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 September 30, 1996
|_| 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 001-04710
WHITMAN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-6076573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3501 Algonquin Road, Rolling Meadows, Illinois 60008
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (847) 818-5000
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
As of October 31, 1996, the Registrant had 103,756,510 outstanding shares
(excluding treasury shares) of common stock, no par value, the Registrant's only
class of common stock.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
CONTENTS
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Cash Flows
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURE
<TABLE>
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
------------------------- --------------------------
1996 1995 1996 1995
----------- ---------- ----------- -----------
(in millions, except per-share data)
<S> <C> <C> <C> <C>
Sales and Revenues $ 856.7 $ 827.1 $ 2,286.8 $ 2,156.2
Cost of Goods Sold 548.7 535.1 1,467.0 1,389.2
----------- ---------- ----------- -----------
Gross Profit 308.0 292.0 819.8 767.0
Selling, General and Administrative Expenses 179.7 171.0 526.6 493.2
Amortization Expense 5.0 4.9 15.0 13.8
----------- ---------- ----------- -----------
Operating Income 123.3 116.1 278.2 260.0
Interest Expense (17.5) (20.2) (53.2) (56.7)
Interest Income 1.5 1.5 4.6 4.4
Other Expense, Net (4.5) (4.6) (13.2) (11.6)
----------- ---------- ----------- -----------
Income Before Income Taxes 102.8 92.8 216.4 196.1
Provision for Income Taxes 42.6 38.6 89.7 81.7
----------- ---------- ----------- -----------
Income Before Minority Interest 60.2 54.2 126.7 114.4
Minority Interest 7.3 6.7 16.1 14.9
----------- ---------- ----------- -----------
Net Income $ 52.9 $ 47.5 $ 110.6 $ 99.5
=========== ========== =========== ===========
Average Number of Common Shares Outstanding 106.1 106.4 106.8 106.1
=========== ========== =========== ===========
Net Income per Common Share $ 0.50 $ 0.45 $ 1.04 $ 0.94
=========== ========== =========== ===========
Cash Dividends per Common Share $ 0.105 $ 0.095 $ 0.305 $ 0.275
=========== ========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<TABLE>
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
September 30, December 31,
1996 1995
------------ -------------
(in millions)
<S> <C> <C>
ASSETS:
Current Assets:
Cash and Cash Equivalents $ 159.2 $ 53.3
Receivables 428.8 378.5
Inventories 314.6 267.1
Other Current Assets 73.3 62.2
------------ -------------
Total Current Assets 975.9 761.1
------------ -------------
Investments 193.5 253.7
Property (at Cost) 1,417.0 1,356.8
Accumulated Depreciation and Amortization (701.0) (659.3)
------------ -------------
Net Property 716.0 697.5
------------ -------------
Intangible Assets 555.5 568.8
Other Assets 74.0 82.2
------------ -------------
Total Assets $ 2,514.9 $ 2,363.3
============ =============
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Short-Term Debt, Including Current Portion of Long-Term Debt $ 140.4 $ 93.8
Accounts and Dividends Payable 301.0 248.6
Other Current Liabilities 154.3 165.2
------------ -------------
Total Current Liabilities 595.7 507.6
------------ -------------
Long-Term Debt 866.8 828.2
Deferred Income Taxes 46.7 33.4
Other Liabilities 122.6 141.0
Minority Interest 236.9 225.3
Shareholders' Equity:
Common Stock (No par, 250.0 million shares authorized; 103.7 million shares
outstanding at September 30, 1996 and
105.2 million shares outstanding at December 31, 1995) 448.6 427.8
Retained Income 410.3 336.6
Cumulative Translation Adjustment (83.4) (80.3)
Unrealized Investment Gain 2.6 9.7
Treasury Common Stock (131.9) (66.0)
------------ -------------
Total Shareholders' Equity 646.2 627.8
------------ -------------
Total Liabilities and Shareholders' Equity $ 2,514.9 $ 2,363.3
============ =============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
<TABLE>
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
1996 1995
----------- -----------
(in millions)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 110.6 $ 99.5
Adjustments to Reconcile to Net Cash Provided by Operating Activities:
Depreciation and Amortization 88.1 81.1
Other 12.2 10.0
Changes in Assets and Liabilities, Net of Acquisitions:
Increase in Receivables (49.2) (33.6)
Increase in Inventories (47.9) (52.4)
Increase in Payables 52.0 54.4
Net Change in Other Assets and Liabilities (5.3) (27.1)
----------- -----------
Net Cash Provided by Continuing Operations 160.5 131.9
Net Cash Used in Discontinued Operations (10.8) (12.4)
----------- -----------
Net Cash Provided by Operating Activities 149.7 119.5
----------- -----------
Cash Flows from Investing Activities:
Capital Investments, Net (95.5) (126.5)
Acquisitions and Joint Ventures (28.8) (70.5)
Purchases of Investments (88.0) (183.9)
Proceeds from Sale of Investments 165.1 182.9
----------- ------------
Net Cash Used in Investing Activities (47.2) (198.0)
----------- ------------
Cash Flows from Financing Activities:
Proceeds from Issuance of Long-Term Debt 127.4 284.6
Repayment of Long-Term Debt (72.5) (150.3)
Net Repayment of Bank Lines of Credit and Commercial Paper (15.0) (7.8)
Net Change in Current Debt 46.6 (0.3)
Common Dividends (32.1) (28.8)
Treasury Stock Purchases (64.9) (15.0)
Issuance of Common Stock 13.7 10.3
----------- -----------
Net Cash Provided by Financing Activities 3.2 92.7
----------- -----------
Effect of Exchange Rate Changes on Cash and Cash Equivalents 0.2 (2.0)
----------- -----------
Change in Cash and Cash Equivalents 105.9 12.2
Cash and Cash Equivalents at January 1 53.3 71.3
----------- -----------
Cash and Cash Equivalents at September 30 $ 159.2 $ 83.5
=========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. The condensed consolidated financial statements included herein have been
prepared by the Registrant, without audit. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission, although the Registrant believes that
the disclosures made are adequate to make the information presented not
misleading. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and notes
thereto included in the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1995. In the opinion of management, the
information furnished herein reflects all adjustments (consisting only of
normal, recurring adjustments) necessary for a fair statement of results
for the interim periods presented.
