SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
___
| X | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
---
OF THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended January 31, 1996
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: 1-4423
HEWLETT-PACKARD COMPANY
----------------------------------------------------
(Exact name of registrant as specified in its charter)
California 94-1081436
------------------------------- ---------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3000 Hanover Street, Palo Alto, California 94304
------------------------------------------ -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (415) 857-1501
--------------
-----------------------------------------------------------------
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
----- -----
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 January 31, 1996
-------------------------- -------------------------------
Common Stock, $1 par value 509.9 million shares
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
INDEX
-----
Page No.
--------
Part I. Financial Information
Item 1. Financial Statements.
Consolidated Condensed Balance Sheet
January 31, 1996 (Unaudited)
and October 31, 1995 2
Consolidated Condensed Statement of Earnings
(Unaudited) Three months ended January 31,
1996 and 1995 3
Consolidated Condensed Statement of Cash Flows
(Unaudited) Three months ended January 31,
1996 and 1995 4
Notes to Consolidated Condensed Financial
Statements (Unaudited) 5
Item 2. Management's Discussion and Analysis of Financial
Condition, Results of Operations and Factors That
May Affect Future Results (Unaudited). 6-8
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders. 9
Item 6. Exhibits and Reports on Form 8-K. 9
Signature 10
Exhibit Index 11
<TABLE>
Item 1. Financial Statements.
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEET
------------------------------------
(Millions except par value and number of shares)
<CAPTION>
January 31 October 31
1996 1995
---------- ----------
(Unaudited)
Assets
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,458 $ 1,973
Short-term investments 838 643
Accounts and notes receivable 6,479 6,735
Inventories:
Finished goods 3,871 3,368
Purchased parts and fabricated assemblies 2,917 2,645
Other current assets 933 875
------ ------
Total current assets 17,496 16,239
------ ------
Property, plant and equipment (less accumulated
depreciation: January 31, 1996 - $4,232;
October 31, 1995 - $4,036) 4,791 4,711
Long-term investments and other assets 3,466 3,477
------ ------
25,753 24,427
====== ======
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Notes payable and short-term borrowings $ 3,437 $ 3,214
Accounts payable 2,160 2,422
Employee compensation and benefits 1,468 1,568
Taxes on earnings 1,671 1,494
Deferred revenues 925 782
Other accrued liabilities 1,763 1,464
------- -------
Total current liabilities 11,424 10,944
------- -------
Long-term debt 1,094 663
Other liabilities 993 981
Shareholders' equity:
Preferred stock, $1 par value
(300,000,000 shares authorized; none
issued)
Common stock and capital in excess of
$1 par value (1,200,000,000 shares
authorized; 509,932,000 and 509,955,000
shares issued and outstanding at January
31, 1996 and October 31,1995,
respectively) 850 871
Retained earnings 11,392 10,968
------- -------
Total shareholders' equity 12,242 11,839
------- -------
$25,753 $24,427
======= =======
The accompanying notes are an integral part of these consolidated
condensed financial statements.
</TABLE>
2
<TABLE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF EARNINGS
--------------------------------------------
(Unaudited)
(Millions except per share amounts)
<CAPTION> Three months ended
January 31
------------------
1996 1995
---- ----
<S>
Net revenue: <C> <C>
Products $8,040 $6,285
Services 1,248 1,019
------ ------
9,288 7,304
------ ------
Costs and expenses:
Cost of products sold and services 5,988 4,547
Research and development 612 535
Selling, general and administrative 1,493 1,290
------ ------
8,093 6,372
------ ------
Earnings from operations 1,195 932
Interest income and other, net 37 33
Interest expense 70 46
------ ------
Earnings before taxes 1,162 919
Provision for taxes 372 317
------ ------
Net earnings $ 790 $ 602
====== ======
Net earnings per share* $ 1.50 $ 1.15
====== ======
Cash dividends declared per share* $ .40 $ .30
====== ======
Average shares and equivalents used
in computing net earnings per share* 526 524
====== ======
The accompanying notes are an integral part of these consolidated
condensed financial statements.
* 1995 amounts have been restated to reflect the retroactive effect of
the March 1995 2-for-1 stock split. See Note 5 for a discussion of the
stock split.
</TABLE>
3
<TABLE>
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
----------------------------------------------
(Unaudited)
(Millions)
<CAPTION>
Three months ended
January 31
------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 790 $ 602
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 289 273
Deferred taxes on earnings (55) (88)
Changes in assets and liabilities:
Accounts and notes receivable 263 24
Inventories (743) (128)
Accounts payable (270) 4
Taxes on earnings 198 98
Other current assets and liabilities 73 150
Other, net 73 (5)
------ ------
Net cash provided by operating activities 618 930
------ ------
Cash flows from investing activities:
Investment in property, plant and equipment (429) (386)
Disposition of property, plant and equipment 138 118
Purchase of short-term investments (1,959) (671)
Maturities of short-term investments 1,824 621
Other, net (6) ---
------ ------
Net cash used in investing activities (432) (318)
------ ------
Cash flows from financing activities:
Change in notes payable and short-term
borrowings 186 (413)
Issuance of long-term debt 441 289
Payment of current maturities of long-term debt (2) (19)
Issuance of common stock under employee
stock plans 86 93
Repurchase of common stock (309) (177)
Dividends (103) (76)
------ ------
Net cash provided by (used in)
financing activities 299 (303)
------ ------
Increase in cash and cash equivalents 485 309
Cash and cash equivalents at beginning of period 1,973 1,357
------ ------
Cash and cash equivalents at end of period $2,458 $1,666
====== ======
The accompanying notes are an integral part of these consolidated
condensed financial statements.
Certain amounts have been reclassified to conform to the 1996
presentation.
</TABLE>
4
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
1. In the opinion of the Company's management, the accompanying
consolidated condensed financial statements contain all adjustments
(which comprise only normal and recurring accruals) necessary to
present fairly the financial position as of January 31, 1996 and
October 31, 1995, and the results of operations and cash flows for
the three months ended January 31, 1996 and 1995.
The results of operations for the three months ended January 31, 1996
are not necessarily indicative of the results to be expected for the
full year.
2. Net earnings per share are computed using the weighted-average number
of common shares and common share equivalents outstanding during each
period. Common share equivalents represent the dilutive effect
of outstanding stock options.
3. Income tax provisions for interim periods are based on estimated
effective annual income tax rates. The effective income tax rate
varies from the U.S. federal statutory income tax rate primarily
because of variations in the tax rates on foreign income.
4. The Company paid interest of $58 million and $27 million during the
three months ended January 31, 1996 and 1995, respectively. During
the same periods, the Company paid income taxes of $208 million and
$258 million, respectively. The effect of foreign currency exchange
rate fluctuations on cash balances held in foreign currencies was
not material.
