<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1999
/ / 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 1-2958
HUBBELL INCORPORATED
(Exact name of registrant as specified in its charter)
STATE OF CONNECTICUT 06-0397030
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
584 DERBY MILFORD ROAD, ORANGE, CT 06477
(Address of principal executive offices) (Zip Code)
(203) 799-4100
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO
--- ---
The number of shares of registrant's classes of common stock outstanding as of
May 7, 1999 were:
Class A ($.01 par value) 10,612,000
Class B ($.01 par value) 54,445,000
<PAGE> 2
HUBBELL INCORPORATED
PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
(IN MILLIONS)
<TABLE>
<CAPTION>
(Unaudited)
March 31, 1999 December 31, 1998
-------------- -----------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and temporary cash investments $ 15.5 $ 30.1
Accounts receivable (net) 227.8 200.2
Inventories 308.1 300.9
Prepaid taxes 24.5 24.0
Other 13.2 9.6
---------- ----------
TOTAL CURRENT ASSETS 589.1 564.8
Property, Plant and Equipment (net) 316.3 310.1
Other Assets:
Investments 201.0 197.3
Purchase price in excess of net assets of companies acquired (net) 239.3 232.6
Property held as investment 11.6 12.0
Other 74.0 73.6
---------- ----------
$ 1,431.3 $ 1,390.4
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Commercial paper and notes $ 148.8 $ 113.3
Accounts payable 67.1 69.8
Accrued salaries, wages and employee benefits 26.8 26.6
Accrued income taxes 43.3 31.1
Dividends payable 20.2 20.4
Accrued consolidation and streamlining charge 10.0 10.0
Other accrued liabilities 71.0 73.8
---------- ----------
TOTAL CURRENT LIABILITIES 387.2 345.0
Long-Term Debt 99.6 99.6
Other Non-Current Liabilities 100.8 104.1
Deferred Income Taxes .9 1.1
Shareholders' Equity 842.8 840.6
---------- ----------
$ 1,431.3 $ 1,390.4
========== ==========
</TABLE>
See notes to consolidated financial statements
2
<PAGE> 3
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
------------------
1999 1998
--------- ---------
<S> <C> <C>
NET SALES $ 367.5 $ 339.7
Cost of goods sold 260.5 235.3
--------- ---------
GROSS PROFIT 107.0 104.4
Selling & administrative expenses 55.2 51.3
--------- ---------
OPERATING INCOME 51.8 53.1
--------- ---------
OTHER INCOME (EXPENSE):
Investment income 3.4 4.1
Interest expense (3.6) (1.7)
Other income (expense), net 2.0 (.5)
--------- ---------
TOTAL OTHER INCOME, NET 1.8 1.9
--------- ---------
INCOME BEFORE INCOME TAXES 53.6 55.0
Provision for income taxes 13.9 15.1
--------- ---------
NET INCOME $ 39.7 $ 39.9
========= =========
EARNINGS PER SHARE - BASIC $ 0.61 $ 0.60
========= =========
EARNINGS PER SHARE - DILUTED $ 0.60 $ 0.58
========= =========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
HUBBELL INCORPORATED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(IN MILLIONS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
------------------
CASH FLOWS FROM OPERATING ACTIVITIES 1999 1998
------- -------
<S> <C> <C>
Net income $ 39.7 $ 39.9
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 14.2 12.7
Deferred income taxes (.7) 1.4
Expenditures for streamlining, consolidation and restructuring (2.1) (.6)
Changes in assets and liabilities, net of the effect of business acquisitions:
(Increase)/Decrease in accounts receivable (25.5) (9.3)
(Increase)/Decrease in inventories (4.0) (6.8)
(Increase)/Decrease in other current assets (2.3) 15.6
Increase/(Decrease) in current operating liabilities 1.7 (2.6)
(Increase)/Decrease in other, net (.4) 1.1
------- -------
Net cash provided by operating activities 20.6 51.4
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of businesses (13.3) (7.3)
Additions to property, plant and equipment (18.3) (21.8)
Purchases of investments (11.1) (8.9)
Repayments and sales of investments 7.4 5.1
Other, net 1.6 1.1
------- -------
Net cash used in investing activities (33.7) (31.8)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of dividends (20.4) (19.5)
Commercial paper and notes - borrowings (repayments) 35.5 (.2)
Exercise of stock options 2.0 .7
Acquisition of treasury shares (18.6) (24.5)
------- -------
Net cash used in financing activities (1.5) (43.5)
------- -------
Decrease in cash and temporary cash investments (14.6) (23.9)
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 30.1 75.2
------- -------
End of period $ 15.5 $ 51.3
======= =======
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
HUBBELL INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
1. Inventories are classified as follows: (in millions)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
--------- ------------
<S> <C> <C>
Raw Material $ 111.6 $ 104.9
Work-in-Process 87.3 79.6
Finished Goods 155.1 162.0
-------- --------
354.0 346.5
Excess of current
production costs over
LIFO cost basis 45.9 45.6
-------- --------
$ 308.1 $ 300.9
======== ========
</TABLE>
2. Shareholders' Equity comprises: (in millions)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
--------- ------------
<S> <C> <C>
Common Stock, $.01 par value:
Class A-authorized 50,000,000 shares,
outstanding 10,659,183 and 10,781,483 shares $ .1 $ .1
Class B-authorized 150,000,000 shares
outstanding 54,507,900 and 54,813,287 shares .5 .5
Additional paid-in-capital 381.0 397.8
Retained earnings 475.0 455.7
Unrealized holding gains (losses) on securities .1 .1
Cumulative translation adjustments (13.9) (13.6)
-------- --------
$ 842.8 $ 840.6
======== ========
</TABLE>
5
<PAGE> 6
HUBBELL INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
3. During the first quarter of 1999, the Company's Power Segment acquired
assets used in the manufacture and supply of high voltage underground
cable accessory products and technology for the electrical utility market
for a cash purchase price of $13.3 million. During the first quarter of
1998, the Company also acquired two product lines and associated assets
for an aggregate cash purchase price of $7.3 million.
The costs of the acquired businesses have been allocated to assets acquired
and liabilities assumed based on fair values with the residual amount
assigned to goodwill, which is being amortized over forty years. The
businesses have been included in the financial statements as of their
respective acquisition date and had no material effect on the Company's
financial position and reported earnings.