2. In the third quarter of 1995, the Registrant's subsidiary, Pepsi General,
acquired the assets of a Pepsi-Cola franchise in Cedar Rapids, Iowa. The
acquisition was accounted for as a purchase, and the operating results
include this acquisition from the date of purchase. The effects of this
acquisition, had it been acquired as of January 1, 1995, would not have
been significant to operating results.
3. Net cash provided by operating activities reflected cash payments and
receipts for interest and income taxes as follows:
Nine Months Ended
September 30,
---------------------
1996 1995
------- -------
(in millions)
Interest Paid $ 59.4 $ 68.1
Interest Received 4.4 4.6
Income Taxes Paid, net 65.5 66.9
4. As of September 30, 1996, the components of inventory were
approximately: raw materials and supplies -- 31 percent; work in
process -- 21 percent; and finished goods -- 48 percent.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1996, the Registrant had cash and cash equivalents of
$159.2 million, compared with $53.3 million at December 31, 1995. The increase
in cash during the first nine months of 1996 principally resulted from an
increase in cash flow from operations, the issuance of long term debt and the
net proceeds from the sale of investments, partially offset by the repayment of
debt, capital expenditures, investments in joint ventures, treasury stock
purchases and dividends.
Cash flow from operations amounted to $149.7 million for the first nine
months of 1996, compared with $119.5 million in the first nine months of 1995.
The increase principally resulted from higher net income and changes in various
other assets and liabilities (excluding primary working capital), offset by an
increased net investment in primary working capital (receivables, inventories,
less payables). The change in primary working capital during the first nine
months of 1995 included the receipt of a $25.4 million income tax refund. There
were no significant changes in any individual other asset or liability account.
Cash used in investing activities totaled $47.2 million in the first nine
months of 1996, compared with $198.0 million for the same period of 1995. Net
capital expenditures declined by $31.0 million to $95.5 million, with the
reduction reflecting, among other factors, lower capital spending for Pepsi
General's distribution facilities in Poland. During the first nine months of
1996, Pepsi General increased its investment in the manufacturing joint venture
in Poland by $28.8 million. For the first nine months of 1996, proceeds from the
sale of investments of $165.1 million were used primarily to purchase new
investments of $88.0 million. In addition, during the third quarter of 1996, the
Registrant's insurance subsidiary loaned $70 million to the Registrant to repay
$70 million of outside debt. Purchases of and proceeds from the sale of
investments principally related to the Registrant's insurance subsidiary. A
substantial portion of the purchases and sales of such investments represent
reinvestment of assets as the investments mature.
In the first nine months of 1996, the Registrant issued debt totaling
$128.1 million (yielding net proceeds of $127.4 million), primarily consisting
of $100 million thirty-year notes, with an 8 year put option, and $25 million
thirty-year notes, with a 12 year put option, with interest rates of
approximately 7.3% and 7.4%, respectively. The proceeds from the issuance of
long-term debt were used primarily to repay commercial paper borrowings as they
matured, and the excess proceeds were invested on a short-term basis. These
investments will be used to repay future maturities and for general corporate
purposes. The Registrant's total debt increased to $1,007.2 million at September
30, 1996, up from $922.0 million at December 31, 1995.
At September 30, 1996, the Registrant had contractual bank lines of credit
of $300.0 million and also maintained a $200.0 million commercial paper program,
which was unchanged from December 31, 1995. Borrowings under these programs
totaled $44.0 million and $15.0 million at September 30, 1996 and December 31,
1995, respectively. The borrowings at September 30, 1996 were included in
current maturities.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
RESULTS OF OPERATIONS
1996 THIRD QUARTER COMPARED WITH 1995 THIRD QUARTER
Sales and revenues increased 3.6 percent to $856.7 million in the third
quarter of 1996 with revenue increases being reported by each of the
Registrant's three major subsidiaries as summarized below:
Quarter Ended
September 30,
------------------------ %
1996 1995 Change
--------- --------- ------
(in millions)
Pepsi General $ 426.5 $ 424.8 0.4
Midas 168.7 160.9 4.8
Hussmann 261.5 241.4 8.3
--------- ---------
Total Sales and Revenues $ 856.7 $ 827.1 3.6
========= =========
Pepsi General's revenues increased $1.7 million, including a $1.4 million
sales increase in Poland. Pepsi General's revenues in the U.S. were essentially
flat compared with last year's exceptionally strong third quarter. Domestic unit
case volume increased 3.3 percent over the third quarter of 1995, led by
stronger sales of 24-pack cans to supermarkets. This package and channel mix
tends to be the most price competitive, and as a result, the average selling
price was down about two percent for the quarter. Midas' revenues increased $7.8
million, principally reflecting increases in the U.S., Canada and Europe, offset
by lower revenues in Australia, due to a decline in the number of company-owned
shops. Hussmann's revenues increased $20.1 million, primarily resulting from
stronger demand in the U.S. and an improved performance in Mexico, offset
partially by softness in the U.K., where new supermarket construction has been
adversely affected by efforts to restrict urban development. The stronger demand
in the U.S. principally results from the overall strength of the supermarket
equipment industry, as well as increased demand for its Impact product line.
Gross profit improved 5.5 percent to $308.0 million, primarily due to the
increase in sales. Gross profit margins improved to 36.0 percent from 35.3
percent in 1995, primarily at Pepsi General, reflecting lower packaging and
sweetener costs, and at Hussmann, reflecting the benefit of stronger sales
volume.
Selling, general and administrative (S,G&A) expenses increased $8.7
million, or 5.1 percent, with the increase reflecting, among other factors, the
effects of higher sales volumes and inflationary cost increases. S,G&A expenses
represented 21.0 percent of sales in the third quarter of 1996, up 0.3
percentage points from the same period last year.