5. The Company made a 2-for-1 split of its $1 par value common stock in
the form of a 100 percent distribution to shareholders of record as
of March 24, 1995. As a result of the stock split, authorized,
outstanding and reserved common shares doubled and capital in excess
of par value was reduced by the par value of the additional common
shares issued. The rights of the holders of these securities were
not otherwise modified. All references in the consolidated condensed
statement of earnings for the period ended January 31, 1995 to number
of shares and per share amounts of the Company's common stock have
been restated.
6. In December 1995, the Company acquired all of the outstanding shares
of common stock of Convex Computer Corporation ("Convex") in exchange
for 1,528,000 shares of the Company's common stock. Convex Computer
Corporation designs, manufactures, markets and supports high
performance computers for engineering, scientific and technical
users. The merger has been accounted for using the pooling-of
-interests method, however, the accompanying consolidated condensed
financial statements have not been restated due to immateriality.
Convex's accumulated deficit and results of operations have been
included in the Company's consolidated condensed financial
statements commencing from the effective date of the merger.
7. In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 ("FAS 123"),
"Accounting for Stock-Based Compensation." The Company is required
to adopt FAS 123 by fiscal 1997, and upon adoption will elect to
continue to measure compensation cost for its employee stock
compensation plans using the intrinsic value-based method of
accounting prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Pro forma disclosure of
net earnings and net earnings per share will reflect the difference
between compensation cost included in net earnings and the related
cost measured by the fair-value based method defined in FAS 123,
including tax effects, that would have been recognized in the
consolidated statement of earnings if the fair value-based method
had been used.
5
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition, Results of Operations and Factors That May
Affect Future Results (Unaudited).
RESULTS OF OPERATIONS
Net Revenue - Net revenue for the first three months of fiscal 1996 was
$9.3 billion, an increase of 27 percent from the same period of fiscal
1995. Product sales increased 28 percent and service revenue grew 22
percent over the corresponding period of fiscal 1995. Net revenue grew
33 percent to $5.5 billion internationally and 20 percent to $3.8 billion
in the U.S.
The first quarter growth in net revenue was principally due to strong
demand for the Company's printer products and related supplies, personal
computer and PC networking products, PC and UNIX servers, and professional
services and consulting.
Costs and Expenses - Cost of products sold and services as a percentage
of net revenue was 64.5 percent for the first quarter of fiscal 1996,
compared to 62.3 percent for the first quarter of fiscal 1995. This
increase over fiscal 1995 was the result of continued competitive
pricing pressures, an ongoing shift in the mix of products sold towards
lower-margin, high-volume product families, and ramp-up costs for
continued introductions of new products. These factors are likely to
continue to cause the cost of sales ratio to trend upward in the future.
Operating expenses as a percentage of net revenue were 22.6 percent for
the first quarter of fiscal 1996, compared to 24.9 percent for the first
quarter of fiscal 1995, a decrease of 2.3 percentage points. This
decrease reflects ongoing efforts to achieve expense structures appropriate
for the Company's changing business. Operating expenses increased 15
percent for the first quarter of fiscal 1996 over the corresponding
year-ago period. This increase resulted primarily from increased marketing
and selling expenses, reflecting increased advertising and commissions,
and research and development expenses, reflecting the Company's commitment
to ensuring a continuing flow of high quality products. A part of the
increase is also attributable to increased employment in selected operating
areas.
Provision for Taxes - The provision for taxes as a percentage of earnings
before taxes was 32.0 percent for the first quarter of fiscal 1996,
compared to 34.5 percent for the first quarter of fiscal 1995. The lower
tax rate resulted from changes in the geographic mix of the Company's
earnings and resolution of certain issues related to tax returns filed
in previous years.
Net Earnings - Net earnings for the first quarter of fiscal 1996 were $790
million or $1.50 per share on an average of 526 million shares, compared
to net earnings of $602 million, or $1.15 per share on an average of 524
million shares for the first quarter of fiscal 1995, as restated to
reflect the retroactive effect of the March 1995 2-for-1 stock split.
FINANCIAL CONDITION
Liquidity and Capital Resources - The Company's financial position remains
strong, with cash and cash equivalents and short-term investments of $3.3
billion at January 31, 1996, compared with $2.6 billion at October 31,
1995. Cash flows from operating activities were $618 million during the
first three months of fiscal 1996 compared to $930 million for the
corresponding period of fiscal 1995.
Despite higher net earnings, cash generated from operations declined
compared to the prior period primarily as a result of significant growth
in inventories, partially offset by a decline in accounts and notes
receivable. Inventories grew 54% compared to the year-ago quarter
versus revenue growth of 27% for the same period.
6
The Company believes that the majority of this increase was necessary to
meet increased demand and customer delivery expectations, due in part to
increasing presence in the retail channel. Inventory management, however,
continues to be an area of focus.
Capital expenditures for the first three months of fiscal 1996 were $429
million, compared to $386 million for the corresponding period in the
previous year. The increase in capital expenditures was primarily due
to expansion of capacity for increased levels of business.
The changes in investment and borrowing activities during the
first three months of fiscal 1996, when compared to the same period in
1995, resulted from changes in the Company's liquidity requirements to
meet short-term working capital needs.
Under the Company's ongoing stock repurchase program, shares have been
purchased periodically to meet employee stock plan requirements. During
the three months ended January 31, 1996, the Company purchased and retired
approximately 3.7 million shares for an aggregate price of $309 million.
During the three months ended January 31, 1995, the Company repurchased
and retired approximately 3.8 million shares for an aggregate price of
$177 million.
FACTORS THAT MAY AFFECT FUTURE RESULTS
HP's future operating results may be adversely affected if the Company
is unable to continue to rapidly develop, manufacture and market
innovative products that meet customers' needs. The process of developing
new high technology products is complex and uncertain and requires
accurate anticipation of customer needs and technological trends.
After the products are developed, the Company must quickly manufacture
them in sufficient volumes at acceptable costs to meet demand.
In addition, portions of the Company's manufacturing operations are
dependent on the ability of significant suppliers to deliver completed
products, integral subassemblies and components in time to meet critical
distribution and manufacturing schedules. The Company periodically
experiences constrained supply of certain component parts in some product
lines, as a result of strong demand in those product lines as well as
strong demand in the industry. Continued constraints may adversely affect
the Company's operating results until alternate sourcing could be
developed.
The Company continues to expand into third-party distribution channels to
accommodate changing industry practices and customer preferences. As
more of the Company's products are distributed through resellers, these
resellers become more important to the Company's success. Some of these
companies are thinly capitalized and may be unable to withstand changes in
business conditions. The Company's financial results could be adversely
affected if the financial condition of these resellers substantially
weakens.
The operations of the Company involve the use of substances regulated
under various federal, state and international laws governing the
environment. It is the Company's policy to apply strict standards for
environmental protection to sites inside and outside the U.S., even if
not subject to regulations imposed by local governments. The liability
for environmental remediation and related costs is accrued when it is
considered probable and the costs can be estimated. Environmental costs
are presently not material to the Company's operations or financial
position.
