UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number: 1-7211
IONICS, INCORPORATED
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-2068530
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
65 Grove Street
Watertown, Massachusetts 02472
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 926-2500
Former name, former address and former fiscal year,
if changed since last report: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- --------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
At March 31, 2000 the Company had 16,210,883 shares of Common Stock, par value
$1 per share, outstanding.
<PAGE>
IONICS, INCORPORATED
FORM 10-Q
INDEX
Page No.
Part I - Financial Information
Consolidated Statements of Operations 2
Consolidated Balance Sheets 3
Consolidated Statements of Cash Flows 4
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of Results of 7
Operations and Financial Condition
Part II- Other Information 10
Signatures 11
Exhibit Index 12
Exhibit 27 - Financial Data Schedule 13
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
IONICS, INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Amounts in thousands, except per share amounts)
Three Months Ended
March 31,
----------------------
2000 1999
---- ----
Net revenue:
<S> <C> <C>
Equipment Business Group $ 41,356 $34,439
Ultrapure Water Group 27,746 24,533
Consumer Water Group 26,419 21,859
Instrument Business Group 7,274 6,585
-------- -------
102,795 87,416
-------- -------
Costs and expenses:
Cost of sales of Equipment Business Group 31,405 24,715
Cost of sales of Ultrapure Water Group 21,865 18,238
Cost of sales of Consumer Water Group 15,701 12,283
Cost of sales of Instrument Business Group 3,278 3,016
Research and development 1,821 1,868
Selling, general and administrative 22,974 20,109
-------- -------
97,044 80,229
-------- -------
Income from operations 5,751 7,187
Interest income 267 108
Interest expense (724) (130)
Equity income 332 163
-------- -------
Income before income taxes and minority interest 5,626 7,328
Provision for income taxes 1,913 2,382
------ -------
Income before minority interest 3,713 4,946
Minority interest expense 151 274
-------- -------
Net income $ 3,562 $ 4,672
======== =======
Basic earnings per share $ .22 $ .29
======= =======
Diluted earnings per share $ .22 $ .29
======= =======
Shares used in basic earnings per
share calculations 16,209 16,127
======= =======
Shares used in diluted earnings per
share calculations 16,404 16,288
======= =======
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
IONICS, INCORPORATED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(Amounts in thousands, except share amounts)
March 31, December 31,
2000 1999
------------- -------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents $ 16,945 $ 13,169
Short-term investments 409 195
Notes receivable, current 4,349 5,374
Accounts receivable 127,015 120,407
Receivables from affiliated companies 1,139 1,231
Inventories:
Raw materials 20,749 20,216
Work in process 10,439 8,913
Finished goods 4,435 4,751
--------- ---------
35,623 33,880
Other current assets 13,502 14,816
Deferred income taxes 4,730 4,730
------ ------
Total current assets 203,712 193,802
Notes receivable, long-term 10,819 10,027
Investments in affiliated companies 9,660 10,752
Property, plant and equipment:
Land 8,519 8,352
Buildings 45,440 44,858
Machinery and equipment 307,841 299,303
Other, including furniture, fixtures and vehicles 50,364 49,119
--------- ----------
412,164 401,632
Less accumulated depreciation (179,140) (174,382)
-------- --------
233,024 227,250
Other assets 63,390 59,075
---------- ----------
Total assets $520,605 $500,906
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable and current portion of long-term debt $ 37,749 $ 25,514
Accounts payable 45,153 41,867
Customer deposits 3,299 2,671
Accrued commissions 2,271 2,362
Accrued expenses 29,097 27,061
Taxes on income 723 -
--------- ----------
Total current liabilities 118,292 99,475
Long-term debt and notes payable 9,554 8,351
Deferred income taxes 25,298 26,803
Other liabilities 4,190 4,425
Stockholders' equity:
Common stock, par value $1, authorized shares: 55,000,000;
issued: 16,210,883 in 2000 and 16,201,483 in 1999 16,211 16,201
Additional paid-in capital 159,518 159,288
Retained earnings 202,866 199,304
Accumulated other comprehensive income (15,315) (12,905)
Unearned compensation (9) (36)
--------- ----------
Total stockholders' equity 363,271 361,852
--------- ---------
Total liabilities and stockholders' equity $520,605 $500,906
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<TABLE>
<CAPTION>
IONICS, INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)
Three Months Ended
March 31,
---------------------
2000 1999
---- ----
Operating activities:
<S> <C> <C>
Net income $ 3,562 $ 4,672
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 7,788 6,920
Provision for losses on accounts and notes receivable 724 176
Compensation expense on restricted stock awards 27 27
Changes in assets and liabilities:
Notes receivable (459) (64)
Accounts receivable (8,434) 1,388
Inventories (1,977) 831
Other current assets 1,199 78
Investments in affiliates 877 (1,102)
Accounts payable and accrued expenses 4,904 (9,416)
Income taxes 584 877
Other (1,302) (1,704)
-------- --------
Net cash provided by operating activities 7,493 2,683
-------- --------
Investing activities:
Additions to property, plant and equipment (12,369) (9,031)
Disposals of property, plant and equipment 724 214
Acquisitions, net of cash acquired (4,250) (8,394)
Purchase of short-term investments (214) (45)
-------- ---------
Net cash used by investing activities (16,109) (17,256)
------- -------
Financing activities:
Principal payments on current debt (18,785) (5,862)
Proceeds from issuance of current debt 29,332 7,717
Principal payments on long-term debt (18) (518)
Proceeds from issuance of long-term debt 1,285 116
Proceeds from stock option plans 242 275
-------- --------
Net cash provided by financing activities 12,056 1,728
-------- --------
Effect of exchange rate changes on cash 336 (440)
-------- --------
Net change in cash and cash equivalents 3,776 (13,285)
Cash and cash equivalents at beginning of period 13,169 28,770
-------- --------
Cash and cash equivalents at end of period $16,945 $15,485
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
IONICS, INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation:
---------------------
In the opinion of the management of Ionics, Incorporated (the
"Company"), all adjustments have been made that are necessary to
present fairly the consolidated financial position of the Company, the
consolidated results of its operations and the consolidated cash flows
for each period presented. The consolidated results of operations for
the interim periods are not necessarily indicative of the results of
operations to be expected for the full year. These financial statements
should be read in conjunction with the Company's 1999 Annual Report as
filed on Form 10-K with the Securities and Exchange Commission. Other
than as noted below, there have been no significant changes in the
information reported in those Notes, other than from the normal
business activities of the Company, and there have been no changes
which would, in the opinion of management, have a materially adverse
effect upon the Company. Certain prior year amounts have been
reclassified to conform to the current year presentation with no impact
on net income.
