SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
____________________________
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the 26 weeks ended June 26, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-6085
____________________________
IBP, inc.
a Delaware Corporation
I.R.S. Employer Identification No. 42-0838666
800 Stevens Port Drive
Dakota Dunes, South Dakota 57049
Telephone 605-235-2061
____________________________
Indicate by check mark whether the registrant(1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
As of August 1, 1999, the registrant had outstanding 92,265,404 shares of
its common stock ($.05 par value).
PART I. FINANCIAL INFORMATION
IBP, inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
June 26, December 26,
1999 1998
---------- ------------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 30,274 $ 27,254
Marketable securities 4,397 1,400
Accounts receivable, less allowance for
doubtful accounts of $9,266 and $12,111 744,130 599,999
Inventories 515,389 405,418
Deferred income tax benefits and
prepaid expenses 66,027 62,744
--------- ---------
TOTAL CURRENT ASSETS 1,360,217 1,096,815
Property, plant and equipment,
less accumulated depreciation
of $889,623 and $843,937 1,186,050 1,072,093
Goodwill, net of accumulated
amortization of $170,642 and $158,808 874,891 724,089
Other assets 98,034 115,099
--------- ---------
$3,519,192 $3,008,096
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 519,637 $ 140,967
Accounts payable 331,671 315,861
Deferred income taxes and other
current liabilities 388,111 408,984
--------- --------
TOTAL CURRENT LIABILITIES 1,239,419 865,812
Long-term debt and capital lease
obligations 587,334 575,522
Deferred income taxes and other
liabilities 169,882 165,848
STOCKHOLDERS' EQUITY:
Common stock at par value 4,750 4,750
Additional paid-in capital 402,810 405,278
Retained earnings 1,186,251 1,067,725
Accumulated other comprehensive income (10,047) (16,456)
Treasury stock (61,207) (60,383)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 1,522,557 1,400,914
--------- ---------
$3,519,192 $3,008,096
========= =========
See accompanying notes to condensed consolidated financial statements.
-2-
IBP, inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
(In thousands, except per share data)
13 Weeks Ended 26 Weeks Ended
-------------------- --------------------
June 26, June 27, June 26, June 27,
1999 1998 1999 1998
--------- --------- --------- ---------
Net sales $3,478,467 $3,334,340 $6,576,119 $6,559,284
Cost of products sold 3,270,433 3,208,199 6,188,937 6,329,314
--------- --------- --------- ---------
Gross profit 208,034 126,141 387,182 229,970
Selling, general and
administrative expense 89,063 59,588 167,526 128,773
--------- --------- --------- ---------
EARNINGS FROM OPERATIONS 118,971 66,553 219,656 101,197
Interest expense, net 12,128 11,900 21,015 24,645
--------- --------- --------- ---------
Earnings before income
taxes and extraordinary
item 106,843 54,653 198,641 76,552
Income tax expense 40,600 20,800 75,500 29,100
--------- --------- -------- ---------
Earnings before
extraordinary item 66,243 33,853 123,141 47,452
Extraordinary loss on early
extinguishment of debt,
less applicable taxes - - - (14,815)
--------- ---------- -------- --------
NET EARNINGS $ 66,243 $ 33,853 $ 123,141 $ 32,637
========= ========== ======== ========
Earnings per share:
Earnings before
extraordinary item $ .72 $ .37 $1.33 $.51
Extraordinary item - - - (.16)
---- ---- ---- ----
Net earnings $ .72 $ .37 $1.33 $.35
==== ==== ==== ====
Earnings per share - assuming
dilution:
Earnings before
extraordinary item $ .71 $ .36 $1.32 $.51
Extraordinary item - - - (.16)
---- ---- ---- ----
Net earnings $ .71 $ .36 $1.32 $.35
==== ==== ==== ====
Dividends per share $.025 $.025 $.05 $.05
==== ==== ==== ====
See accompanying notes to condensed consolidated financial statements.
-3-
IBP, inc. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
26 Weeks Ended
-------------------------
June 26, June 27,
1999 1998
-------- ---------
Inflows(outflows)
NET CASH FLOWS USED BY OPERATING ACTIVITIES $ (46,530) $ (42,210)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for stock of new subsidiaries, net
of cash acquired (270,024) -
Capital expenditures ( 96,373) (77,425)
Purchases of marketable securities ( 19,400) (146,759)
Proceeds from disposals of marketable
securities 19,400 128,879
Investment in life insurance contracts - (33,000)
Other investing activities, net 5,710 (3,969)
-------- -------
Net cash flows used by
investing activities (360,687) (132,274)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in borrowings under revolving
credit agreements 379,000 218,400
Net change in checks in process of
clearance 38,484 (4,926)
Proceeds from issuance of long-term debt 3,000 49,760
Principal payments on long-term
obligations (1,707) (113,293)
Premiums paid on early retirement
of debt - (20,636)
Other financing activities, net (8,237) (6,978)
------- -------
Net cash flows provided by
financing activities 410,540 122,327
------- -------
Effect of exchange rate on cash
and cash equivalents (303) 49
------- -------
Net change in cash and cash equivalents 3,020 (52,108)
Cash and cash equivalents at beginning
of period 27,254 69,022
-------- ---------
Cash and cash equivalents at end of
period $ 30,274 $ 16,914
======== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the periods for:
Interest, net of amounts capitalized $21,089 $24,726
Income taxes, net of refunds received 87,055 5,207
Depreciation and amortization expense 52,111 50,638
Amortization of intangible assets 12,480 12,249
See accompanying notes to condensed consolidated financial statements.
-4-
IBP, inc. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. GENERAL
The condensed consolidated balance sheet of IBP, inc. and subsidiaries
("IBP" or "the company") at December 26, 1998 has been taken from audited
financial statements at that date and condensed. All other condensed
consolidated financial statements contained herein have been prepared by IBP
and are unaudited. The condensed consolidated financial statements should be
read in conjunction with the consolidated financial statements and the notes
thereto included in IBP's Annual Report on Form 10-K for the year ended
December 26, 1998.
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting only of
normal recurring adjustments, necessary to present fairly the financial
position of IBP at June 26, 1999 and the results of its operations and its
cash flows for the periods presented herein.
Certain reclassifications have been made to prior financial statements
to conform to the current year presentation.
B. OTHER
IBP's interim operating results of its Fresh Meats segment may be
subject to substantial fluctuations which do not necessarily occur or recur
on a seasonal basis. Such fluctuations are normally caused by competitive
and other conditions in the cattle and hog markets over which IBP has little
or no control. Therefore, the results of operations for the interim periods
presented are not necessarily indicative of the results to be attained for
the full fiscal year.
C. INVENTORIES
Inventories, valued at the lower of first-in, first-out cost or market
are comprised of the following:
June 26, December 26,
1999 1998
-------- -----------
(In thousands)
Product inventories:
Raw materials $32,045 $ 22,552
Work in process 78,311 69,790
Finished goods 194,388 148,542
------- -------
304,744 240,884
Livestock 133,463 89,321
Supplies 77,182 75,213
------- -------
$515,389 $405,418
======= =======
-5-
D. EARNINGS PER SHARE
(In thousands, except per share amounts)
For the Thirteen Weeks Ended June 26, 1999
------------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
--------- ----------- ---------
Basic EPS:
Net earnings $66,243 92,273 $.72
====== ===
Effect of dilutive
securities:
Employee stock plans 898
------
Diluted EPS $66,243 93,171 $.71
====== ====== ===
For the Thirteen Weeks Ended June 27, 1998
------------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
--------- ----------- ---------
Basic EPS:
Earnings before
extraordinary item $33,853 92,557 $ .37
====== ====
Effect of dilutive
securities:
Employee stock plans 823
------
Diluted EPS $33,853 93,380 $ .36
====== ====== ====
For the Twenty-six Weeks Ended June 26, 1999
---------------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
--------- ----------- ---------
Basic EPS:
Net earnings $123,141 92,284 $1.33
======= ====
Effect of dilutive
securities:
Employee stock plans 964
------
Diluted EPS $123,141 93,248 $1.32
======= ====== ====
For the Twenty-six Weeks Ended June 27, 1998
--------------------------------------------
Earnings Shares Per Share
(Numerator) (Denominator) Amount
--------- ----------- ---------
Basic EPS:
Earnings before
extraordinary item $47,452 92,562 $ .51
====== ====
Effect of dilutive
securities:
Employee stock plans 888
------
Diluted EPS $47,452 93,450 $ .51
====== ====== ====
The summary below lists stock options outstanding at the end of the
fiscal quarters which were not included in the computations of diluted EPS
because the options' exercise price was greater than the average market
price of the common shares. These options had varying expiration dates.