Amortization expense did not change significantly.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
Operating income increased $7.2 million, or 6.2 percent, to $123.3 million
in the third quarter of 1996, with increases at Pepsi General and Hussmann,
partially offset by lower earnings at Midas. Operating income for the
Registrant's three major subsidiaries and corporate administrative expenses are
summarized below:
Quarter Ended
September 30,
------------------------ %
1996 1995 Change
--------- --------- ------
(in millions)
Pepsi General $ 70.2 $ 66.8 5.1
Midas 26.5 29.5 (10.2)
Hussmann 30.4 23.9 27.2
--------- ---------
Subsidiary Operating Income 127.1 120.2 5.7
Corporate Administrative Expenses (3.8) (4.1) (7.3)
--------- -------
Total Operating Income $ 123.3 $ 116.1 6.2
========= =========
Pepsi General's increased operating earnings primarily reflected the
benefits of higher volumes and favorable product costs in the U.S. Pepsi
General's results included $1.4 million in operating losses from its operations
in Poland, compared with losses of $2.9 million in 1995. Midas reported
operating income of $26.5 million, down $3.0 million from the same period of
last year, due to lower results in the U.S., partially offset by higher earnings
in Europe and Canada. The domestic results reflected relatively flat retail
sales activity and lower wholesale shipments to the Midas system, together with
higher operating expenses. Hussmann reported operating earnings of $30.4
million, up $6.5 million, from the same period of last year, primarily resulting
from significantly stronger sales in the U.S. and Mexico, offset by lower
earnings in the U.K.
Net interest expense declined to $16.0 million in the third quarter of
1996 from $18.7 million in the third quarter of 1995, resulting from lower
weighted average interest rates and lower average debt, net of invested cash.
The increase in total debt to $1,007.2 million at September 30, 1996 from $940.9
million at September 30, 1995, included the issuance of $125 million of
thirty-year notes in late September.
Other expense, net, decreased $0.1 million to $4.5 million in the third
quarter of 1996. The decrease was not related to any individually significant
item. Foreign currency gains and losses were not significant in either year.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
RESULTS OF OPERATIONS
1996 FIRST NINE MONTHS COMPARED WITH 1995 FIRST NINE MONTHS
Sales and revenues increased 6.1 percent to $2,286.8 million in the first
nine months of 1996, with revenue increases reported by each of the Registrant's
three major subsidiaries, as summarized below:
Nine Months Ended
September 30,
------------------------- %
1996 1995 Change
---------- ----------- ------
(in millions)
Pepsi General $ 1,143.7 $ 1,083.7 5.5
Midas 461.0 441.8 4.3
Hussmann 682.1 630.7 8.1
---------- -----------
Total Sales and Revenues $ 2,286.8 $ 2,156.2 6.1
========== ===========
Pepsi General's revenues increased $60.0 million, including a $15.6
million sales increase in Poland. The increase in Pepsi General's revenues in
the U.S. reflected the benefits of improved product demand, which was kept
moderate due to the cold, wet spring weather in the Midwest. Domestic unit case
volume increased 4.8 percent over the first nine months of 1995, with 1.6
percent of the increase related to the Cedar Rapids, Iowa franchise acquired in
July, 1995. Midas' revenues increased $19.2 million, primarily due to higher
revenues in Europe, the U.S. and Canada, partially offset by lower revenues in
Australia, due to a lower number of company-owned shops. Hussmann's revenues
increased $51.4 million, primarily driven by significantly stronger sales in the
U.S., partially offset by lower revenues in the U.K., where new supermarket
construction has been adversely affected by urban development restrictions.
Gross profit improved 6.9 percent to $819.8 million, primarily due to the
increase in sales. Gross profit margins improved to 35.8 percent from 35.6
percent, primarily at Pepsi General, reflecting moderately lower packaging and
sweetener costs.
S,G&A expenses increased $33.4 million, or 6.8 percent, with the increase
reflecting, among other factors, the effects of higher sales volume and
inflationary cost increases.. S,G&A expenses represented 23.0 percent of sales
in the first nine months of 1996, compared with the 22.9 percent of sales in the
same period last year. The increase in amortization expense was principally
related to acquisitions made in 1995.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
Operating income increased $18.2 million, or 7.0 percent, to $278.2
million in the first nine months of 1996, with increases at Pepsi General and
Hussmann, partially offset by a decline at Midas. Operating income for the
Registrant's three major subsidiaries and corporate administrative expenses are
summarized below:
Nine Months Ended
September 30,
------------------------ %
1996 1995 Change
--------- --------- ------
(in millions)
Pepsi General $ 165.5 $ 156.3 5.9
Midas 65.2 66.8 (2.4)
Hussmann 60.2 49.7 21.1
--------- ---------
Subsidiary Operating Income 290.9 272.8 6.6
Corporate Administrative Expenses (12.7) (12.8) (0.8)
--------- ---------
Total Operating Income $ 278.2 $ 260.0 7.0
========= =========
In the first nine months Pepsi General's operating earnings were up $9.2
million from last year, primarily reflecting the benefits of higher volumes and
lower sweetener and packaging costs. Pepsi General's results included $9.1
million in operating losses from its operations in Poland, compared with
operating losses of $8.1 million for the same period of 1995. Excluding the
operating losses in Poland, Pepsi General's domestic operating income increased
by 6.2 percent. Midas' operating earnings were $1.6 million below last year,
primarily reflecting lower results in the U.S., due to relatively flat retail
sales activity, lower wholesale shipments to the Midas system, and higher
operating expenses, partially offset by the benefits of higher revenues in
Europe and Canada. Hussmann reported an operating earnings increase of $10.5
million. The increase at Hussmann primarily resulted from stronger sales in the
U.S., partially offset by the effects of lower sales in the U.K.
Net interest expense declined by $3.7 million to $48.6 million in the
first nine months of 1996, resulting from lower weighted average interest rates
partially offset by higher average debt levels.
Other expense, net, increased $1.6 million to $13.2 million in the first
nine months of 1996. The increase was not related to any individually
significant item. Foreign currency gains and losses were not significant in
either year.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
PART II - OTHER INFORMATION
Item 5. Other Information.
On September 20, 1996, the Board of Directors amended Sections 2
and 4 of Article I of the By-Laws of the Registrant to revise the
applicable notice period for a stockholder seeking to bring
business before an annual meeting of the stockholders or to submit
nominations of persons for election to the Board of Directors. The
minimum notice period was increased from 30 days to 60 days before
an annual meeting, with related conforming changes.
Also on September 20, 1996, the Board of Directors amended the
Registrant's Stock Incentive Plan to comply with the provisions of
amended Rule 16b-3 under the Securities Exchange Act of 1934.
