SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to .
Commission file number 33-64450
AMERICAN STANDARD INC.
(Exact name of Registrant as specified in its charter)
Delaware 25-0900465
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Centennial Avenue, P.O. Box 6820, Piscataway, NJ 08855-6820
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (908) 980-6000
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
X Yes No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common stock, $.01 par value, outstanding at
July 31, 1995 1,000
(shares)
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
The following consolidated summary statement of operations of American
Standard Inc. (the "Company") and subsidiaries for the three months and six
months ended June 30, 1995 and 1994 has not been audited, but management
believes that all adjustments, consisting of normal recurring items, necessary
for a fair representation of financial data for those periods have been
included. Results for the first three- and six-month periods of 1995 are not
necessarily indicative of results for the entire year.
AMERICAN STANDARD INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED SUMMARY STATEMENT OF OPERATIONS
(Dollars in millions)
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
SALES $1,370.8 $1,130.5 $2,594.0 $2,120.1
-------- -------- -------- --------
COST AND EXPENSES
Cost of sales 1,008.5 857.3 1,917.6 1,603.6
Selling and administrative expenses 215.1 196.9 415.7 366.5
Other expense 8.4 8.2 19.1 14.4
Interest expense 53.8 64.6 111.2 128.7
--------- -------- -------- --------
1,285.8 1,127.0 2,463.6 2,113.2
INCOME BEFORE INCOME TAXES AND
EXTRAORDINARY ITEM 85.0 3.5 130.4 6.9
Income taxes 35.5 14.9 54.4 31.6
INCOME (LOSS) BEFORE EXTRAORDINARY ITEM 49.5 (11.4) 76.0 (24.7)
Extraordinary loss on retirement of debt - - 30.1
-------- -------- -------- -----
NET INCOME (LOSS) $ 49.5 $ (11.4) $ 45.9 $ (24.7)
========== ========= ====== =======
See accompanying notes
<PAGE>
Item 1. Financial Statements (continued)
AMERICAN STANDARD INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED SUMMARY BALANCE SHEET
(Dollars in millions)
June 30, December 31,
1995 1994
CURRENT ASSETS
Cash and cash equivalents $ 26.5 $ 92.7
Accounts receivable 758.4 595.2
Inventories
Finished products 235.6 160.2
Products in process 97.8 82.5
Raw materials 98.5 80.5
431.9 323.2
Other current assets 67.2 53.4
TOTAL CURRENT ASSETS 1,284.0 1,064.5
FACILITIES, less accumulated depreciation;
June 1995 - $501.4; Dec. 1994 - $430.2 833.4 812.7
GOODWILL 1,088.1 1,053.0
OTHER ASSETS 219.8 225.9
-------- --------
TOTAL ASSETS $3,425.3 $3,156.1
======== ========
CURRENT LIABILITIES
Loans payable to banks 296.1 70.3
Current maturities of long-term debt 66.4 141.6
Accounts payable 378.5 350.5
Accrued payrolls 169.4 140.3
Other accrued liabilities 425.4 366.0
-------- --------
TOTAL CURRENT LIABILITIES 1,335.8 1,068.7
LONG-TERM DEBT 1,757.3 2,152.3
RESERVE FOR POSTRETIREMENT BENEFITS 487.8 437.7
OTHER LIABILITIES 296.2 273.6
TOTAL LIABILITIES 3,877.1 3,932.3
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S DEFICIT
Preferred stock, Series A, 1,000 shares issued
and outstanding, par value $.01 -- --
Common stock, 1,000 shares issued and
outstanding, $.01 par value. -- --
Capital surplus 504.4 214.6
Accumulated deficit (790.5) (836.4)
Foreign currency translation effects (163.0) (151.7)
Minimum pension liability adjustment (2.7) (2.7)
-------- --------
TOTAL STOCKHOLDER'S DEFICIT (451.8) (776.2)
-------- --------
$3,425.3 $3,156.1
======== ========
See accompanying notes
<PAGE>
Item 1. Financial Statements (continued)
AMERICAN STANDARD INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS
(Dollars in millions)
Six Months Ended
June 30,
1995 1994
-------- --------
Cash provided (used) by:
Operating activities:
Income (loss) before extraordinary item $ 76.0 $(24.7)
Depreciation (including asset loss provision in 1994) 55.8 68.7
Amortization of goodwill 16.6 15.4
Non-cash interest 28.5 26.0
Amortization of debt issuance costs 3.2 7.3
Non-cash stock compensation 15.2 14.6
Changes in assets and liabilities:
Accounts receivable (148.8) (92.5)
Inventories (96.7) (69.3)
Accounts payable and other accruals 109.7 77.9
Other assets and liabilities 24.6 17.5
Net cash provided by operating activities 84.1 40.9
Investing activities:
Purchases of property, plant and equipment (56.3) (32.4)
Investments in affiliated companies (17.1) (12.6)
Other 10.6 9.0
Net cash used by investing activities (62.8) (36.0)
--------- --------
Financing activities:
Capital contribution from parent 269.2 -
Loan from parent 4.8 -
Proceeds from issuance of long-term debt 450.5 6.1
Repayments of long-term debt (988.0) (65.1)
Net change in revolving credit facility 197.7 53.7
Net change in other short-term debt (5.4) (6.1)
Purchases of parent company common stock (3.4) (5.5)
Other (13.3) -
-------- -------
Net cash used by financing activities (87.9) (16.9)
-------- -------
Effect of exchange rate changes on cash and
cash equivalents .4 2.0
-------- --------
Net decrease in cash and cash equivalents (66.2) (10.0)
Cash and cash equivalents at beginning of period 92.7 53.2
------- -------
Cash and cash equivalents at end of period $ 26.5 $ 43.2
======= ======
See accompanying notes
<PAGE>
AMERICAN STANDARD INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
Note 1. The 1995 Refinancing
As described in Notes 2 and 10 of Notes to Consolidated Financial
Statements in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, the Company completed a major refinancing (the "1995
Refinancing") in the first quarter of 1995, including the initial public
offering of common stock (the "IPO") by American Standard Companies Inc. (the
parent of American Standard Inc.) and an amended and restated credit agreement
(the "1995 Credit Agreement"). See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Liquidity and Capital
Resources."
Note 2. Tax Matters
As described in Note 7 of Notes to Consolidated Financial Statements in
the Company's Annual Report on Form 10-K for the year ended December 31, 1994,
there are pending German tax issues for the years 1984 through 1990. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."
Note 3. Proposed Offering of Common Stock
On August 1, 1995, the Company's parent, American Standard Companies
Inc., announced its intention to file with the Securities and Exchange
Commission a registration statement relating to a secondary offering of 17.5
million shares (plus an underwriters' over-allotment option of up to 2.625
million shares), substantially all of which shares are owned by Kelso ASI
Partners, L.P., the Company's majority stockholder. All of the shares to be sold
in the offering are previously issued and outstanding shares, and the Company
will receive no proceeds from the offering.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
Operating results improved significantly in the second quarter and
first six months of 1995 compared with the second quarter and first six months
of 1994, due principally to volume increases in the Air Conditioning Products
and Automotive Products segments. As a result of the Company's leveraged buyout
in 1988, the results of operations include the effects of purchase accounting
and reflect a highly leveraged capital structure.
SUMMARY SEGMENT AND INCOME DATA
(Dollars in millions except per share data)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30
-------- -------
1995 1994 1995 1994
---- ---- ---- ----
SALES:
Air Conditioning Products $ 782 $ 648 $1,425 $1,168
Plumbing Products 322 301 645 597
Automotive Products 267 181 524 355
-------- --- -------- -------
Total sales $1,371 $1,130 $2,594 $2,120
====== ====== ====== ======
OPERATING INCOME:
Air Conditioning Products $ 86 $ 66 $ 128 $ 98
Plumbing Products 32 21 73 59
Automotive Products 44 2 87 20
------ ------ ------- -------
Total operating income 162 89 288 177
Interest expense 54 65 111(a) 129
Corporate items 23 20 47 41
-------- ------- ----- -------
Income before income taxes and
extraordinary item 85 4 130 7
Income taxes 35 15 54 32
------- ---- ---- -------
Income (loss) before extraordinary item $ 50 $(11) $ 76 $ (25)
======= ==== ====== ======
(a) Had the initial public offering of the common stock of the Company's parent,
American Standard Companies, Inc., and related debt refinancing occurred on
January 1, 1995, interest expense for the first six months of 1995 would have
been reduced by $4 million.