1999 1998
------ ------
Stock options excluded from
diluted EPS computation 1,538 1,541
Average option price per share $24.69 $24.69
-6-
E. COMPREHENSIVE INCOME
Comprehensive income consists of net earnings and foreign currency
translation adjustments. Management considers its foreign investments
to be permanent in nature and does not provide for taxes on currency
translation adjustments arising from converting the investment in a
foreign currency to U.S. dollars. Comprehensive income for the twenty-
six weeks ended June 26, 1999 and June 27, 1998 was as follows
(unaudited):
26 Weeks Ended
------------------------
June 26, June 27,
1999 1998
---------- ----------
(In thousands)
NET EARNINGS $123,141 $32,637
Other comprehensive income:
Foreign currency translation
adjustments 6,409 (2,642)
------- ------
COMPREHENSIVE INCOME $129,550 $29,995
======= ======
F. COMMITMENTS AND CONTINGENCIES
IBP is involved in numerous disputes incident to the ordinary
course of its business. In the opinion of management, any liability
for which provision has not been made relative to the various lawsuits,
claims and administrative proceedings pending against IBP, including
that described below, will not have a material adverse effect on its
consolidated results of operations, financial position or liquidity.
In July 1996, a lawsuit was filed against IBP by certain cattle
producers in the U.S. District Court, Middle District of Alabama,
seeking certification of a class of all cattle producers. The
complaint alleged, inter alia, that IBP used its market power and
alleged "captive supply" agreements to reduce the prices paid to
producers for cattle. Plaintiffs disclosed that, in addition to
declaratory relief, they sought actual and punitive damages, although
plaintiffs have not specified the amounts they seek. The original
motion for class certification was denied by the District Court;
plaintiffs then amended their motion, defining a narrower class
consisting of only those cattle producers who sold cattle directly to
IBP from 1994 through the date of certification. The District Court
certified this narrower class on April 28, 1999. However, the District
Court noted, in response to concerns raised about conflicts within the
class and about plaintiffs' ability to prove their theory on a class-
wide basis, that it could decertify the class as discovery proceeds.
The 11th circuit recently granted IBP's request for a review of the
class certification decision and is expected to issue an opinion in
late Fall 1999. Management continues to believe that the company has
acted properly and lawfully in its dealings with cattle producers.
-7-
G. ACQUISITIONS
Early in the second quarter 1999, the company, through its
subsidiary Foodbrands America, Inc. ("Foodbrands"), acquired the
outstanding stock of two companies, H&M Food Systems Company, Inc.
("H&M") and Zemco Industries, Inc., the owner of Russer Foods. The
purchase price for these companies was approximately $270 million,
subject to certain post-closing adjustments. H&M is
a producer of custom-formulated pre-cooked meat products and prepared
foods with two plants in Texas. Russer Foods produces and markets a
variety of premium deli meats, with production facilities in New York
and Massachusetts.
In late July 1999, a bankruptcy judge approved IBP's bid for
substantially all of the operating assets of Thorn Apple Valley, Inc.
("TAVI"), a further processor of pork and poultry products. IBP's bid
is subject to U.S. Department of Justice approval, which is expected
sometime during August 1999. The purchase of the TAVI assets, which
will cost approximately $115 million along with assumption of $2.5
million of debt, includes five processing plants, a number of product
brand names and a workforce of about 3,100 employees.
Annual sales of the above three entities are expected to add
approximately $650 million to IBP's consolidated net sales. The net
impact of the acquired companies' results on consolidated 1999 earnings
from operations or net earnings is not expected to be material.
H. BUSINESS SEGMENTS
The company is managed and operated as two divisions, Fresh Meats
and Enterprises, and, accordingly, has two business segments. IBP's Fresh
Meats operation relates principally to the meat processing industry and
primarily involves cattle and hog carcass production, beef and pork
fabrication and related allied product processing activities. This
segment markets its products to food retailers, distributors, wholesalers,
restaurant and hotel chains, other food processors and leather makers, as
well as manufacturers of pharmaceuticals and animal feeds. The
Enterprises segment consists of two IBP subsidiaries, Foodbrands
and The Bruss Company ("Bruss"). The Enterprises
group produces, markets and distributes a variety of frozen and
refrigerated products to the "away from home" food preparation market,
including pizza toppings and crusts, value-added beef and pork-based
products, ethnic specialty foods, appetizers, soups, sauces and side
dishes as well as deli meats and processed beef, pork and poultry
products. Enterprises also produces portion-controlled premium beef and
pork products for sale to restaurants and foodservice customers in
domestic and international markets. The company operates principally in
the United States.
Intersegment sales have been recorded at amounts approximating market.
Earnings from operations are comprised of net sales less all identifiable
operating expenses, allocated corporate selling, general and
administrative expenses, and goodwill amortization. Net interest expense
and income taxes have been excluded from segment operations.
-8-
13 Weeks Ended 26 Weeks Ended
--------------------- ---------------------
June 26, June 27, June 26, June 27,
1999 1998 1999 1998
---------- ---------- ---------- ---------
(in thousands)
NET SALES
---------
Sales to unaffiliated
customers:
Fresh Meats $3,092,570 $3,057,707 $5,905,433 $6,010,817
Enterprises 385,897 276,633 670,686 548,467
--------- --------- --------- ---------
3,478,467 3,334,340 6,576,119 6,559,284
--------- --------- --------- ---------
Intersegment sales:
Fresh Meats: 62,926 47,454 114,950 91,011
Intersegment elimination (62,926) (47,454) (114,950) (91,011)
--------- --------- --------- --------
- - - -
--------- --------- --------- --------
Net sales:
Fresh Meats 3,155,496 3,105,161 6,020,383 6,101,828
Enterprises 385,897 276,633 670,686 548,467
Intersegment elimination (62,926) (47,454) (114,950) (91,011)
--------- --------- --------- ---------
$3,478,467 $3,334,340 $6,576,119 $6,559,284
========= ========= ========= =========
EARNINGS FROM OPERATIONS
- ------------------------
Fresh Meats $ 90,834 $ 45,391 $ 174,757 $ 67,822
Enterprises 28,137 21,162 44,899 33,375
--------- --------- -------- --------
Total earnings
from operations 118,971 66,553 219,656 101,197
Net interest expense (12,128) (11,900) (21,015) (24,645)
--------- --------- -------- --------
Pre-tax earnings $ 106,843 $ 54,653 $ 198,641 $ 76,552
========= ========= ======== ========
NET SALES BY LOCATION
OF CUSTOMERS
- ---------------------
United States $2,955,304 $2,815,152 $5,571,994 $5,544,001
Japan 207,711 207,289 409,146 419,392
Korea 140,159 128,659 248,362 242,961
Canada 47,228 39,241 89,809 59,517
Mexico 42,937 40,413 83,667 81,359
Other foreign countries 85,128 103,586 173,141 212,054
--------- --------- --------- ---------
$3,478,467 $3,334,340 $6,576,119 $6,559,284
========= ========= ========= =========
-9-
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
The matters discussed herein contain forward-looking statements.
Specifically, these forward-looking statements include risks and
uncertainties. Thus, actual results may differ materially from those
expressed or implied in those statements. Those risks and uncertainties
include, without limitation, risks of changing market conditions with
regard to livestock supplies and demand for the company's products,
domestic and international legal and regulatory risks, the costs of
environmental compliance, the impact of governmental regulations,
operating efficiencies, as well as competitive and other risks over
which IBP has little or no control. Moreover, past financial
performance should not be considered a reliable indicator of future
performance. The company makes no commitment to update any forward-
looking statement, or to disclose any facts, events or circumstances
after the date hereof that may affect the accuracy of any forward-
looking statement.
ACQUISITIONS
- ------------
Early in the second quarter 1999, the company, through its
subsidiary Foodbrands America, Inc. ("Foodbrands"), acquired the
outstanding stock of two companies, H&M Food Systems Company, Inc.
("H&M") and Zemco Industries, Inc., the owner of Russer Foods. The
purchase price ofr these companies was approximately $270 million,
subject to certain post-closing adjustments. H&M is a
producer of custom-formulated pre-cooked meat products and prepared
foods with two plants in Texas. Russer Foods produces and markets a
variety of premium deli meats, with production facilities in New York
and Massachusetts. The combined annual sales of these two companies are
expected to total approximately $350 million.
In late July 1999, a bankruptcy judge approved IBP's bid for
substantially all of the operating assets of Thorn Apple Valley, Inc.
("TAVI"), a further processor of pork and poultry products. IBP's bid
is subject to U.S. Department of Justice approval, which is expected
sometime during August 1999. The purchase of the TAVI assets, which
will cost approximately $115 million along with assumption of $2.5
million of debt, includes five processing plants, a number of product
brand names and a workforce of about 3,100 employees.
Annual sales of the above three entities are expected to add
approximately $650 million to IBP's consolidated net sales. The net
impact of the acquired companies' results on consolidated 1999 earnings
from operations or net earnings is not expected to be material.
RESULTS OF OPERATIONS
- ---------------------
Fresh Meats' operating earnings, before non-recurring charges,
improved to 3.5% of net sales in the second quarter 1999 versus 1.5% in
the second quarter 1998. On a year-to-date basis through June, the 1999
operating margin as a percentage of net sales, before non-recurring
charges, was 3.2% compared to 1.1% in the prior year. Both beef and
pork operations performed above prior year levels due to relatively
stable livestock prices and improved demand.