2. Earnings per share (EPS) calculations:
-------------------------------------
<TABLE>
<CAPTION>
(Amounts in thousands, except per share amounts)
For the period ended March 31, 2000 For the period ended March 31, 1999
----------------------------------- -----------------------------------
Net Per Share Net Per Share
Income Shares Amount Income Shares Amount
------ ------ ------ ------ ------ ------
Basic EPS
<S> <C> <C> <C> <C> <C> <C>
Income available to
common stockholders $3,562 16,209 $.22 $4,672 16,127 $.29
Effect of dilutive stock
options - 195 - - 161 -
------ ------ ---- ------ ------ ----
Diluted EPS $3,562 16,404 $.22 $4,672 16,288 $.29
====== ====== ==== ====== ====== ====
</TABLE>
3. Comprehensive Income:
--------------------
The Company has adopted the Statement of Financial Accounting Standards
("SFAS") No. 130, "Reporting Comprehensive Income," which establishes
standards for the reporting and display of comprehensive income and its
components. The table below sets forth "comprehensive income" as
defined by SFAS No. 130 for the three-month periods ended March 31,
2000 and 1999.
<TABLE>
<CAPTION>
(Amounts in thousands)
Three Months Ended March 31,
2000 1999
---- ----
<S> <C> <C>
Net income $3,562 $4,672
Other comprehensive income, net of tax:
Translation adjustments (2,410) (2,950)
------ ------
Comprehensive income $1,152 $1,722
====== ======
</TABLE>
<PAGE>
4. Segment Information.
-------------------
In 1998, the Company adopted SFAS No. 131, "Disclosures about Segments
of an Enterprise and Related Information." At the end of 1998, the
Company changed from three reportable segments to four reportable
"business group" segments corresponding to a "business group" structure
which was put into place in the latter part of 1998. As of March 31,
2000, no changes have been made to the basis of segmentation or the
measurement of profit or loss from that which was reported in the
Company's 1999 Annual Report as filed on Form 10-K with the Securities
and Exchange Commission, and there were no material changes to total
assets by segment.
The following table summarizes the Company's operations by the four
business group segments and "Corporate" (Corporate includes the
elimination of intersegment transfers).
<TABLE>
<CAPTION>
Equipment Ultrapure Consumer Instrument
Business Water Water Business
Dollars in thousands Group Group Group Group Corporate Total
- -----------------------------------------------------------------------------------------------------------------
2000
<S> <C> <C> <C> <C>
Revenue - unaffiliated customers $41,356 $27,746 $26,419 $7,274 - $102,795
Inter-segment transfers 1,582 225 - 386 (2,193) -
Gross profit 9,951 5,881 10,718 3,996 - 30,546
1999
Revenue - unaffiliated customers $34,439 $24,533 $21,859 $6,585 - $ 87,416
Inter-segment transfers 319 197 - 194 (710) -
Gross profit 9,724 6,295 9,576 3,569 - 29,164
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
Comparison of the Three Months Ended March 31, 2000 with the Three Months Ended
March 31, 1999
- -------------------------------------------------------------------------------
Revenues for the first quarter of 2000 increased 17.6%, and net income decreased
by 23.8% compared to the results of the first quarter of 1999. Gross Profit was
$30.5 million in the first quarter of 2000 compared to $29.2 million in the
first quarter of 1999. Gross profit increased in the first quarter of 2000,
compared to the first quarter of 1999 for the Equipment Business Group (EBG),
Consumer Water Group (CWG), and the Instrument Business Group (IBG). These
increases were primarily due to higher sales volume of capital equipment and
consumer water products. The increases were offset by a decrease in gross profit
for the Ultrapure Water Group (UWG) in the first quarter of 2000 compared to the
first quarter of 1999. This decrease was primarily due to highly competitive
pricing pressures in several markets, particularly in the microelectronics
industry.
Total revenues were $102.8 million in the first quarter of 2000 compared with
$87.4 million in the first quarter of 1999. Revenues for the first quarter of
2000 were higher in all of the business group segments.
EBG revenues increased by 20.1% in the first quarter of 2000 as compared to the
first quarter of 1999. This increase came primarily from higher capital
equipment sales and continuing work on a contract to manufacture a storage
system to manage the containment of spent nuclear fuels.
The revenues of the UWG increased by $3.2 million in the first quarter of 2000
compared to the first quarter of 1999. This increase was due primarily from
higher sales to the microelectronics and power industries.
The 20.9% increase in the CWG revenues from the first quarter of 2000 compared
to the first quarter of 1999 was due to growth in both bottled water and home
water products. Included in the growth of the home water business was a
significant increase in sales through the Company's Irish subsidiary opened in
mid-1999.
IBG revenues increased by $0.7 million in the first quarter of 2000 compared to
the first quarter of 1999. This increase resulted from sales of TOC instruments
due to new European pharmaceutical regulations.
Cost of sales as a percentage of revenues was 70.3% in the first quarter of 2000
compared to 66.6% in the first quarter of 1999.
Cost of sales as a percentage of revenues increased in the first quarter of
2000, compared to the first quarter of 1999, for EBG, UWG and CWG, while such
percentage decreased slightly for IBG. The increase in EBG's cost of sale
percentage to 75.9% in the first quarter of 2000 from 71.8% in the first quarter
of 1999 primarily reflected a shift in the mix of contracts to lower margin
equipment business. Cost of sales as a percentage of revenues for UWG increased
in the first quarter of 2000 to 78.8% from 74.3% in the first quarter of 1999.
This increase resulted from the continued competitive environment in the
microelectronics industry for ultrapure water capital equipment. The increase in
the CWG's cost of sales to 59.4% from 56.2% is primarily the result of higher
distribution costs due to increases in fuel and labor costs. These increases
were offset by a slight decrease in cost of sales for IBG in the first quarter
of 2000, compared to the first quarter of 1999, because of a more favorable mix
of sales.
<PAGE>
Operating expenses as a percentage of revenues were 24.1% in the first quarter
of 2000 and 25.1% in the first quarter of 1999. The decrease in operating
expenses as a percentage of revenues primarily reflected higher revenue growth
in EBG and UWG which generally have lower selling costs relative to revenues
than do the other business groups.
Interest income of $0.3 million for the first quarter of 2000 increased slightly
from interest income of $0.1 million for the first quarter of 1999. Interest
expense of $0.7 million for the first quarter of 2000 was higher from the $0.1
million for the first quarter of 1999 due to higher average borrowings by the
Company.
Financial Condition
- -------------------
Working capital decreased $8.9 million during the first three months of 2000
while the Company's current ratio decreased slightly to 1.7 at March 31, 2000
from 2.0 at December 31, 1999. Cash provided from net income and depreciation
totaled $11.4 million during the first three months of 2000, while the primary
uses of cash were for additions to property, plant and equipment and for
acquisitions. Significant capital expenditures were generally made to expand the
Company's bottled water operations and for "own and operate" facilities. At
March 31, 2000 notes payable and the current portion of long-term debt increased
by $12.2 million. The Company believes that its cash and cash equivalents, cash
from operations, lines of credit and foreign exchange facilities are adequate to
meet its currently anticipated needs.
