SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED JUNE 30, 1995
COMMISSION FILE NO. 1-3920
KINARK CORPORATION
(Exact name of the registrant as specified in its charter)
DELAWARE 71-0268502
(State of Incorporation) (I.R.S. Employer Identification No.)
7060 SOUTH YALE
TULSA, OKLAHOMA 74136
(Address of principal executive offices)
Registrant's telephone number: (918) 494-0964
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 and 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES x NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of June 30, 1995.
Common Stock $ .10 Par Value . . . . . 3,747,498<PAGE>
KINARK CORPORATION AND SUBSIDIARIES
INDEX TO QUARTERLY REPORT ON FORM 10-Q
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Independent Accountants' Report 2
Condensed Consolidated Balance Sheets as
of June 30, 1995 (unaudited), and
December 31, 1994 3
Condensed Consolidated Statements of
Operations for the three and six months
ended June 30, 1995 and 1994 (unaudited) 4
Condensed Consolidated Statements of
Cash Flows for the six months ended
June 30, 1995 and 1994 (unaudited) 5
Notes to Condensed Consolidated Financial
Statements for the three and six months
ended June 30, 1995 and 1994 (unaudited) 6-7
Item 2. Managements' Discussion and Analysis of
Financial Condition and Results of
Operations 8-11
PART II. OTHER INFORMATION 12-13
SIGNATURES 14
<PAGE>
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Shareholders of
Kinark Corporation:
We have reviewed the accompanying condensed consolidated balance sheet of
Kinark Corporation and subsidiaries as of June 30, 1995 and the related
condensed consolidated statements of operations for the three and six-month
periods ended June 30, 1995 and 1994 and the condensed consolidated cash flow
statements for the six months ending June 30, 1995 and 1994. These financial
statements are the responsibility of the Corporation's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and of making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Kinark Corporation and
subsidiaries as of December 31, 1994, and the related consolidated statements
of operations, shareholders' equity, and cash flows for the year then ended
(not presented herein); and in our report dated January 30, 1995 (except as to
the second paragraph of the Long-Term Debt Footnote, for which the date is
March 2, 1995), we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of December 31, 1994 is
fairly stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.
Deloitte & Touche
July 27, 1995
Tulsa, Oklahoma<PAGE>
KINARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30 DEC 31
(Dollars in Thousands) 1995 1994
ASSETS Unaudited
CURRENT ASSETS
Cash $ 37 $ 32
Accounts receivable, less allowances 5,016 3,847
Inventories 3,030 3,301
Prepaid expenses 478 482
TOTAL CURRENT ASSETS 8,561 7,662
DEFERRED INCOME TAXES 1,803 1,356
OTHER ASSETS 769 740
PROPERTY, PLANT AND EQUIPMENT, AT COST 36,387 36,167
Less: Allowance for depreciation 25,622 24,971
TOTAL PROPERTY, PLANT & EQUIPMENT, NET 10,765 11,196
TOTAL ASSETS $21,898 $20,954
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 1,536 $ 1,722
Other accrued liabilities 2,807 2,415
Current portion of long-term obligations 801 764
TOTAL CURRENT LIABILITIES 5,144 4,901
LONG-TERM OBLIGATIONS 7,454 6,009
SHAREHOLDERS' EQUITY
Common stock 520 520
Additional paid-in capital 10,531 10,535
Retained earnings 4,226 4,969
Less: Treasury stock at cost (5,977) (5,980)
TOTAL SHAREHOLDERS' EQUITY 9,300 10,044
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $21,898 $20,954
See notes to condensed consolidated financial statements.<PAGE>
KINARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
Three Months Ended Six Months Ended
June 30 June 30
(Dollars in Thousands Except 1995 1994 1995 1994
per Share Amounts)
SALES $9,275 $8,786 $17,029 $17,820
COSTS AND EXPENSES
Cost of sales 6,811 5,890 12,716 11,883
Selling, general & administrative 2,206 1,885 4,183 3,603
Depreciation 482 436 946 876
TOTAL COSTS AND EXPENSES 9,499 8,211 17,845 16,362
OPERATING EARNINGS (224) 575 (816) 1,458
OTHER EXPENSE
Interest expense 188 130 355 282
EARNINGS (LOSS) BEFORE INCOME TAXES (412) 445 (1,171) 1,176
INCOME TAX (EXPENSE) BENEFIT 150 (162) (427) (429)
NET EARNINGS (LOSS) $ (262) $ 283 $ (744) $ 747
NET EARNINGS (LOSS) PER COMMON SHARE $(0.07) $ 0.08 $ (0.20) $ 0.20
See notes to condensed consolidated financial statements.<PAGE>
KINARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
Six Months Ended
June 30
(Dollars in Thousands) 1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES
Net Earnings (Loss) $ (744) $ 747
Adjustments to reconcile net earnings (loss) to net
cash provided by operating activities:
Depreciation 946 876
Change in assets and liabilities:
Accounts receivable (1,169) (752)
Deferred tax asset (447) 417
Inventories and other 245 (495)
Accounts payable and other accrued liabilities 206 905
NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (963) 1,698
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (514) (813)
Discontinued operations 0 (40)
NET CASH USED FOR INVESTING ACTIVITIES (514) (853)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term obligations 7,885 5,670
Payments on long-term obligations (6,403) (6,630)
NET CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES 1,482 (960)
INCREASE (DECREASE) IN CASH 5 (115)
CASH AT BEGINNING OF PERIOD 32 186
CASH AT END OF PERIOD $ 37 $ 71
See notes to condensed consolidated financial statements.<PAGE>
KINARK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1995 AND 1994
UNAUDITED
NOTE 1. BASIS OF PRESENTATION
The condensed consolidated financial statements included in this
report have been prepared by Kinark Corporation (the Company)
pursuant to the rules and regulations of the Securities and Exchange
Commission for interim reporting and include all normal and recurring
adjustments which are, in the opinion of management, necessary for a
fair presentation. These financial statements have not been audited
by an independent accountant. The condensed consolidated financial
statements include the accounts of the Company and its subsidiaries.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations for interim reporting. The Company believes
that the disclosures are adequate to make the information presented
not misleading. However, these financial statements should be read
in conjunction with the financial statements and notes thereto
included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994. The financial data for the interim periods
presented may not necessarily reflect the results to be anticipated
for the complete year.
NOTE 2. EARNINGS PER COMMON SHARE
Net earnings (loss) per common share for the periods presented has
been computed based upon the weighted average number of shares
outstanding of 3,747,115 and 3,755,179 for the three months ended
June 30, 1995 and 1994 respectively, and 3,746,765 and 3,753,833 for
the six months ended June 30, 1995 and 1994 respectively, including
the effect of stock options, when applicable, using the treasury
method.
NOTE 3. INVENTORIES
Inventories consist primarily of zinc, the principal raw material
used in galvanizing. Inventories consist of $2,743,000 raw
materials, $287,000 finished goods and $2,820,000 raw materials,
$481,000 finished goods at June 30, 1995 and December 31, 1994
respectively.
NOTE 4. PLANNED ACQUISITION
The Company has previously announced an agreement providing for the
acquisition of Rogers Galvanizing Company in Tulsa. On August 3, the
Company announced financing plans to complete the purchase of Rogers
and provide for other general corporate purposes. These plans
include subordinated debt provided by the Company's chairman, other
bank financing to be arranged and a Rights Offering of Common Stock
to the Company's stockholders which would raise up to $10 million.