<PAGE>
Operating income for the three months and six months ended June 30,
1994, included charges of $26 million related to employee severance, the
consolidation of production facilities and the implementation of other cost
reduction actions. In those same periods the Company also provided $14 million
of reserves for losses on operating assets expected to be disposed of prior to
the expiration of their originally estimated useful lives.
Results of Operations for the Second Quarter and First Six Months of 1995
Compared with the Second Quarter and First Six Months of 1994
Operating Review
Consolidated sales for the second quarter of 1995 were $1,371 million,
an increase of $241 million, or 21% (17% excluding the favorable effects of
foreign exchange), from $1,130 million in the second quarter of 1994. Sales
increased for all three segments with gains of 21% for Air Conditioning
Products, 7% for Plumbing Products and 48% for Automotive Products. Consolidated
operating income for the second quarter of 1995 was $162 million, an increase of
$73 million, or 82% (72% excluding the favorable effects of foreign exchange),
from $89 million in the second quarter of 1994. Excluding the $40 million of
special charges (described above) from the second quarter of 1994, operating
income improved 26% in the 1995 quarter from an adjusted operating income of
$129 million in the comparable 1994 period. Excluding such special charges
operating income increased 18% for Air Conditioning Products and 175% for
Automotive Products, but declined 20% for Plumbing Products.
Consolidated sales for the first half of 1995 were $2,594 million, an
increase of $474 million, or 22% (18% excluding the favorable effects of foreign
exchange), from $2,120 million in the first half of 1994. Sales increased for
all three segments with gains of 22% for Air Conditioning Products, 8% for
Plumbing Products and 48% for Automotive Products. Consolidated operating income
for the first half of 1995 was $288 million, an increase of $111 million, or 63%
(54% excluding the favorable effects of foreign exchange), from $177 million in
the first half of 1994. Excluding the $40 million of special charges from the
1994 period, operating income improved 33% in the first half of 1995 from an
adjusted operating income of $217 million in the comparable 1994 period.
Excluding such special charges operating income increased 22% for Air
Conditioning Products and 156% for Automotive Products, but declined 6% for
Plumbing Products.
Sales of Air Conditioning Products increased 21% (with little effect
from foreign exchange) to $782 million for the second quarter of 1995 from $648
million for the comparable quarter of 1994, as a result of strong gains in U.S.
and international sales of applied and unitary commercial systems. Markets in
the United States continued to improve in 1995 in both the commercial
new-construction and the commercial and residential replacement markets. Sales
of commercial products in the United States increased 15% because of improved
markets, demand for chiller replacement (accelerated because of the impending
ban on CFC refrigerant production), gains in market share and increased sales of
newer, higher-efficiency products. Residential sales were up 15% due to
increased purchases by distributors in anticipation of peak summer demand and
favorable product shifts (to heat pumps from cooling units and to outdoor from
indoor equipment). International sales of Air Conditioning Products for the
second quarter of 1995 increased principally because of volume increases in the
Far East, Europe and Latin America. Sales for Air Conditioning Products in the
first half of 1995 increased by 22% to $1,425 million from $1,168 million in the
first half of 1994, for the reasons cited for the second quarter.
Operating income of Air Conditioning Products increased 30% (with
little effect from foreign exchange) to $86 million in the second quarter of
1995 from $66 million in the second quarter of 1994. Excluding special charges
of $7 million from the second quarter of 1994, operating income increased 18%.
This improvement primarily reflected expanded commercial product sales in the
United States and improved results in international operations (principally
Europe), as well as a small gain in the Far East on the reorganization and sale
of certain Hong Kong operations in connection with establishing joint ventures
directly in the People's Republic of China. Operating income for residential
products declined because of lower prices (due to competitive pressures) and
increased raw material costs. First-half 1995 operating income, excluding the
special charges of 1994, was up 22% primarily for the reasons mentioned for the
second quarter.
Sales of Plumbing Products increased 7% (4% excluding the favorable
effects of foreign exchange) to $322 million in the second quarter of 1995 from
$301 million in the second quarter of 1994. The exchange-adjusted improvement
resulted from a sales increase of 19% for U.S. operations, while international
operations were flat compared with the second quarter of the prior year. Sales
in the United States increased as a result of higher volumes in both wholesale
and retail market channels offset partly by an unfavorable shift in sales mix to
lower-priced products. For international operations, sales increases in Italy,
the United Kingdom ("U.K."), the Philippines and Thailand (primarily from higher
volumes) were offset by sales decreases in Germany and France (as markets
softened unexpectedly during the quarter), in Mexico and Canada (because of poor
economic conditions) and in South Korea (due to lower exports). Sales of
Plumbing Products for the six months ended June 30, 1995, increased 8% (5%
excluding foreign exchange effects) to $645 million from $597 million in the
first half of 1994, primarily for the reasons described for the second quarter.
Operating income of Plumbing Products for the second quarter of 1995
was $32 million, an increase of 52% (34% excluding the positive effects of
foreign exchange) compared with $21 million for the second quarter of 1994.
Excluding both foreign exchange effects and the special charges of $19 million
from the second quarter of 1994, operating income declined 26%, principally due
to a 29% decline for international operations which was partly offset by a small
improvement for U.S. operations. For international operations, operating income,
as so adjusted for such special charges, declined primarily because of the
market weakness in Germany and France, lower results in Canada and Mexico, costs
associated with implementation of manufacturing process improvements as well as
start-up expenses of new Far East operations. In addition, because Italian and
U.K. operations purchase products from Germany, the strength of the Deutschemark
against Italian and U.K. currencies resulted in Italian and U.K. product cost
increases not being fully recovered through pricing. In the United States,
adjusted second quarter results improved modestly due to the higher volumes,
partly offset by the effect of an unfavorable product mix, the inability to
fully recover material and labor cost increases due to competitive pressures,
and the ongoing costs of implementation of process improvements. Operating
income for Plumbing Products for the first half of 1995 was $73 million, an
increase of 24% from $59 million in the first half of 1994. Excluding both
foreign exchange effects and special charges, operating income in the first half
of 1995 decreased 13%, primarily for the reasons cited for the second quarter.
Sales of Automotive Products for the second quarter of 1995 were $267
million, an increase of 48% (30% excluding the favorable effects of foreign
exchange) from $181 million in the second quarter of 1994. Unit volume of truck
and bus production in Western Europe improved 26% and aftermarket sales grew
approximately 22%. The foreign exchange-adjusted sales increase was the result
of significantly higher volumes, led by Germany and France reflecting the
increased commercial vehicle production in Western Europe, the U.K. as a result
of the growing utility vehicle business in that country and in Brazil as a
result of a 29% increase in truck production. Sales also increased in all other
major markets in which the Company has operations. Sales for the first six
months of 1995 were $524 million, an increase of 48% (30% excluding the
favorable effects of foreign exchange) from $355 million in the first half of
1994, for the reasons described for the second quarter.
Operating income for Automotive Products increased to $44 million in
the 1995 quarter, an increase of 138% excluding both the favorable effects of
foreign exchange and special charges of $14 million from the second quarter of
1994. This significant increase was primarily attributable to the substantially
higher sales volume in improved markets in nearly all European countries and
Brazil, as well as higher margins due to increasing benefits of the
implementation of manufacturing process improvements, a reduced salaried work
force and other cost reductions. Operating income for the first six months of
1995 was $87 million, an increase of 122% excluding both the favorable effects
of foreign exchange and special charges from the 1994 period, for the reasons
cited for the second quarter.
Financial Review
Interest expense decreased by $11 million in the second quarter and by
$18 million in the first half of 1995 compared to the year-earlier periods
primarily as a result of reduced debt balances due to application of the net
proceeds from the IPO and lower overall interest costs (see "Liquidity and
Capital Resources"). Corporate items increased moderately both in the second
quarter and the first half of 1995 primarily because of higher accretion expense
related to postretirement benefits as well as expenses of a corporate
advertising campaign initiated in 1995.