Significant expenditures for the remainder of Year 2000 are anticipated to
include investments in additional "own and operate" facilities and the continued
expansion of bottled water operations.
At March 31, 2000 the Company had incurred approximately $3 million in costs
relating primarily to providing assistance to a project company in obtaining
financing for, and project management and design work on, a major seawater
desalination project in Trinidad announced in September of 1999. Financing for
the project has not yet been obtained. Should financing not be obtained, these
costs would be expensed. The Company anticipates that a determination regarding
financing will occur in the second quarter of 2000. The Company may incur
additional expenditures related to this project prior to such determination.
Accounting Pronouncements
- -------------------------
In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin ("SAB") No. 101, Revenue Recognition in Financial Statements
which was amended by SAB 101A, delaying the implementation date of SAB 101 to
the second fiscal quarter of fiscal years beginning after December 15, 1999.
This bulletin summarizes certain views of the staff on applying generally
accepted accounting principles to revenue recognition in financial statements.
The staff believes that revenue is realized or realizable and earned when all of
the following criteria are met: persuasive evidence of an arrangement exists;
delivery has occurred or services have been rendered; the seller's price to the
buyer is fixed or determinable; and collectibility is reasonably assured. The
Company believes that its current revenue recognition policy complies with the
Commission's guidelines.
<PAGE>
Year 2000 (Y2K) Disclosure
- --------------------------
The Company undertook a program in years 1998 and 1999 to assure the ability of
its information and manufacturing systems to properly recognize and process
date-sensitive information beginning on January 1, 2000. To date, the Company
has completed the transition from calendar 1999 to 2000 with no reported
significant impact to operations. The company will continue to monitor Y2K
related matters at suppliers and customers, as well as the Company's systems,
facilities and products, to ensure that latent defects do not manifest
themselves over the next several months.
Quantitative and Qualitative Disclosures about Market Risk
- ----------------------------------------------------------
Derivative Instruments and Market Risk
There has been no material change in the information reported in the Company's
1999 Annual Report as filed on Form 10-K with the Securities and Exchange
Commission with respect to these risk matters.
Forward-Looking Information
- ---------------------------
Safe Harbor Statement under Private Securities Litigation Reform Act of 1995
The Company's future results of operations and certain statements contained in
this report, including, without limitation, "Management's Discussion and
Analysis of Results of Operations and Financial Condition," constitute
forward-looking statements. Such statements are based on management's current
views and assumptions and involve risks, uncertainties and other factors that
could cause actual results to differ materially from management's current
expectations. Among these factors are acceptance of new products and price
pressures; risk of nonpayment of accounts receivable; risks associated with
foreign operations; risks of latent Y2K defects; risks involved in litigation;
regulations and laws affecting business in each of the Company's markets; market
risk factors, and other risks and uncertainties described from time to time in
the Company's filings with the Securities and Exchange Commission.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
3(ii) By-Laws of the Company as amended through May 2, 2000.
(b) Reports on Form 8-K
No reports on Form 8-K were filed with the Securities and Exchange
Commission during the quarter ended March 31, 2000.
All other items reportable under Part II have been omitted as
inapplicable or because the answer is negative, or because the
information was previously reported to the Securities and Exchange
Commission.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IONICS, INCORPORATED
Date: May 12, 2000 By: /s/Arthur L. Goldstein
-------------- ----------------------------------
Arthur L. Goldstein
Chairman and Chief Executive Officer
(duly authorized officer)
Date: May 12, 2000 By: /s/Robert J. Halliday
-------------- ----------------------------------
Robert J. Halliday
Executive Vice President,
Chief Operating Officer and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Page
--------------
Exhibit
3(ii) By-Laws as amended through May 2, 2000
27.0 Financial Data Schedule 13
(for electronic purposes only)
As amended through May 2, 2000.
By-Laws
of
Ionics, Incorporated
ARTICLE I
Articles of Organization
The name and purposes of the Corporation shall be as set forth in the
Articles of Organization. These By-Laws, the powers of the Corporation and of
its directors and stockholders, and all matters concerning the conduct and
regulation of the business of the Corporation shall be subject to such
provisions in regard thereto, if any, as are set forth in the Articles of
Organization, and the Articles of Organization as from time to time amended are
hereby made a part of these By-Laws. All references in these By-Laws to the
Articles of Organization shall be construed to mean the Articles of Organization
of the Corporation as from time to time amended.
ARTICLE II
Annual Meeting of Stockholders
There shall be an annual meeting of stockholders within six months
after the end of the fiscal year of the Corporation. The date, hour and place of
the annual meeting of the stockholders shall be fixed by the vote of the
directors, and set forth in the notice thereof. In the event that no date for
the annual meeting is established or said meeting has not been held on the date
so fixed or determined, a special meeting in lieu of the annual meeting may be
held with all of the force and effect of an annual meeting. Purposes for which
an annual meeting is to be held, in addition to those prescribed by law, by the
Articles of Organization and by these By-Laws, may be specified by the President
or by a vote of a majority of the directors then in office.
If such annual meeting is not held on the date fixed therefor, a
special meeting of the stockholders may be held in place thereof, and any
business transacted or elections held at such special meeting shall have the
same effect as if transacted or held at the annual meeting and, in such case,
all references in these By-Laws, except in this Article II and in Article IV, to
the annual meeting of the stockholders shall be deemed to refer to such special
meeting. Any such special meeting may be described and referred to simply as the
Annual Meeting of the Stockholders and shall be called, and the purposes thereof
shall be specified in the call, as provided in Article III.
<PAGE>
ARTICLE III
Special Meetings of Stockholders
A special meeting of the stockholders may be called at any time by the
President or by a majority of the directors then in office. Application to an
officer of the Corporation or to a court pursuant to Section 34(b) of the
Business Corporation Law requesting the call of a special meeting of the
stockholders may be made only by stockholders who hold 100% in interest of the
capital stock entitled to vote at the meeting. Such call shall state the time,
place and purposes of the meeting.
ARTICLE IV
Place of Stockholders' Meetings
The annual meeting of the stockholders and any special meeting of the
stockholders, by whomever called, shall be held at the principal office of the
Corporation in Massachusetts or elsewhere in the Commonwealth of Massachusetts,
as may be determined by the Board of Directors and stated in the notice thereof.
Any adjourned session of any annual or special meeting of the stockholders shall
be held in the United States at such place as is designated in the vote of
adjournment.
ARTICLE V
Notice of Stockholders' Meetings
A written notice of each annual or special meeting of stockholders,
stating the place, the date and hour thereof, and the purpose or purposes for
which the meeting is to be held shall be given at least ten (10) days before the
meeting to each stockholder entitled to vote thereat, and to each stockholder
who, under the Articles of Organization or these By-Laws, is entitled to such
notice, by leaving such notice with him or at his residence or usual place of
business, or by mailing it, postage prepaid, addressed to such stockholder at
his address as it appears in the records of the Corporation. Such notice shall
be given by the Clerk, by an Assistant Clerk, or by any other officer, or by a
person designated either by the Clerk or by the person or persons calling the
Meeting, or by the Board of Directors. No notice of the time, place or purposes
of any annual or special meeting of the stockholders shall be required to be
given to a stockholder if a written waiver of such notice is executed before or
after the meeting by such stockholder, or his attorney thereunto authorized, and
filed with the records of the meeting.