A copy of the Registrant's By-Laws, as amended through September
20, 1996, and a copy of the aforesaid Amendment to the
Registrant's Stock Incentive Plan are included as Exhibits to this
report.
Item 6. Exhibits and Reports on Form 8-K.
(a). Exhibits.
3(ii) By-Laws, as amended through September 20, 1996.
10 Amendment to Stock Incentive Plan dated September 20, 1996.
12 Statement of Calculation of Ratio of Earnings to Fixed
Charges.
(b). Reports on Form 8-K.
None filed during the third quarter ended September 30, 1996.
WHITMAN CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
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.
WHITMAN CORPORATION
Date: November 14, 1996 By: /s/ FRANK T. WESTOVER
----------------- --------------------------------
Frank T. Westover
Senior Vice President and Controller
(As Chief Accounting Officer and Duly
Authorized Officer of Whitman Corporation)
EXHIBIT 3(ii)
LOGO
By-Laws
(as Amended through September 20, 1996)
WHITMAN CORPORATION
BY-LAWS
(as Amended through September 20, 1996)
ARTICLE I
Meetings of Stockholders
Section 1. Annual meetings of stockholders for the election of directors
and for the transaction of such other business as may come before the meeting
shall be held on the first Thursday of May at 10:30 A.M., at Chicago, Illinois,
or on such other date or at such other time or place, whether within or without
the State of Delaware, as shall be designated by the Board of Directors.
Section 2. At an annual meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting (a) by or at
the direction of the Board of Directors or (b) by any stockholder of the
Corporation who complies with the notice procedures set forth in this Section 2.
For business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days' notice or prior
public disclosure of the date of the meeting is given or made to the
stockholders, notice by the stockholder to be timely must be received not later
than the close of business on the 10th day following the day on which such
notice of the date of the annual meeting was mailed or such public disclosure
was made. A stockholder's notice to the Secretary shall be set forth as to each
matter the stockholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting and
the reasons for conducting such business at the annual meeting, (b) the name and
address, as they appear on the Corporation's books, of the stockholder proposing
such business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder and (d) any material interest of the
stockholder in such business. Notwithstanding anything in these By-Laws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2. The chairman of an
annual meeting shall, if the facts warrant, determine and declare to the meeting
that business was not properly brought before the meeting and in accordance with
the provisions of this Section 2, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before the
meeting shall not be transacted.
Section 3. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by law or by the Certificate of
Incorporation, may be called by the Chairman and Chief Executive Officer and
shall be called by him or by the Secretary at the request of a majority of the
Board of Directors. Such request shall state the purpose or purposes of the
proposed meeting. Special meetings may be held at such time and place and for
such purposes as shall be stated in the notice thereof.
Section 4. Nominations of persons for election to the Board of Directors of
the Corporation may be made at a meeting of stockholders (a) by or at the
direction of the Board of Directors or (b) by any stockholder of the Corporation
entitled to vote for the election of directors at the meeting who complies with
the notice procedures set forth in this Section 4. Nominations by stockholders
shall be made pursuant to timely notice in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation not
less than 60 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 70 days' notice or prior public disclosure of
the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the meeting was mailed or such public disclosure was made. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, all information relating to
such person that is required to be disclosed in solicitations of proxies for the
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (including
such person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected); and (b) as to the stockholder giving
the notice (i) the name and address, as they appear on the Corporation's books,
of such stockholder and (ii) the class and number of shares of the Corporation
which are beneficially owned by such stockholder. At the request of the Board of
Directors any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the Corporation that information
required to be set forth in a stockholder's notice of nomination which pertains
to the nominee. No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
these By-Laws. The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed in this Section 4, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded.
Section 5. Unless waived, written notice of the date, place, and time of
the holding of each annual and special meeting of the stockholders and, in the
case of a special meeting, the purpose or purposes thereof, shall be given
personally or by mail in a postage prepaid envelope to each stockholder entitled
to vote at such meeting, not less than ten nor more than sixty days before the
date of such meeting, and, if mailed, it shall be directed to such stockholder
at his address as it appears on the records of the Corporation.
Section 6. The officer who has charge of the stock ledger of the
Corporation shall prepare and make before every meeting of stockholders, a
complete list of the stockholders as of the record date entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 7. The Board may, in advance of any meeting of stockholders,
appoint one or more inspectors to act at such meeting, or any adjournment
thereof. If the inspectors shall not be so appointed or if any of them shall
fail to appear or act, the chairman of the meeting may, and on the request of
any stockholder entitled to vote thereat shall, appoint inspectors. Each
inspector, before entering upon the discharge of his duties, shall take and sign
an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors
shall determine the number of shares outstanding and the voting power of each,
the number of shares represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes, ballots or consents, determine the
result, and do such acts as are proper to conduct the election or vote with
fairness to all stockholders. On request of the chairman of the meeting or any
stockholder entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, request or matter determined by them and shall execute
a certificate of any fact found by them. No director or candidate for the office
of director shall act as inspector of an election of directors. Inspectors need
not be stockholders.
Section 8. At each meeting of the stockholders the Chairman and Chief
Executive Officer, or in his absence or inability to act, the President, shall
act as chairman of the meeting. The Secretary, or, in his absence or inability
to act, the Assistant Secretary or any person appointed by the chairman of the
meeting, shall act as secretary of the meeting and keep the minutes thereof. The
order of business at all meetings of the stockholders shall be as determined by
the chairman of the meeting.
Section 9. Except as otherwise provided by law or the Certificate of
Incorporation, at all meetings of the stockholders of fifty-one per cent of the
votes of the shares of stock of the Corporation issued and outstanding and
entitled to vote shall be present in person or by proxy to constitute a quorum
for the transaction of any business, provided that (except as aforesaid) when
stockholders are required to vote by class, fifty-one per cent of the issued and
outstanding shares of the appropriate class shall be present in person or by
proxy. In the absence of a quorum, the holders of a majority of the votes of the
shares of stock present in person or by proxy and entitled to vote may adjourn
the meeting from time to time. Unless the Board shall fix after the adjournment
a new record date for an adjourned meeting, notice of such adjourned meeting
need not be given, except as hereinafter provided, if the time and place to
which the meeting shall be adjourned were announced at the meeting at which the
adjournment is taken. If the adjournment is for more than thirty days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting. At the adjourned meeting the corporation may
transact any business which might have been transacted at the original meeting.