The income tax provisions for the three months and six months ended
June 30, 1995, were $35 million and $54 million, respectively, on income before
income taxes and extraordinary item of $85 million for the quarter and $130
million for the six months. The income tax provisions for the three months and
six months ended June 30, 1994, were $15 million and $32 million, respectively,
on income before income taxes and extraordinary item of $4 million and $7
million, in the respective periods. These provisions reflected the taxes payable
on profitable foreign operations, offset partly in the 1995 periods by tax
benefits from U.S. and certain foreign net operating losses. The unusual
relationship between the pre-tax results and the tax provision for both 1994
periods is explained by tax rate differences and withholding taxes on foreign
earnings as well as by the nondeductibility for tax purposes of the amortization
of goodwill and other purchase accounting adjustments and of the share
allocations made by the Company's Employee Stock Ownership Plan ("ESOP").
Through 1994 the ESOP allocations were made from a plan established in 1988
through a reversion of excess pension plan assets. In 1995 and future years,
Company contributions to fund ESOP allocations should be tax deductible.
As a result of the repayment of debt in the first quarter of 1995 upon
completion of the 1995 Refinancing (see "Liquidity and Capital Resources"), the
six month period ended June 30, 1995, included an extraordinary charge of $30
million attributable to the write-off of unamortized debt issuance costs, for
which no tax benefit was available.
<PAGE>
Cash Flows
Net cash provided by operating activities, after cash interest paid of
$85 million, was $84 million for the first half of 1995 compared with $41
million for the first half of 1994. The $43 million increase resulted primarily
from improved operating results. The Company made capital expenditures of $73
million for the first half of 1995, including $17 million of investments in
affiliated companies (compared with capital expenditures of $45 million for the
first half of 1994, including $13 million of investments in affiliated
companies). Inventories and receivables increased during the first half of 1995
reflecting the increased sales volume and the seasonal pattern typical of the
first six months. The principal financing activities during the first six months
of 1995 were related to the 1995 Refinancing described in "Liquidity and Capital
Resources".
Liquidity and Capital Resources
In the first quarter of 1995 the Company completed the 1995 Refinancing
which reduced the amount of debt outstanding, will significantly lower future
interest costs and provides less restrictive covenants. The net proceeds from
the IPO, totaling approximately $281 million, were used to repay indebtedness
and the proceeds of the 1995 Credit Agreement, which provided a secured
multi-currency, multi-borrower credit facility aggregating $1.0 billion,
replaced outstanding borrowings under the Company's previous bank credit
agreement. Had the IPO and the 1995 Credit Agreement been completed as of
January 1, 1995, interest expense would have been reduced by $4 million and
income before extraordinary item would have been $80 million ($1.06 per share)
for the first half of 1995.
The 1995 Credit Agreement provides reduced borrowing rates, increased
borrowing capacity, less restrictive covenants and lower annual scheduled debt
maturities through 2001. The Company believes that the amounts available from
operating cash flows and funds available under revolving facilities (the
"Revolving Facilities") will be sufficient to meet its expected cash needs and
planned capital expenditures for the foreseeable future.
As of June 30, 1995, the Company had outstanding borrowings of $261
million under the Revolving Facilities. There was $237 million available under
the Revolving Facilities
<PAGE>
after reduction for borrowings and for $52 million of letters of credit usage.
In addition the Company's foreign subsidiaries had approximately $62 million
available (after reduction for borrowings of $35 million) under overdraft
facilities which can be withdrawn by the banks at any time. The Revolving
Facilities are short-term borrowings by their terms under the 1995 Credit
Agreement, and since a portion of the long-term debt under the Company's
previous bank credit agreement was replaced with borrowings under the Revolving
Facilities, a significantly larger portion of debt is classified as short-term.
The 1995 Credit Agreement contains various covenants that limit certain
activities and transactions and require the Company to meet certain financial
tests as described in Note 10 of Notes to Consolidated Financial Statements in
the Company's Annual Report on Form 10-K for the year ended December 31, 1994.
Certain American Standard Inc. debt instruments also contain financial tests and
other covenants. In order to maintain compliance with the covenants and
restrictions contained in its previous credit agreements, it was necessary from
time to time for the Company to obtain waivers and amendments. The Company
believes it is currently in compliance with the covenants contained in the 1995
Credit Agreement, but may have to obtain similar waivers or amendments in the
future.
As described in Note 7 of Notes to Consolidated Financial Statements in
the Company's Annual Report to Stockholders for the year ended December 31,
1994, there are pending German Tax issues for the years 1984 through 1990.
During the first quarter of 1995, the Company received the first of two expected
reports of the German tax authorities on audit findings for tax years 1984
through 1990. This first report was silent on one of the major issues under
audit which had represented over one-third of the potential total adjustments
that the Company earlier anticipated the German tax authorities might propose
for the years 1984 through 1990. While there can be no assurance, the Company
believes it is now unlikely that this issue will be pursued further by the
German tax authorities.
During the second quarter of 1995, the Company received the second
report on audit findings for tax years 1988 through 1990. On the basis of the
second report, and assuming that the matter is not first resolved by
administrative appeals procedures, the remaining proposed adjustments could
ultimately lead to litigation regarding disputed taxes (principally for the 1988
through 1990 period) of up to approximately $80 million (using June 30, 1995
exchange rates), plus interest. In addition, significant transactions similar to
those which gave rise to the possible adjustments referred to above occurred in
years subsequent to 1990. If the German tax authorities should continue to
propose adjustments for the 1988-1990 period, they might, after future tax
audits, also propose tax adjustments for years 1991-1993, that could be as much
as 50% higher than the comparable adjustments for the years 1988 through 1990.
American Standard, on the basis of the opinion of German legal counsel, Meilicke
& Partner, believes the tax returns are substantially correct as filed and any
such adjustments would be inappropriate and intends to contest vigorously any
adjustments which have been or may be assessed. Accordingly, the Company has not
recorded any loss contingency at June 30, 1995 with respect to such matters.
Under German tax law, if an assessment is made for the years under
audit, the authorities may demand immediate payment of the amount assessed prior
to final resolution of the issues. (The same principles would apply as to any
assessment in connection with possible audits for subsequent years.) American
Standard believes, however, on the basis of the opinion of German legal counsel,
that it is highly likely that a suspension of payment pending final resolution
would be obtained. If immediate payment were required, the Company expects that
it would be able to meet such payment from available sources of liquidity or
credit support but that future cash flows and capital expenditures, and
subsequent results of operations for any particular quarterly or annual period,
could be adversely affected.
As a result of recent changes in German tax legislation, the Company's
tax provisions in 1994 and the first six months of 1995 were higher in Germany
and will be higher thereafter. As a result of this German tax legislation and
the related additional tax provisions, the Company believes its exposure to the
issues under the audit referred to above will be reduced for 1994, 1995 and
future years.
American Standard Inc. makes substantial interest payments to its
indirect wholly-owned Netherlands subsidiary. These interest payments had been
exempt from U.S. withholding tax under an income tax treaty between the United
States and the Netherlands. Under a provision in a new treaty such payments
would have become subject to a 15% U.S. withholding tax, except that the Company
received a ruling from the Internal Revenue Service ("IRS") making a
determination that no U.S. withholding tax will be imposed for 1995. The Company
believes, based on the ruling exempting 1995 interest payments from U.S.
withholding tax, that its request for a subsequent ruling covering 1996 (and
later years) should also receive favorable IRS action. If the subsequent IRS
ruling request is not resolved favorably, additional withholding taxes of
approximately $11 million per year could be imposed on the Company commencing in
1996. In such case, the Company would consider alternatives designed to mitigate
the increased withholding taxes; however, there is no assurance that such
alternatives could be found.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
For a discussion of German tax issues see "Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Liquidity and Capital
Resources" in Part I which is incorporated herein by reference..
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
The exhibits listed on the accompanying Index to Exhibits are filed
as part of this quarterly report on Form 10-Q.
(b) Reports on Form 8-K for the quarter ended June 30, 1995.
None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN STANDARD INC.
By: G. Ronald Simon
(Vice President and Controller)
(also signing as Principal
Accounting Officer)
August 11, 1995
<PAGE>
AMERICAN STANDARD INC.
INDEX TO EXHIBITS
(3) (i) Restated Certificate of Incorporation of American Standard Inc.