<PAGE>
No business may be transacted at a meeting of the stockholders except
that (a) specified in the notice thereof given by or at the direction of the
Board of Directors and otherwise in compliance with the provisions hereof, (b)
brought before the meeting by or at the direction of the Board of Directors or
the presiding officer or (c) properly brought before the meeting by or on behalf
of any stockholder who shall have been a stockholder of record at the time of
giving of notice by such stockholder provided for in this paragraph and who
shall continue to be entitled at the time of such meeting to vote thereat and
who complies with the notice procedures set forth in this paragraph with respect
to any business sought to be brought before the meeting by or on behalf of such
stockholder other than the election of directors and with the notice provisions
set forth in Article VIII with respect to the election of directors. In addition
to any other applicable requirements, for business to be properly brought before
a meeting by or on behalf of a stockholder (other than a stockholder proposal
included in the Corporation's proxy statement pursuant to Rule 14a-8 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), the
stockholder must have given timely notice thereof in writing to the Clerk of the
Corporation. In order to be timely given, a stockholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation (a) not less than 80 nor more than 120 days prior to the anniversary
date of the immediately preceding annual meeting of stockholders of the
Corporation, or (b) in the case of a special meeting or in the event that the
annual meeting is called for a date (including any change in a date determined
by the Board pursuant to Article II) more than 60 days prior to such anniversary
date, notice by the stockholder to be timely given must be so received not later
than the close of business on the 20th day following the day on which notice of
the date of such meeting was mailed or public disclosure of the date of such
meeting was made, whichever first occurs. Such stockholder's notice to the Clerk
shall set forth as to each matter the stockholder proposes to bring before the
meeting (a) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting, (b) the
name and record address of the stockholder proposing such business, (c) the
class and number of shares of capital stock of the Corporation held of record,
owned beneficially and represented by proxy by such stockholder as of the record
date for the meeting (if such date shall then have been made publicly available)
and as of the date of such notice by the stockholder, and (d) all other
information which would be required to be included in a proxy statement or other
filings required to be filed with the Securities and Exchange Commission if,
with respect to any such item of business, such stockholder were a participant
in a solicitation subject to Regulation 14A under the Exchange Act (the "Proxy
Rules"). In the event the proposed business to be brought before the meeting by
or on behalf of a stockholder relates or refers to a proposal or transaction
involving the stockholder or a third party which, if it were to have been
consummated at the time of the meeting, would have required of such stockholder
or third party or any of the affiliates of either of them any prior notification
to, filing with, or any orders or other action by, any governmental authority,
then any such notice to the Clerk shall be accompanied by appropriate evidence
of the making of all such notifications or filings and the issuance of all such
orders and the taking of all such actions by all such governmental authorities.
<PAGE>
Notwithstanding anything in these By-Laws to the contrary, no business
shall be conducted at any meeting except in accordance with the procedures set
forth in this Article V, provided, however, that nothing in this Article V shall
be deemed to preclude discussion by any stockholder of any business properly
brought before such meeting.
The presiding officer of the meeting may, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting in accordance with the foregoing procedures, and if he or she
should so determine, he or she shall so declare to the meeting and that business
shall be disregarded.
ARTICLE VI
Quorum of Stockholders
At any meeting of the stockholders, a quorum for the election of any
director or officer, or for the consideration of any question, shall consist of
a majority in interest of all stock issued, outstanding and entitled to vote at
such election or upon such question, respectively, present in person or
represented by proxy; except that if two or more classes of stock are entitled
to vote as separate classes upon any question, then, in the case of each such
class, a quorum for the consideration of such question shall consist of a
majority in interest so present or represented of all stock of that class
issued, outstanding and entitled to vote; and except in any case where a larger
quorum is required by law, by the Articles of Organization or by these By-Laws a
quorum shall consist of the number in interest, so present or represented, as is
so required. Stock owned by the Corporation, if any, shall not be deemed
outstanding for this purpose.
When a quorum is present at any meeting, a plurality of the votes
properly cast for any office shall elect to such office, except where a larger
vote is required by law, by the Articles of Organization or by these By-Laws,
and a majority of the votes properly cast upon any other question (or if two or
more classes of stock are entitled to vote as separate classes upon such
question, then, in the case of each such class, a majority of the votes of such
class properly cast upon the question), except in any case where a larger vote
is required by law, by the Articles of Organization or by these By-Laws, shall
decide the matter.
If a quorum is not present at any meeting, a majority in interest of
the said stockholders present in person or by proxy and entitled to vote may
adjourn such meeting from time to time, without notice other than by
announcement at the meeting, until holders of the amount of stock requisite to
constitute a quorum shall attend. At any such adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the meeting as originally called.
<PAGE>
ARTICLE VII
Proxies and Voting
Section 1. Except as may be provided otherwise in the Articles of
Organization with respect to two or more classes or series of stock,
stockholders entitled to vote shall have one vote for each share of stock
entitled to vote owned by them, and a proportionate vote for each fractional
share. No ballot shall be required for any election unless requested by a
stockholder present or represented at the meeting and entitled to vote in the
election. The Corporation shall not, directly or indirectly, vote upon any share
of its own stock.
Stockholders entitled to vote may vote either in person or by proxy in
writing dated not more than six months before the meeting named therein, which
proxies shall be filed with the Clerk at the meeting, or any adjournment thereof
before being voted. Such proxies shall entitle the holders thereof to vote at
any adjournment of such meeting, but shall not be valid after the final
adjournment of such meeting.
Any action required or permitted to be taken by stockholders may be
taken without a meeting if all stockholders entitled to vote on the matter
consent to the action by a writing or writings, filed with the record of the
meetings of stockholders. Such consents shall be treated for all purposes as a
vote at a meeting.