The Company expects these financial arrangements to be completed
before the end of 1995.<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
SECOND QUARTER ANALYSIS
REVENUES
Quarter Ended 1995 1994
June 30 % of % of
$(000) Sales $(000) Sales
Boyles Galvanizing $4,536 48.9% $3,713 42.2%
Lake River Corporation 2,160 23.3% 2,905 33.1%
Kinpak, Inc. 2,579 27.8% 2,168 24.7%
Total $9,275 100.0% $8,786 100.0%
Consolidated sales for the second quarter of 1995 increased $489,000, or
5.6%, in comparison to the second quarter of 1994. Sales increased at the
Company's Boyles and Kinpak subsidiaries, but declined at Lake River. The
largest sales growth occurred at Boyles where sales were up $823,000, or 22.2%,
on improved volume. Galvanizing throughput totaled 18,988 tons, up 25.6% from
the prior year's second quarter. The volume increase at Boyles during the
second quarter was partially offset by a 2.7% reduction in average selling
price. Though unchanged from the first quarter of 1995, pricing was down
compared to the second quarter of 1994 as the Company continued to experience
declining prices in several markets. Boyles has succeeded in gaining market
share with its aggressive pricing approach and should continue to operate at an
increased volume in comparison to 1994 for the remainder of the year.
Increased sales at Kinpak during the second quarter also contributed to
the Company's sales growth. Sales at this subsidiary were up $411,000, or
19.0%, on improved revenues in each product line. Antifreeze sales increased
27% due primarily to price increases reflecting higher packaging costs.
Windshield washer fluid sales rose 30% also reflecting a higher selling price
in comparison to 1994. Household cleaning product sales were up 12% on
stronger volume for the quarter. The Company outsourced the demonstration
sales function during the second quarter and realized a slight increase in
volume as a result of this transition. At the conclusion of the quarter,
Kinpak's primary customer in this product line made the decision to discontinue
the use of vendor supported demonstrations. Kinpak will utilize the customer's
demonstration staff on a limited basis in an effort to maintain sales volume,
however the Company anticipates a significant reduction in household cleaning
product sales volume during the remainder of the year.
Second quarter sales at Lake River declined $745,000, or 25.6%, from 1994
due to the previously announced loss of this subsidiary's largest customer
during the fourth quarter of 1994. Though down in comparison to the prior
year, sales at Lake River were up 8.5% from the first quarter of 1995 with
revenues up in each of Lake River's areas of operation. The Company expects
this trend to continue with sales down in comparison to the prior year over the
balance of the year.
Six Months Ended 1995 1994
June 30 % of % of
$(000) Sales $(000) Sales
Boyles Galvanizing $8,619 50.6% $7,682 43.1%
Lake River Corporation 4,151 24.4% 5,655 31.7%
Kinpak, Inc. 4,259 25.0% 4,483 25.2%
Total $17,029 100.0% $17,820 100.0%
Through the first half of the year, sales on a consolidated basis declined
$791,000, or 4.4%, from 1994 on sales declines at Lake River and Kinpak which
were partially offset by improved sales at Boyles. Sales were down at Lake
River due to the customer loss discussed above. Kinpak sales declined slightly
on lower windshield washer fluid volume in the first quarter attributable to
reduced distribution of this product. Boyles sales were up $937,000, or 12.2%,
on much stronger volume during the first half of the year.
COSTS AND EXPENSES
Quarter Ended 1995 1994
June 30 % of % of
$(000) Sales $(000) Sales
Cost of sales $6,811 73.4% $5,890 67.0%
Selling, general &
administrative 2,206 23.8% 1,885 21.5%
Depreciation 482 5.2% 436 5.0%
Total $9,499 102.4% $8,211 93.5%
As a percentage of sales, cost of sales increased 6.4% during the second
quarter of 1995 in comparison to 1994. This increase was primarily
attributable to Lake River where reduced sales coupled with significant fixed
costs associated with this subsidiary's terminal operations resulted in a 19%
erosion in gross profit. Boyles' cost of sales percentage increased 6% due to
the reduced average selling price and increased material cost. At Kinpak, cost
of sales as a percentage of sales declined 6% because of higher antifreeze and
windshield washer fluid pricing and increased household cleaning product sales
which have a relatively high gross profit margin. No significant change in
cost of sales percentage is anticipated during the third quarter at Boyles or
Lake River. However, should household cleaning product sales decline as
previously discussed, Kinpak's cost of sales percentage could increase in
future months.
Selling, general and administrative ("S, G & A") expenses for the second
quarter of 1995 increased $321,000 from the prior year's second quarter.
Kinpak's S, G & A expenses increased $239,000 due to increased demonstration
sales force staffing over the first two months of the quarter and the
demonstration outsourcing implementation during the final month of the quarter.
In addition, S, G & A expenses increased at Kinark's corporate office due to
legal and professional fees associated with the evaluation of certain
transactions which were not consummated. These increases in S, G & A expense
were partially offset by decreases at Lake River and Boyles. Lake River S, G &
A fell 14% as various administrative expenses were eliminated in connection
with the customer loss. During the second quarter, certain Boyles
administrative offices were consolidated to reduce staffing and lower
administrative cost. S, G & A expenses are expected to decline in future
months due to the reorganization at Boyles and the reduction in Kinpak sales
demonstration staffing.
Six Months Ended 1995 1994
June 30 % of % of
$(000) Sales $(000) Sales
Cost of sales $12,716 74.7% $11,883 66.7%
Selling, general &
administrative 4,183 24.6% 3,603 20.2%
Depreciation 946 5.5% 876 4.9%
Total $17,845 104.8% $16,362 91.8%
During the first half of 1995, the Company's cost of sales percentage
increased 8.0% compared to 1994. Lake River experienced the greatest increase
in percentage due to the decline in sales previously discussed. Boyles also
experienced increased cost of sales as a percentage of sales due to higher
material cost. Cost of sales at Kinpak on a percentage basis were essentially
unchanged from 1994 for the six month period.
S, G & A expenses increased $580,000 over the first six months of 1995 in
comparison to 1994. Increases occurred at Kinpak due to increased
demonstration sales force staffing and at the Kinark corporate office as
discussed above. These increases were partially offset by reduced S, G & A
expenses at Lake River and Boyles.
OTHER EXPENSE
Interest expense for the second quarter of 1995 was up $58,000 compared to
1994 due to the Company's increased bank debt and higher interest rate. For
the six month period, interest was up $73,000 in the current year in comparison
to 1994. Interest expense should continue to exceed 1994 levels because the
Company's negative operating cash flow has resulted in increased borrowing to
support capital needs.
INCOME TAXES
The Company recorded a net income tax benefit of $150,000 for the second
quarter of 1995 as compared to tax expense of $162,000 in 1994. This income
tax benefit resulted from the Company's pretax loss and reflects management's
view that it is more likely than not the full value of these tax benefits will
ultimately be realized based upon the Company's projected future earnings. Tax
expense includes federal income tax recorded at current rates and state income
tax provisions for various Company operations.
EARNINGS
The Company's increased cost of sales and S, G & A expenses more than
offset the increase in sales during the second quarter of 1995 resulting in a
net loss of $(262,000) or $(.07) per share, down from earnings of $283,000,
$.08 per share, in 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company's loss during the first half of 1995 resulted in a $963,000
net use of cash for operating activities. During the comparable period in
1994, net cash provided by operating activities totaled $1,698,000.
Cash used for investing activities declined to $514,000 through the second
quarter of 1995, a reduction of $339,000 from 1994. The major factor in this
reduction was lower capital expenditures. The Company continued to control
capital expenditures at reduced levels due to the reduced cash from operating
activities.