(ii) Amended By-Laws of American Standard Inc., as adopted May 4, 1995
(27) Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 23,025
<SECURITIES> 3,509
<RECEIVABLES> 779,707
<ALLOWANCES> 21,265
<INVENTORY> 431,899
<CURRENT-ASSETS> 1,284,009
<PP&E> 1,334,760
<DEPRECIATION> 501,407
<TOTAL-ASSETS> 3,425,326
<CURRENT-LIABILITIES> 1,335,760
<BONDS> 1,757,261
<COMMON> 0
0
0
<OTHER-SE> (451,773)
<TOTAL-LIABILITY-AND-EQUITY> 3,425,326
<SALES> 2,594,032
<TOTAL-REVENUES> 2,594,032
<CGS> 1,917,634
<TOTAL-COSTS> 1,917,634
<OTHER-EXPENSES> 19,073
<LOSS-PROVISION> 4,837
<INTEREST-EXPENSE> 111,178
<INCOME-PRETAX> 130,411
<INCOME-TAX> 54,381
<INCOME-CONTINUING> 76,030
<DISCONTINUED> 0
<EXTRAORDINARY> (30,109)
<CHANGES> 0
<NET-INCOME> 45,921
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERICAN STANDARD INC.
AMERICAN STANDARD INC., a corporation organized and existing under the
laws of the State of Delaware, hereby certifies as follows:
1. The name of the Corporation is American Standard Inc. The name under
which the Corporation was originally incorporated is American Radiator &
Standard Sanitary Corporation. The date of filing of the Corporation's original
Certificate of Incorporation with the Secretary of State of the State of
Delaware is March 26, 1929.
2. At a meeting duly held on May 4, 1995, the Board of Directors of the
Corporation adopted a resolution authorizing the amendment and restatement of
the Corporation's Restated Certificate of Incorporation as set forth herein in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware. In lieu of a meeting and vote of the
stockholders of the Corporation, the Corporation's sole stockholder, by written
consent dated May 4, 1995, approved the amendment and restatement of the
Corporation's Restated Certificate of Incorporation and the taking of the
actions contemplated thereby, and such consent was filed with the minutes of the
proceedings of stockholders of the Corporation.
3. Pursuant to Sections 242 and 245 of the General Corporation Law of
the State of Delaware, this Restated Certificate of Incorporation amends and
restates the provisions of the Restated Certificate of Incorporation of the
Corporation as heretofore in effect. The amendments have the effect of (i)
providing a broader statement of the business and purposes of the Corporation;
(ii) classifying the Board of Directors; and (iii) making such other changes as
are proper under the General Corporation Law of the State of Delaware and deemed
necessary or appropriate by the Board of Directors.
4. The text of the Restated Certificate of Incorporation as heretofore
amended is hereby amended and restated to read in its entirety as follows:
FIRST: The name of the Corporation is AMERICAN STANDARD INC.SECOND: The
Corporation's registered office in the State of Delaware is located at
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle; and the name IN WITNESS WHEREOF, American Standard Inc. has
caused this certificate to be signed by Richard A. Kalaher its Vice President,
General Counsel and Secretary and attested by Frederick C. Paine its Assistant
Secretary, this ___th day of May, 1995.
AMERICAN STANDARD INC.
By: ______________________________
Vice President, General
Counsel and Secretary
ATTEST:
By: ________________________________
Assistant Secretary
AMERICAN STANDARD INC.
AMENDED BY-LAWS
As adopted on May 4, 1995
ARTICLE 1.
STOCKHOLDERS
Section 1.1. 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 properly may come before such meeting shall be held at such place,
either within or without the State of Delaware on the first Thursday in May (or,
if such day is a legal holiday, then on the next succeeding business day),
following the annual meeting of stockholders of American Standard Companies
Inc., or at such other date and time as may be fixed from time to time by
resolution of the Board of Directors and set forth in the notice or waiver of
notice of the meeting. [Sections 211(a), (b).]1
Section 1.2. Special Meetings. Special meetings of the stockholders may be
called at any time by the (i) Chief Executive Officer or (ii) by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
authorized Directors or (iii) [by a majority of the holders of the shares of
stock of the Corporation then outstanding and entitled to vote]. Special
meetings of the stockholders shall be held at such places, within or without the
State of Delaware, as shall be specified in the respective notices or waivers of
notice thereof. [Section 211(d).]
Section 1.3. Notice of Meetings; Waiver. The Secretary, Acting Secretary or
any Assistant Secretary shall cause written notice of the place, date and hour
of each meeting of the stockholders, and, in the case of a special meeting, the
purpose or purposes for which such meeting is called, to be given personally or
by mail, not less than ten nor more than sixty days prior to the meeting, to
each stockholder of record entitled to vote at such meeting. If such notice is
mailed, it shall be deemed to have been given to a stockholder when deposited in
the United States mail, postage prepaid, directed to the stockholder at his
address as it appears on the record of stockholders of the Corporation, or, if
he shall have filed with the Secretary or Acting or Assistant Secretary of the
Corporation a written request that notices to him be mailed to some other
address, then directed to him at such other address. Such further notice shall
be given as may be required by law.
No notice of any meeting of stockholders need be given to any stockholder
who submits a signed waiver of notice, whether before or after the meeting.
Neither the business to be transacted at, nor the purpose of, any regular or
special meeting of the stockholders need be specified in a written waiver of
notice. The attendance of any stockholder at a meeting of stockholders shall
constitute a waiver of notice of such meeting, except when the stockholder
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the ground that the meeting is
not lawfully called or convened. [Sections 222, 229.]
Section 1.4. Quorum. Except as otherwise required by law or by the Restated
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting. [Section 216.]
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Section 1.5. Voting. If, pursuant to Section 5.5 of these Amended By-Laws,
a record date has been fixed, every holder of record of shares entitled to vote
at a meeting of stockholders shall be entitled to one vote for each share
outstanding in his name on the books of the Corporation at the close of business
on such record date, provided, however, that the certificate of designation
pertaining to any series of the Corporation's preferred stock may provide for a
greater number of votes per share of such series. If no record date has been
fixed, then every holder of record of shares entitled to vote at a meeting of
stockholders shall be entitled to one vote (subject to the same proviso as set
forth in the immediately preceding sentence) for each share of stock standing in
his name on the books of the Corporation at the close of business on the day
next preceding the day on which notice of the 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. Except as otherwise required by law, by the Restated
Certificate of Incorporation or by these Amended By-Laws, the vote of a majority
of the shares represented in person or by proxy at any meeting at which a quorum
is present shall be sufficient for the transaction of any business at such
meeting. [Sections 212(a), 216.]
Section 1.6. Voting by Ballot. No vote of the stockholders need be taken by
written ballot unless otherwise required by law. Any vote which need not be
taken by ballot may be conducted in any manner approved by the meeting.
Section 1.7. Adjournment. If a quorum is not present at any meeting of the
stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than thirty days, or if after the adjournment a new record date for the
adjourned meeting is fixed pursuant to Section 5.5 of these Amended By-Laws, a
notice of the adjourned meeting, conforming to the requirements of Section 1.3
hereof, shall be given to each stockholder of record entitled to vote at such
meeting. At any adjourned meeting at which a quorum is present, any business may
be transacted that might have been transacted on the original date of the
meeting. [Section 222(c).]
Section 1.8. Proxies. Any stockholder entitled to vote at any meeting of
the stockholders or to express consent to or dissent from corporate action
without a meeting may authorize another person or persons to vote at any such
meeting and express such consent or dissent for him by proxy. A stockholder may
authorize a valid proxy by executing a written instrument signed by such
stockholder, or by causing his or her signature to be affixed to such writing by
any reasonable means including, but not limited to, by facsimile signature, or
by transmitting or authorizing the transmission of a telegram, cablegram or
other means of electronic transmission to the person designated as the holder of
the proxy, a proxy solicitation firm or a like authorized agent. No such proxy
shall be voted or acted upon after the expiration of three years from the date
of such proxy, unless such proxy provides for a longer period. Every proxy shall
be revocable at the pleasure of the stockholder executing it, except in those
cases where applicable law provides that a proxy shall be irrevocable. A
stockholder may revoke any proxy which is not irrevocable by attending the
meeting and voting in person or by filing an instrument in writing revoking the
proxy or by filing another duly executed proxy bearing a later date with the
Secretary. Proxies by telegram, cablegram or other electronic transmission must
either set forth or be submitted with information from which it can be
determined that the telegram, cablegram or other electronic transmission was
authorized by the stockholder. Any copy, facsimile telecommunication or other
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reliable reproduction of a writing or transmission created pursuant to this
section may be substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original writing or
transmission could be used, provided that such copy, facsimile telecommunication
or other reproduction shall be a complete reproduction of the entire original
writing or transmission. [Sections 212(b), (c), (d), (e).]