Section 10. Except as otherwise provided by law, the Certificate of
Incorporation, or any certificate filed by the Corporation in the State of
Delaware pursuant to Section 151 (or any successor provisions) of the General
Corporation Law of the State of Delaware, each holder of record of shares of
stock of the Corporation having voting power shall be entitled at each meeting
of the stockholders to one vote for every share of such stock standing in his
name on the record of stockholders of the Corporation on the date fixed by the
Board as the record date for the determination of the stockholders who shall be
entitled to notice of and to vote at such meeting. Each stockholder entitled to
vote at any meeting of stockholders may authorize another person or persons to
act for him by proxy signed by such stockholder or his attorney-in-fact. Any
such proxy shall be delivered to the secretary of such meeting at or prior to
the time designated in the order of business for so delivering in such proxies.
No proxy shall be valid after the expiration of three years from the date
thereof, unless otherwise provided in the proxy. A proxy shall be revocable at
the pleasure of the stockholder executing it, except in those cases where an
irrevocable proxy is permitted by law. Except as otherwise provided by law, the
Certificate of Incorporation, or these ByLaws, any corporate action to be taken
by vote of the stockholders shall be authorized by a majority of the total votes
cast, or when stockholders are required to vote by class by a majority of the
votes cast of the appropriate class. Unless required by law or determined by the
chairman of the meeting to be advisable, the vote on any question need not be by
written ballot. On a vote by written ballot, each ballot shall be signed by the
stockholder voting, or by his proxy, and shall state the number of shares voted.
Section 11. (a) Any action required to be taken at any annual or special
meeting of stockholders of the Corporation, or any action which may be taken at
any annual or special meeting of the stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Corporation by delivery to its registered office in Delaware, its principal
place of business, or an officer or agent of the Corporation having custody of
the book in which proceedings of the meetings of stockholders are recorded.
Delivery made to the Corporation's registered office shall be made by hand or by
certified or registered mail, return receipt requested.
Every written consent shall bear the date of signature of each stockholder
who signs the consent and no written consent shall be effective to take the
corporate action referred to therein unless, within 60 days of the date the
earliest dated consent with respect thereto is delivered to the Corporation, a
written consent or consents signed by a sufficient number of holders to take
such action are delivered to the Corporation in the manner prescribed in the
first paragraph of this Section.
(b) In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall neither precede, nor be
more than 10 days after, the date on which the resolution fixing the record date
is adopted by the Board of Directors. Any stockholder of record seeking to have
the stockholders authorize or take corporate action by written consent shall, by
written notice to the Secretary, request the Board of Directors to fix a record
date. The Board of Directors shall, not more than 10 days after the date on
which such a request is received, adopt a resolution fixing the record date. If
no record date has been fixed by the Board of Directors within 10 days of the
date on which such a request is received, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board of Directors is required by
applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by applicable law, the record date for determining
stockholders entitled to consent to corporate action in writing without a
meeting shall be at the close of business on the date on which the Board of
Directors adopts the resolution taking such prior action.
ARTICLE II
Board of Directors
Section 1. The business and affairs of the Corporation shall be managed by
the Board of Directors. The Board may exercise all such authority and powers of
the Corporation and do all such lawful acts and things as are not by law or the
Certificate of Incorporation directed or required to be exercised or done by the
stockholders.
Section 2. The number of directors of the Corporation shall be such number
of persons, not less than three (3), as shall from time to time be fixed by
resolution of the Board. Directors need not be stockholders. Except as otherwise
provided by law, the Certificate of Incorporation, or these By-Laws, the
directors shall be elected at the annual meeting of the stockholders, and the
persons receiving a plurality of the votes cast at such election shall be
elected. Directors shall hold office until their respective successors shall
have been duly elected and qualified, or until death, resignation, or removal,
as hereinafter provided in these By-Laws, or as otherwise provided by law of the
Certificate of Incorporation. The Board shall elect one of its members as
Chairman and Chief Executive Officer.
Section 3. The Chairman and Chief Executive Officer, if present, shall
preside at all meetings of the Board. He shall serve as Chairman of the
Executive Committee of the Board and be a member of such other committees of the
Board as shall be determined by the Board at the time of the creation or the
election of the members of any such committees.
Section 4. Meetings of the Board may be held at such place, either within
or without the State of Delaware, as the Board may from time to time determine
or as shall be specified in the notice or waiver of notice of such meeting.
Section 5. Regular meetings of the Board may be held without notice at such
time and place as the Board may from time to time determine.
Section 6. Special meetings of the Board may be called by two or more
directors of the Corporation or by the Chairman and Chief Executive Officer or
the Secretary.
Section 7. Notice of each special meeting of the Board shall be given by
the Secretary as hereinafter provided in this Section, in which notice shall be
stated the time and place of the meeting. Notice of each such meeting shall be
delivered to each director either personally or by telephone, telegraph, cable,
or similar means, at least twenty-four hours before the time at which such
meeting is to be held or mailed by first-class mail, postage prepaid, addressed
to the director at his residence or usual place of business, at least three days
before the day on which such meeting is to be held. Notice of any such meeting
need not be given to any director who shall, either before or after the meeting,
submit a signed waiver of notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of notice to such
director. Except as otherwise specifically required by these By-Laws, a notice
or waiver of notice of any regular or special meeting need not state the purpose
of such meeting.
Section 8. One-third of the entire Board shall be present in person at any
meeting of the Board in order to constitute a quorum for the transaction of
business at such meeting, and, except as otherwise expressly required by law or
the Certificate of Incorporation, the act of a majority of the directors present
at any meeting at which a quorum is present shall be the act of the Board. In
the absence of a quorum at any meeting of the Board, a majority of the directors
present thereat may adjourn such meeting to another time and place, or such
meeting need not be held. At any adjourned meeting at which a quorum is present,
any business may be transacted which might have been transacted at the meeting
as originally called. Except as otherwise provided in this Article II, the
directors shall act only as a Board and the individual directors shall have no
power as such.