The Company utilized its credit facilities to fund the cash used by
operating and investing activities during the first six months of 1995,
resulting in cash provided by financing activities of $1,482,000. Outstanding
borrowings on the Company's $4,250,000 revolving line of credit totaled
$3,346,000 at June 30,1995. The Company has maintained adequate liquidity
despite the losses incurred during the first half of 1995 and expects some
improvement in liquidity through the second half of the year as certain
operations experience seasonal improvements in performance.
On August 3, the Company announced financing plans to complete the
purchase of Rogers Galvanizing Company and provide for other general corporate
purposes. These plans include subordinated debt provided by the Company's
chairman, other bank financing to be arranged and a Rights Offering of Common
Stock to the Company's stockholders which would raise up to $10 million. The
acquisition of Rogers is expected to be completed during the fourth quarter.
This acquisition is expected to essentially double the revenues of the
Company's galvanizing business. Consolidating these two operations should
improve Kinark's galvanizing profitability.<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1995 Annual Meeting of the Company's stockholders was held on
Wednesday, May 17, 1995. The stockholders elected six directors at
the meeting: Richard E. Baierlein, Richard C. Butler, Paul R.
Chastain, Michael T. Crimmins, Harry D. Jones and Mark E. Walker.
The votes for the election of directors were as follows:
Richard E. Baierlein 3,279,047 For
79,198 Against
Richard C. Butler 3,278,600 For
79,645 Against
Paul R. Chastain 3,279,175 For
79,070 Against
Michael T. Crimmins 3,278,950 For
79,295 Against
Harry D. Jones 3,280,050 For
78,195 Against
Mark E. Walker 3,272,830 For
85,415 Against
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
3.1 - Amended and Restated Bylaws of Kinark Corporation.
b) Reports on Form 8-K
On June 19, 1995 the Registrant filed a Form 8-K current
report concerning the March 31, 1995 amendment to Article
II, Section 1 of the Company's bylaws reducing the number
of directors from seven (7) to six (6). <PAGE>
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized:
KINARK CORPORATION
Registrant
/S/J. Bruce Lancaster
J. Bruce Lancaster
Vice President - Finance
(Principal Financial Officer)
Date: August 14, 1995<PAGE>
Exhibit Index
Page
3.1 Amended and Restated Bylaws of Kinark Corporation 15
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<ARTICLE> 5
<LEGEND>
FDS Kinark Corporation period ending 6/30/95
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 37
<SECURITIES> 0
<RECEIVABLES> 5089
<ALLOWANCES> (73)
<INVENTORY> 3030
<CURRENT-ASSETS> 8561
<PP&E> 36387
<DEPRECIATION> (25622)
<TOTAL-ASSETS> 21898
<CURRENT-LIABILITIES> 5144
<BONDS> 0
<COMMON> 520
0
0
<OTHER-SE> 8780
<TOTAL-LIABILITY-AND-EQUITY> 21898
<SALES> 17029
<TOTAL-REVENUES> 17029
<CGS> 12716
<TOTAL-COSTS> 17845
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 355
<INCOME-PRETAX> (1171)
<INCOME-TAX> (427)
<INCOME-CONTINUING> (744)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (744)
<EPS-PRIMARY> (0.20)
<EPS-DILUTED> (0.20)
</TABLE>
KINARK CORPORATION AMENDED AND RESTATED BYLAWS
March 31, 1995<PAGE>
AMENDED AND RESTATED BYLAWS
OF
KINARK CORPORATION
ARTICLE I.
Stockholders' Meetings
SECTION 1. Annual Stockholders' Meetings. The annual meeting of the
stockholders of the Corporation shall be held at 11:00 A.M. on the second
Wednesday in May each year, or on such other date or at such other time as the
Board of Directors may determine.
SECTION 2. Special Stockholders' Meetings. Special meetings of
stockholders of the Corporation shall be held whenever called in the manner
required by law for purposes as to which there are special statutory
provisions, and for other purposes when called by the Chairman of the Board of
Directors or by order of a majority of the entire Board of Directors.
SECTION 3. Place of Stockholders' Meetings. All meetings of stockholders
shall be held at a place designated by the Board of Directors in Tulsa,
Oklahoma or at such other places as the Board may determine, which may be
within or outside of the State of Delaware.
SECTION 4. Notice of Stockholders' Meetings. Except as otherwise
provided by law, notice of all stockholders' meetings stating the date, time
and place, and, in the case of special meetings, the purpose or purposes for
which such meetings are called, shall be given by the Chairman of the Board of
Directors, the President, a Vice President, the Secretary, or an Assistant
Secretary to each stockholder of record having voting power in respect of the
business to be transacted thereat, by delivering such notice to each
stockholder, or by mailing such notice, addressed to each stockholder at his
address appearing on the books of the Corporation, not less than ten (10) days
nor more than sixty (60) days prior to the date of the meeting. Any meeting at
which all stockholders having voting power with respect to the business to be
transacted thereat are present, either in person or by proxy, shall be a valid
meeting for the transaction of business, notwithstanding that notice has not
been given as provided above. Adjourned meetings may be held at the time and
place announced at the meeting at which adjournment is taken without further
notice except as provided by law. At any adjourned meeting the Corporation may
transact any business which might have been transacted at the original meeting.
SECTION 5. Advance Notice of Stockholder Business. At an annual meeting
of the stockholders, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought before an annual
meeting business must be (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors,
(b) otherwise properly brought before the meeting by or at the direction of the
Board of Directors, or (c) otherwise properly brought before the annual meeting
by a stockholder of record and constitute a proper subject to be brought before
such meeting. For business to be properly brought before an annual meeting by
a stockholder (other than the election of directors), the stockholder must have
given timely notice thereof in writing to the Secretary of the Corporation. A
stockholder's notice to the Secretary shall set forth as to each matter (other
than the election of directors) the stockholder proposes to bring before the
annual meeting (a) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (b) the name and record address of the stockholder proposing
such business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder, (d) a representation that the
stockholder is a holder of record of capital stock of the Corporation entitled
to vote at such meeting and intends to appear in person or by proxy at the
annual meeting to present such business, and (e) any material interest of the
stockholder in such business. Notwithstanding anything in the Bylaws to the
contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section. The Chairman of an
annual meeting shall, if the facts warrant, determine and declare to the annual
meeting that business was not properly brought before the meeting and in
accordance with the provisions of this Section, and if he should so determine,
he shall so declare to the annual meeting and any such business not properly
brought before the annual meeting shall not be transacted. At any special
meeting of the stockholders, only such business shall be conducted as shall
have been brought before the meeting by or at the direction of the Board of
Directors.
With respect to stockholder business to be brought before an annual
meeting of stockholders (other than a request for inclusion of a proposal in
the Corporation's proxy statement pursuant to Rule 14a-8 of the Securities
Exchange Act of 1934, as amended), to be timely, a stockholder's notice must be
delivered to or mailed to and received at the principal executive offices of
the Corporation, not less than ninety (90) days in advance of such meeting.
For purposes of this Section, reference to a requirement to deliver notice
to the Corporation a set number of days in advance of an annual meeting shall
mean that such notice must be delivered such number of days in advance of the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is advanced by more than
30 days or delayed more than 60 days from such anniversary, notice by the
stockholder to be timely must be so delivered not later than the close of
business on the later of the 60th day prior to such annual meeting or the 10th
day following the day on which notice of such meeting is first given to
stockholders. For the purposes of this Section, notice of an annual meeting
shall be deemed to first be given to stockholders when disclosure of such date
is first made in a press release reported by the Dow Jones News Services,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant
to Sections 13, 14 and 15(d) of the Securities Exchange Act of 1934, as
amended.