Section 1.9. Organization; Procedure. At every meeting of stockholders the
presiding officer shall be the President or, in the event of his absence or
disability, any Vice President or a presiding officer chosen by a majority of
the stockholders present in person or by proxy. The Secretary or Acting
Secretary, or in the event of his absence or disability, the Assistant
Secretary, if any, or if there be no Assistant Secretary, in the absence of the
Secretary or Acting Secretary, an appointee of the presiding officer, shall act
as Secretary of the meeting. The order of business and all other matters of
procedure at every meeting of stockholders may be determined by such presiding
officer.
Section 1.10. Stockholder Proposals and Nominations of Directors.
Nominations for election to the Board of Directors of the Corporation at a
meeting of the stockholders may be made by the Board of Directors, or on behalf
of the Board of Directors by a Nominating Committee appointed by the Board of
Directors, or by any stockholder of the Corporation entitled to vote for the
election of Directors at such meeting.
Section 1.11. [Reserved] Inspectors of Elections. [Sections 231(a), (b),
(d).]
Section 1.12. [Reserved] Opening and Closing of Polls. [Section 231(c).]
Section 1.13. Consent of Stockholders in Lieu of Meeting. Any action
required or permitted to be taken by the stockholders of the Corporation 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 the State
of Delaware, its principal place of business, or to an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
Every written consent permitted by this section shall bear the date of
signature of each stockholder who signs the consent and no written consent shall
be effective to take the corporate action referred to therein unless, within
sixty days of the earliest dated consent delivered in the manner required by law
to the Corporation, written consents signed by a sufficient number of holders to
take action are delivered to the Corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an officer
or agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered mail, return
receipt requested. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not so consented in writing. [Section 228(a), (c), (d).]
<PAGE>
ARTICLE 2.
BOARD OF DIRECTORS
Section 2.1. General Powers. Except as may otherwise be provided by law, by
the Restated Certificate of Incorporation or by these Amended By-Laws, 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. [Section 141(a).]
Section 2.2. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be eleven (11), which number
may be modified from time to time by resolution of the Board of Directors, but
in no event shall the number of Directors be less than three (3) or greater than
twenty-one (21). Each Director (whenever elected) shall hold office until his
successor has been duly elected and qualified, or until his earlier death,
resignation or removal. [Section 141(b).]
Section 2.3. Election of Directors. The members of the Board of Directors
elected by the holders of the Common Stock of the Corporation shall be divided
at the annual meeting of stockholders to be held in 1995 into three classes,
designated Classes I, II and III, which shall be as nearly equal in number as
possible. At the annual meeting of stockholders in 1995, Directors of Class I
shall be elected to hold office for a term expiring at the annual meeting of
stockholders to be held in 1996, Directors of Class II shall be elected to hold
office for a term expiring at the annual meeting of stockholders to be held in
1997 and Directors of Class III shall be elected to hold office for a term
expiring at the annual meeting of stockholders to be held in 1998. At each
succeeding annual meeting of stockholders following such initial classification
and election, the respective successors of Directors whose terms are expiring
shall be elected for terms expiring at the annual meeting of stockholders held
in the third succeeding year. If the annual meeting of stockholders for the
election of Directors is not held on the date designated therefor, the Directors
shall cause the meeting to be held as soon thereafter as convenient. At each
meeting of the stockholders for the election of Directors, provided a quorum is
present, the Directors shall be elected by a plurality of the votes validly cast
in such election. Not-withstanding the foregoing, the election, term, removal
and filling of vacancies with respect to Directors elected separately by the
holders of one or more series of Preferred Stock of the Corporation shall not be
governed by this Article II, but rather shall be as provided for in the
resolutions adopted by the Board of Directors creating and establishing such
series of Preferred Stock. [Sections 141(d), 211(b), (c), 216.]
Section 2.4. Annual and Regular Meetings. The annual meeting of the Board
of Directors for the purpose of electing officers and for the transaction of
such other business as may come before the meeting shall be held as soon as
possible following adjournment of the annual meeting of the stockholders at the
place of such annual meeting of the stockholders. Notice of such annual meeting
of the Board of Directors need not be given. The Board of Directors from time to
time may by resolution provide for the holding of regular meetings and fix the
place (which may be within or without the State of Delaware) and the date and
hour of such meetings. Notice of regular meetings need not be given, provided,
however, that if the Board of Directors shall fix or change the time or place of
any regular meeting, notice of such action shall be mailed promptly, or sent by
facsimile transmission or telegram, to each Director who shall not have been
present at the meeting at which such action was taken, addressed to him at his
usual place of business, or shall be delivered to him personally. Notice of such
action need not be given to any Director who attends the first regular meeting
after such action is taken without protesting the lack of notice to him, prior
to or at the commencement of such meeting, or to any Director who submits a
<PAGE>
signed waiver of notice, whether before or after such meeting. [Section 141(g).]
Section 2.5. Special Meetings; Notice. Special meetings of the Board of
Directors shall be held whenever called by a majority of the total authorized
number of Directors, the Chairman or by the President or, in the event of his
absence or disability, by any Vice President or by the Secretary or Acting
Secretary, at such place (within or without the State of Delaware), date and
hour as may be specified in the respective notices or waivers of notice of such
meetings. Special meetings of the Board of Directors may be called on 24 hours'
notice, if notice is given to each Director personally or by telephone,
telegram, facsimile or other electronic means of transmission, or on five days'
notice, if notice is mailed to each Director, addressed to him at his usual
place of business. Notice of any special meeting need not be given to any
Director who attends such meeting without protesting the lack of notice to him,
prior to or at the commencement of such meeting, or to any Director who submits
a signed waiver of notice, whether before or after such meeting, and any
business may be transacted thereat. [Sections 141(g), 229.] Section 2.5.1.
Quorum; Voting. At all meetings of the Board of Directors, the presence of a
majority of the total authorized number of Directors shall constitute a quorum
for the transaction of business. Except as otherwise required by law, the
Restated Certificate of Incorporation or these Amended By-Laws, 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 of Directors. [Section 141(b).]
Section 2.6. Adjournment. A majority of the Directors present, whether or
not a quorum is present, may adjourn any meeting of the Board of Directors to
another time or place. No notice need be given of any adjourned meeting unless
the time and place of the adjourned meeting are not announced at the time of
adjournment, in which case notice conforming to the requirements of Section 2.5
shall be given to each Director.
Section 2.7. Action Without a Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a meeting
if all members of the Board of Directors consent thereto in writing, and such
writing or writings are filed with the minutes of proceedings of the Board of
Directors. [Section 141(f).]
Section 2.8. Organization. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board or, in his absence or if such office
is vacant, by the President, or in their absence by a chairman chosen at the
meeting. The Secretary or Acting Secretary shall act as secretary of the
meeting, but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting.
Section 2.9. Regulations; Manner of Acting. To the extent consistent with
applicable law, the Restated Certificate of Incorporation and these Amended
By-Laws, the Board of Directors may adopt such rules and regulations for the
conduct of meetings of the Board of Directors and for the management of the
property, affairs and business of the Corporation as the Board of Directors may
deem appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
Section 2.10. Action by Telephonic Communications. Members of the Board of
Directors may participate in a meeting of the Board of Directors by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this provision shall constitute presence in person at such
meeting. [Section 141(i).]
<PAGE>
Section 2.11. Resignations. Any Director may resign at any time by
delivering a written notice of resignation, signed by such Director, to the
President or the Secretary or Acting Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery. [Section 141(b).]
Section 2.12. Removal of Directors. A Director may be removed for or
without cause, upon the affirmative vote of the holders of a majority of the
outstanding shares of stock of the Corporation then entitled to vote at an
election of Directors, cast at a special meeting of stockholders called for the
purpose or at an annual meeting. Notwithstanding the foregoing, the election,
term, removal and filling of vacancies with respect to Directors elected
separately by the holders of one or more series of Preferred Stock of the
Corporation shall not be governed by this Ariticle II, but rather shall be as
provided for either in the Restated Certificate of Incorporation or in the
Preferred Stock Certificate of Designations pursuant to which such series of
Preferred Stock was created and established. [Section 141(k).]