-10-
In the second quarter 1999, Fresh Meats incurred a pre-tax, non-
cash charge of $17 million for cow slaughter and boning operation
impairment write-downs. IBP's Palestine, Texas, cow plant, which closed
in April 1999, was written off as part of the charge. The charge
reduced net earnings by $10 million or $.11 per diluted share.
Enterprises' second quarter 1999 operating earnings dipped
slightly to 7.3% of net sales compared to 7.6% in the second quarter
1998 due primarily to higher raw material prices. Through six months,
the comparable figures were 6.7% in 1999 versus 6.1% in 1998, due in
large part to margin improvement in pizza toppings and crusts, deli
items and specialty products.
According to the latest United States Department of Agriculture
("USDA") and industry analysts' estimates, beef production in 1999 will
equal or exceed 1998 levels, which is higher than earlier expected.
Thus, it appears that live cattle supplies will be abundant for the
balance of this year. The USDA also forecasted 1999 pork production to
be up slightly from 1998 and chicken production up 6% from 1998.
Therefore, the resulting record level of protein supplies will likely
exert moderating or downward pressure on livestock and fresh meat prices
for the remainder of 1999.
During the first quarter 1998, the company completed its purchase
of all of Foodbrands' $112 million outstanding 10.75% Senior
Subordinated Notes. Net prepayment premiums, accelerated amortization of
unamortized deferred financing costs, and transaction expenses totaled
$23.9 million, before applicable income tax benefit of $9.1 million, and
was accounted for as an extraordinary loss in the condensed consolidated
statement of earnings.
13 Weeks Ended 26 Weeks Ended
--------------------- ----------------------
June 26, June 27, June 26, June 27,
1999 1998 1999 1998
--------- --------- ---------- ----------
Net Sales:
Fresh Meats $3,092,570 $3,057,707 $5,905,433 $6,010,817
Enterprises 385,897 276,633 670,686 548,467
--------- --------- --------- ---------
$3,478,467 $3,334,340 $6,576,119 $6,559,284
========= ========= ========= =========
Earnings from Operations:
Fresh Meats:
Before Non-recurring
Charges $107,529 $45,391 $191,452 $72,266
======= ========= ======= ======
After Non-recurring
Charges 90,834 45,391 174,757 67,822
====== ====== ======= ======
Enterprises 28,137 21,162 44,899 33,375
====== ====== ======= ======
-11-
SALES
In the second quarter 1999, Fresh Meats' net sales increased 1%
from the second quarter 1998. The primary factor was an increase in
pounds of beef products sold, especially at the Lakeside plant in
Alberta, Canada, offset somewhat by a lower average pork selling price.
Enterprises' 39% net sales increase from the prior year second quarter
was due in large part to Foodbrands' acquisitions (the appetizer division
of the Diversified Food Group ("DFG Foods"), which was acquired in the
fourth quarter 1998, as well as the previously mentioned Russer Foods and
H&M), although existing operations' net sales increased 9% and The Bruss
Company's ("Bruss") second quarter 1999 net sales were 22% higher than in
the comparable 1998 period.
For the six months ended June, the 2% decline in Fresh Meats' 1999
net sales from 1998 was the result of lower pork and beef selling
prices, partially offset by increased pounds of beef and pork products
sold. Enterprises' 1999 net sales through June increased 22% over the
first six months of 1998 due in large part to acquisitions, but also to
sales volume increases at Bruss and other Foodbrands divisions, reduced
somewhat by lower selling prices resulting from lower raw material costs
passed through to customers.
Export volumes increased 6% in the second quarter and 5% in the
first six months of 1999 compared to the same 1998 periods. Net export
dollar sales during the second quarter 1999 showed improvement over the
first three months of 1999, but were 4% below the second quarter 1998.
Japan continues to be IBP's most significant export destination,
although year-to-date 1999 export volumes were 3% below the prior year.
Meanwhile, improving economic conditions in 1999 have brought about a
73% volume gain in Korea and a 25% volume increase in Taiwan over the
first six months of 1998. Additionally, export volumes to Mexico were
up 12% during the first six months of 1999 versus 1998. Net export
sales accounted for 12% and 13% of year-to-date 1999 and 1998 net sales,
respectively.
COST OF PRODUCTS SOLD
In the second quarter, Fresh Meats' 1999 cost of products sold
decreased 1% from the second quarter 1998, chiefly as a result of lower
average live hog prices, offset somewhat by an increase in beef volume.
The 1999 cost of products sold included $17 million of cow plant asset
impairment write-downs.
Enterprises' second quarter 1999 cost of products sold increased
40% from the first quarter 1998 on increased volume of products sold,
due in large part to acquisitions but also to volume increases in other
operations.
In the year-to-date period ended June, Fresh Meats' cost of
products sold decreased 4% in 1999 compared to 1998. Lower average live
hog prices were the most significant factor, offset somewhat by
increased pounds of Fresh Meats products sold and the aforementioned cow
plant asset impairment write-downs.
-12-
Enterprises' six months' comparative cost of products sold in
1999 versus 1998 increased 21% from the first half of 1998. Increased
volume of products sold was due in part to impact of the acquired
companies and also to higher volumes sold by existing divisions. The
volume increase was partially offset by lower raw material costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE
Second quarter and six months' 1999 expense increased 49% and 30%,
respectively, over the comparable 1998 periods. The increases were
chiefly a result of Foodbrands' acquisitions, consulting expense,
corporate salaries, and a $7 million second quarter 1998 accrual for
export-related harbor maintenance tax refunds.
INTEREST EXPENSE
The 15% decrease in year-to-date 1999 net interest expense versus
the first half of 1998 was due primarily to a lower average effective
interest rate offset somewhat by higher average borrowings in 1999.
Average borrowings and net interest expense will trend higher in the
second half of 1999 as a result of additional borrowings required for
the recent Foodbrands acquisitions and increased capital expenditures.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The acquisitions of Russer Foods and H&M in April 1999 required cash
payments of approximately $270 million, which were funded with available
unused credit facilities. The company will likely secure longer-term
financing for some or all of the purchase price at a later date.
Total outstanding borrowings averaged $896 million in the first six
months of 1999 compared to $867 million in the comparable 1998 period.
The higher 1999 average outstanding borrowings versus the first half of
1998 were due primarily to the second quarter 1999 acquisitions.
Borrowings outstanding under committed and uncommitted credit facilities
at June 26, 1999 totaled $695 million compared to $316 million at
December 26, 1998, and available unused credit capacity under committed
facilities was $100 million.
Year-to-date capital expenditures through June 26, 1999 totaled $96
million compared to $77 million in the first six months of 1998.
Significant projects with spending in 1999 included completion of the
company's world headquarters complex, various beef plant food safety
projects, and several plant expansions. Approximately one half of the
1999 spending was for revenue enhancement or cost-saving projects, while
the remainder generally went toward upgrades and replacements of
existing equipment and facilities.
-13-
YEAR 2000
- ---------
The "Year 2000" problem relates to computer systems that have time
and date-sensitive programs that were designed to read years beginning
with "19," but may not properly recognize the year 2000. If a computer
system or other equipment with embedded chips or processors
(collectively, "Business Systems") used by the company or a third party
dealing with the company fails because of the inability of the system or
application to properly read the year "2000", the results could
conceivably have a material adverse effect on the company. This Year
2000 issue can arise at any point in the company's supply,
manufacturing, processing, distribution, and financial chains.
The company has an internal team responsible for assessing the
impact of Year 2000 and leading and monitoring the company's state of
readiness with respect to this issue. The assessment and planning phase
is essentially complete, the implementation phase is 95% complete, and
the testing phase is approximately 90% complete. All phases are expected
to be completed during 1999.
As part of the Year 2000 readiness program, significant service
providers, vendors, suppliers, customers, and governmental entities
("Key Business Partners") that are considered critical to business
operations around January 1, 2000, have been identified. Steps are
being undertaken to reasonably ascertain their stage of Year 2000
readiness as it relates directly or indirectly to the company.
The possible consequences of the company or its Key Business
Partners not being fully Year 2000 compliant by January 1, 2000 include,
among other things, temporary plant closings, delays in the delivery of
products and/or receipt of supplies, invoice and collection errors and
inventory and supply obsolescence. However, the company believes that
its Year 2000 readiness program, including the contingency planning
discussed below, should significantly reduce the adverse effect any such
disruptions may have.
The company will have developed a formal contingency plan by the end
of the third quarter 1999 to address risks considered critical to
operations. In addition, the progress of the Year 2000 readiness
program is being closely monitored and additional measures will be taken
as risks arise. These measures may include stockpiling critical
supplies and packaging materials, securing alternate sources of supplies
or services, and other appropriate measures.
