5 million per occurrence. Liability insurance in effect during
the last several years provides coverage for environmental matters only
in certain circumstances.
The Corporation is involved in environmental remediation activities at
numerous sites where it has been notified that it is or may be a
potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act or similar state "superfund"
laws and at certain of its own properties. Of the known sites in which
it is involved, the Corporation estimates that slightly over 50 percent
are being
<PAGE> 6
investigated. Of the remaining sites, approximately one-half are being
remediated and the other one-half are being monitored, an activity which
occurs after either site investigation or remediation has been
completed. The ultimate costs to the Corporation for the remediation of
these sites cannot be predicted with certainty due to the often unknown
magnitude of the pollution or the necessary cleanup, the varying costs of
alternative cleanup methods, the amount of time necessary to accomplish
such clean-ups, the evolving nature of cleanup technologies and
government regulations and the inability to determine the Corporation's
share of multi-party clean-ups or the extent to which contribution will
be available from other parties. The Corporation has established
reserves for environmental remediation costs for these sites in amounts
which it believes are probable and reasonably estimable. Based on
analysis of currently available information and previous experience with
respect to the clean-up of hazardous substances, the Corporation believes
that it is reasonably possible that costs associated with these sites may
exceed current reserves by amounts that may prove insignificant or that
could range, in the aggregate, up to approximately $74 million. This
estimate of the range of reasonably possible additional costs is less
certain than the estimates upon which reserves are based, and in order to
establish the upper limit of such range assumptions least favorable to
the Corporation among the range of reasonably possible outcomes were
used. In estimating both its current reserves for environmental
remediation and the possible range of additional costs, the Corporation
has not assumed it will bear the entire cost of remediation of every site
to the exclusion of other known potentially responsible parties who may
be jointly and severally liable. The ability of other potentially
responsible parties to participate has been taken into account, based
generally on the parties' financial condition and probable contribution
on a per site basis. No amounts have been recorded for potential
recoveries from insurance carriers.
In the fourth quarter of 1992, the Corporation filed suit in the State of
Washington against numerous insurance carriers for coverage under
comprehensive general liability insurance policies issued by those
carriers. The Corporation is seeking a declaratory judgment to the
effect that past and future environmental remediation and other related
costs with respect to certain of the sites are covered by such policies.
Approximately 220 suits involving 9,160 plaintiffs are currently pending
in several State Courts in Mississippi. The suits allege a
variety of torts including nuisance, trespass and infliction of emotional
distress primarily related to the discharge of dioxin into the Leaf River
from a pulp mill owned by a subsidiary of the Corporation. Three of
these cases have been tried. A total of $241,000 in compensatory damages
and $4 million in punitive damages were awarded to three plaintiffs in
the first two cases (Ferguson and Simmons) with respect to certain
claims. The jury found in favor of the Corporation with respect to a
fourth plaintiff. The Corporation has appealed both judgments. On July
8, 1993, in the third Mississippi dioxin case tried, the jury returned a
verdict in favor of the Corporation on all counts. The plaintiffs have
filed a notice of appeal.
<PAGE> 7
On November 9, 1993, the circuit court judge to whom almost all the
remaining Mississippi dioxin cases have been assigned issued an Order
staying trials and other material proceedings in these cases until the
Mississippi Supreme Court has decided the Ferguson and Simmons appeals.
The Mississippi Supreme Court heard oral arguments in Ferguson and
Simmons on March 21, 1994. No decision has been issued to date.
In January 1994, one of the two dioxin cases pending in federal court in
Mississippi, which was scheduled for trial in June 1994, was voluntarily
dismissed with prejudice by the plaintiffs after testing indicated that
no dioxin from the pulp mill was present on the plaintiff's property. In
the second dioxin case pending in Federal Court, the plaintiffs filed a
Notice of Voluntary Dismissal in February 1994.
Although there can be no assurances as to the ultimate outcome of the
approximately 220 suits pending against the Corporation for alleged
discharges of dioxin, based on the opinions of counsel, the Corporation
believes that substantial grounds exist for reversal of the judgments in
Ferguson and Simmons and that it has meritorious defenses to the
remaining lawsuits.
On January 23, 1992, the mill's primary insurance carrier took the
position that these claims are not within its coverage. Suit has been
filed against the mill's carriers seeking a declaratory judgment to the
effect that such claims are within the policy provisions.