7
A portion of the Company's research and development activities, its
corporate headquarters and other critical business operations are located
near major earthquake faults. The ultimate impact on the Company,
significant suppliers and the general infrastructure is unknown, but
operating results could be materially affected in the event of a major
earthquake. The Company is predominantly self-insured for losses and
interruptions caused by earthquakes.
Although the Company believes that it has the product offerings and
resources needed for continuing success, future revenue and margin trends
cannot be reliably predicted and may cause the Company to adjust its
operations. Factors external to the Company can result in volatility
of the Company's common stock price. Because of the foregoing factors,
recent trends should not be considered reliable indicators of future
stock prices or financial results.
8
PART II. OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Company's Annual Meeting of Shareholders was held on
February 27, 1996.
(b) At said Annual Meeting, shareholders voted on two matters:
the election of directors and the appointment of Price
Waterhouse LLP as the Company's independent accountants.
The shareholders elected all members of the management
slate in an uncontested election and approved the
appointment of independent accountants, by the following
votes, respectively.
Directors
--------- Votes Withheld/
Director Votes For Abstentions
-------- --------- ---------------
Thomas E. Everhart 416,604,382 1,017,777
John B. Fery 416,549,193 1,072,966
Jean-Paul G. Gimon 416,608,421 1,013,738
Sam Ginn 416,582,504 1,039,655
Richard A. Hackborn 416,619,862 1,002,297
Walter B. Hewlett 416,608,767 1,013,392
George A. Keyworth II 416,607,509 1,014,650
David M. Lawrence, M.D. 416,545,752 1,076,407
Paul F. Miller, Jr. 416,608,977 1,013,182
Susan P. Orr 416,597,382 1,024,777
David W. Packard 416,600,506 1,021,653
Donald E. Petersen 416,597,498 1,024,661
Lewis E. Platt 416,624,124 998,035
Robert P. Wayman 416,599,350 1,022,809
Accountants
-----------
Votes Withheld/
Votes for Votes Against Abstentions
--------- ------------- --------------
416,718,437 409,171 494,551
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
A list of exhibits is set forth in the Exhibit Index
found on page 11 of this report.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the
three months ended January 31, 1996.
9
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
SIGNATURE
---------
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.
HEWLETT-PACKARD COMPANY
(Registrant)
Dated: March 14, 1996 By: ROBERT P. WAYMAN
-------------------------
Robert P. Wayman
Executive Vice President,
Finance and Administration
(Chief Financial Officer)
10
HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
-------------
Exhibits:
1. Not applicable.
2. None.
3. Amended Bylaws.
4. None.
5-9. Not applicable.
10-11. None.
12-14. Not applicable.
15. None.
16-17. Not applicable.
18-19. None.
20-21. Not applicable.
22-24. None.
25-26. Not applicable.
27. Financial Data Schedule.
28. Not applicable.
99. None.
BY-LAWS
of
HEWLETT-PACKARD COMPANY
(a California Corporation)
_________________
ARTICLE I
OFFICES
Section 1.1 PRINCIPAL OFFICE. The principal office for the
transaction of the business of the corporation is hereby fixed and
located at 3000 Hanover Street, in the city of Palo Alto, State of
California. The Board of Directors is hereby granted full power and
authority to change said principal office to another location within or
without the State of California.
Section 1.2 OTHER OFFICES. One or more branch or other
subordinate offices may at any time be fixed and located by the Board of
Directors at such place or places within or without the State of
California as it deems appropriate.
ARTICLE II
DIRECTORS
Section 2.1 EXERCISE OF CORPORATE POWERS. Except as other- wise
provided by the Articles of Incorporation of the corporation or by the
laws Of the State of California now or hereafter in force, the business
and affairs of the corporation shall be man- aged and all corporate
powers shall be exercised by or under the direction of the Board of
Directors. The Board may delegate the management of the day-to-day
operation of the business of the corporation as permitted by law
provided that the business and affairs of the corporation shall be
managed and all corporate powers shall be exercised under the ultimate
direction of the Board.
Section 2.2 NUMBER. The number of the Corporation's directors shall
be not less than eleven (11) nor more than twenty-one (21) until changed
by an amendment of this Section 2.2 adopted by the Shareholders or Board
of Directors. Within such limits the exact number of directors shall be
fourteen (14) until changed by an amendment to this Section 2.2 adopted
by the shareholders or by the Board of Directors.
Section 2.3 NEED NOT BE SHAREHOLDERS. The directors Of the
corporation need not be shareholders of the corporation.
Section 2.4 COMPENSATION. Directors shall receive for their
services as directors such stated fees or other compensation and
allowances for expenses of attendance as may from time to time be fixed
by the Board of Directors. The directors may also serve the corporation
in other capacities and receive compensation therefor.
Section 2.5 ELECTION AND TERM OF OFFICE. At each annual meeting of
shareholders, directors shall be elected to hold office until the next
annual meeting, provided, that if for any reason, said annual meeting or
an adjournment thereof is not held or the directors are not elected
thereat, then the directors may be elected at any special meeting of the
shareholders called and held for that purpose. The term of office of
the directors shall begin immediately after their election and shall
continue until the expiration of the term for which elected and until
their respective successors have been elected and qualified.
Section 2.6 VACANCIES. A vacancy or vacancies in the Board of
Directors shall exist when any authorized position of director is not
then filled by a duly elected director, whether caused by death,
resignation, removal, change in the authorized number of directors (by
the Board or the shareholders) or otherwise. The Board of Directors may
declare vacant the office of a director who has been declared of unsound
mind by an order of court or convicted of a felony. Except for a
vacancy created by the removal of a director, vacancies on the Board may
be filled by a majority of the directors then in office, whether or not
less than a quorum, or by a sole remaining director. A vacancy created
by the removal of a director may be filled only by the approval of the
shareholders. The shareholders may elect a director at any time to fill
any vacancy not filled by the directors, but any such election requires
the affirmative vote of a majority of the outstanding shares entitled to
vote and must be made at a meeting duly called and held in accordance
with Article X. Any director may resign effective upon giving written
notice to the Chairman of the Board, the President, the Secretary or the
Board of Directors of the corporation, unless the notice specifies a
later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected to
take office when the resignation becomes effective.
Section 2.7 REMOVAL. (a) Any and all of the directors may be
removed without cause if such removal is approved by the affirmative
vote of a majority of the outstanding shares entitled to vote at an
election of directors, subject to the following:
(1) No director may be removed (unless the entire Board is
removed) when the votes cast against removal, or not
consenting in writing to such removal, would be sufficient
to elect such director if voted cumulatively at an election
at which the same total number of votes were cast (or, if
such action is taken by written consent, all shares entitled
to vote were voted) and the entire number of directors
authorized at the time of the director's most recent
election were then being elected; and
(2) When by the provisions of the Articles the holders of
the shares of any class or series, voting as a class or
series, are entitled to elect one or more directors, any
director so elected may be removed only by the applicable
vote of the holders of the shares of that class or series.
(b) Any reduction of the authorized number of directors does not
remove any director prior to the expiration of such director's term of
office.