It is currently estimated that the aggregate cost of the company's
Year 2000 efforts will be approximately $13 million, of which $11
million has been spent or committed. The budgeted $13 million includes
approximately $8 million, of which $6 million has been spent or
committed, for computer hardware, most of which will be capitalized.
The remaining $5 million is primarily for computer software, all of
which will be expensed as incurred and funded with operating cash flows.
Almost $5 million has been expensed to date.
The company's Year 2000 readiness program is an ongoing process and
the estimates of costs and completion dates for various components of
the Year 2000 readiness program described above are subject to change.
-14-
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of stockholders of IBP, inc. was held on April
22, 1999, in Dakota Dunes, South Dakota.
(c) The following matter was voted upon at the annual meeting:
(i) The election of the members of the Board of Directors:
Richard L. Bond
Votes for: 76,199,509
Votes withheld: 423,446
John S. Chalsty
Votes for: 75,654,161
Votes withheld: 968,794
Dr. Wendy L. Gramm
Votes for: 76,197,144
Votes withheld: 425,811
John J. Jacobson, Jr.
Votes for: 76,208,447
Votes withheld: 414,508
Eugene D. Leman
Votes for: 76,216,178
Votes withheld: 406,777
Martin A. Massengale
Votes for: 76,199,381
Votes withheld 423,574
Robert L. Peterson
Votes for: 76,112,732
Votes withheld: 510,233
Michael L. Sanem
Votes for: 76,218,691
Votes withheld: 404,264
JoAnn R. Smith
Votes for: 76,206,379
Votes withheld: 416,576
-15-
Item 5. Other Information
In connection with its Medium-Term Notes program, the company
hereby reports the following computations:
26 Weeks Ended
--------------------
June 26, June 27,
1999 1998
------- -------
Earnings before income taxes
and extraordinary item $198,641 $ 76,552
Total fixed charges 30,853 33,176
Capitalized interest (4,645) (3,345)
------- -------
Earnings before fixed charges,
income taxes and extraordinary
item $224,849 $106,383
======= =======
Ratio of earnings to fixed charges 7.3 3.2
=== ===
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed by the company during the
quarter ended June 26, 1999.
-16-
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1934, the
registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IBP, inc.
---------------------------
(Registrant)
August 6, 1999 /s/ Robert L. Peterson
- -------------------- ---------------------------
(date) Robert L. Peterson
Chairman of the Board and
Chief Executive Officer
/s/ Larry Shipley
----------------------------
Larry Shipley
Chief Financial Officer
and President of IBP
Enterprises
/s/ Craig J. Hart
-----------------------------
Craig J. Hart
Vice President
and Controller
-17-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
for the 26 weeks ended June 26, 1999, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-25-1999
<PERIOD-END> JUN-26-1999
<CASH> 30,274
<SECURITIES> 4,397
<RECEIVABLES> 753,396
<ALLOWANCES> 9,266
<INVENTORY> 515,389
<CURRENT-ASSETS> 1,360,217
<PP&E> 1,733,560
<DEPRECIATION> 889,623
<TOTAL-ASSETS> 3,519,192
<CURRENT-LIABILITIES> 1,239,419
<BONDS> 587,334
0
0
<COMMON> 4,750
<OTHER-SE> 1,517,807
<TOTAL-LIABILITY-AND-EQUITY> 3,519,192
<SALES> 6,576,119
<TOTAL-REVENUES> 6,576,119
<CGS> 6,188,937
<TOTAL-COSTS> 6,188,937
<OTHER-EXPENSES> 167,526
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,015
<INCOME-PRETAX> 198,641
<INCOME-TAX> 75,500
<INCOME-CONTINUING> 123,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 123,141
<EPS-BASIC> 1.33
<EPS-DILUTED> 1.32
</TABLE>
______________________________________________________
BY-LAWS
OF
IBP, inc.
(Incorporated the Laws of the State of Delaware)
As amended through February 24, 1999
______________________________________________________
TABLE OF CONTENTS
ARTICLE I
Offices
Section 1. Registered Office 1
Section 2. Other Offices 1
ARTICLE II
Meetings of Stockholders
Section 1. Place of Meeting 1
Section 2. Annual Meetings 1
Section 3. Special Meetings 2
Section 4. Notice of Meetings 2
Section 5. Quorum 3
Section 6. Adjournments 3
Section 7. Conduct of Meeting 3
Section 8. List of Stockholders 5
Section 9. Voting 5
Section 10. Inspector of Election 7
ARTICLE III
Board of Directors
Section 1. General Powers 8
Section 2. Number, Qualification and Election 8
Section 3. Notification of Nominations 8
Section 4. Quorum and Manner of Acting 11
Section 5. Place of Meeting 11
Section 6. Regular Meeting 11
Section 7. Special Meetings 11
Section 8. Notice of Meetings 12
Section 9. Rules and Regulations 12
Section 10. Participation in Meeting by Means
of Communications Equipment 12
Section 11. Action Without Meeting 12
Section 12. Resignations 13
Section 13. Removal of Directors 13
Section 14. Vacancies 13
Section 15. Compensation 14
ARTICLE IV
Executive and Other Committees
Section 1. Executive Committee 14
Section 2. Other Committees 16
Section 3. Procedure, Meetings, Quorum 16
ARTICLE V
Officers
Section 1. Number; Term of Office 18
Section 2. Removal 18
Section 3. Resignation 19
Section 4. Vacancies 19
Section 5. Chairman of the Board 19
Section 6. The President 19
Section 7. Vice-Presidents 19
Section 8. Treasurer 20
Section 9. Secretary 20
Section 10. Controller 20
Section 11. Assistant Treasurers, Secretaries
and Controllers 20
ARTICLE VI
Indemnification of Directors, Officers,
Employees and Agents
Section 1. Third Party Actions 21
Section 2. Derivative Actions 21
Section 3. Determination of Indemnification 22
Section 4. Right of Indemnification 23
Section 5. Advance of Expenses 23
Section 6. Indemnification by a Court 23
Section 7. Indemnification Not Exclusive 24
Section 8. Insurance 24
Section 9. Indemnification to Continue 25
Section 10 Definitions of Certain Terms 25
ARTICLE VII
Capital Stock
Section 1. Certificates for Shares 26
Section 2. Transfer of Shares 26
Section 3. Addresses of Stockholders 27
Section 4. Lost, Destroyed and Mutilated Certificates 27
Section 5. Regulations 28
Section 6. Fixing Date for Determination of
Stockholder of Record 28
ARTICLE VIII
Seal
ARTICLE IX
Fiscal Year
ARTICLE X
Waiver of Notice
ARTICLE XI
Form of By-law for Amendment of By-laws
Section 1. Amendments 31
Section 2. Entire Board of Directors 32
ARTICLE XII
Miscellaneous
Section 1. Execution of Documents 32
Section 2. Deposits 32
Section 3. Checks 33
Section 4. Proxies in Respect of Stock or Other Securities
of Other Corporations 33
Section 5. By-laws Subject to Law and Restated Certificate
of Incorporation of the Corporation 33
ARTICLE I
Offices
Section 1. Registered Office. The registered office of
IBP, inc. (hereinafter called the "Corporation" in the State
of Delaware shall be at Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801, in the City of Wilmington,
County of New Castle, and the registered agent in charge
thereof shall be The Corporation Trust Company.
Section 2. Other Offices. The Corporation may also have
an office or offices, and keep the books and records of the
Corporation, except as may otherwise be required by law, at
such other place or places, either within or without the State
of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation require.
ARTICLE II
Meetings of Stockholders
Section 1. Place of Meeting. All meetings of the
stockholders of the Corporation shall be held at the office of
the Corporation or at such other places, within or without the
State of Delaware, as may from time to time be fixed by the
Board of Directors.
Section 2. Annual Meetings. The annual meeting of the
stockholders of the Corporation for the election of directors
and for the transaction of such other business as may properly
come before the meeting shall be held on the first Wednesday
in June in each year, if not a legal holiday under the laws of
the place where the meeting is to be held, and, if a legal
holiday, then on the next succeeding day which is not a legal
holiday under the laws of such place, or on such other date
and at such hour as may from time to time be fixed by the
Board of Directors.
Section 3. Special Meetings. Subject to the provisions
of any Preferred Stock Designation (as such term is defined in
the Restated Certificate of Incorporation of the Corporation),
special meetings of the stockholders for any purpose or
purposes may be called only by the Chairman of the Board of
Directors of the Corporation or a majority of the entire Board
of Directors. Only such business as is specified in the
notice of any special meeting of the stockholders shall come
before such meeting.