Section 2. Only persons who are nominated in accordance with the
following procedures shall be eligible for election as directors, except as may
be otherwise provided in the Corporation's Restated Articles of Organization, as
amended. Nominations of persons for election to the Board of Directors at the
annual meeting may be made at the annual meeting of stockholders (a) by the
Board of Directors or at the direction of the Board of Directors by any
nominating committee or person appointed by the Board of Directors or (b) by any
stockholder of record at the time of giving of notice provided for in this
Section 2 and who shall continue to be entitled at the time of the meeting to
vote for the election of directors at the meeting who complies with the notice
procedures set forth in this Section 2 rather than the notice procedures with
respect to other business set forth in Article V. Nominations by stockholders
shall be made only after timely notice by such stockholder in writing to the
Clerk of the Corporation. In order to be timely given, a stockholder's notice
shall be delivered to or mailed and received at the principal executive offices
of the Corporation not less than 80 nor more than 120 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders of
the Corporation; provided, however, that in the event that the meeting is called
for a date, including any change in a date determined by the Board pursuant to
Article II, more than 60 days prior to such anniversary date, notice by the
stockholder to be timely given must be so received not later than the close of
business on the 20th day following the day on which notice of the date of the
meeting was mailed or public disclosure of the date of the meeting was made,
whichever first occurs. Such stockholder's notice to the Clerk shall set forth
(a) as to each person whom the stockholder proposes to nominate for election or
re-election as a director, (i) the name, age, business address and residence
address of the person, (ii) the principal occupation or employment of the
person, (iii) the class and number of shares of capital stock of the
Corporation, if any, which are beneficially owned by the person, (iv) any other
information regarding the nominee as would be required to be included in a proxy
statement or other filings required to be filed pursuant to the Proxy Rules, and
(v) the consent of each nominee to serve as a director of the Corporation if so
elected; and (b) as to the stockholder giving the notice, (i) the name and
record address of the stockholder, (ii) the class and number of shares of
capital stock of the Corporation which are beneficially owned by the stockholder
as of the record date for the meeting (if such date shall then have been made
publicly available) and as of the date of such notice, (iii) a representation
that the stockholder intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice, (iv) a representation
that the stockholder (and any party on whose behalf or in concert with whom such
stockholder is acting) is qualified at the time of giving such notice to have
such individual serve as the nominee of such stockholder (and any party on whose
behalf or in concert with whom such stockholder is acting) if such individual is
elected, accompanied by copies of any notification or filings with, or orders or
other actions by, any governmental authority which are required in order for
such stockholder (and any party on whose behalf such stockholder is acting) to
be so qualified, (v) a description of all arrangements or understandings between
such stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nomination or nominations are to be
made by such stockholder, and (vi) such other information regarding such
stockholder as would be required to be included in a proxy statement or other
filings required to be filed pursuant to the Proxy Rules. The Corporation may
require any proposed nominee to furnish such other information as may reasonably
be required by the Corporation to determine the eligibility of such proposed
nominee to serve as director. No person shall be eligible for election as a
director unless nominated in accordance with the procedures set forth herein.
<PAGE>
The presiding officer of the meeting may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedures, and if he or she should so determine,
he or she shall so declare to the meeting and the defective nomination shall be
disregarded.
ARTICLE VIII
Board of Directors
A. The Corporation shall have a board of not less than three directors,
nor more than 15 directors. Pursuant to the provisions of Massachusetts
General Laws Chapter 156B, Section 50A (as such provision or any
successor provision may be amended from time to time), the directors
shall be classified, with respect to the time for which they severally
hold office, into three classes, as nearly equal in number as possible,
and designated Class I, Class II and Class III. Each class of directors
shall be elected to hold office for a term continuing until the annual
meeting held in the third year following the year of their election and
until their successors are duly elected and qualified.
B. The number of directors in each Class of directors shall be fixed only
by a vote of the Board of Directors from time to time.
C. Vacancies and newly created directorships, whether resulting from an
increase in the size of the Board of Directors, from the death,
resignation, disqualification or removal of a director, or otherwise,
shall be filled solely by the affirmative vote of a majority of the
remaining directors then in office, even though less than a quorum of
the Board of Directors. Any director elected in accordance with the
procedure set forth in this paragraph C shall hold office for the
remainder of the full term of the Class of directors in which the
vacancy occurred or the new directorship was created and until such
director's successor shall have been elected and qualified (subject to
such director's earlier resignation or removal).
D. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
E. No director need be a stockholder except as may be otherwise provided
by law, by the RestatedArticles of Organization, as amended, or these
By-Laws.
<PAGE>
ARTICLE IX
Powers of Directors
The business and property of the Corporation shall be managed by, and
be under the control of, the Board of Directors which shall have and may
exercise all the powers of the Corporation except such as are conferred upon the
stockholders or other officers by law, by the Articles of Organization, or by
these By-Laws.
Except as may be otherwise specifically provided by law or by vote of
the stockholders, the Board of Directors is expressly authorized to issue, from
time to time, all or any portion or portions of the capital stock of the
Corporation of any class, which may have been authorized but not issued or
otherwise reserved for issue, to such person or persons and for such
consideration (but not less than the par value thereof in case of stock having
par value), whether cash, tangible or intangible property, good will, services
or expenses, as they may deem best, without first offering (for subscription or
sale) such authorized but unissued stock to any present or future stockholders
of the Corporation, and generally in their absolute discretion to determine the
terms and manner of any disposition of such authorized but unissued stock.
ARTICLE X
Committees of Directors
The Board of Directors, by vote of a majority of the directors then in
office, may at any time elect from its own number an executive committee and/or
one or more other committees, to consist of not less than two members, and may
from time to time designate or alter, within the limits permitted by this
Article X, the duties and powers of such committees or change their membership,
and may, at any time, abolish such committees or any of them. The President
shall be an ex officio member of the executive committee, if any.
Any committee shall be vested with such powers of the Board of
Directors as the Board may determine in the vote establishing such committees or
in a subsequent vote of a majority of directors then in office, provided
however, that no such committee shall have any power prohibited by law, the
Articles of Organization, or these By-Laws.
Each member of a committee shall hold office until the first meeting of
the Board of Directors following the next annual meeting of the stockholders (or
until such other time as the Board of Directors may determine either in the vote
establishing the committee or at the election of such member) and until his
successor is elected and qualified, or until he sooner dies, resigns, is
removed, is replaced by change of membership, or becomes disqualified by ceasing
to be a director, or until the committee is sooner abolished by the Board of
Directors.
A majority of the members of any committee then in office, but not less
than two, shall constitute a quorum for the transaction of business, but any
meeting may be adjourned from time to time by a majority of the votes cast upon
the question, whether or not a quorum is present, and the meeting may be held as
adjourned without further notice. Each committee may make its rules not
inconsistent herewith for the holding and conduct of its meetings, but unless
otherwise provided in such rules its meetings shall be held and conducted in the
same manner as nearly as may be, as is provided in these By-Laws for meetings of
the Board of Directors. The Board of Directors shall have power to rescind any
vote or resolution of any committee provided that no rights of third parties
shall be impaired by such rescission.
<PAGE>
Any action required or permitted to be taken at any meeting of a
committee may be taken without a meeting if written consent to the action in
writing by all of the members of the committee is filed with the minutes of the
committee. Such consents shall be treated for all purposes as a vote at a
meeting.