Section 2.8 NOTIFICATION OF NOMINATIONS. Nominations for the
election of directors may be made by the Board of Directors or by any
shareholder entitled to vote for the election of directors. Any
shareholder entitled to vote for the election of directors at a meeting
may nominate persons for election as directors only if written notice of
such shareholder's intent to make such nomination is given, either by
personal delivery or by United States mail, postage prepaid, to the
Secretary of the Company not later than (I) with respect to an election
to be held at an annual meeting of shareholders, 90 days in advance of
such meeting, and (ii) with respect to an election to be held at a
special meeting of shareholders for the election of directors, the close
of business on the seventh day following the date on which notice of
such meeting is first given to shareholders. Each such notice shall set
forth: (a) the name and address of the shareholder who intends to make
the nomination and of the person or persons to be nominated, (b) a
representation that such shareholder is a holder of record of stock of
the Company 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, a description of all arrangements or
understandings between such shareholder and each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by such shareholder, (d) Such
other information regarding each nominee proposed by such shareholder as
would have been required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission
had each nominee been nominated, or intended to be nominated by the
Board of Directors, and (e) the consent of each nominee to serve as a
director of the Company if so elected. The chairman of a shareholder
meeting may refuse to acknowledge the nomination of any person not made
in compliance with the foregoing procedure. (As amended November 21,
1985.)
ARTICLE III
OFFICERS
Section 3.1 ELECTION AND QUALIFICATIONS. The officers of this
corporation shall consist of a President, one or more Vice Presidents, a
Secretary and a Chief Financial Officer who Shall be chosen by the Board
of Directors, and such other officers, including but not limited to a
Chairman of the Board, a Vice Chairman of the Board, a Chairman of the
Executive Committee and a Treasurer as the Board of Directors shall deem
expedient, who shall be chosen in such manner and hold their offices for
such terms as the Board of Directors may prescribe. Any two or more of
such offices may be held by the same person. The Board Of Directors may
designate one or more Vice Presidents as Executive Vice Presidents or
Senior Vice Presidents. Either the Chairman of the Board, the Vice
Chairman of the Board, the Chairman Of the Executive Committee, or the
President, as the Board of Directors may designate from time to time,
shall be the Chief Executive Officer of the corporation. The Board of
Directors may from time to time designate the President or any Executive
Vice President as the Chief Operating Officer of the corporation. Any
Vice President, Treasurer or Assistant Treasurer, or Assistant
Secretary, respectively, may exercise any of the powers of the
President, the Chief Financial Officer, or the Secretary, respectively,
as directed by the Board of Directors and shall perform such other
duties as are imposed upon such officer by the By-Laws or the Board of
Directors. (As amended January 20, 1978.)
Section 3.2 TERMS OF OFFICE AND COMPENSATION. The term of office
and salary of each of said officers and the manner and time of the
payment of such salaries shall be fixed and determined by the Board of
Directors and may be altered by said Board from time to time at its
pleasure, subject to the rights, if any, of said officers under any
contract of employment.
Section 3.3 REMOVAL AND VACANCIES. Any officer of the corporation
may be removed at the pleasure of the Board of Directors at any meeting
or by vote of shareholders entitled to exercise the majority of voting
power of the corporation at any meeting or at the pleasure of any
officer who may be granted such power by resolution of the Board of
Directors. Any officer may resign at any time upon written notice to
the corporation without prejudice to the rights, if any, of the
corporation under any contract to which the officer is a party. If any
vacancy occurs in any office of the corporation, the Board of Directors
may elect a successor to fill such vacancy for the remainder of the
unexpired term and until a successor is duly chosen and qualified.
ARTICLE IV
CHAIRMAN OF THE BOARD
Section 4.1 POWERS AND DUTIES. The Chairman Of the Board Of
Directors, if there be one, shall preside at all meetings of the
shareholders and of the Board of Directors, and shall have the power to
call meetings of the shareholders and the Board of Directors to be held
within the limitations prescribed by law or by these By-Laws, at such
times and at such places as the Chairman of the Board shall deem proper.
The Chairman of the Board shall have such other powers and shall be
subject to such other duties as the Board of Directors may from time to
time prescribe. (As amended January 20, 1978.)
ARTICLE IVa
VICE CHAIRMAN OF THE BOARD
Section 4.la POWERS AND DUTIES. The Vice Chairman Of the Board of
Directors, if there shall be one, shall, in the case of the absence,
disability or death of the Chairman, exercise all the powers and perform
all the duties of the Chairman of the Board. The Vice Chairman shall
have such other powers and perform such other duties as may be granted
or prescribed by the Board of Directors.
ARTICLE IVb
CHAIRMAN OF THE EXECUTIVE COMMITTEE
Section 4.lb POWERS AND DUTIES. The Chairman of the Executive
Committee, if there be one, shall have the power to call meetings of the
shareholders and also of the Board of Directors to be held, subject to
the limitations prescribed by law or by these By-Laws, at such times and
at such places as the Chairman of the Executive Committee shall deem
proper. The Chairman of the Executive Committee shall have such other
powers and be subject to such other duties as the Board of Directors may
from time to time prescribe. (As amended January 20, 1978.)
ARTICLE V
PRESIDENT
Section 5.1 POWERS AND DUTIES. The powers and duties of the
President are:
(a) To call meetings of the shareholders and also of the Board of
Directors to be held, subject to the limitations prescribed by law or by
these By-Laws, at such times and at such places as the President shall
deem proper.
(b) To affix the signature of the corporation to all deeds,
conveyances, mortgages, leases, obligations, bonds, certificates and
other papers and instruments in writing which have been authorized by
the Board of Directors or which, in the judgment of the President,
should be executed on behalf of the corporation, and to sign
certificates for shares of stock of the corporation.
(c) To have such other powers and be subject to such other duties
as the Board of Directors may from time to time prescribe.
ARTICLE VI
VICE PRESIDENT
Section 6.1 POWERS AND DUTIES. In Case Of the absence, disability
or death of the President, the Vice President, or one of the Vice
Presidents, shall exercise all the powers and perform all the duties of
the President. If there is more than one Vice President, the order in
which the Vice Presidents shall succeed to the powers and duties of the
President shall be as fixed by the Board of Directors. The Vice
President or Vice Presidents shall have such other powers and perform
such other duties as may be granted or prescribed by the Board of
Directors.
ARTICLE VII
SECRETARY
Section 7.1 POWERS AND DUTIES. The powers and duties of the
Secretary are:
(a) To keep a book of minutes at the principal office of the
corporation, or such other place as the Board of Directors may order, of
all meetings of its directors and shareholders with the time and place
of holding, whether regular or special, and, if special, how authorized,
the notice thereof given, the names of those present at directors'
meetings, the number of shares present or represented at shareholders'
meetings and the proceedings thereof.
(b) To keep the Seal of the Corporation and to affix the same to
all instruments which may require it.
(c) To keep or cause to be kept at the principal office of the
corporation, or at the office of the transfer agent or agents, a share
register, or duplicate share registers, showing the names of the
shareholders and their addresses, the number and classes of shares, and
the number and date of cancellation of every certificate surrendered for
cancellation.