Although the ultimate outcome of these environmental matters and legal
proceedings cannot be determined with certainty, based on presently
available information management believes that adequate reserves have
been established for probable losses with respect thereto and that such
ultimate outcome, after taking such reserves into account, will not have
a material adverse effect on the consolidated financial position of the
Corporation.
<PAGE> 8
<TABLE>
<CAPTION>
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT (unaudited) Georgia-Pacific Corporation and Subsidiaries
Second Quarter Third Quarter Fourth Quarter
(Dollar amounts, except First --------------------- ---------------------- --------------------------
per share, in millions) Quarter Quarter Year-to-date Quarter Year-to-date Quarter Year-to-date
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1994
NET SALES
Building products $1,767 60%
Pulp and paper 1,180 40
Other operations 8 -
- ----------------------------------------------------------------------------------------------------------------------------------
Total net sales $2,955 100%
==================================================================================================================================
OPERATING PROFITS
Building products $ 247 97%
Pulp and paper (53) (20)
Other operations 3 1
Other income 57 22
- ----------------------------------------------------------------------------------------------------------------------------------
Total operating
profits 254 100%
====
General corporate (28)
Interest expense (121)
Cost of accounts
receivable sale
program (6)
Provision for
income taxes (43)
- ----------------------------------------------------------------------------------------------------------------------------------
Income before
extraordinary item
and accounting change 56
Extraordinary item, net
of taxes (11)
Accounting change,
net of taxes (5)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $ 40
==================================================================================================================================
Per common share:
Income before
extraordinary item
and accounting
change $ .63
Extraordinary item (.12)
Accounting change (.06)
- ----------------------------------------------------------------------------------------------------------------------------------
Net income $ .45
==================================================================================================================================
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
SALES AND OPERATING PROFITS BY INDUSTRY SEGMENT (unaudited) Georgia-Pacific Corporation and Subsidiaries
Second Quarter Third Quarter Fourth Quarter
(Dollar amounts, except First ------------------------------ ------------------------------ --------------------------
per share, in millions) Quarter Quarter Year-to-date Quarter Year-to-date Quarter Year-to-date
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1993
NET SALES
Building products $1,596 54% $1,782 56% $3,378 55% $1,781 60% $5,159 57% $1,908 60% $ 7,067 58%
Pulp and paper 1,340 46 1,416 44 2,756 45 1,191 40 3,947 43 1,284 40 5,231 42
Other operations 8 - 7 - 15 - 10 - 25 - 7 - 32 -
- ------------------------------------------------------------------------------------------------------------------------------------
Total net sales $2,944 100% $3,205 100% $6,149 100% $2,982 100% $9,131 100% $3,199 100% $12,330 100%
====================================================================================================================================
OPERATING PROFITS
Building products $ 309 148% $ 202 107% $ 511 129% $ 210 98% $ 721 118% $ 252 157% $ 973 126%
Pulp and paper (67) (32) (14) (7) (82) (20) (10) (5) (92) (15) (95) (59) (187) (24)
Other operations 2 1 - - 3 - 4 2 7 1 3 2 10 1
Other income (expense) (36) (17) - - (36) (9) 10 5 (26) (4) - - (26) (3)
- ------------------------------------------------------------------------------------------------------------------------------------
Total operating
profits 208 100% 188 100% 396 100% 214 100% 610 100% 160 100% 770 100%
==== ==== ==== ==== ==== ==== ====
General corporate (29) (33) (62) (67) (129) (76) (205)
Interest expense (129) (133) (262) (128) (390) (123) (513)
Cost of accounts
receivable sale
program (8) (7) (15) (7) (22) (7) (29)
(Provision) benefit for
income taxes (1) (10) (11) (40) (51) 10 (41)
- ------------------------------------------------------------------------------------------------------------------------------------
Income (loss) before
extraordinary item 41 5 46 (28) 18 (36) (18)
Extraordinary item, net
of taxes - (8) (8) (8) (16) - (16)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ 41 $ (3) $ 38 $ (36) $ 2 $ (36) $ (34)
====================================================================================================================================
Per common share:
Income (loss) before
extraordinary item $ .47 $ .06 $ .53 $ (.33) $ .20 $ (.41) $ (.21)
Extraordinary item - (.09) (.09) (.09) (.18) - (.18)
- ------------------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ .47 $ (.03) $ .44 $ (.42) $ .02 $ (.41) $ (.39)
====================================================================================================================================
</TABLE>