4. The following table sets forth the computation of earnings per share for
the three months ended March 31 (in millions except per share data):
<TABLE>
<CAPTION>
MARCH 31
--------
1999 1998
---- ----
<S> <C> <C>
Net Income $ 39.7 $ 39.9
Weighted average number of common
shares outstanding during the period 65.2 66.9
Common equivalent shares 1.1 2.0
-------- --------
Average number of shares outstanding 66.3 68.9
Earnings per share:
Basic $ 0.61 $ 0.60
Diluted $ 0.60 $ 0.58
</TABLE>
5. The following table sets forth the computation of comprehensive income for
the three months ended March 31 (in millions):
<TABLE>
<CAPTION>
MARCH 31
--------
Comprehensive Income 1999 1998
- -------------------- ---- ----
<S> <C> <C>
Net Income $ 39.7 $ 39.9
Changes in:
Cumulative Translation Adjustment (.3) (.2)
Unrealized gains (losses) on securities -- --
------- -------
Comprehensive Income $ 39.4 $ 39.7
======= =======
</TABLE>
6
<PAGE> 7
HUBBELL INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
6. The following table sets forth financial information by industry segment
for the three months ended March 31 (in millions):
<TABLE>
<CAPTION>
March 31
--------
Industry Segment
1999 1998
---- ----
<S> <C> <C>
Net Sales
Electrical $ 220.1 $ 191.1
Power 97.5 94.1
Telecommunications 33.0 34.8
Other 16.9 19.7
-------- --------
Total $ 367.5 $ 339.7
Operating Income
Electrical $ 36.3 $ 33.9
Power 12.5 12.2
Telecommunications 1.8 5.6
Other 1.2 1.4
-------- --------
Segment Total $ 51.8 $ 53.1
Interest Expense (3.6) (1.7)
Investment and Other Income, Net 5.4 3.6
-------- --------
Income Before Income Taxes $ 53.6 $ 55.0
</TABLE>
7. The issuance of FAS No. 133 - "Accounting for Derivative Instruments and
Hedging Activity" effective in 2000 requires the recognition of all
derivatives as either assets or liabilities on the consolidated balance
sheet at fair value. This will change the current practices of the Company,
but it is not expected to have a significant impact on the financial
position or the results of operations.
8. In the opinion of management, the information furnished in Part I-Financial
Information on Form 10-Q reflects all adjustments (which include only
normal recurring adjustments) necessary to present fairly the financial
statements for the periods indicated.
9. The results of operations for the three months ended March 31, 1999 and
1998 are not necessarily indicative of the results to be expected for the
full year.
7
<PAGE> 8
HUBBELL INCORPORATED
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1999
FINANCIAL CONDITION
At March 31, 1999, the Company's financial position remained strong with working
capital of $201.9 million and a current ratio of 1.5 to 1. Total borrowings at
March 31, 1999, were $248.4 million, 29.5% of shareholder's equity.
The net decline in cash and temporary cash investments of $14.6 million for the
three months ended March 31, 1999, reflects the following: expenditures for
plant and equipment as part of the consolidation and streamlining initiative,
the acquisition of treasury shares under the Company's $300 million share
repurchase program, and the quarterly dividend payment offset by cash provided
from operating activities and additional borrowings.
The decline in net cash provided by operating activities reflects an increase
in cash used for working capital requirements primarily due to an increase in
accounts receivable resulting from higher sales in March. The increase in
inventories is to provide adequate stock to maintain customer service levels
during relocation of manufacturing operations, as a result of the consolidation
and streamlining initiatives.
The Company believes that currently available cash, borrowing facilities, and
its ability to increase its credit lines if needed, combined with internally
generated funds, should be more than sufficient to fund capital expenditures as
well as any increase in working capital that would be required to accommodate a
higher level of business activity.
RESULTS OF OPERATIONS
Consolidated net sales increased by 8% on greater shipments of high voltage
underground cable accessory product assets combined with the acquisition in
1999 and six product lines in 1998. Offsetting these improvements was a decline
in orders from telephone companies to the Telecommunications Segment, which
combined with investment in new product development, resulted in a 2% decline
in operating income.
Electrical Segment sales increased by 15% primarily due to greater shipments
in generally all product lines and due to the effect of the acquisition of the
three lighting businesses during 1998. Operating income increased 7% from the
benefits of improved performance in Wiring products, which was partly offset by
a change in product mix, price competition and a weaker Canadian market.
Power Segment sales increased 4%, with the inclusion of sales generated by the
underground cable accessory product business. Operating income increased only
by 2%, due to price competition for surge arresters and the effects of weaker
international markets.
Telecommunications Segment sales, which included for the first quarter of 1999
Siescor Technologies product line, were impacted by the lower demand for
existing product lines sold to the Regional Bell Operating Companies (RBOC).
Operating profit also declined as the segment's investment in new product
development increased substantially over prior year.
Other Industry Segment sales decreased 14% due to the slow down in the steel
industry coupled with the Asian economic problems. Operating income declined in
line with the lower sales volume.
8
<PAGE> 9
HUBBELL INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1999
(CONTINUED)
Sales through the Company's International units decreased 15% reflecting the
weakened economies of the Canadian and Asian markets. Operating income from
International units decreased in line with sales and was further impacted by
unfavorable translation rates due to the strengthening of the U.S. dollar
against foreign currencies.
The effective income tax rate for 1999 was 26.0% versus 27.5% in 1998. The
decrease in the effective tax rate reflects a higher level of tax benefit from
Puerto Rico operations. Net income decreased 1% while diluted earnings per share
increased 3%.
The Company's consolidation and streamlining program is proceeding according to
management's plan. At March 31, 1999, the accrual balance was $22.8 million.
Through March 31, 1999, cumulative costs charged to the consolidation and
streamlining accrual were $21.8 million as follows (in millions):
<TABLE>
<CAPTION>
Employee Asset Exist Other
Benefits Disposals Costs Costs Total
-------- --------- ----- ----- -----
<S> <C> <C> <C> <C> <C>
1997 Streamlining Charge $ 15.6 $ 18.0 $ 6.1 $ 4.9 $ 44.6
Amounts Utilized in 1997 (.6) (7.3) (0.1) (4.9) (12.9)
Amounts Utilized in 1998 (3.8) (2.4) (0.6) -- (6.8)
Amounts Utilized in 1999 (.3) (1.8) -- -- (2.1)
------- ------- ------ ------ -------
Remaining Reserve $ 10.9 $ 6.5 $ 5.4 $ -- $ 22.8
======= ======= ====== ====== =======
</TABLE>
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have date-sensitive software may recognize a date using
"00" as the Year 1900 rather than the Year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
During 1995, the Company established a task force to assess the impact the
Year 2000 could have on the Company's operations and its relationship with
customers and vendors and to develop appropriate action plans. The action
plans address the required modification or replacement of software and
equipment utilized in the Company's operations along with a timetable and
estimated costs. Cost for replacement of software and equipment are
capitalized in accordance with Company policies while costs of modifications
are expensed as incurred. Total expenditures are estimated to be $20 million
with approximately 80% having been spent to date.
9
<PAGE> 10
HUBBELL INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1999
(CONTINUED)
The action plans also address the impact that suppliers and customer Year 2000
issues may have on the Company. The Company relies on third party suppliers for
materials, utilities, transportation, banking and key services. Efforts are
underway to evaluate supplier's Year 2000 readiness and to determine
alternatives and contingency plans such as alternate supply sources and
accumulation of inventory. Approaches to reducing supply disruptions will vary
by business and facility and are intended as a means of managing the risk but
cannot eliminate the potential for disruption due to a third party. The Company
is also dependent upon its customers for sales and cashflow. Interruptions in
our customers' operation from Year 2000 issues could result in reduced sales,
increased inventories or receivables and lower cashflows. While these events are
possible, the diversity of the Company's customer base is broad enough to
minimize the effects of a single occurrence. Steps are being taken to monitor
customers' Year 2000 readiness, including testing of transactions, as a means of
determining risks and alternatives.