SECTION 6. Quorum at Stockholders' Meetings. At any meeting of the
stockholders, a majority in interest of the capital stock issued and
outstanding and entitled to vote thereat represented by stockholders of record
in person or by proxy, shall constitute a quorum, but if a quorum is not
present, a majority in interest of those present may adjourn any meeting from
time to time. When a quorum is present at any meeting, a majority of the
number of shares of stock entitled to vote represented thereat shall decide any
questions brought before such meeting unless the question is one upon which by
express provision of law or of the Corporation's Restated Certificate of
Incorporation or these Bylaws a larger or different vote is required, in which
case such express provision shall govern.
SECTION 7. Proxy and Voting. The term "Certificate" whenever used in
these Bylaws shall be deemed to refer to the Restated Certificate of
Incorporation of the Corporation as from time to time amended. Subject to the
provisions of Section 3 of Article VIII hereof, the holders of record of the
capital stock of the Corporation shall be entitled to one vote for each share
thereof so held by them of record. Shares of its own capital stock belonging
to the Corporation shall not be voted, directly or indirectly. Stockholders of
record entitled to vote may vote at any meeting either in person or by proxy in
writing, which shall be filed with the Secretary of the meeting before being
voted. Such proxies shall entitle the holders thereof to vote at any
adjournment of such meeting. Stockholders entitled to vote may also be
represented by a general power of attorney produced at any meeting until it is
revoked. No proxy or power of attorney shall be voted after three years from
its date, unless said proxy or power of attorney provides for a longer period.
SECTION 8. List of Stockholders. It shall be the duty of the Secretary
or other officer who shall have charge of the stock ledger of the Corporation
to prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open at the Corporation's office or at a place
within the city where the meeting is to be held, as specified in the notice of
the meeting for such ten (10) day period, to the examination of any stockholder
for any purpose germane to the meeting, during ordinary business hours. The
list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who may
be present. The original or duplicate stock ledger shall be the only evidence
as to the stockholders entitled to examine such list or the books of the
Corporation, or to vote in person or by proxy at such meeting.
SECTION 9. Consent of Stockholders in Lieu of Meeting.
(a) Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of the stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing, setting
forth the action so taken, shall be signed by the holders of outstanding stock
having not less than the minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all shares entitled to vote
thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in Delaware, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be made by hand or by certified or
registered mail, return receipt requested.
(b) Every written consent shall bear the date of the signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty (60) days of
the date the earliest dated consent is delivered to the Corporation, a written
consent or consents signed by a sufficient number of holders to take action are
delivered to the Corporation in the manner prescribed in paragraph (e) of this
Section.
(c) In order that the Corporation may determine the stockholders entitled
to consent to corporate action in writing without a meeting, the Board of
Directors may fix a record date, which record date shall 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 (10) 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 (10) days after
the date on which such a request is received, adopt a resolution fixing the
record date. If no record date has been fixed by the Board of Directors within
ten (10) days of the date on which such a request is received, the record date
for determining stockholders entitled to consent to corporate action in writing
without a meeting, when no prior action by the Board of Directors is required
by applicable law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation in accordance with paragraphs (a) and (b) of this Section. 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.
(d) Within five (5) business days after receipt of the earliest dated
consent delivered to the Corporation in the manner provided in this Section,
the Corporation shall retain nationally recognized independent inspectors of
election for the purpose of performing a ministerial review of the validity of
consents and any revocations thereof. The cost of retaining inspectors of
election shall be borne by the Corporation.
(e) At any time that stockholders soliciting consents in writing to
corporate action have a good faith belief that the requisite number of valid
and unrevoked consents to authorize or take the action specified has been
received by them, the consents shall be delivered by the soliciting
stockholders to the Corporation's registered office in the State of Delaware or
principal place of business or to the Secretary of the Corporation, together
with a certificate stating their belief that the requisite number of valid and
unrevoked consents has been received as of a specific date, which date shall be
identified in the certificate. In the event that delivery is made to the
Corporation's registered office in Delaware, such delivery shall be made by
hand or by certified or registered mail, return receipt requested. Upon
receipt of such consents, the Corporation shall cause the consents to be
delivered promptly to the inspectors of election. The Corporation also shall
deliver promptly to the inspectors of election any revocations of consents in
its possession, custody or control as of the time of receipt of the consents.
(f) As promptly as practicable after the consents and revocations are
received by them, the inspectors of election shall issue a preliminary report
to the Corporation and the soliciting stockholders stating: (i) the number of
shares represented by valid and unrevoked consents; (ii) the number of shares
represented by valid revocations, (iii) the number of shares represented by
invalid consents; (iv) the number of shares represented by invalid revocations;
(v) the number of shares entitled to submit consents as of the record date; and
(vi) whether, based on their preliminary count, the requisite number of valid
and unrevoked consents has been obtained to authorize or take the action
specified in the consents. Unless the Corporation and the soliciting
stockholders agree to a shorter or longer period, the Corporation and the
soliciting stockholders shall have five (5) days to review the consents and
revocations and to advise the inspectors and the opposing party in writing as
to whether they intend to challenge the preliminary report. If no timely
written notice of an intention to challenge the preliminary report is received,
the inspectors shall certify the preliminary report (as corrected or modified
by virtue of the detection by the inspectors of clerical errors) as their final
report and deliver it to the Corporation and the soliciting stockholders. If
the Corporation or the soliciting stockholders give written notice of an
intention to challenge the preliminary report, a challenge session shall be
scheduled by the inspectors as promptly as practicable. A transcript of the
challenge session shall be recorded by a certified court reporter. Following
completion of the challenge session, the inspectors shall issue as promptly as
practicable their final report and deliver it to the Corporation and the
soliciting stockholders. A copy of the final report shall be included in the
book in which the proceedings of meetings of stockholders are recorded.
(g) The Corporation shall give prompt notice to the stockholders of the
results of any consent solicitation or the taking of corporate action without a
meeting by less than unanimous written consent.
(h) This Section shall in no way impair or diminish the right of any
stockholder or director, or any officer whose title to office is contested, to
contest the validity of any consent or revocation thereof, or to take any other
action with respect thereto.
ARTICLE II.
Board of Directors
SECTION 1. Number, Election, Qualification and Term of Office. Pursuant
to the provisions of Article Ninth of the Certificate, Directors shall be
chosen by plurality vote of the stockholders entitled to vote at appropriate
annual or special meetings of the Stockholders. The number of Directors which
shall constitute the whole Board of the Corporation shall be six (6), but the
number may be increased or decreased at any time by amendment of these Bylaws,
subject to the provisions of the Certificate. Except as provided elsewhere in
these Bylaws, Directors shall hold office until the next annual meeting of
Stockholders after their election and until their successors are elected and
qualified. No decrease in the number of Directors shall have the effect of
shortening the term of an incumbent Director.