ARTICLE XI
Meetings of the Board of Directors;
Action without a Meeting
Regular meetings of the Board of Directors may be held without call or
notice at such places and at such times as the Board may from time to time
determine, provided, that reasonable notice of such determination and of any
changes therein is given to each member of the Board then in office. A regular
meeting of the Board of Directors for the purpose of electing officers and
agents may be held without call or notice immediately after and at the same
place as the annual meeting of the stockholders and, if held upon due call or
notice, for such other and further purposes as may be specified in such call or
notice.
Special meetings of the Board of Directors may be held at any time and
at any place when called by the President, the Treasurer, or two or more
directors, reasonable notice thereof being given to each director by the
Secretary, or if there be no Secretary, by the Clerk, or in the case of death,
absence, incapacity or refusal of the Secretary (or the Clerk, as the case may
be), by the officer or directors calling the meeting. In any case, it shall be
deemed sufficient notice to a director to send notice by mail at least forty
eight hours, or by telegram at least twenty-four hours, before the meeting,
addressed to him at his usual or last known business or residence address, or to
give notice to him in person, either by telephone or by handing him a written
notice at least twenty-four hours before the meeting.
Notwithstanding the foregoing, notice of a meeting need not be given to
any director if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any director who
attends the meeting without protesting prior thereto, or at its commencement,
the lack of notice to him.
Any action required or permitted to be taken at any meeting of the
directors may be taken without a meeting if written consent to the action in
writing by all directors is filed with the minutes of the directors. Such
consents shall be treated for all purposes as a vote at a meeting.
<PAGE>
ARTICLE XII
Quorum of Directors
At any meeting of the Board of Directors, a quorum for any election, or
for the consideration of any question, shall consist of a majority of the
directors then in office, but any meeting may be adjourned from time to time by
a majority of the votes cast upon the question, whether or not a quorum is
present, and the meeting may be held as adjourned without further notice. When a
quorum is present at any meeting, the votes of a majority of the directors
present and voting shall be requisite and sufficient for election to any office,
and a majority of the directors present and voting shall decide any question
brought before such meeting except in any case where a larger vote is required
by law, by the Articles of Organization, or these By-Laws, or where an
additional vote of certain directors then in office is required under the terms
of any outstanding securities of this Corporation or any agreement, law or
regulation to which it is subject.
ARTICLE XIII
Officers and Agents
The officers of the Corporation shall be a President, a Treasurer, a
Clerk, and such other officers, which may include a Secretary, a Controller, one
or more Vice Presidents, Assistant Treasurers, Assistant Clerks or Assistant
Controllers, as the Board of Directors may, in its discretion, appoint. The
Corporation may also have such agents, if any, as the Board of Directors may, in
its discretion, appoint. The President need not be a director. The Clerk shall
be a resident of Massachusetts unless the Corporation has a resident agent
appointed for the purpose of serving process. So far as is permitted by law, any
two or more offices may be held by the same person.
Subject to law, to the Articles of Organization, and to the other
provisions of these By-Laws, each officer shall have, in addition to the duties
and powers herein set forth, such duties and powers as the Board of Directors
may from time to time designate.
The President, Treasurer and the Clerk shall be elected annually by the
Board of Directors at its first meeting following the annual meeting of the
stockholders, by vote of a majority of the full Board of Directors. Such other
offices of the Corporation as may be created in accordance with these By-Laws
may be filled at such meeting by vote of a majority of the directors then in
office.
Each officer shall (subject to Article XIX of these By-Laws) hold
office until the first meeting of the Board of Directors following the next
annual meeting of the stockholders and until his successor is elected or
appointed and qualified, or until he sooner dies, resigns, is removed, or
becomes disqualified. Each agent shall retain his authority at the pleasure of
the Board of Directors.
Any officer, employee, or agent of the Corporation may be required, as
and if determined by the Board of Directors, to give bond for the faithful
performance of his duties.
<PAGE>
ARTICLE XIV
President and Vice President
The President shall be the chief executive officer of the Corporation
and shall have general charge and supervision of the business of the Corporation
unless otherwise provided by law, the Articles of Organization, the By-Laws, or
by specific vote of the Board of Directors. The President shall preside at all
meetings of the stockholders and of the Board of Directors at which he is
present except as otherwise voted by the Board of Directors.
Any Vice President shall have such duties and powers as shall be
designated from time to time by the Board of Directors or by the President, and
in any case, shall be responsible to and shall report to the President. In the
absence or disability of the President, the Vice President or, if there be more
than one, the Vice Presidents in the order of their seniority or as otherwise
designated by the Board of Directors, shall have the powers and duties of the
President.
ARTICLE XV
Treasurer and Assistant Treasurer
The Treasurer shall be the chief financial officer of the Corporation
(unless another officer is so designated by the Board of Directors) and shall be
in charge of its funds and the disbursements thereof, subject to the President
and the Board of Directors, and shall have such duties and powers as are
commonly incident to the office of a corporate treasurer and such other duties
and powers as may be prescribed from time to time by the Board of Directors or
by the President. If no Controller is elected, the Treasurer shall also have the
duties and powers of the Controller as provided in these By- Laws. The Treasurer
shall be responsible to and shall report to the Board of Directors, but in the
ordinary conduct of the Corporation's business, shall be under the supervision
of the President.
Any Assistant Treasurer shall have such duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Treasurer, and
shall be responsible to and shall report to the Treasurer. Unless otherwise
designated by the Board of Directors, the Assistant Treasurer shall, in the
absence or disability of the Treasurer, perform the duties of and have the
powers of the Treasurer.
<PAGE>
ARTICLE XVI
Controller and Assistant Controller
If a Controller is elected, he shall be the chief accounting officer of
the Corporation and shall be in charge of its books of account and accounting
records and of its accounting procedures, and shall have such duties and powers
as are commonly incident to the office of a corporate controller and such other
duties and powers as may be prescribed from time to time by the Board of
Directors or by the President. The Controller shall be responsible to and shall
report to the Board of Directors, but, in the ordinary conduct of the
Corporation's business, shall be under the supervision of the President.
Any Assistant Controller shall have duties and powers as shall be
prescribed from time to time by the Board of Directors or by the Controller, and
shall be responsible to and shall report to the Controller.
ARTICLE XVII
Clerk and Assistant Clerk
The Clerk shall be a resident of the Commonwealth of Massachusetts. He
shall record all proceedings of the stockholders in books to be kept therefor,
and shall have custody of the Corporation's records, documents and valuable
papers. In the absence of the Clerk from any such meeting, the Secretary, if
any, may act as temporary Clerk and shall record the proceedings thereof in the
aforesaid books, or a temporary Clerk may be chosen by vote of the meeting.
The Clerk shall also keep, or cause to be kept, the stock transfer
records of the Corporation, which shall contain a complete list of the names and
addresses of all stockholders and the amount of stock held by each.
The Clerk or, in his absence, the Secretary or the Assistant Clerk, if
any, shall have custody of the corporate seal and be responsible for affixing it
to documents as required unless the Board of Directors shall designate
otherwise.