Section 2.13. Vacancies and Newly Created Directorships. If any vacancies
shall occur in the Board of Directors, by reason of death, resignation, removal
(and the stockholders shall not have filled such vacancy as provided in Section
2.13 above) or otherwise, or if the authorized number of Directors shall be
increased, the Directors then in office shall continue to act, and such
vacancies or newly created directorships, as the case may be, may be filled by a
majority of Directors then in office, although less than a quorum. A Director
elected by the Directors pursuant to this Section 2.14 to fill a vacancy or a
newly created directorship shall hold office until his successor has been
elected and qualified or until his earlier death, resignation or removal.
[Section 223.]
Section 2.14. Compensation. The amount, if any, which each Director shall
be entitled to receive as compensation for his services as such shall be fixed
from time to time by resolution of the Board of Directors. [Section 141(h).]
Section 2.15. Reliance on Accounts and Reports, etc. A Director, or a
member of any Committee designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in good faith upon the
records of the Corporation and upon information, opinions, reports or statements
presented to the Corporation by any of the Corporation's officers or employees,
or Committees designated by the Board of Directors, or by any other person as to
the matters the member reasonably believes are within such other person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Corporation. [Section 141(e).]
ARTICLE 3.
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.1. How Constituted. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more Committees,
including an Executive Committee, each such Committee to consist of such number
of Directors as from time to time may be fixed by the Board of Directors. The
Board of Directors may designate one or more Directors as alternate members of
any such Committee, who may replace any absent or disqualified member or members
at any meeting of such Committee. Thereafter, members (and alternate members, if
any) of each such Committee may be designated at the annual meeting of the Board
of Directors. Any such Committee may be abolished or re-designated from time to
time by the Board of Directors. Each member (and each alternate member) of any
such Committee (whether designated at an annual meeting of the Board of
Directors or to fill a vacancy or otherwise) shall hold office until his
<PAGE>
successor shall have been designated or until he shall cease to be a Director,
or until his earlier death, resignation or removal. [Section 141(c).]
Section 3.2. Powers. During the intervals between the meetings of the Board
of Directors, the Executive Committee, except as otherwise provided in this
section, shall have and may exercise all the powers and authority of the Board
of Directors in the management of the property, affairs and business of the
Corporation, including the power to declare dividends and to authorize the
issuance of stock. Each such other Committee, except as otherwise provided in
this section, shall have and may exercise such powers of the Board of Directors
as may be provided by resolution or resolutions of the Board of Directors.
Neither the Executive Committee nor any such other Committee shall have the
power or authority:
3.2.1. to amend the Restated Certificate of Incorporation (except that a
Committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors
as provided in Section 151(a) of the Delaware General Corporation Law, fix the
designations and any of the preferences or rights of such shares relating to
dividends, redemption, dissolution, any distribution of assets of the
Corporation or the conversion into, or the exchange of such shares for, shares
of any other class or classes or any other series of the same or any other class
or classes of stock of the Corporation or fix the number of shares of any series
of stock or authorize the increase or decrease of the shares of any series),
3.2.2. to adopt an agreement of merger or consolidation, 3.2.3. to
recommend to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets,
3.2.4. to recommend to the stockholders a dissolution of the Corporation or
a revocation of a dissolution, or
(e) to amend the Amended By-Laws of the Corporation.
The Executive Committee shall have, and any such other Committee may be
granted by the Board of Directors, power to authorize the seal of the
Corporation to be affixed to any or all papers which may require it. [Section
141(c).]
Section 3.3. Proceedings. Each such Committee may fix its own rules of
procedure and may meet at such place (within or without the State of Delaware),
at such time and upon such notice, if any, as it shall determine from time to
time. Each such Committee shall keep minutes of its proceedings and shall report
such proceedings to the Board of Directors at the meeting of the Board of
Directors next following any such proceedings.
Section 3.4. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members (or alternate members) constituting a majority
of the total authorized membership of such Committee shall constitute a quorum
for the transaction of business. The act of the majority of the members present
at any meeting at which a quorum is present shall be the act of such Committee.
Any action required or permitted to be taken at any meeting of any such
Committee may be taken without a meeting, if all members of such Committee shall
consent to such action in writing and such writing or writings are filed with
the minutes of the proceedings of the Committee. The members of any such
Committee shall act only as a Committee, and the individual members of such
Committee shall have no power as such. [Section 141(c), (f).]
<PAGE>
Section 3.5. Action by Telephonic Communications. Members of any Committee
designated by the Board of Directors may participate in a meeting of 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 participation in a meeting pursuant to this provision shall constitute
presence in person at such meeting. [Section 141(i).]
Section 3.6. Absent or Disqualified Members. In the absence or
disqualification of a member of any Committee, 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 such absent or disqualified
member. [Section 141(c).]
Section 3.7. Resignations. Any member (and any alternate member) of any
Committee may resign at any time by delivering a written notice of resignation,
signed by such member, to the Chairman or the President. Unless otherwise
specified therein, such resignation shall take effect upon delivery.
Section 3.8. Removal. Any member (and any alternate member) of any
Committee may be removed at any time, either for or without cause, by resolution
adopted by a majority of the whole Board of Directors.
Section 3.9. Vacancies. If any vacancy shall occur in any Committee, by
reason of disqualification, death, resignation, removal or otherwise, the
remaining members (and any alternate members) shall continue to act, and any
such vacancy may be filled by the Board of Directors.
ARTICLE 4.
OFFICERS
Section 4.1. Number. The officers of the Corporation shall be chosen by the
Board of Directors and shall be a President, one or more Vice Presidents, a
Secretary, a Controller, a General Auditor and a Treasurer, and it may, if it so
determines, elect a Chairman of the Board of Directors from among its members.
The Board of Directors also may elect a Vice Chairman and one or more Acting or
Assistant Secretaries, Assistant Controllers and Assistant Treasurers in such
numbers as the Board of Directors may determine. Any number of offices may be
held by the same person, except that neither the Chairman of the Board of
Directors nor the President shall also hold the office of Secretary. No officer,
other than the Chairman or Vice Chairman, need be a Director of the Corporation.
[Section 142(a), (b).]
Section 4.2. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual meeting,
officers may be elected at any regular or special meeting of the Board of
Directors. Each officer shall hold office until his successor has been elected
and qualified, or until his earlier death, resignation or removal. [Section
142(b).]
Section 4.3. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board of Directors.
Section 4.4. Removal and Resignation; Vacancies. Any officer may be removed
for or without cause at any time by the Board of Directors. Any officer may
resign at any time by delivering a written notice of resignation, signed by such
officer, to the Board of Directors or the President or the Secretary or Acting
Secretary. Unless otherwise specified therein, such resignation shall take
<PAGE>
effect upon delivery. Any vacancy occurring in any office of the Corporation, by
death, resignation, removal or otherwise, shall be filled by the Board of
Directors. [Section 142(b), (e).]
Section 4.5. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and perform
such duties as may be specified in these Amended By-Laws, except that in any
event each officer shall exercise such powers and perform such duties as may be
required by law. [Section 142(a).]
Section 4.6. The President. The President shall preside at all meetings of
the stockholders and Directors at which he is present in the absence of the
Chairman or Vice Chairman, shall be the chief executive officer and the chief
operating officer of the Corporation, shall have general control and supervision
of the policies and operations of the Corporation and shall see that all orders
and resolutions of the Board of Directors are carried into effect. He shall
manage and administer the Corporation's business and affairs and shall also
perform all duties and exercise all powers usually pertaining to the office of a
chief executive officer and a chief operating officer of a corporation. He shall
have the authority to sign, in the name and on behalf of the Corporation,
checks, orders, contracts, leases, notes, drafts and other documents and
instruments in connection with the business of the Corporation, and together
with the Secretary or an Acting or Assistant Secretary, conveyances of real
estate and other documents and instruments to which the seal of the Corporation
is affixed. He shall have the authority to cause the employment or appointment
of such employees and agents of the Corporation as the conduct of the business
of the Corporation may require, to fix their compensation, and to remove or
suspend any employee or agent elected or appointed by the President or the Board
of Directors. The President shall perform such other duties and have such other
powers as the Board of Directors or the Chairman may from time to time
prescribe.
Section 4.7. Vice Presidents. Each Vice President shall perform such duties
and exercise such powers as may be assigned to him from time to time by the
President. In the absence of the President, the duties of the President shall be
performed and his powers may be exercised by such Vice President as shall be
designated by the President, or failing such designation, such duties shall be
performed and such powers may be exercised by each Vice President in the order
of their earliest election to that office, subject in any case to review and
superseding action by the President.