SECTION 2. Powers. The business of the Corporation shall be managed by
the Board of Directors except as otherwise provided by the laws of the State of
Delaware, the Certificate or these Bylaws. In the management and control of
the property, business and affairs of the Corporation, the Board of Directors
is hereby vested with all the powers possessed by the Corporation itself so far
as this delegation of authority is not inconsistent with the laws of the State
of Delaware, the Certificate or these Bylaws. The Board of Directors, subject
to any restrictions contained in the Certificate, shall have the power to
declare and pay dividends upon the shares of its capital stock as provided by
the laws of the State of Delaware. The Board of Directors shall have authority
from time to time to set apart out of any of the funds of the Corporation
available for dividends a reserve or reserves as working capital or for any
proper purpose or reserves, as the Board may deem to be in the interests of the
Corporation; and the Board shall likewise have power to determine in its
discretion what part of the assets of the Corporation available for dividends
in excess of such reserve or reserves, if any, shall be declared in dividends
and paid to the stockholders of the Corporation.
SECTION 3. Directors' Meetings. Regular meetings of the Board of
Directors shall be held at such places within or outside of the State of
Delaware and at such times as the Board by resolution may determine from time
to time, and if so determined, no notice thereof need be given and any and all
business may be transacted thereat. Special meetings of the Board of Directors
may be held at any time or place, either within or outside of the State of
Delaware, whenever called by the Chairman of the Board of Directors, the
President, a Vice President, the Secretary, an Assistant Secretary, or any
Director, notice thereof being given to each Director by the Secretary or an
Assistant Secretary, or the officer calling the meeting, or at any time without
notice, provided all the Directors are present, or those not present shall at
any time before or after the meeting waive or have waived notice thereof in
writing. Notice of special meetings, stating the time and place thereof, shall
be given by mailing the same addressed to each Director at his residence or
business address on or before the fourth day before the day of the meeting, or
by delivering or telephoning the same to him personally or telegraphing or
telecopying (receipt confirmed) the same to him at his residence or business
address, on or before the second day before the day of the meeting. Such
special meetings shall be held at such times and places as the notice or waiver
thereof shall specify. Except as otherwise specifically provided in these
Bylaws, no notice of the purposes of any special meeting of the Board of
Directors need be given, and unless otherwise indicated in the notice thereof,
any and all business may be transacted at a special meeting.
SECTION 4. Chairman of the Board of Directors. The Chairman of the Board
of Directors may, but need not, be a stockholder of the Corporation but shall
be chosen from among the Directors of the Corporation and shall, when present,
preside at all meetings of the stockholders and of the Board of Directors and
Executive Committee. He may call meetings of the Board of Directors and of any
committee whenever he deems it necessary.
SECTION 5. Quorum at Directors' Meetings. One-third of the total number
of members of the Board of Directors as constituted from time to time, but not
less than two, shall constitute a quorum for the transaction of business, but
if a quorum shall not be present, a majority of those present may adjourn any
meeting from time to time and the meeting may be held as adjourned without
further notice or waiver. A majority of the members present at any meeting at
which a quorum is present may decide any question brought before such meeting,
except as otherwise provided by the laws of the State of Delaware, the
Certificate or these Bylaws. Members of the Board, or any committee designated
by the Board, may participate in a meeting of the Board, or committee, by means
of conference telephone or similar communications equipment, by means of which
all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting.
SECTION 6. Unanimous Written Consent. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee
thereof may be taken without a meeting if all members of the Board or committee
consent thereto in writing, and such writing is filed with the minutes of
proceedings of the Board or committee.
SECTION 7. Compensation of Directors. Directors shall not receive any
stated salary for their services as Directors, but by resolution of the Board
there may be established a fixed annual retainer plus a fee for attendance at
each Directors' meeting and, if held during a separate 24-hour period, a fee
for attendance at each meeting of a Committee of the Board; provided, however,
that Directors who are also officers of the Corporation are not entitled to any
compensation for their services as Directors. All Directors, including
Directors who are also officers of the Corporation, shall be entitled to
reimbursement for all expenses necessarily incurred in attending meetings of
the Board.
SECTION 8. Interested Directors. No contract or transaction between the
Corporation and one or more of the Directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of the Directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the Director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof
which authorizes the contract or transaction, or solely because his or their
votes are counted for such purpose if (i) the material facts as to his or their
relationship or interest and as to the contract or transaction are disclosed or
are known to the Board of Directors or the committee, and the Board of
Directors or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested Directors, even though
the disinterested Directors be less than a quorum; or (ii) the material facts
as to his or their relationship or interest and as to the contract or
transaction are disclosed or are known to the stockholders entitled to vote
thereon, and the contract or transaction is specifically approved in good faith
by vote of the stockholders; or (iii) the contract or transaction is fair as to
the Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum at
a meeting of the Board of Directors or of the committee which authorizes the
contract or transaction.
SECTION 9. Notice of Stockholder Nominees. Only persons who are
nominated in accordance with the procedures set forth in this Section shall be
eligible for election as Directors. Nominations of persons for election to the
Board of Directors of the Corporation may be made at a meeting of stockholders
by or at the direction of the Board of Directors by any nominating committee or
person appointed by the Board of Directors or by any stockholder of the
Corporation entitled to vote for the election of Directors at the meeting who
complies with the notice procedures set forth in this Section. Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made pursuant to timely notice in writing to the Secretary
of the Corporation. Such stockholder's notice shall set forth (a) as to each
person whom the stockholder proposes to nominate for election or re-election as
a Director, (i) the name, age, business address and residence address of such
person, (ii) the principal occupation or employment of such person, (iii) the
class and number of shares of the Corporation which are beneficially owned by
such person, and (iv) any other information relating to such person that is
required to be disclosed in solicitations of proxies for election of Directors,
or is otherwise required, in each case pursuant to Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (including without
limitation such person's written consent to being named in the proxy statement
as a nominee and to serving as a Director if elected); and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, and (ii) the class and number of shares of the Corporation which
are beneficially owned by such stockholder. 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. The Chairman of the meeting shall,
if the facts warrant, determine and declare to the meeting that a nomination
was not made in accordance with the procedures prescribed by the Bylaws, and if
he should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
With respect to an election to be held at an annual meeting of
stockholders, to be timely, a stockholder's notice shall be delivered to or
mailed and received at the principal executive offices of the Corporation, not
less than ninety (90) days in advance of such meeting. With respect to an
election to be held at a special meeting of stockholders for the election of
directors, stockholder's notice shall be given before the close of business on
the tenth day following the date on which notice of such meeting is first given
to stockholders. For purposes of this Section, reference to a requirement to
deliver notice to the Corporation a set number of days in advance of an annual
meeting shall mean that such notice must be delivered such number of days in
advance of the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed more than 60 days from such
anniversary, notice by the stockholder to be timely must be so delivered not
later than the close of business on the later of the 60th day prior to such
annual meeting or the 10th day following the day on which notice of such
meeting is first given to stockholders. For the purposes of this Section,
notice of an annual or special meeting shall be deemed to first be given to
stockholders when disclosure of such date is first made in a press release
reported by the Dow Jones News Services, Associated Press or comparable
national news service or in a document publicly filed by the Corporation with
the Securities and Exchange Commission pursuant to Sections 13, 14 and 15(d) of
the Securities Exchange Act of 1934, as amended.
ARTICLE III.