(d) To keep a supply of certificates for shares of the corporation,
to fill in all certificates issued, and to make a proper record of each
such issuance; provided, that so long as the corporation shall have one
or more duly appointed and acting transfer agents of the shares, or any
class or series of shares, of the corporation, such duties with respect
to such shares shall be performed by such transfer agent or transfer
agents.
(e) To transfer upon the share books of the corporation any and all
shares of the corporation; provided, that so long as the corporation
shall have one or more duly appointed and acting transfer agents of the
shares, or any class or series of shares, of the corporation, such
duties with respect to such shares shall be performed by such transfer
agent or transfer agents, and the method of transfer of each certificate
shall be subject to the reasonable regulations of the transfer agent to
which the certificate is presented for transfer, and also, if the
corporation then has one or more duly appointed and acting registrars,
to the reasonable regulations of the registrar to which the new
certificate is presented for registration; and provided, further that no
certificate for shares of stock shall be issued or delivered or, if
issued or delivered, shall have any validity whatsoever until and unless
it has been signed or authenticated in the manner provided in Section
12.4 hereof.
(f) To make service and publication of all notices that may be
necessary or proper, and without command or direction from anyone. In
case of the absence, disability, refusal, or neglect of the Secretary to
make service or publication of any notices, then such notices may be
served and/or published by the President or a Vice President, or by any
person thereunto authorized by either of them or by the Board of
Directors or by the holders of a majority of the outstanding shares of
the corporation.
(g) Generally to do and perform all such duties as pertain to the
office of Secretary and as may be required by the Board of Directors.
ARTICLE VIII
CHIEF FINANCIAL OFFICER
Section 8.1 POWERS AND DUTIES. The powers and duties of the Chief
Financial Officer are:
(a) To supervise the corporate-wide treasury functions and financial
reporting to external bodies.
(b) To have the custody of all funds, securities, evidence of
indebtedness and other valuable documents of the corporation and, at the
Chief Financial Officer's discretion, to cause any or all thereof to be
deposited for the account of the corporation at such depositary as may
be designated from time to time by the Board of Directors.
(c) To receive or cause to be received, and to give or cause to be
given, receipts and acquittances for monies paid in for the account of
the corporation.
(d) To disburse, Or Cause to be disbursed, all funds of the
corporation as may be directed by the Board of Directors, taking proper
vouchers for such disbursements.
(e) To render to the President and to the Board Of Directors,
whenever they may require, accounts of all transactions and of the
financial condition of the corporation.
(f) Generally to do and perform all such duties as pertain to the
office of Chief Financial Officer and as may be required by the Board of
Directors.
ARTICLE IX
COMMITTEES OF THE BOARD
Section 9.1 APPOINTMENT AND PROCEDURE. The Board Of Directors may,
by resolution adopted by a majority of the authorized number of
directors, designate one or more committees, each consisting of two (2)
or more directors, to serve at the pleasure of the Board. The Board may
designate one (1) Or more directors as alternate members of any
committee, who may replace any absent member at any meeting of the
committee.
Section 9.2 POWERS. Any committee appointed by the Board of
Directors, to the extent provided in the resolution of the Board or in
these By-Laws, shall have all the authority of the Board except with
respect to:
(a) the approval of any action which requires the approval or vote
of the shareholders;
(b) the filling of vacancies on the Board or on any committee;
(c) the fixing of compensation of the director for serving on the
Board or on any committee;
(d) the amendment or repeal of By-Laws or the adoption of new
By-Laws ;
(e) the amendment or repeal of any resolution of the Board which
by its express terms is not so amendable or repealable;
(f) a distribution to the shareholders of the corporation, except
at a rate or in a periodic amount or within a price range determined by
the Board;
(g) the appointment of other committees of the Board Or the
members thereof.
Section 9.3 EXECUTIVE COMMITTEE. In the event that the Board of
Directors appoints an Executive Committee, such Executive Committee, in
all cases in which specific directions to the contrary shall not have
been given by the Board of Directors, shall have and may exercise,
during the intervals between the meetings of the Board of Directors, all
the powers and authority of the Board of Directors in the management of
the business and affairs of the corporation (except as provided in
Section 9.2 hereof) in such manner as the Executive Committee may deem
in the best interests of the corporation.
ARTICLE X
MEETINGS OF SHAREHOLDERS
Section 10.1 PLACE OF MEETINGS. Meetings (whether regular, special
or adjourned) of the shareholders of the corporation shall be held at
the principal office for the transaction of business as specified in
accordance with Section 1.1 hereof, or any place within or without the
State which may be designated by written consent of all the shareholders
entitled to vote thereat, or which may be designated by the Board of
Directors.
Section 10.2 TIME OF ANNUAL MEETINGS. The annual meeting of the
shareholders shall be held at the hour of 2:00 o'clock in the afternoon
on the fourth Tuesday in February of each year, if not a legal holiday,
and if a legal holiday, then On the next succeeding business day not a
legal holiday.
Section 10.3 SPECIAL MEETINGS. Special meetings of the shareholders
may be called by the Board of Directors, the Chairman of the Board, the
Vice Chairman of the Board, the Chairman of the Executive Committee, the
President or the holders of shares entitled to cast not less than 10% of
the vote at the meeting.
Section 10.4 NOTICE OF MEETINGS. (a) Whenever shareholders are
required or permitted to take any action at a meeting, a written notice
of the meeting shall be given not less than 10 nor more than 60 days
before the day of the meeting to each shareholder entitled to vote
thereat. Such notice Shall State the place, date and hour of the
meeting and (1) in the case of a special meeting, the general nature of
the business to be transacted, and that no other business may be
transacted, or (2) in the case of the annual meeting, those matters
which the Board, at the time of the mailing of the notice, intends to
present for action by the shareholders, but subject to the provisions of
subdivision (b) any proper matter may be presented at the meeting for
such action. The notice of any meeting at which directors are to be
elected shall include the names of nominees intended at the time of the
notice to be presented by management for election.
(b) Any shareholder approval at a meeting, other than unanimous
approval by those entitled to vote, on any of the matters listed below
shall be valid only if the general nature of the proposal so approved
was stated in the notice of meeting or in any written waiver of notice;
(1) a proposal to approve a contract or other transaction
between the corporation and one or more of its directors, or
between the corporation and any corporation, firm or association
in which one or more directors has a material financial interest;
(2) a proposal to amend the Articles of Incorporation;
(3) a proposal regarding a reorganization, merger or
consolidation involving the corporation;
(4) a proposal to wind up and dissolve the corporation;
(5) a proposal to adopt a plan of distribution of the
shares, obligations or securities of any other corporation,
domestic or foreign, or assets other than money which is not
in accordance with the liquidation rights of any preferred
shares as specified in the Articles of Incorporation.