Section 9. Any director of the Corporation may resign at any time by giving
a written notice of resignation to the Board, the Chairman and Chief Executive
Officer, or the Secretary. Any such resignation shall take effect at the time
specified therein or, if the time when it shall become effective shall not be
specified therein, immediately upon its receipt; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
Section 10. Vacancies or newly created directorships resulting from an
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, and the directors so
chosen shall hold office until their successors are duly elected and shall
qualify. If, at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a majority
of the whole Board (as constituted immediately prior to any such increase), the
Court of Chancery may, upon application of any stockholder or holder or holders
of at least ten percent of the votes of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office. Except as otherwise
provided in these By-Laws, when one or more directors shall resign from the
Board, effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or
vacancies, to vote thereon to take effect when such resignation or resignations
shall become effective, and each director so chosen shall hold office as
provided in this Section 10 in the filling of other vacancies.
Section 11. Except as otherwise provided in the Certificate of
Incorporation or these By-Laws, any director may be removed, either with or
without cause, at any time, by the affirmative vote of a majority of the votes
of the issued and outstanding stock entitled to vote for the election of
directors of the Corporation given at a special meeting of the stockholders
called and held for such purpose; and the vacancy in the Board caused by any
such removal may be filled by such stockholders at such meeting, or, if the
stockholders shall fail to fill such vacancy, as in these By-Laws provided.
Section 12. The Board shall have authority to fix the compensation,
including fees and reimbursement of expenses, of directors for services to the
Corporation in any capacity, provided that no such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 13. Any action required or permitted to be taken at any meeting of
the Board or of any committee thereof may be taken without a meeting if all
members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee. Members of the Board or of any committee designated
by the Board may participate in a meeting of such Board or committee by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other and participation in a
meeting pursuant to this procedure shall constitute presence in person at such
meeting.
ARTICLE III
Committees of the Board
Section 1. The Board of Directors may, by resolution adopted by a majority
of the whole Board, designate an Executive Committee to exercise, subject to
applicable provisions of law, all the powers of the Board in the management of
the business and affairs of the Corporation when the Board is not in session,
including without limitation the power to declare dividends and to authorize the
issuance of the Corporation's capital stock, and may, by resolution similarly
adopted, designate one or more other committees. The Executive Committee and
each such other committee shall consist of two or more directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, other than the Executive Committee
whose powers are expressly provided for herein, may to the extent permitted by
law exercise such powers and shall have such responsibilities as shall be
specified in the designating resolution. In the absence or disqualification of
any member of such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board to
act at the meeting in the place of any such absent or disqualified member. Each
committee shall keep written minutes of its proceedings and shall report such
proceedings to the Board when required.
Section 2. A majority of any committee may determine its action and fix the
time and place of its meetings, unless the Board shall otherwise provide. Notice
of such meetings shall be given to each member of the committee in the manner
provided for in Article II, Section 7. The Board shall have power at any time to
fill vacancies in, to change the membership of, or to dissolve any such
committee. Nothing herein shall be deemed to prevent the Board from appointing
one or more committees consisting in whole or in part of persons who are not
directors of the Corporation; provided, however, that no such committee shall
have or may exercise any authority of the Board.
ARTICLE IV
Officers
Section 1. The officers of the Corporation shall consist of the Chairman
and Chief Executive Officer, the President, one or more Vice Presidents, the
Treasurer, the Controller and the Secretary. Any two or more offices may be held
by the same person. Each such officer shall be elected from time to time by the
Board of Directors to hold office until his successor shall have been duly
elected and shall have qualified, or until his death, or until he shall have
resigned, or have been removed, as hereinafter provided in these By-Laws. The
Board may from time to time elect, or the Chairman and Chief Executive Officer
may appoint, such other officers (including one or more Assistant Vice
Presidents, Assistant Secretaries, Assistant Treasurers, and Assistant
Controllers) and such agents, as may be necessary or desirable for the conduct
of the business of the Corporation. Such other officers and agents shall have
such duties and shall hold their offices for such terms as shall be provided in
these By-Laws or as may be prescribed by the Board or by the Chairman and Chief
Executive Officer.
Section 2. Any officer or agent of the Corporation may resign at any time
by giving written notice of his resignation to the Board, the Chairman and Chief
Executive Officer, or the Secretary. Any such resignation shall take effect at
the time specified therein or, if the time when it shall become effective shall
not be specified therein, immediately upon its receipt; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 3. Any officer or agent of the Corporation may be removed, either
with or without cause, at any time, by the vote of a majority of the whole Board
at any meeting of the Board, or, except in the case of an officer or agent
elected by the Board, by the Chairman and Chief Executive Officer. Such removal
shall be without prejudice to the contractual rights, if any, of the person so
removed.
Section 4. A vacancy in any office, whether arising from death,
resignation, removal or any other cause, may be filled for the unexpired portion
of the term of the office which shall be vacant in the manner prescribed in
these By-Laws for the regular election or appointment of such office.
Section 5. The Chairman and Chief Executive Officer shall have the primary
responsibility for and the general control and management of all of the business
and affairs of the Corporation, under the direction of the Board. He shall have
power to select and appoint all necessary officers and employees of the
Corporation except such officers as under these By-Laws are to be elected by the
Board, to remove all appointed officers or employees whenever he shall deem it
necessary, and to make new appointments to fill the vacancies. He shall have the
power of suspension from office for cause of any elected officer, which shall be
forthwith declared in writing to the Board. Whenever in his opinion it may be
necessary, he shall define the duties of any officer or employee of the
Corporation which are not prescribed in the By-Laws or by resolution of the
Board. He shall have such other authority and shall perform such other duties as
may be assigned to him by the Board.
Section 6. The President shall be the chief operating officer of the
Corporation and shall have such authority and perform such duties relative to
the business and affairs of the Corporation as may be delegated to him by the
Board or the Chairman and Chief Executive Officer. In the absence of the
Chairman and Chief Executive Officer, the President shall preside at meetings of
the stockholders and of the directors.
Section 7. Each Vice President and each Assistant Vice President shall have
such powers and perform all such duties as from time to time may be assigned to
him by the Board, the Chairman and Chief Executive Officer, the President or the
senior officer to whom he reports.
Section 8. The Treasurer shall exercise general supervision over the
receipt, custody and disbursement of corporate funds. He shall have such further
powers and duties and shall be subject to such directions as may be granted or
imposed upon him from time to time by the Board or the Chairman and Chief
Executive Officer.