At this time, activities have been progressing in accordance with the action
plans and executive management is monitoring programs. While the Company
believes its efforts to address the Year 2000 Issue will be successful in
avoiding any material adverse effect on the Company's operations or financial
condition, it recognizes that failing to resolve Year 2000 issues on a timely
basis would, in a "most reasonably likely worst case scenario", significantly
limit its ability to manufacture and distribute its products and process its
daily business transactions for a period of time, especially if such failure is
coupled with third party or infrastructure failures. Similarly, the Company
could be significantly affected by the failure of one or more significant
suppliers, customers or components of the infrastructure to conduct their
respective operations after 1999. Adverse effects on the Company could include,
among other things, business disruption, increased costs, loss of business and
other similar risks.
MARKET RISKS
In the operation of its business, the Company has identified market risk
exposures to foreign currency exchange rates, raw material prices and interest
rates. There have not been any material changes effecting the identified risks
or the Company's strategy for managing the exposures from the preceding fiscal
year.
FORWARD-LOOKING STATEMENTS
Certain statements made in the discussion of Financial Condition and Results of
Operations are forward-looking. Certain statements under the caption "Impact of
the Year 2000 Issue" are also forward-looking. These may be identified by the
use of forward-looking words or phrases, such as "believe", "expect",
"anticipate", "should", "plan", "estimated", "potential", "target", "goals",
and "scheduled", among others. In connection with the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995, the Company is hereby
identifying important factors that could cause actual results to differ
materially from those contained in the specified statements. The Company notes
that a variety of factors could cause the Company's assessment of Year 2000
issues to differ materially from the actual impact of Year 2000 issues. The
risks and uncertainties that may affect the Company's assessment of Year 2000
issues includes (1) the complexity involved in ascertaining all situations in
which Year 2000 issues may arise; (2) the ability of the Company to obtain the
services of sufficient personnel to implement the program; (3) possibe
increases in the cost of personnel required to implement the program; (4)
absence of delays in scheduled deliveries of new hardware and software from
third party suppliers; (5) the receipt and the reliability of responses from
suppliers, customers and others to whom compliance inquiries are being made;
(6) the ability of material third parties to bring their affected systems into
compliance and (7) absence of unforeseen events which could delay timely
implementation of the program.
10
<PAGE> 11
HUBBELL INCORPORATED
PART II -- OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS
NUMBER DESCRIPTION
3b* By-laws, as amended on March 8, 1999.
27. Financial Data Schedule (Electronic filings only)
- -----------------------------
* Filed hereunder
REPORTS ON FORM 8-K
There were no reports on Form 8-K filed for the three months ended March 31,
1999.
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.
HUBBELL INCORPORATED
Dated: May 14, 1999 /s/ T. H. Powers
----------------------------
Timothy H. Powers
Senior Vice President and
Chief Financial Officer
11
<PAGE> 1
Exhibit 3b
HUBBELL INCORPORATED
BY-LAWS
AS ADOPTED BY THE BOARD OF DIRECTORS
MARCH 8, 1999
<PAGE> 2
BY-LAWS
of
HUBBELL INCORPORATED
ARTICLE I
Meetings of Shareholders
------------------------
Section 1. Place. All meetings of the shareholders shall be held at the
principal office of the Corporation in the State of Connecticut, or at such
other place or places within or without the State of Connecticut as may be
designated from time to time by the Chairman of the Board, or, in the absence of
such designation, as may be determined by resolution of the Board of Directors.
Section 2. Annual Meeting. The annual meeting of shareholders shall be
held on the first Monday of May in each year, or if that day be a legal holiday,
then on the next succeeding business day, at 10:00 o'clock in the forenoon, or
on such other date and at such other time as may be designated from time to time
by the Chairman of the Board, or, in the absence of such designation, as may be
determined by resolution of the Board of Directors, for the election of
directors and for such other business as may properly come before such meeting.
Section 3. Special Meetings. Special meetings of the shareholders may
be called by the Chairman of the Board or the Board of Directors. Upon the
written request of the holders of not less than one-tenth of the voting power of
all shares entitled to vote at the meeting, the Chairman of the Board shall call
a special shareholders' meeting for the purposes specified in such request and
cause notice thereof to be given pursuant to the provisions of these By-Laws. If
the Chairman of the Board shall not, within fifteen days after receipt of such
shareholders' request, so call such meeting, such shareholders may call the
same. The general purpose or purposes for which a special meeting is called
shall be stated in the notice thereof, and no other business shall be transacted
at the meeting. Any such special meeting of the shareholders shall be held at
the principal office of the Corporation in the State of Connecticut or at such
other place or places within or without the State of Connecticut as may be
designated from time to time by the Chairman of the Board, or, in the absence of
such designation, as may be determined by resolution of the Board of Directors.
Section 4. Notice. Written notice of all meetings of the shareholders
shall be given by or at the direction of the Chairman of the Board or Secretary
to each shareholder of record entitled to vote at such meeting, by leaving such
notice with him or at his residence or usual place of business or by mailing a
copy thereof addressed to him at his last known post office address as last
shown on the stock records of the Corporation, postage prepaid, not less than
ten (10) days nor more than sixty (60) days before the date of the meeting; each
such notice shall state the place, day and hour of the meeting and, if the
notice is for a special meeting, the purpose or purposes for which the meeting
is called.
Section 5. Quorum. Except as otherwise provided by statute or the
Certificate of Incorporation, the holders of a majority of the votes provided by
the Certificate of Incorporation for the issued and outstanding shares shall
constitute a quorum at all meetings of shareholders for all purposes, except as
otherwise provided in these By-Laws or by statute or the Certificate of
Incorporation, but no action required by law, the Certificate of Incorporation
or these By-Laws to be authorized or taken by the holders of a designated
proportion of the voting power of shares or of the shares of any particular
class or of each class, may be authorized or taken by a lesser proportion. The
holders of a majority of the voting power of
1
<PAGE> 3
the shares entitled to vote represented at any such meeting may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, and any business may be transacted at such adjourned meeting which
might have been transacted at the meeting as originally notified. The
shareholders present at a duly-held meeting at which a quorum is present may
continue to do business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.