Section 10.5 DELIVERY OF NOTICE. Notice of a shareholders' meeting
or any report shall be given either personally or by mail or other means
of written communication, addressed to the share holder at the address
of such shareholder appearing on the books of the corporation or given
by the shareholder to the corporation for the purpose of notice; or if
no such address appears or is given, at the place where the principal
executive office of the corporation is located or by publication at
least once in a newspaper of general circulation in the county in which
the principal executive office is located. The notice or report shall
be deemed to have been given at the time when delivered personally or
deposited in the mail or sent by other means of written communication.
An affidavit of mailing of any notice or report in accordance with the
provisions of this section, executed by the Secretary, Assistant
Secretary or any transfer agent, shall be prima facie evidence of the
giving of the notice or report.
If any notice or report addressed to the shareholders at the
address of such shareholder appearing on the books of the corporation is
returned to the corporation by United States Postal Service marked to
indicate that the United States Postal Service is unable to deliver the
notice or report to the shareholder at such address, all future notices
or reports shall be deemed to have been duly given without further
mailing if the same shall be available for the shareholder upon written
demand of the shareholder at the principal executive office of the
corporation for a period of one (1) year from the date of the giving of
the notice to all other shareholders.
Section 10.6 ADJOURNED MEETINGS. When a shareholders' meeting is
adjourned to another time or place, unless the By-Laws otherwise require
and except as provided in this section, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting the
corporation may transact any business which might have been transacted
at the original meeting. If the adjournment is for more than forty-five
(45) 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 shareholder of record entitled to vote at the meeting.
Section 10.7 CONSENT TO SHAREHOLDERS' MEETING. The transactions of
any meeting of shareholders, however called and noticed, and wherever
held, are as valid as though had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy,
and if, either before or after the meeting, each of the persons entitled
to vote, not present in person or by proxy signs a written waiver of
notice or a consent to the holding of the meeting or an approval of the
minutes thereof. All such waivers, consents and approvals shall be
filed with the corporate records or made a part of the minutes of the
meeting. Attendance of a person at a meeting shall constitute a waiver
of notice of such meeting, except when the person objects at the
beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened and except that attendance at
a meeting is not a waiver of any right to object to the consideration of
matters required by the California General Corporation Law to be
included in the notice but not so included in the notice if such
objection is expressly made at the meeting. Neither the business to be
transacted at nor the purpose of any regular or special meeting of
shareholders need be specified in any written waiver of notice, unless
otherwise provided in the Articles of Incorporation or By-Laws, except
as provided in subdivision (b) of Section 10.4.
Section 10.8 QUORUM. (a) The presence in person or by proxy of the
persons entitled to vote the majority of the voting shares at any
meeting shall constitute a quorum for the transaction of business. If a
quorum is present, the affirmative vote of the majority of shares
represented at the meeting and entitled to vote on any matter shall be
the act of the shareholders, unless the vote of a greater number or
voting by classes is required by law or the Articles of Incorporation of
these By-Laws and except as provided in subdivision (b).
(b) The shareholders present at a duly called or held meeting at
which a quorum is present may continue to transact business until
adjournment notwithstanding the withdrawal of the number of enough
shareholders to leave less than a quorum, if any action taken (other
than adjournment) is approved by at least a majority of the shares
required to constitute a quorum.
(c) In the absence of a quorum, any meeting of shareholders may
be adjourned from time to time by the vote of a majority of the shares
represented either in person or by proxy, but no other business may be
transacted, except as provided in subdivision
(b).
Section 10.9 ACTION BY CONSENT. Subject to the rights of the
holders of shares of any series of Preferred Stock or any other class of
stock or series thereof having a preference over the Common Stock as to
dividend or upon liquidation, any action required or permitted to be
taken by the stockholders of the Company must be effected at a duly
called annual or special meeting of stockholders of the Company and may
not be effected by any consent in writing by such stockholders. (As
amended November 21, 1985).
Section 10.10 VOTING RIGHTS. Except as provided in Section 10.12 or
in the Articles of Incorporation or in any statute relating to the
election of directors or to other particular matters, each outstanding
share, regardless of class, shall be entitled to one vote on any matter
submitted to a vote of shareholders. Any holder of shares entitled to
vote on any matter may vote part of the shares in favor of the proposal
and refrain from voting the remaining shares or vote them against the
proposal, other than elections to office, but, if the shareholder
fails to specify the number of shares such shareholder is voting
affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to all shares such shareholder is
entitled to vote.
Section 10.11 DETERMINATION OF HOLDERS OF RECORD. (a) In order that
the corporation may determine the shareholders entitled to notice of any
meeting or to vote, or entitled to receive payment of any dividend or
other distribution or allotment of any rights or entitled to exercise
any rights in respect of any other lawful action, the Board of Directors
may fix, in advance, a record date, which shall not be more than sixty
(60) nor less than ten (10) days prior to the date of such meeting nor
more than sixty (60) days prior to any other action.
(b) In the absence of any record date set by the Board of Directors
pursuant to subdivision (a) above then:
(1) The record date for determining shareholders entitled
to notice of or to vote at a meeting of shareholders shall be
at the close of business on the business day next preceding the
day on which notice is given or, if notice is waived, at the close of
business on the business day next preceding the day on which the
meeting is held.
(2) The record date for determining shareholders for any
other purpose shall be at the close of business on the day on
which the Board adopts the resolution relating thereto, or the
sixtieth (60th) day prior to the date of such other action,
whichever is later.
(c) A determination of shareholders of record entitled to notice of
or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting unless the Board fixes a new record
date for the adjourned meeting, but the Board shall fix a new record
date if the meeting is adjourned for more than forty- five (45) days
from the date set for the original meeting.
(d) Shareholders on the record date are entitled to notice and to
vote or to receive the dividend, distribution or allotment of rights or
to exercise the rights, as the case may be, notwithstanding any transfer
of any shares on the books of the corporation after the record date,
except as otherwise provided in the Articles of Incorporation of these
By-Laws or by agreement or applicable law.
Section 10.12 ELECTION FOR DIRECTORS. (a) Every shareholder
complying with subdivision (b) and entitled to Vote at any election of
directors may cumulate such shareholder's votes and give one candidate a
number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the shareholder's shares are
entitled, or distribute the shareholder's votes on the same principle
among as many candidates as the shareholder thinks fit.
(b) No Shareholder shall be entitled to cumulate votes (i.e.,
cast for any one or more candidates a number of votes greater than the
number of the shareholder's shares) unless such candidates or
candidates' names have been placed in nomination prior to the voting and
the shareholder has given written notice to the chairman of the meeting
at the meeting prior to the voting of the shareholder's intention to
cumulate the Shareholder's votes. If any one shareholder has given such
notice, all shareholders may cumulate their votes for candidates in
nomination.
(c) In any election of directors, the candidates receiving the
highest number of votes of the shares entitled to be voted for them up
to the number of directors to be elected by such shares are elected.
(d) Elections for directors need not be by ballot unless a
shareholder demands election by ballot at the meeting and before the
voting begins or unless the By-Laws so require.