Section 9. The Controller shall be the chief accounting officer of the
Corporation and shall maintain adequate records of all assets, liabilities and
transactions of the Corporation; he shall establish and maintain internal
accounting controls and, in cooperation with the independent public accountants
selected by the Board, shall supervise internal auditing. He shall have such
further powers and duties as may be conferred upon him from time to time by the
Board or the Chairman and Chief Executive Officer.
Section 10. The Secretary shall keep or cause to be kept in one or more
books provided for that purpose, the minutes of all meetings of the Board, the
committees of the Board and the stockholders; he shall see that all notices are
duly given in accordance with the provisions of these By-Laws and as required by
law; he shall be custodian of the records and the seal of the Corporation and
affix and attest the seal to all stock certificates of the Corporation (unless
the seal of the Corporation on such certificates shall be a facsimile, as
hereinafter provided) and affix and attest the seal to all other documents to be
executed on behalf of the Corporation under its seal; he shall see that the
books, reports, statements, certificates and other documents and records
required by law to be kept and filed are properly kept and filed; and in
general, he shall perform all the duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the Board or
the Chairman and Chief Executive Officer.
Section 11. Any Assistant Secretary, Assistant Treasurer, or Assistant
Controller elected or appointed as heretofore provided, shall perform the duties
and exercise the powers of the Secretary, Treasurer and Controller,
respectively, in their absence or inability to act, and shall perform such other
duties and have such other powers as the Board, the Chairman and Chief Executive
Officer, the Secretary, Treasurer, or Controller (as the case may be), may from
time to time prescribe.
Section 12. If required by the Board, any officer of the Corporation shall
give a bond or other security for the faithful performance of his duties in such
amount and with such surety or sureties as the Board may specify.
Section 13. The compensation of the officers of the Corporation for their
services as such officers shall be fixed from time to time by the Board;
provided, however, that the Board may by resolution delegate to the Chairman and
Chief Executive Officer the power to fix compensation of non-elected officers
and agents appointed by him. An officer of the Corporation shall not be
prevented from receiving compensation by reason of the fact that he is also a
director of the Corporation, but any such officer who shall also be a director
shall not have any vote in the determination of the amount of compensation paid
to him.
ARTICLE V
Indemnification and Insurance
Section 1. Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans maintained
or sponsored by the Corporation, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than said Law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including attorneys' fees,
judgments, fines, excise taxes pursuant to the Employee Retirement Income
Security Act of 1974 or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that, except as provided in
Section 2 of this Article, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board ofDirectors of the Corporation. The right to
indemnification conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that, if the Delaware General Corporation Law requires, the payment of
such expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section or otherwise. The
Corporation may, by action of its Board of Directors, provide indemnification to
employees and agents of the Corporation with the same scope and effect as the
foregoing indemnification of directors and officers.
Section 2. If a claim under Section 1 of this Article is not paid in full
by the Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standard of conduct which makes it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the claimant has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the claimant has not met the applicable standard of
conduct.
Section 3. The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Certificate of
Incorporation, by-law, agreement, vote of stockholders or disinterested
directors or otherwise. No repeal or modification of this Article shall in any
way diminish or adversely effect the rights of any director, officer, employee
or agent of the Corporation hereunder in respect of any occurrence or matter
arising prior to any such repeal or modification.
Section 4. The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
ARTICLE VI
Contracts, Proxies, Etc.
Section 1. Except as otherwise required by law, the Certificate of
Incorporation or these By-laws, any contracts or other instruments may be
executed and delivered in the name and on behalf of the Corporation by such
officer or officers (including any assistant officer) of the Corporation as the
Board of Directors may from time to time direct. Such authority may be general
or confined to specific instances as the Board may determine. The Chairman and
Chief Executive Officer, the President or any Vice President may execute bonds,
contracts, deeds, leases and other instruments to be made or executed for or on
behalf of the Corporation. Subject to any restrictions imposed by the Board or
the Chairman and Chief Executive Officer, the President or any Vice President of
the Corporation may delegate contractual power to others under his jurisdiction,
it being understood, however, that any such delegation of power shall not
relieve such officer of responsibility with respect to the exercise of such
delegated power.
Section 2. Unless otherwise provided by resolution adopted by the Board,
the Chairman and Chief Executive Officer, the President or any Vice President
may from time to time appoint an attorney or attorneys or agent or agents of the
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as the holder of stock or other
securities in any other corporation, any of whose stock or other securities may
be held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, or to consent in writing, in the name of
the Corporation as such holder, to any action by such other corporation, and may
instruct the person or persons so appointed as to the manner of casting such
votes or giving such consent, and may execute or cause to be executed in the
name and on behalf of the Corporation and under its corporate seal or otherwise,
all such written proxies or other instruments as he may deem necessary or proper
in the premises.
ARTICLE VII
Shares, Books, Etc.
Section 1. Every holder of stock in the Corporation shall be entitled to
have a certificate signed by or in the name of the Corporation by the Chairman
and Chief Executive Officer, the President or a Vice President, and by the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary,
certifying the number of shares owned by such holder in the Corporation. Any of
or all 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 such officer, transfer
agent, or registrar at the date of issue.
Section 2. The books and records of the Corporation may be kept at such
places within or without the State of Delaware, as the Board of Directors may
from time to time determine.
Section 3. Transfers of shares of stock of the Corporation shall be made on
the stock records of the Corporation only upon authorization by the registered
holder thereof, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary or with a transfer agent, and or
surrender of the certificate or certificates for such shares properly endorsed
or accompanied by a duly executed stock transfer power and the payment of all
taxes thereon. Except as otherwise provided by law, the Corporation shall be
entitled to recognize the exclusive right of a person in whose name any share or
shares stand on the record of stockholders as the owner of such share or shares
for all purposes, including, without limitation, the right to receive dividends
or other distributions, and to vote as such owner, and the Corporation may hold
any such stockholder of record liable for calls and assessments and shall not be
bound to recognize any equitable or legal claim to or interest in any such share
or shares on the part of any other person whether or not it shall have express
or other notice thereof.