The Clerk shall have such other duties and powers as are commonly
incident to the office of a corporate clerk, and such other duties and powers as
may be prescribed from time to time by the Board of Directors or the President.
If no Secretary is elected, the Clerk shall also have and perform all
of the duties and powers of the Secretary, and, in his absence from any such
meeting, a temporary Clerk shall be chosen who shall record the proceedings
thereof.
Each Assistant Clerk (who shall each be residents of the Commonwealth
of Massachusetts) shall have such duties and powers as shall from time to time
be designated by the Board of Directors or the Clerk, and shall be responsible
to and shall report to the Clerk. In the absence or disability of the Clerk, the
Assistant Clerk or, if there be more than one, the Assistant Clerks in order of
their seniority or as otherwise designated by the Clerk, shall have the powers
and perform the duties of the Clerk.
<PAGE>
ARTICLE XVIII
Secretary
If a Secretary is elected, he shall keep a true record of the
proceedings of all meetings of the Board of Directors and of any meetings of any
committees of the Board, and, in his absence from any such meeting, a temporary
Secretary shall be chosen who shall record the proceedings thereof. The
Secretary shall have such duties and powers as are commonly incident to the
office of a corporate secretary, and such other duties and powers as may be
prescribed from time to time by the Board of Directors or by the President.
ARTICLE XIX
Resignations and Removals
Any director or officer may resign at any time by delivering his
resignation in writing to the President, the Clerk or the Secretary, or to a
meeting of the Board of Directors. The stockholders may, by the affirmative vote
of a majority in interest of the stock issued and outstanding and entitled to
vote at the election of directors, remove any director or directors from office
only for cause, provided that the directors of any class that is elected by a
particular class of stockholders may be so removed only by the affirmative vote
of a majority in interest of the stock of such class. The Board of Directors
may, by vote of a majority of the directors then in office, remove any director
from office with cause, or remove any officer from office, with or without
cause. The Board of Directors may, at any time, by vote of a majority of the
directors present and voting, terminate or modify the authority of any agent. No
director or officer resigning and (except where a right to receive compensation
for a definite future period shall be expressly provided in a written agreement
with the Corporation duly approved by the Board of Directors) no director or
officer removed shall have any right to any compensation as such director or
officer for any period following his resignation or removal, or any right to
damages on account of such removal, whether his compensation be by the month, or
by the year, or otherwise. Any director or officer may be removed for cause only
after reasonable notice and opportunity to be heard before the body proposing to
remove him.
ARTICLE XX
Vacancies
Any vacancy or vacancies in the Board of Directors shall be filled in
accordance with the procedure set forth in Paragraph C of Article VIII.
If the office of any member of a Committee of the Board of Directors
becomes vacant, the Board of Directors may elect a successor or successors by
the affirmative vote of a majority of the directors then in office.
The Board of Directors shall have and may exercise all its powers,
notwithstanding the existence of one or more vacancies in its fixed number,
provided that this be at least two directors then in office.
<PAGE>
ARTICLE XXI
Capital Stock
The authorized amount of the capital stock and the par value, if any,
of the shares shall be as fixed in the Articles of Organization. At all times
when there are two or more classes of stock, the several classes of stock shall
conform to the description and terms, and have the respective preferences,
voting powers, restrictions and qualifications, set forth in the Articles of
Organization.
ARTICLE XXII
Certificate of Stock
Each stockholder shall be entitled to a certificate of the capital
stock of the Corporation owned by him, in such form as shall, in conformity to
law, be prescribed from time to time by the Board of Directors. Such certificate
shall be signed by the President or a Vice President and by either the Treasurer
or an Assistant Treasurer, and may, but need not be, sealed with the corporate
seal, but when any such certificate is signed by a transfer agent or by a
registrar other than a director, officer, or employee of the Corporation, the
signature of the President or a Vice President and of the Treasurer or an
Assistant Treasurer of the Corporation, or either or both such signatures and
such seal upon such certificate, may be facsimile. If any officer who has
signed, or whose facsimile signature has been placed on, any such certificate
shall have ceased to be such officer before such certificate is issued, the
certificate may be issued by the Corporation with the same effect as if he were
such officer at the time of issue.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to the Articles of Organization, the By-Laws,
or any agreement to which the Corporation is a party, shall have the restriction
noted conspicuously on the certificate, and shall also set forth on the face or
back either the full text of the restriction or a statement of the existence of
such restriction and a statement that the Corporation will furnish a copy
thereof to the holder of such certificate upon written request and without
charge. Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized to
be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish a
copy thereof to the holder of such certificate upon written request and without
charge.
<PAGE>
ARTICLE XXIII
Transfer of Shares of Stock
Subject to the restrictions, if any, stated or noted on the stock
certificates, shares of stock may be transferred on the books of the Corporation
only by surrender to the Corporation or its transfer agent, of the certificate
therefor, properly endorsed or accompanied by a written assignment or power of
attorney properly executed, with all requisite stock transfer stamps affixed,
and with such proof of the authenticity and effectiveness of the signature as
the Corporation or its transfer agent shall reasonably require. Except as may be
otherwise required by law, the Articles of Organization, or these By-Laws, the
Corporation shall have the right to treat the person registered on the stock
transfer books as the owner of any shares of the Corporation's stock as the
owner in fact thereof for all purposes, including the payment of dividends, the
right to vote with respect thereto and otherwise, and accordingly shall not be
bound to recognize any attempted transfer, pledge or other disposition thereof
or any equitable or other claim with respect thereto, whether or not it shall
have actual or other notice thereof, until such shares shall have been
transferred on the Corporation's books in accordance with these By-Laws. It
shall be the duty of each stockholder to notify the Corporation of his post
office address.
ARTICLE XXIV
Transfer Agents and Registrars; Further Regulations
The Board of Directors may appoint one or more banks, trust companies
or corporations doing a corporate trust business, in good standing under the
laws of the United States or any state therein, to act as the Corporation's
transfer agent and/or registrar for shares of the capital stock, and the Board
may make such other and further regulations, not inconsistent with applicable
law, as it may deem expedient concerning the issue, transfer and registration of
capital stock and stock certificates of the Corporation.
ARTICLE XXV
Loss of Certificates
In the case of the alleged loss, destruction, or wrongful taking of a
certificate of stock, a duplicate certificate may be issued in place thereof
upon receipt by the Corporation of such evidence of loss and such indemnity
bond, with or without surety, as shall be satisfactory to the President and the
Treasurer, or otherwise upon such terms as the Board of Directors may prescribe
consistent with law.