Section 10.13 PROXIES. (a) Every person entitled to vote shares may
authorize another person or persons to act by proxy with respect to such
shares. Any proxy purporting to be executed in accordance with the
provisions of the General Corporation Law of the State of California
shall be presumptively valid.
(b) No proxy shall be valid after the expiration of eleven (11)
months from the date thereof unless otherwise provided in the proxy.
Every proxy continues in full force and effect until revoked by the
person executing it prior to the vote pursuant thereto, except as
otherwise provided in this section. Such revocation may be effected by
a writing delivered to the corporation stating that the proxy is revoked
or by a subsequent proxy executed by, or by attendance at the meeting
and voting in person by, the person executing the proxy. The dates
contained on the forms of proxy presumptively determine the order of
execution, regardless of the postmark dates on the envelopes in which
they are mailed.
(c) A proxy is not revoked by the death or incapacity of the
maker unless, before the vote is counted, written notice of such death
or incapacity is received by the corporation.
Section 10.14 INSPECTORS OF ELECTION. (a) In advance of any meeting
of shareholders the Board may appoint inspectors of election to act at
the meeting and any adjournment thereof. If inspectors of election are
not so appointed, or if any persons so appointed fail to appear or
refuse to act, the chairman of any meeting of shareholders may, and on
the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election (or persons to replace those who so fail or
refuse) at the meeting. The number of inspectors shall be either one
(1) or three (3). If appointed at a meeting on the request of one or more
shareholders or proxies, the majority of shares represented in person or
by proxy shall determine whether one (1) Or three (3) inspectors are to
be appointed.
(b) The inspectors of election shall determine the number of
shares outstanding and the voting power of each, the shares represented
at the meeting, the existence of a quorum and the authenticity, validity
and effect of proxies, receive votes, ballots or consents, hear and
determine all challenges and questions in any way arising in connection
with the right to vote, count and tabulate all votes or consents,
determine when the polls shall close, determine the result and do such
acts as may be proper to conduct the election or vote with fairness to
all shareholders.
(c) The inspectors of election shall perform their duties
impartially, in good faith, to the best of their ability and as
expeditiously as is practical. If there are three (3) inspectors of
election, the decision, act or certificate of a majority is effective in
all respects as the decision, act or certificate of all. Any report or
certificate made by the inspectors of election is prima facie evidence
of the facts stated therein.
Section 10.15 ORGANIZATION. The Chairman of the Board Of Directors
shall preside at each meeting of shareholders. In the absence of the
Chairman, the meeting shall be chaired by an officer of the corporation
in accordance with the following order: Vice Chairman, Chairman of the
Executive Committee, President, Executive Vice President, Senior Vice
President and Vice President. In the absence of all such officers, the
meeting shall be chaired by a person chosen by the vote of a majority in
interest of the shareholders present in person or represented by proxy
and entitled to vote thereat, shall act as chairman. The Secretary or
in his or her absence an Assistant Secretary or in the absence of the
Secretary and all Assistant Secretaries a person whom the chairman of
the meeting shall appoint shall act as secretary of the meeting and keep
a record of the proceedings thereof. The Board of Directors of the
Company shall be entitled to make such rules or regulations for the
conduct of meetings of shareholders as it shall deem necessary,
appropriate or convenient. Subject to such rules and regulations of the
Board of Directors, if any, the chairman of the meeting shall have the
right and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or order
of business for the meeting, rules and procedures for maintaining order
at the meeting and the safety of those present, limitations on
participation in such meeting to shareholders of record of the Company
and their duly authorized and constituted proxies, and such other persons
as the Chairman shall permit, restrictions on entry to the meeting after
the time fixed for the commencement thereof, limitations on the time
allotted to questions or comments by participants and regulation of the
opening and closing of the polls for balloting on matters which are to
be voted on by ballot, unless, and to the extent, determined by the
Board of Directors or the chairman of the meeting, meetings of
shareholders shall not be required to be held in accordance with rules
of parliamentary procedure. (As amended November 21, 1985).
ARTICLE XI
MEETING OF DIRECTORS
Section 11.1 PLACE OF MEETINGS. Unless otherwise specified in the
notice thereof, meetings (whether regular, special, or adjourned) of the
Board of Directors of this corporation shall be held at the principal
office of the corporation for the transaction of business, as specified
in accordance with Section 1.1 hereof, which is hereby designed as an
office for such purpose in accordance with the laws of the State of
California, or in any other place within or without the State which has
been designated from time to time by resolution of the Board or by
written consent of all members of the Board.
Section 11.2 REGULAR MEETINGS. Regular meetings of the Board of
Directors, of which no notice need be given except as required by the
laws of the State of California, at such times as may be designated from
time to time by the Board of Directors.
Section 11.3 SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board, the
Vice Chairman of the Board, the President, the Chairman of the Executive
Committee, any Vice President or the Secretary or by any two (2) Or more
of the directors. (As amended January 20, 1978.)
Section 11.4 NOTICE OF MEETINGS. Except in the case of regular
meetings, notice of which has been dispensed with, the meetings of the
Board of Directors shall be held upon four (4) days' notice by mail or
forty-eight (48) hours' notice delivered personally or by telephone,
telegraph or other electronic or wireless means. If the address of a
director is not shown on the records and is not readily ascertainable,
notice shall be addressed to him at the city or place in which the
meetings of the directors are regularly held. Except as set forth in
Section 11.6, notice of the time and place of holding an adjourned
meeting need not be given to absent directors if the time and place be
fixed at the meeting adjourned.
Section 11.5 QUORUM. A majority of the authorized number of
directors constitutes a quorum of the Board for the transaction of
business. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present
shall be regarded as the act of the Board of Directors, except as
otherwise provided by law. A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal
of directors, if any action taken is approved by at least a majority of
the required quorum for such meeting.
Section 11.6 ADJOURNED MEETINGS. A majority of the directors
present, whether or not a quorum is present, may adjourn any meeting to
another time and place. If the meeting is adjourned for more than
twenty-four (24) hours, notice of any adjournment to another time or
place shall be given prior to the time of the adjourned meeting to the
directors who were not present at the time of the adjournment.
Section 11.7 WAIVER OF NOTICE AND CONSENT. (a) Notice of a meeting
need not be given to any director who signs a waiver of notice, whether
before or after the meeting, or who attends the meeting without
protesting, prior thereto or at its commencement, the lack of notice to
such director.
(b) The transactions of any meeting of the Board, however called
and noticed or wherever held, are as valid as though had at a meeting duly
held after regular call and notice if a quorum is present and if, either
before or after the meeting, each of the directors not present signs a
written waiver of notice, a consent to holding the meeting or an
approval of the minutes thereof. All such waivers, consents and
approvals shall be filed with the corporate records or made a part of
the minutes of the meeting.
Section 11.8 ACTION WITHOUT A MEETING. Any action required or
permitted to be taken by the Board may be taken without a meeting, if
all members of the Board shall individually or collectively consent in
writing to such action. Such written consent or consents shall be filed
with the minutes of the proceedings of the Board. Such action by
written consent shall have the same force and effect as an unanimous
vote of such directors.