Executive and Other Committees
The Board of Directors may, by resolution passed by a majority of the
whole Board, designate three or more of its members (with or without one or
more alternates) to constitute an Executive Committee, which Committee shall,
in the intervals between meetings of the Board, have and may exercise any or
all powers of the Board of Directors, in the management of the business and
affairs of the Corporation, except as otherwise provided in the laws of the
State of Delaware, and shall have power to authorize the seal of the
Corporation to be affixed to all papers which may require it. A majority of
the members of the Executive Committee, as of the time constituted, shall be
necessary to constitute a quorum thereof, and the act of a majority of the
members of the Executive Committee who are present at any meeting thereof at
which a quorum is present shall be the act of the Executive Committee. Any
person designated by the Executive Committee shall act as secretary of the
Committee. The Executive Committee, except as provided otherwise herein or in
resolutions of the Board of Directors, shall fix the time and place of its
regular meetings and its own rules and procedures, keep a record of its acts
and proceedings, and report the same from time to time to the Board of
Directors. Any vacancy in the Executive Committee shall be filled by vote of a
majority of the Directors at the time in office at a duly convened meeting of
the Board of Directors. Special meetings of the Executive Committee may be
held at any time or place either within or outside of the State of Delaware,
whenever called by any member of the Committee, notice thereof being given to
each member and to each alternate, if any, by the Secretary, an Assistant
Secretary, or the member calling the meeting, or at any time without notice,
provided each member (or his alternate) is present, or those not present shall
at any time before or after the meeting waive or have waived notice thereof in
writing. Notice of special meetings, stating the time and place thereof, shall
be given by mailing the same addressed to each member and to each alternate, if
any, at his residence or business address on or before the second day before
the day of the meeting, or by delivering or telephoning the same to him
personally or telegraphing or telecopying (receipt confirmed) the same to him
at his residence or business, on or before the day before the day of the
meeting.
The Board of Directors, by resolution passed by a majority of the whole
Board, may appoint from their number other committees from time to time, the
number (not less than two) composing each of such committees and the powers
conferred upon the same to be determined by such resolution of the Board of
Directors.
ARTICLE IV.
Officers
SECTION 1. Number and Election. Subject to the provisions of Section 3
of this Article, the officers of the Corporation shall be a Chief Executive
Officer, a President, one or more Vice Presidents (one of whom may be
designated the Executive Vice President), a Secretary and a Chief Financial
Officer. Such officers shall be chosen annually by the Board of Directors
after its election by the stockholders, and a meeting of the Board of Directors
may be held without notice for this purpose immediately after the annual
meeting of the stockholders or a special meeting of stockholders held in lieu
thereof, and at the same place. Such officers shall hold office until their
successors are chosen and qualified, subject expressly, to the provisions of
Article V of these Bylaws.
SECTION 2. Eligibility of Officers. The President may, but need not, be
a stockholder but shall be chosen from among the Directors of the Corporation.
Other officers of the Corporation may, but need not, be stockholders or
Directors of the Corporation. Any two offices (but not more than two) may be
held by the same person provided the duties thereof can be consistently
performed by one individual.
SECTION 3. Additional Officers and Agents. The Board of Directors, in
its discretion, may choose a Controller, one or more Assistant Vice Presidents,
Assistant Treasurers, or Assistant Secretaries, and such other officers or
agents as it may deem advisable, who shall have such powers and perform such
duties as provided in these Bylaws, or as the Chairman of the Board of
Directors or the President shall direct (subject to the provisions of Articles
IX and XIII hereof), but such powers and duties may from time to time be
increased or limited by the Board of Directors. Unless otherwise provided by
resolutions of the Board of Directors, all officers and agents appointed
pursuant to this Section shall hold office at the pleasure of the Board.
SECTION 4. Office of the Chief Executive. The Board of Directors shall
elect one or more of the officers of the Company to occupy the office of the
Chief Executive. The officer or officers occupying the office of Chief
Executive shall be the Chief Executive Officers of the Company and, subject to
the provisions of Articles IX and XIII hereof, shall have all the powers and
perform all the duties commonly incident to this Office, and, subject to the
control of the Board of Directors, shall have the general management and
conduct responsibility of the affairs and business of the Company and each
shall act as co-chair of any annual or special meeting of the stockholders.
SECTION 5. President. In the absence or disability of the Chairman of
the Board of Directors, the President may call meetings of the Board of
Directors and of any committee thereof whenever he deems it necessary. Subject
to the provisions of Section 1 of Article VIII hereof, the President or any
Vice President, unless some other officer or person is thereunto specifically
authorized by the Board of Directors, shall sign all certificates of stock of
the Corporation.
SECTION 6. Vice Presidents. Except as otherwise provided in Article IX
hereof, in the absence or disability of the Chairman of the Board of Directors
and the President, the Executive Vice President (if named by the Board of
Directors), the Vice Presidents in the order of their seniority established by
the Board of Directors, shall perform all the duties of the Chairman and of the
President, and, when so acting, shall have all the powers of the Chairman and
of the President, subject to all restrictions upon them, including, without
limitation, the provisions of Articles IX and XIII hereof. The Vice Presidents
shall perform such other duties and have such other powers as the Board of
Directors shall designate from time to time.
SECTION 7. Secretary. The Secretary shall keep accurate minutes of all
meetings of the stockholders and the Board of Directors and the Executive
Committee, if present at such meetings, and be responsible for the custody
thereof, shall perform all the duties commonly incident to this office, and
shall perform such other duties and shall have such other powers as the Board
of Directors shall designate from time to time. The Secretary shall have
custody of the corporate seal, shall attest such seal on all documents whose
execution under seal is duly authorized or required, and, subject to the
provisions of Section 1 of Article VIII hereof, shall have power, together with
the President or a Vice President, to sign certificates of stock of the
Corporation. In the Secretary's absence at any meeting, an Assistant Secretary
or a Secretary pro tempore shall perform the Secretary's duties thereat.
SECTION 8. Chief Financial Officer. The Vice President of Finance shall
be the Chief Financial Officer of the Corporation. He shall have the care and
custody of moneys, funds, valuable papers and documents of the Corporation
(other than his own bond which shall be in the custody of the President) and,
subject expressly to the provisions of Article IX hereof, shall have and
exercise, under the supervision of the Board of Directors, all the powers and
duties commonly incident to his office and shall perform such other duties and
have such other powers as the Board of Directors shall designate from time to
time. He shall also, if required by the Board of Directors, give bond in such
form and with such sureties as it may require. He shall deposit all funds of
the Corporation in such bank or banks, trust company or trust companies or with
such firm or firms doing a banking business as the Board of Directors shall
designate. He may endorse for deposit or collection and deposit all checks,
notes, drafts or other orders for the payment of money, payable to the
Corporation or to its order. All property of the Corporation in his possession
shall be subject at all times to the inspection of any Director and subject to
control of the Board of Directors. Subject to the provisions of Section 1 of
Article VIII hereof, he shall have power, together with the President or a Vice
President, to sign certificates of stock of the Corporation. The Vice
President of Finance shall be subject in every way to the supervision and
control of the President. In the event the Corporation shall not have a
Controller, the Vice President of Finance shall perform the duties of the
Controller as provided in Section 9 of this Article.
SECTION 9. Controller. The Controller shall be the chief accounting and
auditing officer of the Corporation and as such shall be in charge of its
auditing department and financial statements. He shall have general
supervision of the books of account of the Corporation, shall have and
exercise, under the direction of the Chief Financial Officer or the President
if the Chief Financial Officer is also the Controller, all the powers and
duties commonly incident to his office, and shall perform such other duties and
have such other powers as the Board of Directors shall from time to time
designate.
SECTION 10. Staff Auditors. Staff Auditors (including staff accountants
functioning in an internal auditor capacity) shall be supervised by the Chief
Financial Officer. If requested by the President, the Audit Committee of the
Board of Directors, or the Board of Directors, or at the initiation of a Staff
Auditor, a Staff Auditor shall report directly to the President, the Audit
Committee of the Board of Directors or the Board of Directors without the
necessity of reporting to the Chief Financial Officer.