<PAGE>
ARTICLE XXVI
Record Date
The directors may fix in advance a time, which shall not be more than
sixty days before the date of any meeting of stockholders or the date for the
payment of any dividend or the making of any distribution to the stockholders or
the last day on which the consent or dissent of stockholders may be effectively
expressed for any purpose, as the record date for determining the stockholders
having the right to notice of, and to vote at, such meeting and any adjournment
thereof, or the right to receive such dividend or distribution, or the right to
give such consent or dissent, and in such case only stockholders of record on
such record date shall have such right, notwithstanding any transfer of stock on
the books of the Corporation after the record date; or, without fixing such
record date, the directors may, for any of such purposes, close the transfer
books for all or any part of such period, provided that if a dividend is
declared, the stock transfer books shall not be closed and the Corporation or
the transfer agent, if there be one, shall take a record of all stockholders
entitled to the dividend without actually closing the books for transfer of the
stock.
ARTICLE XXVII
Seal
The seal of the Corporation shall, subject to alteration by the Board
of Directors, consist of a flat-faced circular die with the word
"Massachusetts", together with the name of the Corporation and the year of
incorporation, cut or engraved thereon. An impression of the seal impressed upon
the original copy of these By-Laws shall be deemed conclusively to be the seal
adopted by the Board of Directors.
ARTICLE XXVIII
Execution of Papers
Except as the Board of Directors may generally or in particular cases
otherwise authorize or direct, all deeds, leases, transfers, contracts,
proposals, bonds, notes, checks, drafts and other obligations made, accepted or
endorsed by the Corporation shall be signed or endorsed on behalf of the
Corporation by its President or by one of its Vice Presidents or by its
Treasurer.
ARTICLE XXIX
Fiscal Year
Except as from time to time provided by the Board of Directors, the
fiscal year of the Corporation shall end on December 31 of each year.
<PAGE>
ARTICLE XXX
Indemnification of Directors and Officers
Each director and each officer elected by the stockholders (including
persons elected by directors to fill vacancies in the Board of Directors or in
any such offices), and each former director or officer, and the heirs,
executors, administrators and assigns of each of them, shall be indemnified by
the Corporation against all costs and expenses, including fees and disbursements
of counsel and the cost of settlements (other than amounts paid to the
Corporation itself) reasonably incurred by or imposed upon him in connection
with or arising out of any action, suit or proceeding, civil or criminal, in
which he may be involved by reason of his being or having been an officer or a
director of the Corporation, or by reason of any action alleged to have been
taken or omitted by him as a director or an officer of the Corporation. Such
indemnification shall include payment by the Corporation of expenses incurred in
defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding, upon the Corporation's receipt of the
undertaking of the person indemnified to repay such payment if such person shall
be adjudicated not entitled to such indemnification under this Article XXX.
Officers elected by the Directors but who are not directors and
employees and other agents of the Corporation (including persons who serve at
its request as directors or officers of another organization in which it owns
shares or of which it is a creditor) and each such former officer, employee and
agent, and the heirs, executors, administrators and assigns of each of them, may
be indemnified by the Corporation to whatever extent authorized by the Board of
Directors.
No indemnification shall be provided to any person, or to his heirs,
executor, administrator or assigns, with respect to any matter as to which he
shall have been finally adjudicated in any action, suit or proceeding not to
have acted in good faith in the reasonable belief that his action was in the
best interests of the Corporation.
The foregoing indemnification shall not be exclusive of any other
rights of indemnification for which any such director, officer, employee or
agent may be entitled.
If and as authorized by the Board of Directors the Corporation shall
purchase and maintain insurance on behalf of any person who is a Director,
officer, employee or other agent of the Corporation, or is or was serving at the
request of the Corporation as a Director, officer, employee or other agent of
another organization in which it owns shares or of which it is a creditor,
against any liability incurred by such person in such capacity, or arising out
of his status as such, whether or not the Corporation would have power to
indemnify said person against such liability.
<PAGE>
ARTICLE XXXI
Contracts and Dealings with Certain
Other Corporations or Firms
No contract or other transaction between the Corporation and any other
person, firm or corporation shall, in the absence of fraud, in any way be
affected or invalidated, nor shall any director be subject to surcharge with
respect to any such contract or transaction by the fact that such director, or
any firm of which a director is a member, or any corporation of which any
director is a shareholder, officer or director, is a party to, or may be
pecuniarily or otherwise interested in, such contract or transaction, provided
that the fact that he individually, or such firm or corporation, is so
interested shall be disclosed to the Board of Directors at their meeting at
which, or prior to the directors executing their written consents by which,
action to authorize, ratify or approve such contract or transaction shall be
taken. Any director of the Corporation may vote upon or give his written consent
to any contract or other transaction between the Corporation and any subsidiary
or affiliated corporation without regard to the fact that he is also a director
or officer of such subsidiary or affiliated corporation.
ARTICLE XXXII
Voting Stock in Other Corporations
Unless otherwise ordered by the Board of Directors, the President or,
in case of his absence or failure to act, the Treasurer shall have full power
and authority on behalf of the Corporation to attend and to act and to vote at
any meetings of stockholders of any corporation in which this Corporation may
hold stock, and at any such meeting shall possess and may exercise any and all
rights and powers incident to the ownership of such stock and which, as the
owner thereof, the Corporation might have possessed and exercised if present.
The Board of Directors, by resolution from time to time, or, in absence thereof,
the President, may confer like powers upon any other person or persons as
attorneys and proxies of the Corporation.
ARTICLE XXXIII
Corporate Records
The original or attested copies of the Articles of Organization,
By-Laws, and records of all meetings of the incorporators and stockholders, and
the stock and transfer records, which shall contain the names of all
stockholders and the record address and the amount of stock held by each, shall
be kept in Massachusetts at the principal office of the Corporation or at an
office of its transfer agent or of the Clerk. Said copies and records need not
all be kept in the same office. They shall be available at all reasonable times
to the inspection of any stockholder for any proper purpose, but not to secure a
list of the stockholders for the purpose of selling said list, or copies
thereof, or of using the same for a purpose other than in the interest of the
applicant, as a stockholder, relative to the affairs of the Corporation.
<PAGE>
ARTICLE XXXIV
Amendments
These By-Laws may be altered, amended or repealed, by vote of a
majority of all stock issued, outstanding and entitled to vote at any annual or
special meeting of the stockholders called for the purpose, the notice of which
shall specify the subject matter of the proposed alteration, amendment or repeal
or the articles to be affected thereby; or without a meeting by unanimous
written consent of the holders of all stock of the Corporation issued,
outstanding and entitled to vote. These By-Laws may also be altered, amended or
repealed by vote or action of a majority of the Directors. Not later than the
time of giving notice of the meeting of stockholders next following the making,
amending or repealing by the Directors of any By-Law, notice thereof stating the
substance of such changes shall be given to all stockholders entitled to vote on
amending the By-Laws. Any By-Law adopted by the Directors may be amended or
repealed by the stockholders.
ARTICLE XXXV
Massachusetts Chapter 110D
Until such time as this Article shall be repealed or the By-Laws shall
be amended to provide otherwise, in each case in accordance with Article XXXIV
of the By-Laws, the provisions of Chapter ll0D of the Massachusetts General Laws
shall not apply to "control share acquisitions" of the Corporation within the
meaning of said Chapter 110D.
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