Section 4.8. The Secretary. The Secretary shall have the following powers
and duties:
4.8.1. He shall keep or cause to be kept a record of all the proceedings of
the meetings of the stockholders and of the Board of Directors in books provided
for that purpose.
4.8.2. He shall cause all notices to be duly given in accordance with the
provisions of these Amended By-Laws and as required by law.
4.8.3. Whenever any Committee shall be appointed pursuant to a resolution
of the Board of Directors, he shall furnish a copy of such resolution to the
members of such Committee.
4.8.4. He shall be the custodian of the records and of the seal of the
Corporation and cause such seal (or a facsimile thereof) to be affixed to all
certificates representing shares of the Corporation prior to the issuance
thereof and to all instruments the execution of which on behalf of the
Corporation under its seal shall have been duly authorized in accordance with
these Amended By-Laws, and when so affixed he may attest the same.
<PAGE>
4.8.5. He shall properly maintain and file all books, reports, statements,
certificates and all other documents and records required by law, the Restated
Certificate of Incorporation or these Amended By-Laws.
4.8.6. He shall have charge of the stock books and ledgers of the
Corporation and shall cause the stock and transfer books to be kept in such
manner as to show at any time the number of shares of stock of the Corporation
of each class issued and outstanding, the names (arranged alphabetically or
chronologically) and the addresses of the holders of record of such shares, the
number of shares held by each holder and the date as of which each became such
holder of record.
4.8.7. He shall sign (unless the Treasurer, an Assistant Treasurer or
Acting or Assistant Secretary shall have signed) certificates representing
shares of the Corporation the issuance of which shall have been authorized by
the Board of Directors.
4.8.8. He shall perform, in general, all duties incident to the office of
Secretary and such other duties as may be specified in these Amended By-Laws or
as may be assigned to him from time to time by the Board of Directors, or the
President.
Section 4.9. The Treasurer. The Treasurer shall have the following powers
and duties:
4.9.1. He shall have charge and supervision over and be responsible for the
moneys, securities, receipts and disbursements of the Corporation, and shall
keep or cause to be kept full and accurate records of all receipts of the
Corporation.
4.9.2. He shall cause the moneys and other valuable effects of the
Corporation to be deposited in the name and to the credit of the Corporation in
such banks or trust companies or with such bankers or other depositaries as
shall be selected in accordance with Section 8.5 of these Amended By-Laws.
4.9.3. He shall cause the moneys of the Corporation to be disbursed by
checks or drafts (signed as provided in Section 8.6 of these Amended By-Laws)
upon the authorized depositaries of the Corporation and cause to be taken and
preserved proper vouchers for all moneys disbursed.
4.9.4. He shall render to the Board of Directors or the President, whenever
requested, a statement of the financial condition of the Corporation and of all
his transactions as Treasurer, and render a full financial report at the annual
meeting of the stockholders, if called upon to do so.
4.9.5. He shall be empowered from time to time to require from all officers
or agents of the Corporation reports or statements giving such information as he
may desire with respect to any and all financial transactions of the
Corporation.
4.9.6. He may sign (unless an Assistant Treasurer or the Secretary or an
Acting or Assistant Secretary shall have signed) certificates representing stock
of the Corporation the issuance of which shall have been authorized by the Board
of Directors.
4.9.7. He shall perform, in general, all duties incident to the office of
treasurer and such other duties as may be specified in these Amended By-Laws or
as may be assigned to him from time to time by the Board of Directors, or the
President.
Section 4.10. Additional Officers. The Board of Directors may appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents and the officers specified in Section 4.1 hereof not covered in
Sections 4.6 through 4.9 hereof shall hold their offices for such terms and
shall exercise such powers and perform such duties as generally pertain to their
<PAGE>
respective offices, as well as such powers and duties as from time to time may
be authorized or prescribed by the Board of Directors. The Board of Directors
from time to time may delegate to any officer or agent the power to appoint
subordinate officers or agents and to prescribe their respective rights, terms
of office, authorities and duties. Any such officer or agent may remove any such
subordinate officer or agent appointed by him, for or without cause. [Section
142(a), (b).]
Section 4.11. Security. The Board of Directors may require any officer,
agent or employee of the Corporation to provide security for the faithful
performance of his duties, in such amount and of such character as may be
determined from time to time by the Board of Directors. [Section 142(c).]
ARTICLE 5.
CAPITAL STOCK
Section 5.1. Certificates of Stock, Uncertificated Shares. The shares of
the Corporation shall be represented by certificates, provided that the Board of
Directors may provide by resolution or resolutions that some or all of any or
all classes or series of the stock of the Corporation, or rights associated
therewith shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until each certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock in the Corporation represented by certificates
and upon request every holder of uncertificated shares shall be entitled to have
a certificate signed by, or in the name of the Corporation, by the Chairman,
President or a Vice President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Acting or Assistant Secretary, representing the number of
shares registered in certificate form. Such certificate shall be in such form as
the Board of Directors may determine, to the extent consistent with applicable
law, the Restated Certificate of Incorporation and these Amended By-Laws.
[Section 158.]
Section 5.2. Signatures; Facsimile. All of such signatures on the
certificate may be a facsimile, engraved or printed, to the extent permitted by
law. In case any officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed upon a certificate shall have ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue. [Section 158.]
Section 5.3. Lost, Stolen or Destroyed Certificates. The Board of Directors
may direct that a new certificate be issued in place of any certificate
theretofore issued by the Corporation alleged to have been lost, stolen or
destroyed, upon delivery to the Board of Directors of an affidavit of the owner
or owners of such certificate, setting forth such allegation. The Board of
Directors may require the owner of such lost, stolen or destroyed certificate,
or his legal representative, to give the Corporation a bond sufficient to
indemnify it against any claim that may be made against it on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
any such new certificate. [Section 167.]
Section 5.4. Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares, duly endorsed or
accompanied by appropriate evidence of succession, assignment or authority to
transfer, the Corporation shall issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Within a reasonable time after the transfer of uncertificated stock, the
Corporation shall send to the registered owner thereof a written notice
containing the information required to be set forth or stated on certificates
pursuant to Sections 151, 156, 202(a) or 218(a) of the General Corporation Law
<PAGE>
of the State of Delaware. Subject to the provisions of the Restated Certificate
of Incorporation and these Amended By-Laws, the Board of Directors may prescribe
such additional rules and regulations as it may deem appropriate relating to the
issue, transfer and registration of shares of the Corporation. [Section 151(f).]
Section 5.5. Record Date. In order to determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or entitled to express consent to corporate action in writing without a
meeting, 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
action, the Board of Directors may fix, in advance, a record date, which record
date shall not precede the date on which the resolution fixing the record date
is adopted by the Board of Directors, and which shall not be more than sixty nor
less than ten days before the date of such meeting. 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 the stockholders entitled
pursuant to these Amended By-Laws 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. If no record date has been fixed by the Board of
Directors, 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 law, shall be the first date on which a signed
written consent setting forth the action taken or proposed to be taken is
delivered to the Corporation by delivery to its registered office in the State
of Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered office
shall be by hand or by certified or registered mail, return receipt requested.
If no record date has been fixed by the Board of Directors and prior action by
the Board of Directors is required by 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 day on which the Board of
Directors adopts the resolution taking such prior action.
In order that the Corporation may determine the stockholders entitled to
receive payment of any dividend or other distribution or allotment of any rights
of the stockholders entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
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,
and which record date shall be not more than sixty days prior to such action. If
no record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. [Section 213.]
Section 5.6. Registered Stockholders. Prior to due surrender of a
certificate for registration of transfer, the Corporation may treat the
registered owner as the person exclusively entitled to receive dividends and
other distributions, to vote, to receive notice and otherwise to exercise all
the rights and powers of the owner of the shares represented by such
certificate, and the Corporation shall not be bound to recognize any equitable
or legal claim to or interest in such shares on the part of any other person,
whether or not the Corporation shall have notice of such claim or interests.
Whenever any transfer of shares shall be made for collateral security, and not
absolutely, it shall be so expressed in the entry of the transfer if, when the
<PAGE>
certificates are presented to the Corporation for transfer or uncertificated
shares are requested to be transferred, both the transferor and transferee
request the Corporation to do so. [Section 159.]