SECTION 11. Assistant Vice Presidents. Any Assistant Vice President
shall have such powers and perform such duties as the Board of Directors shall
from time to time designate or as the President shall direct.
SECTION 12. Assistant Secretaries and Assistant Treasurers. Any
Assistant Secretary shall (subject to any limitation placed upon his powers and
duties by the Board of Directors) have all the powers and duties of the
Secretary, to be exercised as occasion may require. He shall have such other
powers and perform such other duties as the Board of Directors shall from time
to time designate, or as the Chairman of the Board of Directors or the
President (subject to the limitations contained in Section 3 of this Article)
shall direct.
Any Assistant Treasurer shall (subject to any limitation placed upon his
powers and duties by the Board of Directors) have all the powers and duties of
the Chief Financial Officer, to be exercised as occasion may require. He shall
have such other powers and perform such other duties as the Board of Directors
shall from time to time designate, or as the Chairman of the Board of Directors
or the President (subject to the limitations contained in Section 3 of this
Article) shall direct. If required by the Board of Directors, any Assistant
Treasurer shall give bond in such form and with such sureties as the Board of
Directors may require.
SECTION 13. Salaries. Salaries of officers, agents and employees shall
be fixed from time to time by the Board of Directors. Any employment contract,
whether for an officer, agent or employee, if expressly approved or
specifically authorized by the Board of Directors, may fix a term of employment
thereunder and any such contract, but only if so approved or authorized, shall
be valid and binding upon the Corporation in accordance with the terms thereof;
provided, however, that this provision shall not limit or restrict in any way
the right of the Corporation at any time in its discretion (which right is
hereby expressly reserved) to remove from office, discharge or terminate the
employment or otherwise dispense with the services of any such officer, agent
or employee, as hereinafter in these Bylaws provided, prior to the expiration
of the term of employment under any such contract; provided, further, that the
Corporation shall not thereby be relieved of any continuing liability for
salary or other compensation for which such contract provides. The provisions
of this Section are subject to the provisions of Section 2 of Article II
hereof.
ARTICLE V.
Resignations and Removals
SECTION 1. Officers, Agents and Employees. Any officer or agent of the
Corporation may resign at any time by giving written notice to the Board of
Directors, the Chairman of the Board of Directors, the President or the
Secretary of the Corporation; and any member of any committee may resign by
giving written notice either as aforesaid or to the committee of which he is a
member or to the chairman thereof. Any such resignation shall take effect at
the time specified therein or, if not specified, upon receipt thereof; and,
unless otherwise specified therein, the acceptance of such resignation shall
not be necessary to make it effective. The Board of Directors, by vote of not
less than a majority of the entire Board, or the stockholders if they so elect
at any meeting thereof called for the purpose, may at any time, with or without
cause, remove from office, discharge or terminate the employment of any
officer, agent, employee or member of any committee elected or appointed by it,
any committee or any officer.
SECTION 2. Directors. Any Director of the Corporation may resign at any
time by giving written notice to the Board of Directors, the Chairman of the
Board of Directors, the President, or the Secretary of the Corporation. Any
such resignation shall take effect at the time specified or, if the time is not
specified, upon receipt; and, unless otherwise specified, the acceptance of
such resignation shall not be necessary to make it effective. The
stockholders, at any meeting called for the purpose, may remove any Director
from office with or without cause. If any Director is removed by the
stockholders, the stockholders may, at the same meeting by plurality vote,
elect a successor Director for the remainder of the unexpired term of any
Director so removed.
ARTICLE VI.
Vacancies and Increase in Directors
SECTION 1. Officers or Agents. If the office of any officer or agent
becomes vacant by reason of death, resignation, removal, disqualification or
otherwise, the Board of Directors may choose a successor or successors who
shall serve for the unexpired term (subject, however, to the provisions of
Article V hereof), or at the pleasure of the Board as it may determine.
SECTION 2. Directors. Vacancies and newly created Directorships
resulting from an increase in the authorized number of Directors may be filled
by a majority of the Directors then in office, although less than a quorum.
Any Director or Directors chosen to fill any vacancy or any newly created
Directorship shall hold office until the next annual meeting of stockholders
after his or their appointment and until his or their successor or successors
shall be duly elected and qualified.
ARTICLE VII.
Waiver of Notice
Whenever any notice whatsoever is required to be given by these Bylaws, or
the Certificate, or any of the laws of the State of Delaware, a waiver thereof
in writing signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed equivalent thereto.
The presence at any meeting of a person or persons entitled to notice thereof
shall be deemed a waiver of such notice as to such person or persons.
ARTICLE VIII.
Capital Stock
SECTION 1. Certificates of Stock, Transfer Agents and Registrars. Every
stockholder shall be entitled to a certificate or certificates of capital stock
of the Corporation in such form as may be prescribed by the Board of Directors,
duly numbered and setting forth the number and kind of shares. Each
certificate shall be signed by the President or a Vice President and by the
Secretary or an Assistant Secretary, and may have affixed thereto an impression
of the corporate seal. Before issue, a record of each certificate shall be
entered on the books of the Corporation. The Board of Directors may also
appoint one or more Transfer Agents and/or Registrars for its stock of any
class or classes and for the transfer and registration of certificates
representing the same and may require stock certificates to be countersigned by
one or more of them. If certificates of capital stock of the Corporation are
signed by a Transfer Agent or by a Registrar, the signatures thereon of the
President or a Vice President and of the Secretary or an Assistant Secretary of
the Corporation and the corporate seal may be facsimiles, engraved or printed.
Any provisions of these Bylaws with reference to the signing of stock
certificates shall include, in cases above-permitted, such facsimile
signatures. If any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on, any such certificate
or certificates, shall cease to be such officer or officers of the Corporation,
whether because of death, resignation, or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such certificate or
certificates may nevertheless be adopted by the Corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers of the Corporation. The
Board of Directors may, from time to time, make such additional rules and
regulations as it may deem expedient concerning the issue, transfer and
registration of certificates for shares of stock of the Corporation.
SECTION 2. Transfers of Stock and Addresses of Stockholders. Shares of
stock may be transferred by delivery of the certificate therefor accompanied
either by an assignment in writing on the back of the certificate or by a
written power of attorney to sell, assign and transfer the same on the books of
the Corporation, signed by the person appearing by the certificate to be the
owner of the shares represented thereby, and such shares of stock shall be
transferable on the books of the Corporation upon surrender thereof so assigned
or endorsed. The person registered on the books of the Corporation as the
owner of any shares of stock shall exclusively be entitled as the owner of such
shares to receive dividends, to vote and to exercise all other rights and
privileges as such owner in respect thereof. It shall be the duty of every
stockholder to notify the Corporation of his mailing address and of any changes
thereto. The latest address furnished by each stockholder shall be entered on
the books of the Corporation, and the latest address appearing on such books
shall be conclusively deemed to be the mailing address and/or the last known
mailing address of such stockholder. If any stockholder shall fail to notify
the Corporation of his mailing address, it shall be sufficient to send
corporate notices to such stockholder at the address, if any, understood by the
Secretary to be his mailing address.