Section 4. Notice of Meetings. Written notice of each
meeting of the stockholders, whether annual or special, shall
be given, either by personal delivery or by mail, not less
than 10 nor more than 60 days before the date of the meeting
to each stockholders or record entitled to notice of the
meeting. If mailed, such notice shall be deemed given when
deposited in the United States mail, postage prepaid, directed
to the stockholder at such stockholder's address as it appears
on the records of the Corporation. Each such notice shall
state the place, date and hour of the meeting, and, in the
case of a special meeting, the purpose or purposes for which
the meeting is called. Notice of any meeting of stockholders
shall not be required to be given to any stockholder who shall
attend such meeting in person or by proxy without protesting,
prior to or at the commencement of the meeting, the lack of
proper notice to such stockholder, or who shall waive notice
thereof as provided in Article X of these By-laws. Notice of
adjournment of a meeting of stockholders need not be given if
the time and place to which it is adjourned are announced at
such meeting, unless the adjournment is for more than 30 days
or, after adjournment, a new record date is fixed for the
adjournment meeting.
Section 5. Quorum. The holders of a majority of the
votes entitled to be cast by the stockholders entitled to
vote, which if any vote is to be taken by classes shall mean
the holders of a majority of the votes entitled to be cast by
the stockholders of each such class, present in person or by
proxy, shall constitute a quorum for the transaction of
business at any meeting of the stockholders.
Section 6. Adjournments. In the absence of a quorum, the
holders of a majority of the votes entitled to be cast by the
stockholders, present in person or by proxy, may adjourn the
meeting from time to time. At any such adjourned meeting at
which a quorum may be present, any business may be transacted
which might have been transacted at the meeting as originally
called.
Section 7. Conduct of Meeting. At each meeting of the
stockholders, the Chairman of the Board, or, in the absence of
the Chairman of the Board, such person designated by the Board
of Directors, shall act as Chairman. No business may be
transacted at an annual meeting of stockholders, other than
business that is either (a) specified in the notice of meeting
(or any supplement thereto) given by or at the direction of
the Board of Directors (or any duly authorized committee
thereof), (b) otherwise properly brought before the annual
meeting by or at the direction of the Board of Directors (or
any duly authorized committee thereof), or (c) otherwise
properly brought before the annual meeting by any stockholder
of the Corporation (i) who is a stockholder of record on the
date of the giving of the notice provided for in this Section
7 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (ii) who complies
with the notice procedures set forth in this Section 7.
In addition to any other applicable requirements, for
business to be properly brought before an annual meeting by a
stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the
Corporation.
To be timely, a stockholder's notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the Corporation not less than sixty (60)
days nor more than ninety (90) days prior to the anniversary
date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the
annual meeting is called for a date that is not within sixty
(60) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not
later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure of the
date of the annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to
the Secretary must set forth as to each matter such
stockholder proposes to bring before the annual meeting (i) 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, (ii) the name and record
address of such stockholders, (iii) the class or series and
number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder, (iv) a
description of all arrangements or understandings between such
stockholder and any other person or persons (including their
names) in connection with the proposal of such business by
such stockholder and any material interest of such stockholder
in such business, and (v) a representation that such
stockholder intends to appear in person or by proxy at the
annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting
in accordance with the procedures set forth in this Section 7;
provided, however, that once business has been properly
brought before the annual meeting in accordance with such
procedures, nothing in this Section 7 shall be deemed to
preclude discussion by any stockholder of any such business.
If the Chairman of an annual meting determines that business
was not properly brought before the annual meeting in
accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the business was not properly
brought before the meeting and such business shall not be
transacted.
Section 8. List of Stockholders. It shall be the duty of
the Secretary or other officer of the Corporation who has
charge of the stock ledger to prepare and make, at least 10
days before each meeting of the stockholders, a complete list
of the stockholders entitled to vote thereat, arranged in
alphabetical order, and showing the address of each
stockholder and the number of shares registered in such
stockholder's name. Such list shall be produced and kept
available at the times and places required by law.
Section 9. Voting. Each stockholder of record of any
class or series of stock having a preference over any class of
Common Stock of the Corporation as to dividends or upon
liquidation shall be entitled at each meeting of stockholders
to such number of votes for each share of such stock as may be
fixed in the Restated Certificate of Incorporation or pursuant
to the provisions of any Preferred Stock Designation and each
stockholder of record of Common Stock shall be entitled at
each meeting of stockholders to one vote for each share of
such stock, in each case, registered in such stockholder's
name on the books of the Corporation;
(1) on the date fixed pursuant to Section 6 of Article VII
of these By-laws as the record date for the determination of
stockholders entitled to notice of and to vote at such
meeting; or
(2) if no such record date shall have been so fixed, then
at the close of business on the day next preceding the day on
which notice of such meeting is given, or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held, or, if action is taken by
written consent without a meeting (to the extent permitted by
these By-laws and the Restated Certificate of Incorporation of
the Corporation) and no record date for determining
stockholders entitled to express consent to corporate action
in writing without a meeting shall have been fixed, the day on
which the first written consent is expressed.
Each shareholder entitled to vote at any meeting of
stockholders may authorize not in excess of three persons to
act for such stockholder by a proxy signed by such stockholder
or such stockholder's attorney-in-fact. Any such proxy shall
be delivered to the secretary of such meeting at or prior to
the time designated for holding such meeting, but in any event
not later than the time designated in the order of business
for so delivering such proxies. No such proxy shall be voted
or acted up after three years from its date, unless the proxy
provides for a longer period.
At each meeting of the stockholders, all corporate
actions to be taken by vote of the stockholders shall be
authorized by a majority of the votes cast by the stockholders
entitled to vote thereon, present in person or represented by
proxy, and where a separate vote by class is required, a
majority of the votes cast by the stockholders of such class,
present in person or represented by proxy, shall be the act of
such class; subject, in each case, to such greater vote as may
be prescribed by the Restated Certificate of Incorporation of
the Corporation or by law. Unless required by law or determine
by the chairman of the meeting to be advisable, the vote on
any matter, including the election of directors, need not be
by written ballot. In the case of a vote by written ballot,
each ballot shall be signed by the stockholder voting, or by
such stockholder's proxy, and shall state the number of shares
voted.
Section 10. Inspector of Election. In advance of any
meeting of stockholders, the Board of Directors by resolution
or the Chairman shall appoint one or more inspectors of
election to act at the meeting and make a written report
thereof. One or more other persons may be designated as
alternate inspectors to replace any inspector who fails to
act. If no inspector or alternate is present, ready and
willing to act at a meeting of stockholders, the Chairman of
the meeting shall appoint one or more inspectors to act at the
meeting. Unless otherwise required by law, inspectors may be
officers, employees or agents of the Corporation and need not
be stockholders of the Corporation. Notwithstanding anything
herein to the contrary, no director or nominee for the office
of director shall be appointed as an inspector. Each
inspector, before entering upon the discharge of his or her
duties, shall take and sign an oath faithfully to execute the
duties of inspector according to the best of his or her
ability. The inspector shall have the duties prescribed by
law and shall take charge of the polls and, when the vote is
completed, shall make a certificate of the result of the vote
taken and of such other facts as may be required by law.
ARTICLE III
Board of Directors
Section 1. General Powers. The business and affairs of
the Corporation shall be managed by or under the direction of
the Board of Directors, which may exercise all such powers of
the Corporation and do all such lawful acts and things as are
not required by law, by the Restated Certificate of
Incorporation of the Corporation or by these By-laws directed
or required to be exercised or done by the stockholders.
Section 2. Number, Qualification and Election. Except as
otherwise provided pursuant to provisions of any Preferred
Stock Designation, the number of directors of the Corporation
shall be determined from time to time by vote of a majority of
the entire Board of Directors, provided that the number
thereof may not be less than three.
Each of the directors of the Corporation shall hold office
until the next annual meeting of stockholders following such
director's election and until such director's successor shall
have been elected and qualified, or until his earlier death,
or resignation or removal in the manner hereinafter provided.
No decrease in the number of directors shall shorten the term
of any incumbent director.
Directors need not be stockholders of the Corporation.
In any election of directors, the persons receiving a
plurality of the votes case, up to the number of directors to
be elected in such election, shall be deemed elected.
Section 3. Notification of Nominations. Only persons who
are nominated in accordance with the following procedures
shall be eligible for election as directors of the
Corporation, except as may be otherwise provided in the
Certificate of Incorporation of the Corporation with respect
to the right of holders of preferred stock of the Corporation
to nominate and elect a specified number of directors in
certain circumstances. Nominations of persons for election to
the Board of Directors may be made at any annual meeting of
stockholders (a) by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (b) by
any stockholder of the Corporation (i) who is a stockholder of
record on the date of the giving of the notice provided for in
this Section 3 and on the record date for the determination of
stockholders entitled to vote at such annual meeting and (ii)
who complies with the notice procedures set forth in this
Section 3.
In addition to any other applicable requirements, for a
nomination to be made by a stockholder, such stockholder must
have given timely notice thereof in proper written form to the
Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must
be delivered to or mailed and received at the principal
executive offices of the Corporation not less than sixty (60)
days nor more than ninety (90) days prior to the anniversary
date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the
annual meeting is called for a date that is not within sixty
(60) days before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not
later than the close of business on the tenth (10th) day
following the date on which such notice of the date of the
annual meeting was mailed or such public disclosure of the
date of annual meeting was made, whichever first occurs.