Section 6. Voting. Each outstanding share shall be entitled to the
number of votes on each matter submitted to a vote at a meeting of shareholders
as provided by the Certificate of Incorporation. Shares otherwise entitled to
vote but disqualified from voting for any reason of law, shall not be considered
as outstanding for the purpose of quorum or of computing the voting power of the
Corporation or shares of any class. Every person entitled to vote or execute
consents, waivers or releases in respect of shares may do so either in person or
by one or more agents authorized by a written dated proxy executed by him. Each
shareholder shall have the number of votes provided by the Certificate of
Incorporation for each share of stock registered in his name at the time at
which the record date shall be fixed as hereinafter in Section 7 of this Article
I provided. Except as otherwise provided by statute, or the Certificate of
Incorporation, the Corporation may treat the person in whose name shares of
stock or other securities stand of record on its books as the absolute owner of
such shares or other securities as if such person had full competency, capacity
and authority to exercise all rights of ownership, irrespective of: (a) any
knowledge or notice to the contrary, or (b) any description indicating a
representative, pledge or other fiduciary relation or any reference to any other
instrument or to the rights of any other person appearing upon its records or
upon the share, certificate or other security. Except as otherwise provided by
statute, these By-Laws or the Certificate of Incorporation, if a quorum exists,
action on a matter by the shareholders, other than the election of directors, is
approved if the votes cast which favor the action exceed the votes cast which
oppose the action. Except as otherwise provided by the Certificate of
Incorporation, if a quorum exists at a meeting of shareholders, directors are
elected by a plurality of the votes cast by the shares entitled to vote in the
election.
Section 7. Fixing Record Date. For the purpose of determining the
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or for the purpose of determining shareholders entitled
to receive payment of any dividend or other distribution or the allotment of any
rights, or for the purpose of any other shareholder action, the Board of
Directors by resolution may fix a date, not more than seventy (70) days nor less
than ten (10) full days immediately preceding the date of the meeting, nor more
than seventy (70) days prior to any other action, as the record date for any
such determination of shareholders, such date in any case not to be earlier than
the date such action is taken by the Board of Directors. In the absence of such
direction by the Board of Directors, such day shall, in the case of each
shareholder meeting, whether the annual meeting or a special meeting, be the day
twenty-five (25) days immediately preceding the date of such meeting. If such
day be a holiday, the next preceding business day shall be fixed as such record
date. The books of the Corporation shall not be closed for transfers. When a
determination of shareholders entitled to vote at any meeting of shareholders
has been made as provided in this section, such determination shall apply to any
adjournment thereof.
Section 8. List of Shareholders. The Secretary shall make or cause to
be made before each meeting of shareholders, a complete list or other equivalent
record of the shareholders entitled to vote at such meeting, arranged in
alphabetical order, with the address of and the number and class of shares held
by each. Such list or other equivalent record shall be available for inspection
by any shareholder, beginning two business days after notice of the meeting is
given for which the list was prepared and continuing through the meeting, at the
Corporation's principal office or at a place identified in the meeting notice in
the city where the meeting will be held. A shareholder, his agent or attorney is
entitled on written demand to inspect and, subject to statutory requirements, to
copy the list, during regular business hours and
2
<PAGE> 4
at his expense, for any proper purpose in the interest of the shareholder as
such or of the Corporation and not for speculative or trading purposes or for
any purpose inimical to the interest of the Corporation or its shareholders.
Such list or other equivalent record shall also be produced and kept open at the
time and place of the meeting and shall be subject for any such proper purpose
to such inspection during the whole time of the meeting.
Section 9. Inspection of Books. Shareholders shall have no right except
as conferred by statute or by these By-Laws to inspect any books, papers,
records or accounts of the Corporation.
Section 10. (A) Annual Meetings of Shareholders. (1) Nominations of
persons for election to the Board of Directors of the Corporation and the
proposal of business to be considered by the shareholders may be made at an
annual meeting of shareholders (a) pursuant to the Corporation's notice of
meeting delivered pursuant to Article 1, Section 4 of these By-Laws, or (b) by
any shareholder of the Corporation who is entitled to vote at the meeting, who
complies with the notice procedures set forth in subparagraphs (2) and (3) of
this paragraph (A) of this By-Law and who was a shareholder of record at the
time such notice is delivered to the Secretary of the Corporation.
(2) For nominations or other business to be properly brought before an
annual meeting by a shareholder pursuant to clause (b) of paragraph (A)(1) of
this By-Law, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation, and, in the case of business other than
nominations, such other business must be a proper matter for shareholder action.
To be timely, a shareholder's notice shall be delivered to the Secretary at the
principal executive offices of the Corporation not less than seventy days nor
more than ninety days prior to the first anniversary of the preceding year's
annual meeting; provided, however, that in the event that the date of the annual
meeting is advanced by more than twenty days, or delayed by more than seventy
days, from such anniversary date, notice by the shareholder to be timely must be
so delivered not earlier than the ninetieth day prior to such annual meeting and
not later than the close of business on the later of the seventieth day prior to
such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made. Such shareholder's
notice shall set forth (a) as to each person whom the shareholder proposes to
nominate for election or re-election as a director all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected; (b) as to
any other business that the shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the shareholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such shareholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by such
shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph (A)(2)
of this By-Law to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least eighty
days prior to the first anniversary of the preceding year's annual meeting, a
shareholder's notice required by this By-Law shall also be considered timely,
but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the Secretary at the principal executive
offices of the Corporation not
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later than the close of business on the tenth day following the day on which
such public announcement is first made by the Corporation.
(B) Special Meetings of Shareholders. Only such business shall be
conducted at a special meeting of shareholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting pursuant to Article
I, Sections 3 and 4 of these By-Laws. Nominations of persons for election to the
Board of Directors may be made at a special meeting of shareholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (a)
by or at the direction of the Board of Directors or (b) by any shareholder of
the Corporation who is entitled to vote at the meeting, who complies with the
notice procedures set forth in this By-Law and who is a shareholder of record at
the time such notice is delivered to the Secretary of the Corporation.
Nominations by shareholders of persons for election to the Board of Directors
may be made at such a special meeting of shareholders if the shareholder's
notice as required by paragraph (A)(2) of this By-Law shall be delivered to the
Secretary at the principal executive offices of the Corporation not earlier than
the ninetieth day prior to such special meeting and not later than the close of
business on the later of the seventieth day prior to such special meeting or the
tenth day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. This paragraph (B) is not intended to
have any application to a special meeting of shareholders called by shareholders
pursuant to Section 33-696(a)(2) of the Connecticut Business Corporation Act.
(C) General. (1) Only persons who are nominated in accordance with the
procedures set forth in this By-Law shall be eligible to serve as directors and
only such business shall be conducted at a meeting of shareholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this By-Law. Except as otherwise provided by law, the Certificate of
Incorporation or these By-Laws, the Chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made in accordance with the procedures set forth
in this By-Law and, if any proposed nomination or business is not in compliance
with this By-Law, to declare that such defective nomination shall be disregarded
or that such proposed business shall not be transacted.
(2) For purposes of this By-Law, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones New Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
(3) For purposes of this By-Law, no adjournment nor notice of
adjournment of any meeting shall be deemed to constitute a new notice of such
meeting for purposes of this Section 10, and in order for any notification
required to be delivered by a shareholder pursuant to this Section 10 to be
timely, such notification must be delivered within the periods set forth above
with respect to the originally scheduled meeting.