SECTION 3. Transfer Books. The Board of Directors shall have power to
close the stock transfer books of the Corporation for a period not exceeding
sixty (60) days preceding the date of any meeting of stockholders, the date for
payment of any dividend, the date for the allotment of rights, or the date when
any change or conversion or exchange of capital stock shall go into effect, or
for a period not exceeding sixty (60) days in connection with obtaining the
consent of the stockholders for any purpose; provided, however, that in lieu of
closing the stock transfer books as aforesaid, the Board of Directors may fix
in advance a date not exceeding sixty (60) days preceding the date of any
meeting of stockholders, the date for the payment of any dividend, the date for
the allotment of rights, the date when any change or conversion or exchange of
capital stock shall go into effect, or a date in connection with obtaining such
consent, as a record date for the determination of the stockholders entitled to
notice of, and to vote at, any such meeting and any adjournment thereof, to
receive payment of any such dividend, to any such allotment of rights, to
exercise the rights in respect of any such change, conversion or exchange of
capital stock, or to give such consent, and such stockholders and only such
stockholders as shall be stockholders of record on the date so fixed shall be
entitled to such notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights, or to give such consent, as the case may
be, notwithstanding any transfer of any stock on the books of the Corporation
after such record date is fixed as aforesaid. Except where the transfer books
of the Corporation shall have been closed or a date shall have been fixed as
the record date for the determination of the stockholders entitled to vote, as
hereinbefore provided, no share of stock shall be voted at any election for
Directors which shall have been transferred on the books of the Corporation
within twenty (20) days next preceding such election of Directors.
SECTION 4. Loss of Certificates. In case of the loss, mutilation or
destruction of a certificate of stock, a duplicate certificate may be issued
upon such terms, consistent with Delaware General Corporate Law, as the Board
of Directors shall prescribe.
ARTICLE IX.
Contracts, Checks, Drafts, Etc.
SECTION 1. Contracts, Etc. Except as otherwise prescribed in these
Bylaws, the Chairman of the Board of Directors, or the President, or a Vice
President shall sign, in the name and on behalf of the Corporation, all deeds,
bonds, contracts, mortgages and other instruments, the execution of which shall
be authorized by the Board of Directors (subject to the restrictions contained
in Section 2 of Article II hereof), but the Board of Directors, subject to such
restrictions, may authorize any other officer or officers, agent or agents, in
the name and on behalf of the Corporation, to sign and execute any such deed,
bond, contract, mortgage or other instrument and such authority may be general
or confined to specific instances. Except as so authorized by the Board of
Directors (and, if required by the provisions of Section 2 of Article II
hereof, by the stockholders), and except in the ordinary course of business, no
officer, agent or employee of the Corporation shall have power or authority to
bind the Corporation by any contract or engagement or to pledge, sell or
otherwise dispose of its credit or any of its property or to render it
pecuniarily liable for any purpose or in any amount in excess of $25,000.
SECTION 2. Checks, Drafts, Etc. All checks, drafts, notes, bonds, bills
of exchange or other orders, instruments or obligations for the payment of
money shall be signed by the Chairman of the Board, President or Vice President
or such officer or officers, or agent or agents, as the Board of Directors
shall by resolution direct. The Board of Directors may, in its discretion,
also provide by resolution for countersignature or registration of checks,
drafts, notes and/or bonds of the Corporation.
ARTICLE X.
Indemnification and Insurance
SECTION 1. Right to Indemnification. The Corporation shall indemnify any
person who is or was a party (which shall include for purposes of this Article
X the giving of testimony or similar involvement) or is threatened to be made a
party to or is involved in any threatened, pending or completed action, suit or
proceeding whether civil, criminal, administrative, or investigative
(hereinafter a "proceeding") by reason of the fact that such person was or is
an "authorized representative" (as defined below) against expenses (which shall
include attorneys' fees), judgments, ERISA excise taxes or penalties, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such proceeding to the fullest extent permitted under the
Delaware General Corporation Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment).
As used in this Article X, the term "authorized representative" shall mean a
Director, officer, employee or agent of the Corporation, or a person serving at
the request of the Corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans.
SECTION 2. Advancing Expenses. Expenses incurred by a person in
defending a proceeding (including permissive and compulsory counterclaims and
affirmative defenses) brought by reason of the fact that such person is or was
an authorized representative shall be paid by the Corporation in advance of the
final disposition of such proceeding upon receipt of an undertaking by or on
behalf of such person to repay such amount if it shall be ultimately determined
that such person is not entitled to be indemnified under this Article X or
otherwise. The Corporation shall advance all expenses which the person's
defense counsel certifies by an affidavit to the Corporation as being
reasonable and incurred in defending a proceeding.
SECTION 3. Right of Claimant to Bring Suit. If a claim under Sections 1
or 2 of this Article X is not paid in full by the Corporation within thirty
(30) days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any proceeding in advance
of its final disposition where the required undertaking has been tendered to
the Corporation) that the claimant has not met the standards of conduct which
make it permissible under the Delaware General Corporation Law for the
Corporation to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Corporation.
SECTION 4. Scope of Article. The indemnification and advancement of
expenses authorized by this Article X shall (i) not be deemed exclusive of any
other rights to which those seeking indemnification and advancement of expenses
may be entitled under any statute, provision of the Certificate, agreement,
vote of stockholders or directors or otherwise, (ii) continue as to a person
who has ceased to be an authorized representative, and (iii) inure to the
benefit of the heirs, executors and administrators of an authorized
representative.
SECTION 5. Reliance on Provisions. Each person who shall act as an
authorized representative of the Corporation shall be deemed to be doing so in
reliance upon the rights of indemnification and advancement of expenses
provided by this Article X, and the provisions of this Article X shall be
deemed a contract between the Corporation and the authorized representative.
Any repeal or modification of the provisions of this Article X shall not affect
any rights or obligations then existing.
SECTION 6. Insurance. The Corporation may, but shall not be obligated
to, purchase and maintain insurance at its expense, to protect itself and any
person who is or was an authorized representative against any liability
asserted against him in such capacity or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability.
ARTICLE XI.
Seal
The seal of the Corporation shall contain the words "Kinark Corporation
Corporate Seal Delaware".
ARTICLE XII.
Offices and Books and Records
The Corporation and its directors and stockholders shall have a registered
office in the City of Wilmington, Delaware, and may also have additional
offices within and/or outside of the State of Delaware, and unless otherwise
expressly required by the laws of the State of Delaware, the books and records
of the Corporation may be kept outside of the State of Delaware at such places
as may be designated from time to time by the Board of Directors.
ARTICLE XIII.
Voting of and Exercise of Control Through Stockholdings
The Board of Directors (whose authorization in this connection shall be
necessary in all cases) may from time to time appoint an attorney or attorneys
or agent or agents of the Corporation, or may at any time or from time to time
authorize the Chairman of the Board of Directors, the President or any Vice
President to appoint an attorney or attorneys or agent or agents of the
Corporation, in the name and on behalf of the Corporation, to cast the votes
which the Corporation may be entitled to cast as a stockholder or otherwise in
any other corporation or association, any of whose stock or securities may be
held by the Corporation, at meetings of the holders of the stock or other
securities of such other corporations or associations, or to consent in writing
to any action by any such other corporation or association, and may instruct
the person or persons so appointed as to the manner of casting such votes or
giving such consent, and may from time to time authorize the execution and
delivery, on behalf of the Corporation and under its corporate seal, or
otherwise, of such written proxies, consents, waivers or other instruments as
may be deemed necessary or proper in the premises.
ARTICLE XIV.
Amendments
All bylaws of the Corporation shall be subject to alteration or repeal,
and new bylaws may be made, by the affirmative vote of the holders of record of
a majority of a quorum of the outstanding stock of the Corporation entitled to
vote, or by the affirmative vote of a majority of the whole Board of Directors
given at any meeting thereof, provided that notice of the proposed alteration
or repeal or of the proposed new bylaws be included in the notice of such
meeting or waiver thereof.