Section 11.9 CONFERENCE TELEPHONE MEETINGS. Members of the Board
may participate in a meeting through use of conference telephone or
similar communications equipment, so long as all members participating
in such meeting can hear one another. Participation in a meeting
pursuant to this section constitutes presence in person at such meeting.
Section 11.10 ORGANIZATION. The Chairman Of the Board shall preside
at all meetings of the Board of Directors. In the absence of the
Chairman, the meeting shall be chaired by one of the following directors
in the order stated: Vice Chairman, Chairman of the Executive Committee,
President and Executive Vice President. In the absence of all such
directors, a President Pro Tem chosen by a majority of the directors
present shall preside at the meeting.
Section 11.11 MEETINGS OF COMMITTEES. The provisions of this
Article, except for Section 11.10, apply also to committees of the Board
and action by such committees.
ARTICLE XII
SUNDRY PROVISIONS
Section 12.1 INSTRUMENTS IN WRITING. All checks, drafts, demands
for money and notes of the corporation, as all written contracts of the
corporation, shall be signed by such officer or officers, agent or
agents, as the Board of Directors may from time to time by resolution
designate. No officer, agent, or employee of the corporation shall have
power to bind the corporation by contract or otherwise unless authorized
to do so by these By-Laws or by the Board of Directors.
Section 12.2 FISCAL YEAR. The fiscal year of this corporation shall
begin on the first day of November of each year and end on the last day
of October of the following year.
Section 12.3 SHARES HELD BY THE CORPORATION. Shares in other
corporations standing in the name of this corporation may be voted or
represented and all rights incident thereto may be exercised on behalf
of this corporation by the President or by any other officer of this
corporation authorized so to do by resolution of the Board of Directors.
Section 12.4 CERTIFICATES OF STOCK. There shall be issued to each
holder of fully paid shares of the capital stock of the corporation a
certificate or certificates for such shares. Every holder of shares in
the corporation shall be entitled to have a certificate signed in the
name of the corporation by the Chairman or Vice Chairman of the Board or
the President or a Vice President and by the Chief Financial Officer or
the Treasurer or an Assistant Treasurer or the Secretary or any
Assistant Secretary, certifying the number of shares and the class or
series of shares owned by the shareholder. Any or all of the signatures
on the certificate may be facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer
agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if such person were an
officer, transfer agent or registrar at the date of issue.
Section 12.5 LOST CERTIFICATES. The corporation may issue a new
share certificate or a new certificate for any other security in the
place of any certificate theretofore issued by it, alleged to have been
lost, stolen or destroyed, and the corporation may require the owner of
the lost, stolen or destroyed certificate or the owner's legal
representative to give the corporation a bond (or other adequate
security) sufficient to indemnify it against any claim that may be made
against it (including any expense or liability) on account of the
alleged loss, theft or destruction of any such certificate or the
issuance of such new certificate. The Board of Directors may adopt such
other provisions and restrictions with reference to lost certificates,
not inconsistent with applicable law, as it shall in its discretion deem
appropriate.
Section 12.6 CERTIFICATION AND INSPECTION OF BY-LAWS. The
corporation shall keep at its principal executive office in this state,
or if its principal executive office is not in this state at its
principal business office in this state, the original or a copy of these
By-Laws as amended to date, which shall be open to inspection by the
shareholders at all reasonable times during office hours. If the
principal executive office of the corporation is outside this state and
the corporation has no principal business office in this state, it shall
upon the written request of any shareholder furnish to such shareholder
a copy of the By-Laws as amended to date.
Section 12.7 NOTICES. Any reference in these By-Laws to the time a
notice is given or sent means, unless otherwise expressly provided, the
time a written notice by mail is deposited in the United States mails,
postage prepaid; or the time any other written notice is personally
delivered to the recipient or is delivered to a common carrier for
transmission, or actually transmitted by the person giving the notice by
electronic means, to the recipient; or the time any oral notice is
communicated, in person or by telephone or wireless, to the recipient or
to a person at the office of the recipient who the person giving the
notice has reason to believe will promptly communicate it to the
recipient.
Section 12.8 REPORTS TO SHAREHOLDERS. Except as may other- wise be
required by law, the rendition of an annual report to the shareholders
is waived so long as there are less than one hundred (100) holders of
record of the shares of the corporation (determined as provided in
Section 605 of the California General Corporation Law). At Such time or
times, if any, that the corporation has one hundred (100) or more
holders of record of its shares, the Board of Directors shall cause an
annual report to be sent to the shareholders not later than one hundred
twenty (120) days after the close of the fiscal year or within such
shorter time period as may be required by applicable law, and such
annual report shall contain such information and be accompanied by such
other documents as may be required by applicable law.
ARTICLE XIII
CONSTRUCTION OF BY-LAWS WITH REFERENCE TO PROVISIONS OF LAW
Section 13.1 DEFINITIONS. Unless defined Otherwise in these By-Laws
or, unless the context otherwise requires, terms used herein shall have
the same meaning, if any, ascribed thereto in the California General
Corporation Law, as amended from time to time.
Section 13.2 BY-LAW PROVISIONS ADDITIONAL AND SUPPLEMENTAL TO
PROVISIONS OF LAW. All restrictions, limitations, requirements and
other provisions of these By-Laws shall be construed, insofar as
possible, as supplemental and additional to all provisions of law
applicable to the subject matter thereof and shall be fully complied
with in addition to the said provisions of law unless such compliance
shall be illegal.
Section 13.3 BY-LAW PROVISIONS CONTRARY TO OR INCONSISTENT WITH
PROVISIONS OF LAW. Any article, section, subsection, subdivision,
sentence, clause or phrase of these By-Laws which upon being construed
in the manner provided in Section 13.2 hereof, shall be contrary to or
inconsistent with any applicable provision of law, shall not apply so
long as said provisions of law shall remain in effect, but such result
shall not affect the validity or applicability of any other portions of
these By-Laws, it being hereby declared that these By-Laws would have
been adopted and each article, section, subsection, subdivision,
sentence, clause or phrase thereof, irrespective of the fact that any
one or more articles, sections, subsections, subdivisions, sentences,
clauses or phrases is or are illegal.
ARTICLE XIV
AMENDMENTS
All by-laws of the Company shall be subject to alteration, amendment,
or repeal, in whole or in part, and new By-Laws not inconsistent with
the laws of the State of California or any provision of the Certificate
of Incorporation may be made, either by the affirmative vote of a
majority of the whole Board of Directors at any regular or special
meeting of the Board, or by the affirmative vote of the holders of a
majority of the issued and outstanding stock of the Company entitled to
vote in respect thereof, given at an annual meeting or at any special
meeting at which a quorum shall be present, provided that, in each case
of a proposed alteration, amendment, or repeal of the By-Laws of or the
proposal of new By-Laws to be voted on at a meeting of stockholders
notices thereof shall be included in the notice of the meeting of the
stockholders.
As amended February 27, 1996
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