(4) Notwithstanding the foregoing provisions of this By-Law, a
shareholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this By-Law. Nothing in this By-Law shall be deemed to affect any
rights of shareholders to request inclusion of proposals in the Corporation's
proxy statement pursuant to Rule 14a-8 under the Exchange Act.
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ARTICLE II
Directors
---------
Section 1. Election. The business and affairs of the Corporation shall
be managed by a Board of Directors consisting of not less than three (3)
directorships and not more than eleven (11) directorships, as shall be
determined by a resolution adopted by the Board of Directors. Within the
foregoing numerical limits the number of directorships constituting the full
Board of Directors may be increased by the concurring vote of the directors
holding a majority of the directorships constituting the full Board of Directors
immediately prior to such vote. Each of the directors shall hold office until
the annual meeting of the shareholders held next after his election and his
successor is elected and qualified, or until his earlier death, resignation or
removal.
Section 2. Vacancies. Vacancies in the Board of Directors resulting
from death, resignation, removal or other cause (including an increase in the
number of directorships constituting the Board of Directors) may be filled for
the unexpired term by action of the sole remaining director, or by unanimous
written consent of all remaining directors without a meeting, or by a majority
vote of the remaining directors, at a special meeting called for that purpose or
at any regular meeting of the Board of Directors, though such remaining
directors are less than a quorum and though such majority is less than a quorum.
The shareholders may elect a director at any time to fill any vacancy which has
not been filled by the directors as herein provided, at a special meeting of the
shareholders called for such purpose.
Section 3. Regular Meetings. The directors shall hold regular meetings
at the principal office of the Corporation on the second Tuesday of March, the
second Tuesday of June, the second Tuesday of September, and the second Tuesday
of December in each year, at 9:00 o'clock in the forenoon, local time, or at
such other place either within or without the State of Connecticut or on such
other date or at such other hour as may be determined by resolution of the Board
of Directors.
Section 4. Special Meetings. Special meetings shall be held wherever
and whenever ordered by the Chairman of the Board or by any two directors. The
Secretary shall call a special meeting when and as requested so to do in writing
by the Chairman of the Board or by any two directors.
Section 5. Adjourned Meetings. If two or more directors be present at
any meeting, they may adjourn such meeting to any time prior to the day of the
next regular meeting of the Board of Directors. No notice of the time and place
appointed for the holding of any adjourned meeting need be given.
Section 6. Action Without Meeting. Directors may participate in a
meeting of the Board of Directors by means of conference telephone or similar
communications equipment enabling all directors participating in the meeting to
hear one another, and participation in a meeting pursuant to this By-Law shall
constitute presence in person at such a meeting. If all the directors severally
or collectively consent in writing to any action taken by the Corporation prior
to such consent, or to be taken by the Corporation subsequent to such consent,
and the number of such directors constitutes a quorum for such action, such
action shall be a valid corporate action as though it had been authorized at a
meeting of the Board of Directors and shall be effective when the last director
signs the consent, unless the consent specifies a different effective date. The
Secretary shall file such consents with the minutes of the meeting of the Board
of Directors.
Section 7. Quorum. A majority of the directors qualified and acting
shall constitute a quorum provided that such quorum shall not be less than
one-third of the number of directorships provided by
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applicable statutes and these By-Laws, nor at any time less than two (2)
directorships. The act of a majority of the directors present at a meeting at
which a quorum is present at the time of the act shall be the act of the Board
of Directors, unless the act of a greater number is required by these By-Laws or
by statute.
Section 8. Notice and Place of Meeting. No notice shall be required for
a regular meeting of the Board of Directors held at the principal office of the
Corporation except as provided in Article VIII of these By-Laws. The Secretary
shall give notice of regular meetings of the Board of Directors held at any
place other than the principal office of the Corporation and of special meetings
by mailing, postage prepaid, a written notice thereof to each director at least
five (5) days before the meeting, or by telegraphing or telephoning the same, or
by a personal service of written or oral notice, at least two (2) days before
the meeting. Unless otherwise indicated in the notice thereof, any and all
business may be transacted at a special meeting, except as in these By-Laws
otherwise expressly provided. At any meeting at which every director shall be
present, even though without any notice, any business may be transacted.
Special meetings of the Board of Directors may be held at such
place or places, either within or without the State of Connecticut, as may be
designated from time to time by the Chairman of the Board, or, in the absence of
such designation, as may be determined by resolution of the Board of Directors.
The directors may have an office and keep the books of the
Corporation in the principal office of the Corporation; or they may have an
office and keep the books of the Corporation, except the stock book and the
transfer book, in such other place or places, either within or without the State
of Connecticut, as may be designated from time to time by the Chairman of the
Board, or, in the absence of such designation, as may be determined by
resolution of the Board of Directors.
Section 9. Powers. In addition to the powers and authorities by these
By-Laws expressly conferred upon them, the Board of Directors may exercise all
such powers of the Corporation and do all such lawful acts and things as are not
by statute or by the Certificate of Incorporation or by these By-Laws directed
or required to be exercised or done by the shareholders.
Section 10. Compensation of Directors. The directors shall receive for
their services such fees, if any, as may be fixed from time to time by the Board
of Directors. The directors shall be reimbursed for any reasonable expenses
actually incurred in connection with their duties.
Section 11. Resignation. Any director may resign by giving written
notice of his resignation to the Corporation in care of the Chairman of the
Board or the Secretary. Any such resignation shall take effect upon receipt of
such notice by the Corporation, or at such later date as may be specified
therein.
ARTICLE III
Committees
----------
Section 1. Executive Committee. The Board of Directors shall, by
resolution adopted by an affirmative vote of directors holding a majority of the
directorships, appoint from among its members an Executive Committee consisting
of two or more directors, and may designate one or more directors as alternate
members of such Executive Committee, who may replace any absent or disqualified
member at any meeting of the Executive Committee, which Executive Committee
shall have and may exercise, during the intervals between the meetings of the
Board of Directors, all the powers of the Board of Directors in the
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management of the business, properties and affairs of the Corporation, including
authority to take all action provided in the By-Laws to be taken by the Board of
Directors; except authority to: (i) authorize distributions; (ii) approve or
propose to shareholders action that by statute is required to be approved by
shareholders; (iii) fill vacancies on the Board of Directors or on any of its
committees; (iv) amend the Certificate of Incorporation; (v) adopt, amend or
repeal By-Laws; (vi) approve a plan of merger not requiring shareholder
approval; (vii) authorize or approve reacquisition of shares, except according
to a formula or method prescribed by the Board of Directors; (viii) authorize or
approve the issuance or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations of a class or
series of shares, except that the Board of Directors may authorize a committee
or a senior executive officer of the Corporation to do so within limits
specifically prescribed by the Board of Directors; (ix) fix compensation of
directors for serving on the Board of Directors or on any committee thereof; or
(x) amend or repeal any resolution of the Board of Directors which by its terms
shall not be so amendable or repealable. All acts done and powers conferred by
the Executive Committee shall be deemed to be, and may be certified as being
done or conferred, under authority of the Board of Directors.