To be in proper written form, a stockholder's notice to
the Secretary must set forth (a) as to each person whom the
stockholder proposes to nominate for 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 or series and number of shares of
capital stock of the Corporation which are owned beneficially
or of record by the person, and (iv) any other information
relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address
of such stockholder, (ii) the class or series and number of
shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, (iii) a
description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the
nomination(s) are to be made by such stockholder, (iv) a
representation that such stockholder intends to appear in
person or by proxy at the annual meeting to nominate the
persons named in its notice, and (v) any other information
relating to such stockholder that would be required to be
disclosed in a proxy statement or other filings required to
be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Exchange
Act and the rules and regulations promulgated thereunder.
Such notice must be accompanied by a written consent of each
proposed nominee to be named as a nominee and to serve as a
director if elected.
No person shall be eligible for election as a director of
the Corporation unless nominated in accordance with the
procedures set forth in this Section 3 at an annual meeting,
or unless elected by written consent of shareholders pursuant
to the procedures set forth in Article VII, Section 6. If the
Chairman of the annual meeting determines that a nomination
was not made in accordance with the foregoing procedures, the
Chairman shall declare to the meeting that the nomination was
defective and such defective nomination shall be disregarded.
Section 4. Quorum and Manner of Acting. Except as
otherwise provided by these By-laws, a majority of the entire
Board of Directors shall constitute a quorum for the
transaction of business at any meeting of the Board, and,
except as so provided, the vote 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, a majority
of the directors present may adjourn the meeting to another
time and place, without notice other than announcement at the
meeting. 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.
Section 5. Place of Meeting. The Board of Directors may
hold its meetings at such place or places within or without
the State of Delaware as the Board may from time to time
determine or as shall be specified or fixed in the respective
notices or waivers or notice thereof.
Section 6. Regular Meetings. Regular meetings of the
Board of Directors shall be held at such times and places as
the Board shall from time to time by resolution determine. If
any day fixed for a regular meeting shall be a legal holiday
under the laws of the place where the meeting is to be held,
the meeting which would otherwise to be held on that day shall
be held at the same hour on the next succeeding business day.
Section 7. Special Meetings. Special meetings of the
Board of Directors shall be held whenever called by the
Chairman of the Board or by a majority of the directors.
Section 8. Notice of Meetings. Notice of regular
meetings of the Board of Directors or of any adjourned meeting
thereof need not be given. Notice of each special meeting of
the Board shall be mailed to each directors, addressed to such
director at such director's residence or usual place of
business, at least two days before the day on which the
meeting is to be held or shall be sent to such director at
such place by telegraph or be given personally or by
telephone, not later than the day before the meeting is to be
held, but notice need not be given to any director who shall,
either before or after the meeting, submit a signed waiver of
such notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of
notice to such director. Every such notice shall state the
time and place but need not state the purpose of the meeting.
Section 9. Rules and Regulations. The Board of Directors
may adopt such rules and regulations not inconsistent with the
provisions of these By-laws for the conduct of its meetings
and management of the affairs of the Corporation as the Board
may deem proper. In the absence of the Chairman of the Board,
such person as may be designated by the Board of Directors
shall preside at meetings of the Board.
Section 10. Participation in Meetings by Means of
Communications Equipment. Any one or more members of the
Board of Directors or any committee thereof may participate in
any meeting of the Board or of any such 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 such participation in a meeting shall
constitute presence in person at such meeting.
Section 11. Action Without Meeting. Any action required
or permitted to be taken at any meeting of the Board of
Directors or any committee thereof may be taken without a
meeting if all of the members of the Board or of any such
committee consent thereto in writing and the writing or
writings are filed without the minutes of proceedings of the
Board or of such committee.
Section 12. Resignations. Any director of the
Corporation may at any time resign by giving written notice to
the Board of Directors, the Chairman of the Board, the
President or the Secretary of the Corporation. Such
resignation shall take effect at the time specified therein
or, if the time be not specified, upon receipt thereof, and,
unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective. If
the resignation of a director is effective at a future time,
the Board of Directors may elect a successor prior to such
effective time to take office when such resignation becomes
effective.
Section 13. Removal of Directors. Subject to the terms
of any Preferred Stock Designation, any director may be
removed at any time for cause or without cause by vote of the
holders of a majority in voting interest of shares then
entitled to vote in the election of directors. Any director
may also be removed at any time for cause by vote of a
majority of the entire Board of Directors. The vacancy in the
Board caused by any such removal may be filled by the
stockholders or as provided in Section 14 of Article III of
these By-laws.
Section 14. Vacancies. Except as otherwise provided by
the terms of any Preferred Stock Designation or any other
securities of the Corporation, newly created directorships
resulting from any increase in the number of directors may be
filled by the affirmative vote of a majority of the Board of
Directors then in office, provided that a quorum of the Board
of Directors is present, and any vacancies on the Board of
Directors resulting from death, resignation, removal or other
cause shall only be filled 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, or by a
sole remaining directors, or by the stockholders in accordance
with Section 13 of this Article III or at a meeting called for
that purpose in accordance with Section 3 of Article II of
these By-laws. The director elected to fill a vacancy shall
hold office for the unexpired term in respect of which such
vacancy occurred and until his successor shall be elected and
shall qualify or until his earlier death or resignation or
removal in the manner provided herein.
Section 15. Compensation. Each director who shall not at
the time also be a salaried officer or employee of the
Corporation or any of its subsidiaries (hereinafter referred
to as an "outside director"), in consideration of such person
serving as a director, shall be entitled to receive from the
Corporation such amount per annum and such fees for attendance
at meetings of the Board of Directors or of committees of the
Board, or both, as the Board shall from time to time
determine. In addition, each director, whether or not an
outside director, shall be entitled to receive from the
Corporation reimbursement for the reasonable expenses incurred
by such person in connection with the performance of such
person's duties as a director. Nothing contained in this
Section shall preclude any director from serving the
Corporation or any of its subsidiaries in any other capacity
and receiving proper compensation therefor.
ARTICLE IV
Executive and Other Committees
Section 1. Executive Committee. The Board of Directors
may, by resolution adopted by a majority of the entire Board,
designate annually three or more of its members to constitute
members or alternate members of an Executive Committee. The
Board of Directors may designate one or more directors as
alternate members of the Executive Committee, who may replace
any absent or disqualified member at any meeting of such
committee. In the absence or disqualification of a member of
the Executive Committee, and in the absence of a designation
by the Board of Directors of an alternate member to replace
the absent or disqualified member, the member or members
thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors
to act at the meeting in the place of any absent or
disqualified member. The Executive Committee shall have and
may exercise, between meetings of the Board, all the powers
and authority of the Board in the management of the business
and affairs of the Corporation, including, if such Committee
is so empowered and authorized by resolution adopted by a
majority of the entire Board, the power and authority to
declare a dividend, to authorize the issuance of stock, to
adopt a certificate of ownership and merger pursuant to
Section 253 of the General Corporation Law of the State of
Delaware and may authorize the seal of the Corporation to be
affixed to all papers which may require it, except that the
Executive Committee shall not have such power or authority in
reference to:
(a) amending the Restated Certificate of Incorporation of
the Corporation;
(b) adopting an agreement of merger or consolidation under
Sections 251 or 252 of the General Corporation Law of
the State of Delaware involving the Corporation;
(c) recommending to the stockholders the sale, lease or
exchange of all or substantially all of the property
and assets of the Corporation;
(d) recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution;
(e) adopting, amending or repealing any By-law;
(f) filling vacancies on the Board or on any committee of
the Board, including the Executive Committee; or
(g) amending or repealing any resolution of the Board which
by its terms may be amended or repealed only by the
Board.
The Board shall have power at any time to change the
membership of the Executive Committee, to fill all vacancies
in it and to discharge it, either with or without cause.
Section 2. Other Committees. The Board of Directors may,
by resolution adopted by a majority of the entire Board,
designate one or more other committees, each committee to
consist of one or more of the members of this Board and each
of which committee shall have such authority of the Board as
may be specified in the resolution of the Board designating
such committee. A majority of all the members of such
committee may determine its action and fix the time and place
of its meetings, unless the Board shall otherwise provide.
The Board shall have power at any time to change the
membership of, to fill all vacancies in and to discharge any
such committee, either with or without cause.