Section 4. The Board may make such additional rules and regulations, not
inconsistent with these By-Laws, as it may deem expedient concerning the issue,
transfer and registration of certificates for shares of stock of the
Corporation. It may appoint or authorize any officer or officers to appoint, one
or more transfer agents or one or more registrars and may require all
certificates for shares of stock to bear the signature or signatures of any of
them.
Section 5. Upon notice to the Corporation by the holder of any certificate
representing shares of stock of the Corporation of any loss, theft, destruction
or mutilation of such certificate, the Corporation may issue a new certificate
of stock in the place of any certificate theretofore issued by it which the
holder thereof shall allege to have been lost, stolen, or destoyed or which
shall have been mutilated, and the Board may, in its discretion, require such
holder or his legal representatives to give to the Corporation a bond in such
sum, limited or unlimited, and in such form and with such surety or sureties as
the Board in its absolute discretion shall determine, and to indemnify the
Corporation against any claim which may be made against it on account of the
alleged loss, theft, or destruction of any such certificate, or of the issuance
of a new certificate. Anything herein to the contrary notwithstanding, the
Board, in its absolute discretion, may refuse to issue any such new certificate,
except pursuant to legal proceedings under the laws of the State of Delaware.
ARTICLE VIII
Fiscal Year
The fiscal year of the Corporation shall be determined by the Board of
Directors.
ARTICLE IX
Seal
The Corporate seal shall have inscribed thereon the name of the
Corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it, or a facsimile thereof, to be
impressed or affixed or reproduced or otherwise.
ARTICLE X
Amendments
These By-Laws may be amended or repealed, or new By-Laws may be adopted, by
the Board of Directors at any meeting thereof; provided that By-Laws adopted by
the Board may be amended or repealed by the stockholders.
EXHIBIT 10
WHITMAN CORPORATION
Amendment to
Stock Incentive Plan
September 20, 1996
Pursuant to authorization of the Board of Directors of Whitman Corporation (the
"Company") for the purposes of complying with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended effective August 15, 1996, the Company's Stock
Incentive Plan, as heretofore amended (the "Plan"), is hereby amended as
hereinbelow set forth.
1. Paragraph 1(b) of the Plan shall read as follows:
"(b) 'Committee' shall mean two or more members of the Board of Directors,
each of whom shall be a 'Non-Employee Director' within the meaning of Rule
16b-3 under the Exchange Act, and who are selected by the Board of
Directors as provided in Paragraph 4."
2. The first sentence of Paragraph 4 of the Plan shall read
as follows:
"The members of the Committee shall be selected by the
Board of Directors to administer the Plan."
3. The last sentence of Paragraph 11(B) of the Plan shall be
deleted.
IN WITNESS WHEREOF, the Company has caused this Amendment to be signed on its
behalf by a duly authorized officer and its corporate seal to be affixed and
attested as of the date first above written.
WHITMAN CORPORATION
By: /s/ William B. Moore
William B. Moore
Vice President
(Corporate Seal)
Attest:
/s/ Olga Iszczuk
Olga Iszczuk
Assistant Secretary
<TABLE>
EXHIBIT 12
WHITMAN CORPORATION
STATEMENT OF CALCULATION
OF RATIO OF EARNINGS TO FIXED CHARGES
(in Millions, Except Ratios)
<CAPTION>
Nine Months
Ended September 30, Years Ended December 31,
---------------------- -------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- -------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings:
Income from Continuing
Operations before Taxes $ 216.4 $ 196.1 $ 259.7 $ 212.7 $ 212.2 $ 170.6 $ 161.7
Fixed Charges, Excluding
Capitalized Interest 63.0 65.3 86.7 82.2 105.9 106.9 138.2
--------- --------- -------- -------- -------- --------- ---------
Earnings as Adjusted $ 279.4 $ 261.4 $ 346.4 $ 294.9 $ 318.1 $ 277.5 $ 299.9
========= ========= ======== ======== ======== ========= =========
Fixed Charges:
Interest Expense $ 53.2 $ 56.7 $ 74.6 $ 71.1 $ 96.2 $ 97.7 $ 128.6
Portion of Rents Representative
of Interest Factor 9.8 8.6 12.1 11.1 9.7 9.2 9.6
--------- --------- -------- -------- -------- --------- ---------
Fixed Charges, Excluding
Capitalize Interest 63.0 65.3 86.7 82.2 105.9 106.9 138.2
Capitalized Interest 0.0 0.1 0.2 0.2 0.2 0.2 0.2
--------- --------- -------- -------- -------- --------- ---------
Total Fixed Charges $ 63.0 $ 65.4 $ 86.9 $ 82.4 $ 106.1 $ 107.1 $ 138.4
========= ========= ======== ======== ======== ========= =========
Ratio of Earnings to
Fixed Charges 4.4x 4.0x 4.0x 3.6x 3.0x 2.6x 2.2x
========= ========= ======== ======== ======== ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000049573
<NAME> WHITMAN CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 159,200
<SECURITIES> 0
<RECEIVABLES> 428,800<F1>
<ALLOWANCES> 7,100
<INVENTORY> 314,600
<CURRENT-ASSETS> 975,900
<PP&E> 1,417,000
<DEPRECIATION> 701,000
<TOTAL-ASSETS> 2,514,900
<CURRENT-LIABILITIES> 595,700
<BONDS> 866,800
0
0
<COMMON> 448,600
<OTHER-SE> 197,600
<TOTAL-LIABILITY-AND-EQUITY> 2,514,900
<SALES> 2,286,800
<TOTAL-REVENUES> 2,286,800
<CGS> 1,467,000
<TOTAL-COSTS> 2,008,600<F2>
<OTHER-EXPENSES> 13,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,600<F3>
<INCOME-PRETAX> 216,400
<INCOME-TAX> 89,700
<INCOME-CONTINUING> 110,600<F4>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 110,600
<EPS-PRIMARY> $1.04
<EPS-DILUTED> $1.04
<FN>
<F1>Net of allowance for doubtful accounts of $7,100
<F2>Includes Selling,
General and Administrative Expenses, Amortization Expense and Cost of Goods Sold
<F3>Interest expense is offset by $4,600 of interest income, therefore gross
interest expense equals $53,200
<F4>Income from continuing operations is
reported after minority interest of $16,100
</FN>
</TABLE>