Section 2. Meetings, Quorums and Manner of Acting. Meetings of the
Executive Committee shall be held whenever called by the Chairman of the Board
or the Chairman of the Executive Committee. Notice of any meeting shall be
mailed to each member, addressed to him at his residence or usual place of
business, not later than the second day before the day on which the meeting is
to be held, or shall be sent to him at such place by telegraph, or be delivered
personally, or by telephone, not later than the day before the day on which such
meeting is to be held. Unless limited by statute, the Certificate of
Incorporation, the By-Laws, or the terms of the notice thereof, any and all
business may be transacted at any meeting of the Executive Committee. A majority
of the members of the Executive Committee in office at the time of any meeting
of the Executive Committee shall be present in person to constitute a quorum for
the transaction of business. The vote of a majority of the members present at
the time of such vote, if a quorum is present at such time, shall be the act of
the Executive Committee. Directors may participate in a meeting of the Executive
Committee by means of conference telephone or similar communications equipment
enabling all members participating in the meeting to hear one another, and
participation in a meeting pursuant to this By-Law shall constitute presence in
person at such a meeting. A majority of the members present, whether or not a
quorum is present, may adjourn any meeting to another time and place; and no
notice of an adjourned meeting need be given.
Section 3. Records. The Executive Committee shall keep minutes of its
proceedings and shall submit the same from time to time to the Board of
Directors. The Secretary of the Corporation shall act as secretary to the
Executive Committee.
Section 4. Vacancies. Any newly-created memberships and vacancies
occurring in the Executive Committee shall be filled by resolution adopted by a
majority of the entire Board of Directors.
Section 5. Other Committees. The Board of Directors may, by resolution
adopted by an affirmative vote of directors holding a majority of the
directorships, designate one or more other committees, each such committee to
consist of two or more directors of the Corporation, and may designate one or
more directors as alternate members of such committee, who may replace any
absent or disqualified member at any meeting of such committee. Each such other
committee shall have such name, and such power and authority as may be
determined from time to time by resolutions adopted by an affirmative vote of
directors holding a majority of the directorships. The requirement with respect
to the manner in which each such other committee shall hold meetings and take
actions shall be set forth in the resolutions of the Board of Directors
designating such other committee.
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ARTICLE IV
Officers
--------
Section 1. Number. The officers of the Corporation shall be a Chairman
of the Board, a President, such number of Vice Presidents, any of whom may be
designated as Executive Vice Presidents or Senior Vice Presidents, as the Board
of Directors may from time to time determine, a Secretary, a Treasurer, a
Controller, Assistant Secretaries, Assistant Treasurers, and such other officers
as may be appointed in accordance with the provisions of Section 3 of this
Article IV. One person may hold the offices and perform the duties of any two or
more of such offices.
Section 2. Election, Term of Office and Qualifications. The officers of
the Corporation shall be chosen annually by the Board of Directors, at the first
regular meeting of the Board of Directors held following the annual meeting of
shareholders. Each officer, except as to those provided for in Section 3 of this
Article IV, shall hold his office for the term of one year and until his
successor shall have been duly chosen and qualified, or until his earlier death,
resignation or removal. The Chairman of the Board shall be elected from among
the directors; and the term of his office shall cease if not otherwise
terminated, when he shall cease to be a director.
Section 3. Other Officers. The Board of Directors may appoint such
other officers and agents as it shall deem necessary, who shall have such
authority and shall perform such duties as from time to time shall be prescribed
by the Board of Directors.
Section 4. Compensation of Officers. The compensation of the officers
of the Corporation shall be determined by the Board of Directors, which shall
have the power to authorize contracts for such compensation. However, the
appointment of any officers pursuant to these By-Laws for a given term, or a
general provision in these By-Laws or the Certificate of Incorporation of this
Corporation with respect to the term of office of any such officer, shall not of
itself create any contract rights.
Section 5. Removal of Officers. Any officer may be removed at any time,
for or without cause, by resolution of the Board of Directors at any meeting.
Section 6. Resignation of Officers. Any officer may resign at any time
by giving written notice of his resignation to the Corporation, in care of the
Chairman of the Board or the Secretary. Any such resignation shall take effect
upon receipt of such notice by the Corporation, or at such later date as may be
specified therein.
Section 7. Vacancies. A vacancy in any office because of death,
resignation, removal or other cause may be filled for the unexpired portion of
the term by the Board of Directors.
Section 8. Chairman of the Board. The Chairman of the Board, subject to
the control of the Board of Directors, shall have general and direct charge,
control and supervision and active management of all of the business and affairs
of the Corporation (other than those specific operations related duties
delegated by these By-Laws to the President), and shall see that all orders and
resolutions of the Board of Directors are carried into effect, subject, however,
to the right of the Board of Directors to delegate any specific powers to any
other officer or officers of the Corporation. The Chairman of the Board shall,
when present, act as Chairman at all meetings of the shareholders of the
Corporation, and shall, when present, preside at all meetings of the Board of
Directors. The Chairman of the Board shall have general authority to execute
full and complete powers of attorney, bonds, deeds, mortgages, contracts,
agreements, proxies and other
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instruments and documents in the name and on behalf of the Corporation. He shall
have the general powers and duties of supervision and management incident to the
office of the Chairman of the Board of the Corporation, and such other duties as
from time to time may be assigned to him by the Board of Directors.
Section 9. President. The President shall be the chief executive
officer of the Corporation, and, subject to the control of the Board of
Directors, shall have general and direct charge, control and supervision and
active management solely of the operations of the Corporation, subject, however,
to the right of the Board of Directors to delegate any specific powers to any
other officer or officers of the Corporation. The President shall have general
authority to execute full and complete powers of attorney, bonds, deeds,
mortgages, contracts, agreements, proxies and other instruments and documents in
the name and on behalf of the Corporation, and shall have such other duties as
from time to time may be assigned to him by the Board of Directors or the
Executive Committee.
Section 10. Vice Presidents. The Executive Vice Presidents and the
Senior Vice Presidents, if elected, and the other Vice Presidents shall perform
such duties as shall from time to time be imposed upon them by the Board of
Directors, the Chairman of the Board or the President. In the absence or
disability of the President, the Chairman of the Board shall perform all duties
and exercise all powers of the President.
Section 11. The Secretary. The Secretary shall, except as otherwise
provided by resolution of the Board of Directors:
(a) keep the minutes of the meetings of the shareholders and the Board
of Directors in books provided for such purposes;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and of the seal of the Corporation and
see that it is affixed to all documents, the execution of which, on behalf of
the Corporation under its seal, is duly authorized in accordance with the
provisions of these By-Laws;
(d) have charge of the stock certificate books of the Corporation and
keep or cause to be kept by the Transfer Agent and Registrar of the Corporation,
or by any other agent, the stock ledger and transfer books and such lists and
records of shareholders as are required by Article I, Section 8 and Article V,
Section 1 of these By-Laws; shall exhibit the same at all reasonable times to
any director, upon application; and shall produce the same at any meeting of
shareholders, upon the request of any shareholder, to the extent set forth in
said other sections of these By-Laws;
(e) see that the books, records, statements, certificates and all other
documents and records required by law are properly kept and filed; and
(f) in general, perform all duties incident to the office of the
Secretary, and such other duties as from time to time may be assigned to him by
the Board of Directors.