Section 3. Procedure; Meetings, Quorum. Regular meetings
of the Executive Committee or any other committee of the Board
of Directors, of which no notice shall be necessary, may be
held at such times and places as shall be fixed by resolution
adopted by a majority of the members thereof. Special
meetings of the Executive Committee or any other committee of
the Board shall be called at the request of any member
thereof. Notice of each special meeting of the Executive
Committee or any other committee of the Board shall be sent by
mail, telegraph or telephone, or be delivered personally to
each member thereof not later than the day before the day on
which the meeting is to be held, but notice need not be given
to any member who shall, either before or after the meeting,
submit a signed waiver of such notice or who shall attend such
meeting without protesting, prior to or at its commencement,
the lack of such notice to such member. Any special meeting of
the Executive Committee or any other committee of the Board
shall be a legal meeting without any notice thereof having
been given, if all the members thereof shall be present
thereat. Notice of any adjourned meeting of any committee of
the Board need not be given. The Executive Committee or any
other Committee of the Board may adopt such rules and
regulations not inconsistent with the provisions of law, the
Restated Certificate of Incorporation of the Corporation or
these By-laws for the conduct of its meetings as the Executive
Committee or such other committee of the Board may deem
proper. A majority of the Executive Committee or any other
committee of the Board shall constitute a quorum for the
transaction of business at any meeting, and the vote of a
majority of the members thereof present at any meeting at
which a quorum is present shall be the act of such committee.
The Executive Committee or any other committee of the Board of
Directors shall keep written minutes of its proceedings and
shall report on such proceedings to the Board.
ARTICLE V
Officers
Section 1. Number; Term of Office. The officers of the
Corporation shall be a Chairman of the Board, a President, one
or more Vice-Presidents, one or more of whom may be designated
as Executive, Group or Senior Vice-Presidents, a Treasurer, a
Secretary, a Controller, and such other officers or agents
with such titles and such duties as the Board of Directors may
from time to time determine, each to have such authority,
functions or duties as in these By-laws provided or as the
Board may from time to time determine, and each to hold office
for such term as may be prescribed by the Board and until such
person's successor shall have been chosen and shall quality,
or until such person's death or resignation, or until such
person's removal in the manner hereinafter provided. The
Chairman of the Board shall be elected from among the
directors. One person may hold the offices and perform the
duties of any two or more of said officers; provided, however,
that no officer shall execute, acknowledge or verify any
instrument in more than one capacity if such instrument is
required by law, the Restated Certificate of Incorporation of
the Corporation or these By-laws to be executed, acknowledged
or verified by two or more officers. The Board may from time
to time authorize any officer to appoint and remove any such
other officers and agents and to prescribe their powers and
duties.
Section 2. Removal. Any officer may be removed, either
with or without cause, by the Board of Directors at any
meeting thereof called for the purpose, or, except in the case
of any officer elected by the Board, by any committee or
superior officer upon whom such power may be conferred by the
Board.
Section 3. Resignation. Any officer may resign at any
time by giving written notice to the Board of Directors, the
Chairman of the Board, the President or the Secretary of the
Corporation. Such resignation shall take effect at the time
specified therein or, if the time is not specified, upon
receipt thereof; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make
it effective.
Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal or any other cause may be filled
for the unexpired portion of the term in the manner prescribed
in these By-laws for election to such office.
Section 5. Chairman of the Board. The Chairman of the
Board shall be the chief executive officer of the Corporation
and as such shall have general supervision and direction of
the business and affairs of the Corporation, subject to the
control of the Board of Directors. The Chairman of the Board
shall, if present, preside at meetings of the Board of
Directors and, if present, preside at meetings of the
stockholders.
Section 6. The President. The President, if any, shall
be the chief operating officer of the Corporation. The
President shall perform such other duties as the Board may
from time to time determine.
Section 7. Vice-Presidents. Each Vice-President shall
have such powers and duties as shall be prescribed by the
Chairman of the Board or the Board of Directors.
Section 8. Treasurer. The Treasurer shall perform all
duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to the Treasurer
by the Chairman of the Board or the Board of Directors.
Section 9. Secretary. The Secretary shall see that all
notices required to be given by the Corporation are duly given
and served; the Secretary shall be custodian of the seal of
the Corporation and shall affix the seal or cause it to be
affixed to all certificates of stock of the Corporation
(unless the seal of the Corporation on such certificates shall
be a facsimile, as hereinafter provided) and to all documents,
the execution of which on behalf of the Corporation under its
seal is duly authorized in accordance with the provisions of
these By-laws. The Secretary shall have charge of the stock
ledger and also of the other books, records and papers of the
Corporation and shall see that the reports, statements and
other documents required by law are properly kept and filed;
and shall in general perform all the duties incident to the
office of Secretary and such other duties as from time to time
may be assigned to such person by the Chairman of the Board or
the Board of Directors.
Section 10. Controller. The Controller shall perform all
of the duties incident to the office of the Controller and
such other duties as may from time to time be assigned to such
person by the Chairman of the Board or the Board of Directors.
Section 11. Assistant Treasurers, Secretaries and
Controllers. The Assistant Treasurers, the Assistant
Secretaries and the Assistant Controllers shall perform such
duties as shall be assigned to them by the Treasurer,
Secretary or Controller, respectively, or by the Chairman of
the Board or the Board of Directors.
ARTICLE VI
Indemnification of Directors, Officers,
Employees and Agents
Section 1. Third Party Actions. The Corporation shall
indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in
the right of the Corporation) by reason of the fact that such
person is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by
such person in connection with such action, suit or proceeding
if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to
believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which
such person reasonably believed to be in or not opposed to the
best interests of the Corporation, and, with respect to any
criminal action or proceeding, that such person had reasonable
cause to believe that his or her conduct was unlawful.
Section 2. Derivative Actions. The Corporation shall
indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action
or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person
is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or
other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit if such
person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best
interests of the Corporation, except that no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of such person's
duty to the Corporation unless and only to the extent that the
Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the
Court of Chancery of Delaware or such other court shall deem
proper.
Section 3. Determination of Indemnification. Any
indemnification under Section 1 or 2 of the Article VI (unless
ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is
proper in the circumstances because such person has met the
applicable standard of conduct set forth in Section 1 or 2 of
this Article VI. Such determination shall be made (i) by the
Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or
proceeding, or (ii) if such a quorum is not obtainable, or,
even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or
(iii) by the stockholders.
Section 4. Right to Indemnification. Notwithstanding the
other provisions of this Article VI, to the extent that a
director, officer, employee or agent of the Corporation has
been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in Section 1 or 2 of
this Article VI, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred
by such person in connection therewith.
Section 5. Advance of Expenses. Expenses incurred in
defending or investigating a threatened or pending civil or
criminal action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to
repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the
Corporation as authorized in this Article VI.
Section 6. Indemnification by a Court. Notwithstanding
any contrary determination in the specific case under Section
3 of this Article VI, and notwithstanding the absence of any
determination thereunder, any director, officer, employee or
agent may apply to any court of competent jurisdiction in the
State of Delaware for indemnification to the extent otherwise
permissible under Sections 1 and 2 of this Article VI. The
basis of such indemnification by a court shall be a
determination by such court that indemnification of the
director, officer, employee or agent is proper in the
circumstances because he has met the applicable standards of
conduct set forth in Section 1 or 2 of this Article VI, as the
case may be. Notice of any application for indemnification
pursuant to this Section 6 shall be given to the Corporation
promptly upon the filing of such application.
Section 7. Indemnification Not Exclusive. The
indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VI shall not be deemed
exclusive of any other rights to which any person seeking
indemnification or advancement of expenses may be entitled
under any law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in
such person's official capacity and as to action in another
capacity while holding such office. The provisions of this
Article VI shall not be deemed to preclude the indemnification
of any person who is not specified in Sections 1 or 2 of this
Article VI but whom the Corporation has the power or
obligation to indemnify under the provisions of the General
Corporation Law of the State of Delaware, or otherwise.
Section 8. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against
any liability asserted against such person and incurred by
such person in any such capacity, or arising out of such
person's status as such, whether or not the Corporation would
have the power to indemnify such person against such liability
under the provisions of this Article VI.
Section 9. Indemnification To Continue. The
indemnification and advancement of expenses provided by, or
granted pursuant to, this Article VI shall, unless otherwise
provided when authorized or ratified, continue as to a person
who has ceased to be a director, officer, employee or agent
and shall inure to the benefit of the heirs, executors and
administrators of such person.
Section 10. Definitions of Certain Terms. For purposes
of this Article VI, references to "the Corporation" shall
include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if
its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or another enterprise, shall
stand in the same position under the provisions of this
Article VI with respect to the resulting or surviving
corporation as such person would have with respect to such
constituent corporation if its separate existence had
continued.
For purposes of this Article VI, references to "other
enterprises" shall include employee benefit plans; references
to "fines" shall include any excise taxes assessed on a person
with a respect to an employee benefit plan; references to
"serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the
Corporation which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an
employee benefit plan, its participants, or beneficiaries; and
a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants
and beneficiaries of any employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests
of the Corporation" as referred to in this Article VI.