Section 12. Assistant Secretary. Any Assistant Secretary shall, at the
request of the Secretary, or in his absence or disability, perform any or all
the duties of the Secretary and, when so acting, he shall have all the powers
of, and be subject to all the restrictions upon, the Secretary. He shall perform
such other duties as from time to time may be assigned to him by the Board of
Directors.
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Section 13. The Treasurer. The Treasurer shall, except as otherwise
provided by resolution of the Board of Directors:
(a) have charge and custody of, and be responsible for, all funds and
securities of the Corporation, and deposit all such funds and securities in the
name of the Corporation in such banks, trust companies or other depositories as
the Board of Directors, or any officer or officers duly authorized by the Board
of Directors, shall, from time to time, direct or approve;
(b) receive, and give receipt for, money paid to the Corporation from
any source whatsoever;
(c) exhibit at all reasonable times his records to any of the directors
of the Corporation upon application during business hours at the office of the
Corporation where such books and records are kept; and
(d) perform all the duties and all necessary acts in connection with
the administration of the financial affairs of the Corporation, and in general
perform all the duties appertaining to the office of Treasurer, and such other
duties as from time to time may be assigned to him by the Board of Directors.
Section 14. Assistant Treasurer. Any Assistant Treasurer shall, at the
request of the Treasurer, or in his absence or disability, perform any or all
the duties of the Treasurer and, when so acting, he shall have all the powers
of, and be subject to all the restrictions upon, the Treasurer. He shall perform
such other duties as from time to time may be assigned to him by the Board of
Directors.
Section 15. The Controller. The Controller shall, except as otherwise
provided by resolution of the Board of Directors:
(a) have active control of, and shall be responsible for, all matters
pertaining to the accounts of the Corporation;
(b) supervise the auditing and keeping of all payrolls and vouchers of
the Corporation;
(c) keep full and accurate account of all monies received and paid on
account of the Corporation;
(d) receive, audit and consolidate all operating and financial
statements of the Corporation, and supervise the books of account of the
Corporation, and auditing practices of the Corporation;
(e) prepare a statement of the condition of the finances of the
Corporation for submission at all regular meetings of the Board of Directors,
and a full financial report for submission at the annual meeting of the
shareholders; and
(f) in general, perform all the duties appertaining to the office of
Controller, and such other duties as from time to time may be assigned to him by
the Board of Directors.
Section 16. Delegation of Duties. In case of the absence of any officer
of the Corporation, or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors may delegate the powers or duties of such
officer to any other officer, or to any director, for the time being, by a
resolution adopted by an affirmative vote of directors holding a majority of the
directorships.
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ARTICLE V
Administrative Provisions
-------------------------
Section 1. Books. The following books and records of the Corporation
shall be kept at the principal office of the Corporation: correct and complete
books and records of account; statements of the financial condition of the
Corporation; minutes of the proceedings of its incorporators, shareholders,
directors and committees of directors; and a record of its shareholders, giving
the names and addresses of all shareholders and the number and class of shares
held by each.
Subject to the provisions of the applicable statutes, the
Board of Directors shall determine, from time to time, whether, and if allowed,
when, and under what conditions and regulations the books, records and accounts
of the Corporation or any of them shall be open to the inspection of the
shareholders, and the shareholders' rights in this respect are, and shall be,
restricted and limited accordingly. No right of inspection accorded a
shareholder acting in person or by his agent or attorney shall be exercised
except at the reasonable time and for a specified, reasonable and proper purpose
and in good faith in the interest of such shareholder as such or of the
Corporation, and not for speculative or trading purposes or any purpose inimical
to the interest of the Corporation or its shareholders.
Section 2. Checks and Notes. All checks, drafts, and other orders for
the payment of money, and all promissory notes of the Corporation, shall be
signed by such officer or officers of the Corporation or such other person or
persons as from time to time may be designated by resolution of the Board of
Directors, or as may be designated by any officer or officers duly authorized by
the Board of Directors to make such designation.
Section 3. Dividends and Surplus. Except as otherwise provided in the
Certificate of Incorporation and applicable statutes, dividends and
distributions upon the shares of the Corporation in shares of the Corporation's
stock or in cash or property, may be declared and paid pursuant to resolution of
the Board of Directors, whenever, and in such amounts, as in the discretion of
the Board of Directors, the condition of the affairs of the Corporation shall
render advisable. The Board of Directors, in its discretion, subject to the
Certificate of Incorporation and applicable statutes, may purchase, take,
receive or otherwise acquire, hold, own, pledge, transfer or otherwise dispose
of any of the shares of the capital stock of the Corporation. The Board of
Directors may from time to time set aside from the unreserved and unrestricted
earnings of the Corporation such sum or sums as it, in its absolute discretion,
may deem proper, as a reserve fund to meet contingencies or for dividends or for
any other purpose it may deem to be conducive to the best interest of the
Corporation.
ARTICLE VI
Shares and Their Transfer
-------------------------
Section 1. Certificates of Stock. Certificates for shares of the stock
of the Corporation shall be in such form as may be approved by the Board of
Directors, shall be numbered in the order of their issue, may be under seal of
the Corporation, and shall be signed by the Chairman of the Board or the
President or a Vice President and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer, except that such signature may be
facsimile if such certificate is signed by a transfer agent, transfer clerk
acting on behalf of the Corporation, or registrar. If any officer who has signed
or whose facsimile signature has been used on such certificate ceases to serve
the Corporation as an officer in the capacity as to which his signature was to
be used before such certificate is delivered by the Corporation, the certificate
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may, nevertheless, be adopted by the Corporation and be issued and delivered as
though such officer had not ceased to hold such office. Each such certificate
shall set forth upon the face thereof as at the time of issue: (a) the name of
the Corporation; (b) a statement that the Corporation is organized under the
laws of the State of Connecticut; (c) the name of the person to whom issued; (d)
the number, class and designation of series, if any, of shares which such
certificate represents; and (e) the par value of each share represented by each
such certificate or a statement that the shares are without par value. Each such
certificate shall set forth upon the face or back of the certificate, or shall
state that the Corporation will furnish to any shareholder upon request and
without charge, a full or summary statement of the designations, terms,
limitations and relative rights and preferences of the shares of each class of
stock authorized to be issued, and if this Corporation is authorized to issue
any class in series, the variations in the relative rights and preferences
between the shares of each such series so far as the same have been fixed and
determined, and the authority of the Board of Directors to fix and determine the
relative rights and preferences of subsequent series. Every certificate
exchanged or returned to the Corporation shall be marked "Cancelled" with the
date of cancellation, and shall be filed by the transfer agent or by the
Secretary or such other agency as the Secretary may direct.
Section 2. Transfer of Stock. Transfers of shares of the stock shall be
made on the books of the Corporation only by the holder thereof, in person or by
his duly-authorized attorney, upon surrender of the certificate properly
endorsed. Transfer as collateral security shall be designated as such. A person
in whose name shares of stock stand on the books of the Corporation shall be
deemed the owner thereof.
Section 3. Lost, Destroyed or Stolen Securities. Where the owner of a
security issued by this Corporation claims that the security has been lost,
destroyed or wrongfully taken, the Corporation shall issue a new security in
place of the original security if the owner: (a) so requests before the
Corporation, its transfer agent or registrar has notice that the security has
been acquired by a bona fide purchaser; (b) files with the Corporation, its
transfer agent or registrar as the case may be, a sufficient indemnity bond; and
(c) satisfies any other reasonable requirements imposed by a proper officer of
the Corporation or by its transfer agent or registrar as the case may be. In the
event that the Corporation, its transfer agent or registrar has registered a
transfer of a security before receiving notification from the owner that such
security has been lost, apparently destroyed or wrongfully taken, the
Corporation, its transfer agent or registrar shall not issue a new security in
place of such lost, destroyed or wrongfully taken security.
ARTICLE VII
Miscellaneous Provisions
------------------------
Section 1. Fiscal Year. The fiscal year of the Corporation shall be the
calendar year.
Section 2. Offices. The principal office of the Corporation shall be
located at Derby Milford Road, Town of Orange, State of Connecticut.
Section 3. Agents and Representatives. Except as otherwise provided in
Sections 8, 9, and 10 of Article IV, the Chairman of the Board, the President,
the Executive Vice Presidents, the Senior Vice Presidents, or any Vice
President, together with the Secretary or Treasurer, are authorized and
empowered in the name of, and as the act and deed of, the Corporation, to name
and appoint general and special agents, including, without limiting the
generality of the foregoing, a registered agent for service of process in
Connecticut or any other jurisdiction, representatives, and attorneys to
represent the Corporation in the United States or in any foreign country, and to
prescribe, limit, and define the powers and duties of such agents,
representatives and attorneys, and to grant, substitute, revoke, or cancel, in
whole or in part, any
12
<PAGE> 14
power of attorney or other authority conferred on any such agent,
representative, or attorney. All powers of attorney or other instruments which
may be executed pursuant to this provision shall be signed by the Chairman of
the Board, the President, the Executive Vice Presidents, the Senior Vice
Presidents, or a Vice President and by the Secretary or the Treasurer and the
seal of the Corporation shall be affixed thereto. No further authorization by
the Board of Directors shall be necessary in connection with the foregoing, it
being intended that this By-Law shall constitute full and complete authority by
which the officers above-mentioned may act for the purposes aforesaid.
Section 4. Notices. Whenever under the provision of these By-Laws
notice is required to be given to any officer, director or shareholder, such
notice shall be given as required or permitted by applicable statutes or
provisions of such By-Laws. In the absence of any such provisions of applicable
statutes or By-Laws, such notice may be given by leaving the notice with the
officer, director or shareholder in person, or at his residence, or usual place
of business, or by mailing a copy thereof, postage prepaid, addressed to him at
his last known post office address as last shown on the books of the
Corporation. If no address appears on the books of the Corporation for such
officer, director or shareholder, said notice shall be thus mailed to him at the
general post office in the Town of Orange, Connecticut. Any such notice shall be
deemed to be duly given at the time when the same shall be thus mailed.
Section 5. Waiver of Notice. Whenever any notice of time, place,
purpose or any other matter, including any special notice or form of notice, is
required or permitted to be given any person by law or under the provisions of
the Certificate of Incorporation or the By-Laws of this Corporation, waiver of
notice signed by the person or persons entitled to such notice, whether before
or after the time stated therein shall be equivalent to the giving of such
notice. The Secretary of the Corporation shall cause any such waiver to be filed
with or entered upon the records of the Corporation or, in the case of waiver of
notice of a meeting, the records of the meeting. A shareholder's attendance at a
meeting: (1) waives objection to lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting; and (2) waives
objection to consideration of a particular matter at the meeting that is not
within the purpose or purposes described in the meeting notice, unless the
shareholder objects to considering the matter when it is presented. A director's
attendance at or participation in a meeting waives any required notice to him of
the meeting unless the director at the beginning of the meeting, or promptly
upon his arrival, objects to holding the meeting or transacting business at the
meeting and does not thereafter vote for or assent to action taken at the
meeting.
Section 6. Proxy. Every person entitled to vote or execute consents,
waivers or releases in respect of shares may do so either in person or by one or
more agents authorized by a written proxy executed by him. Such proxy is not
valid after eleven months from its date of execution unless it specifies a
longer time for which it is to continue in force or limits its use to a
particular meeting not yet held. A photographic or similar reproduction of a
proxy or a telegram, cablegram, wireless, facsimile transmission or similar
transmission of a proxy sent by such person is a sufficient writing. A proxy
shall be revocable at will except as provided by statute in the case of
irrevocable proxies, but revocation shall not affect any vote or other action
theretofore taken. The Corporation may treat any duly-executed proxy as not
revoked and in full force and effect until it receives a duly-executed
instrument revoking it, or duly-executed proxy bearing a later date, or in the
case of death or incapacity of the person executing the same, written notice to
such effect. A duly-executed proxy shall be irrevocable if it specifies that it
is irrevocable and if, and only so long as, it is coupled with an interest
sufficient in law as provided by applicable statutes to support an irrevocable
power coupled therewith.
13
<PAGE> 15
Section 7. Seal. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its organization and the words "Corporate
Seal, Connecticut".
ARTICLE VIII
Amendments
----------
By-Laws of the Corporation shall be subject to amendment or repeal, and
new By-Laws may be adopted by the shareholders and to the extent hereinafter
permitted, by the Board of Directors. Any notice of a meeting of shareholders or
the Board of Directors at which By-Laws are to be amended, repealed or adopted,
shall include notice of such proposed action. If such action has to be taken by
the Board of Directors, said notice shall be delivered or mailed to the
directors at least five (5) days before the meeting, provided, however, that if
all the directors are present at such meeting, or waive such notice either
before or after such meeting, such circumstances or action shall be equivalent
to giving of such notice. Amendment, repeal or adoption of By-Laws by
shareholders shall require the affirmative vote of the holders of a majority of
the voting power of shares entitled to vote thereon, or such greater proportion
thereof, or such class vote as the By-Laws shall provide. Amendment, repeal or
adoption of By-Laws by the Board of Directors shall require the affirmative vote
of directors holding a majority of the directorships. No By-Law provision
prescribing the vote required to amend the By-Laws or any thereof shall be
amended by a lesser vote. By-Laws amended or adopted by the shareholders shall
be subject to amendment or repeal by the Board of Directors, except such By-Laws
as the shareholders shall declare to be not subject to amendment or repeal by
the Board of Directors.
14
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