ARTICLE VII
Capital Stock
Section 1. Certificates for Shares. Certificates
representing shares of stock of each class of the Corporation,
whenever authorized by the Board of Directors, shall be in
such form as shall be approved by the Board. The certificates
representing shares of stock of each class shall be signed by,
or in the name of, the Corporation by the Chairman of the
Board, the President or a Vice-President and by the Secretary
or an Assistant Secretary or the Treasurer or an Assistant
Treasurer of the Corporation, and sealed with the seal of the
Corporation, which may be a facsimile thereof. Any or all
such signatures may be facsimiles if countersigned by a
transfer agent or registrar. Although any officer, transfer
agent or registrar whose manual or facsimile signature is
affixed to such a certificate ceases to be such officer,
transfer agent or registrar before such certificate has been
issued, it may nevertheless be issued by the Corporation with
the same effect as if such officer, transfer agent or
registrar were still such at the date of its issue.
The stock ledger and blank share certificates shall be
kept by the Secretary or by a transfer agent or by a registrar
or by any other officer or agent designated by the Board.
Section 2. Transfer of Shares. Transfers of shares of
stock of each class of the Corporation shall be made only on
the books of the Corporation by the holder thereof, or by such
holder's attorney thereunto authorized by a power of attorney
duly executed and filed with the Secretary of the Corporation
or a transfer agent for such stock, if any, and on 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. The person in
whose name shares stand on the books of the Corporation shall
be deemed the owner thereof for all purposes as regards the
Corporation; provided, however, that whenever any transfer of
shares shall be made for collateral security and not
absolutely, and written notice thereof shall be given to the
Secretary or to such transfer agent, such fact shall be stated
in the entry of the transfer. No transfer of shares shall be
valid as against the Corporation, its stockholders and
creditors for any purpose, except to render the transferee
liable for the debts of the Corporation to the extent provided
by law, until it shall have been entered in the stock records
of the Corporation by an entry showing from and to whom
transferred.
Section 3. Addresses of Stockholders. Each stockholder
shall designate to the Secretary or transfer agent of the
Corporation an address at which notices of meetings and all
other corporate notices may be served or mailed to such
person, and, if any stockholder shall fail to designate such
address, corporate notices may be served upon such person by
mail directed to such person at such person's post office
address, if any, as the same appears on the share record books
of the Corporation or at such person's last known post office
address.
Section 4. Lost, Destroyed and Mutilated Certificates.
The holder of any share of stock of the Corporation shall
immediately notify the Corporation of any loss, theft,
destruction or mutilation of the certificate therefor; the
Corporation may issue to such holder a new certificate or
certificates for shares, upon the surrender of the mutilated
certificate or, in the case of loss, theft or destruction of
the certificate, upon satisfactory proof of such loss, theft
or destruction; the Board of Directors, or a committee
designated thereby, or the transfer agents and registrars for
the stock, may, in their discretion, require the owner of the
lost, stolen or destroyed certificates, or such person's legal
representative, to give the Corporation a bond in such sum and
with such surety or sureties as they may direct to indemnify
the Corporation and said transfer agents and registrars
against any claim that may be made on account of the alleged
loss, theft or destruction of any such certificate the
issuance of such new certificate.
Section 5. Regulations. The Board of Directors may make
such additional rules and regulations as it may deem expedient
concerning the issue and transfer of certificates representing
shares of stock of each class of the Corporation and may make
such rules and take such action as it may deem expedient
concerning the issue of certificates in lieu of certificates
claimed to have been lost, destroyed, stolen or mutilated.
Section 6. Fixing Date for Determination of Stockholders
of Record. In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or entitled to
receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for
the purpose of any other lawful purpose, except to express
consent to corporate action in writing without a meeting, the
board of directors may fix, in advance, a record date, which
shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date
for the adjourned meeting.
In order that the corporation may determine that
stockholders are entitled to consent to corporate action in
writing without a meeting, the board of directors may fix a
record date, which record date shall not precede the date upon
which the resolution fixing the record date is adopted by the
board of directors, and which date shall not be more than ten
days after the date upon 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
promptly, but in all events within ten 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 ten 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 any officer or agent of
the corporation having custody of the book in which
proceedings of stockholders meetings are recorded, to the
attention of the secretary of the corporation. Delivery 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.
In the event of the delivery to the corporation of a
written consent or consents purporting to authorize or take
corporate action and/or related revocations (each such written
consent or related revocation is referred to in this section
as a "Consent"), the secretary of the corporation shall
provide for safekeeping of such Consent and shall immediately
appoint duly qualified and independent inspectors to (i)
conduct promptly such reasonable ministerial review as such
inspectors deem necessary or appropriate for the purpose of
ascertaining the sufficiency and validity of such Consent and
all matters incident thereto, including, without limitation,
whether holders of shares having the requisite voting power to
authorize or take the action specified in the Consent have
given consent, and (ii) deliver to the secretary a written
report regarding the foregoing. If after such investigation
and report the secretary shall determine that the Consent is
valid, that fact shall be certified on the records of the
corporation kept for the purpose of recording the proceedings
of meetings of stockholders, and the Consent shall be filed in
such records, at which time the Consent shall become effective
as stockholder action.
ARTICLE VIII
Seal
The Board of Directors shall provide a corporate seal,
which shall be in the form of a circle and shall bear the full
name of the Corporation and such other words or figures as the
Board of Directors may approve and adopt. The seal may be
used by causing it or a facsimile thereof to be impressed or
affixed or in any other manner reproduced.
ARTICLE IX
Fiscal Year
The fiscal year of the Corporation shall end on the last
Saturday in December each year.
ARTICLE X
Waiver of Notice
Whenever any notice whatsoever is required to be given by
these By-laws, by the Restated Certificate of Incorporation of
the Corporation or by law, the person entitled thereto may,
either before or after the meeting or other matter in respect
of which such notice is to be given, waive such notice in
writing, which writing shall be filed with or entered upon the
records of the meeting or the records kept with respect to
such other matter, as the case may be, and in such event such
notice need not be given to such person and such waiver shall
be deemed equivalent to such notice.
ARTICLE XI
Form of By-law For
Amendment of By-laws
Section 1. Amendments. These By-laws may be altered,
amended or repealed, in whole or in part, or new By-laws may
be adopted by the stockholders or by the Board of Directors,
provided, however, that notice of such alteration, amendment,
repeal or adoption of new By-laws be contained in the notice
of such meeting of stockholders or Board of Directors, as the
case may be. All such amendments must be approved by either
the holders of a majority of the outstanding capital stock
entitled to vote thereon or by a majority of the entire Board
of Directors then in office.
Section 2. Entire Board of Directors. As used in this
Article XI and in these By-laws generally, the term "entire
Board of Directors" means the total number of directors (as
determined from time to time by the Board of Directors in
accordance with Section 2 of Article III of these By-laws)
which the Corporation would have if there were no vacancies.
ARTICLE XII
Miscellaneous
Section 1. Execution of Documents. The Board of
Directors or any committee thereof shall designate the
officers, employees and agents of the Corporation who shall
have power to execute and deliver deeds, contracts, mortgages,
bonds, debentures, notes, checks, drafts and other orders for
the payment of money and other documents for and in the name
of the Corporation and may authorize such officers, employees
and agents to delegate such power (including authority to
redelegate) by written instrument to other officers, employees
or agents of the Corporation. Such delegation may be by
resolution or otherwise and the authority granted shall be
general or confined to specific matters, all as the Board or
any such committee may determine. In the absence of such
designation referred to in the first sentence of this Section,
the officers of the Corporation shall have such power so
referred to, to the extent incident to the normal performance
of their duties.
Section 2. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the
credit of the Corporation or otherwise as the Board of
Directors or any committee thereof or any officer of the
Corporation to whom power in that respect shall have been
delegated by the Board or any such committee shall select.
Section 3. Checks. All checks, drafts and other orders
for the payment of money out of the funds of the Corporation,
and all notes or other evidences of indebtedness of the
Corporation, shall be signed on behalf of the Corporation in
such manner as shall from time to time be determined by
resolution of the Board of Directors or of any committee
thereof.
Section 4. Proxies in Respect of Stock or Other
Securities of Other Corporations. The Board of Directors or
any committee thereof shall designate the officers of the
Corporation who shall have authority from time to time to
appoint an agent or agents of the Corporation to exercise in
the name and on behalf of the Corporation the powers and
rights which the Corporation may have as the holder of stock
or other securities in any other corporation, and to vote or
consent in respect of such stock or securities; such
designated officers may instruct the person or persons so
appointed as to the manner of exercising such powers and
rights; and such designated officers may execute or cause to
be executed in the name and on behalf of the Corporation and
under its corporate seal, or otherwise, such written proxies,
powers of attorney or other instruments as they may deem
necessary or proper in order that the Corporation may exercise
its said powers and rights; provided, however, that in the
absence of any such designation, the Chairman of the Board
shall exercise the rights of the Corporation hereunder.
Section 5. By-laws Subject to Law and Restated
Certificate of Incorporation of the Corporation. Each
provision of these By-laws is subject to any contrary
provision of the Restated Certificate of Incorporation of the
Corporation or of any applicable law as from time to time in
effect, and to the extent any such provision is inconsistent
therewith, such provision shall be superseded thereby for as
long as and to the extent which it is inconsistent, but for
all other purposes of these By-laws shall continue in full
force and effect.
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