Section 5.7. Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents and one or more registrars, and may require
all certificates representing shares to bear the signature of any such transfer
agents or registrars.
ARTICLE 6.
INDEMNIFICATION
Section 6.1. Nature of Indemnity. 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, by reason of the fact that he is or
was or has agreed to become a Director or officer of the Corporation, or is or
was serving or has agreed to serve at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust or
other enterprise, or by reason of any action alleged to have been taken or
omitted in such capacity, and may indemnify any person who was or is a party or
is threatened to be made a party to such an action, suit or proceeding by reason
of the fact that he is or was or has agreed to become an employee or agent of
the Corporation, or is or was serving or has agreed to serve at the request of
the Corporation as an employee or agent 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 him or on his behalf in connection with such action, suit or
proceeding and any appeal therefrom, if he acted in good faith and in a manner
he 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 conduct was unlawful; except that in the case of
an action or suit by or in the right of the Corporation to procure a judgment in
its favor (1) such indemnification shall be limited to expenses (including
attorneys' fees) actually and reasonably incurred by such person in the defense
or settlement of such action or suit, and (2) 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 to the Corporation unless and only to the extent that the
Delaware Court of Chancery 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 Delaware Court of
Chancery or such other court shall deem proper.
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 he 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 reasonable cause to believe that his conduct was unlawful.
Section 6.2. Successful Defense. 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
6.1 hereof or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
Section 6.3. Determination That Indemnification is Proper. Any
indemnification of a Director or officer of the Corporation under Section 6.1
hereof (unless ordered by a court) shall be made by the Corporation unless a
determination is made that indemnification of the Director or officer is not
proper in the circumstances because he has not met the applicable standard of
conduct set forth in Section 6.1 hereof. Any indemnification of an employee or
agent of the Corporation under Section 6.1 hereof (unless ordered by a court)
<PAGE>
may be made by the Corporation upon a determination that indemnification of the
employee or agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 6.1 hereof. Any such
determination shall be made (1) by a majority vote of the Directors who are not
parties to such action, suit or proceeding, even though less than a quorum, or
(2) if there are no such Directors, or if such Directors so direct, by
independent legal counsel in a written opinion, or (3) by the stockholders.
Section 6.4. Advance Payment of Expenses. Expenses (including attorneys'
fees) incurred by a Director or officer in defending any civil, criminal,
administrative or investigative action, suit or proceeding shall 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 or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article.
Such expenses (including attorneys' fees) incurred by other employees and agents
may be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate. The Board of Directors may authorize the Corporation's
counsel to represent such Director, officer, employee or agent in any action,
suit or proceeding, whether or not the Corporation is a party to such action,
suit or proceeding.
Section 6.5. Procedure for Indemnification of Directors and Officers. Any
indemnification of a Director or officer of the Corporation under Sections 6.1
and 6.2, or advance of costs, charges and expenses to a Director or officer
under Section 6.4 of this Article, shall be made promptly, and in any event
within 30 days, upon the written request of the Director or officer. If a
determination by the Corporation that the Director or officer is entitled to
indemnification pursuant to this Article is required, and the Corporation fails
to respond within sixty days to a written request for indemnity, the Corporation
shall be deemed to have approved such request. If the Corporation denies a
written request for indemnity or advancement of expenses, in whole or in part,
or if payment in full pursuant to such request is not made within 30 days, the
right to indemnification or advances as granted by this Article shall be
enforceable by the Director or officer in any court of competent jurisdiction.
Such person's costs and expenses incurred in connection with successfully
establishing his right to indemnification, in whole or in part, in any such
action shall also be indemnified by the Corporation. It shall be a defense to
any such action (other than an action brought to enforce a claim for the advance
of costs, charges and expenses under Section 6.4 of this Article where the
required undertaking, if any, has been received by the Corporation) that the
claimant has not met the standard of conduct set forth in Section 6.1 of this
Article, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors, its
independent legal counsel, and its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 6.1 of this Article, nor the fact that there has
been an actual determination by the Corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 6.6. Survival; Preservation of Other Rights. The foregoing
indemnification provisions shall be deemed to be a contract between the
Corporation and each Director, officer, employee and agent who serves in any
such capacity at any time while these provisions as well as the relevant
provisions of the General Corporation Law of the State of Delaware are in
effect. Any repeal or modification of these indemnification provisions shall not
affect any right or obligation then existing with respect to any state of facts
then or previously existing or any action, suit or proceeding previously or
<PAGE>
thereafter brought or threatened based in whole or in part upon any such state
of facts. Such a "contract right" may not be modified retroactively without the
consent of such Director, officer, employee or agent.
The indemnification provided by this Article VI shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested Directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall 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 a person.
Section 6.7. Insurance. The Corporation shall purchase and maintain
insurance on behalf of any person who is or was or has agreed to become a
Director or officer 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 any liability asserted against
him and incurred by him or on his behalf in any 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 under the provisions of this Article,
provided that such insurance is available on acceptable terms, which
determination shall be made by a vote of a majority of the entire Board of
Directors.
Section 6.8. Severability. If this Article VI or any portion hereof shall
be invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each Director or officer and may
indemnify each employee or agent of the Corporation as to costs, charges and
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement with respect to any action, suit or proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the
right of the Corporation, to the fullest extent permitted by any applicable
portion of this Article that shall not have been invalidated and to the fullest
extent permitted by applicable law.
ARTICLE 7.
OFFICES
Section 7.1. Registered Office. The registered office of the Corporation in
the State of Delaware shall be located at Corporation Trust Center, 1209 Orange
Street in the City of Wilmington, County of New Castle.
Section 7.2. Other Offices. The Corporation may maintain offices or places
of business at such other locations within or without the State of Delaware as
the Board of Directors may from time to time determine or as the business of the
Corporation may require.
<PAGE>
ARTICLE 8.
GENERAL PROVISIONS
Section 8.1. Dividends. Subject to any applicable provisions of law and the
Restated Certificate of Incorporation, dividends upon the shares of the
Corporation may be declared by the Board of Directors at any regular or special
meeting of the Board of Directors and any such dividend may be paid in cash,
property, shares of the Corporation's capital stock or rights to acquire the
same.
A member of the Board of Directors, or a member of any Committee designated
by the Board of Directors shall be fully protected in relying in good faith upon
the records of the Corporation and upon such information, opinions, reports or
statements presented to the Corporation by any of its officers or employees, or
Committees of the Board of Directors, or by any other person as to matters the
Director reasonably believes are within such other person's professional or
expert competence and who has been selected with reasonable care by or on behalf
of the Corporation, as to the value and amount of the assets, liabilities and/or
net profits of the Corporation, or any other facts pertinent to the existence
and amount of surplus or other funds from which dividends might properly be
declared and paid. [Sections 172, 173.]
Section 8.2. Reserves. There may be set aside out of any funds of the
Corporation available for dividends such sum or sums as the Board of Directors
from time to time, in its absolute discretion, thinks proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation or for such other purpose as the
Board of Directors shall think conducive to the interest of the Corporation, and
the Board of Directors may similarly modify or abolish any such reserve.
Section 8.3. Execution of Instruments. The President, any Vice President,
the Secretary or Acting Secretary or the Treasurer may enter into any contract
or execute and deliver any instrument in the name and on behalf of the
Corporation. The Board of Directors or the President may authorize any other
officer or agent to enter into any contract or execute and deliver any
instrument in the name and on behalf of the Corporation. Any such authorization
may be general or limited to specific contracts or instruments.
Section 8.4. Corporate Indebtedness. No loan shall be contracted on behalf
of the Corporation, and no evidence of indebtedness shall be issued in its name,
unless authorized by the Board of Directors or the President or any Vice
President. Such authorization may be general or confined to specific instances.
Loans so authorized may be effected at any time for the Corporation from any
bank, trust company or other institution, or from any firm, corporation or
individual. All bonds, debentures, notes and other obligations or evidences of
indebtedness of the Corporation issued for such loans shall be made, executed
and delivered as the Board of Directors or the President or any Vice President
shall authorize. When so authorized by the Board of Directors or the President
or any Vice President, any part of or all the properties, including contract
rights, assets, business or good will of the Corporation, whether then owned or
thereafter acquired, may be mortgaged, pledged, hypothecated or conveyed or
assigned in trust as security for the payment of such bonds, debentures, notes
and other obligations or evidences of indebtedness of the Corporation, and of
the interest thereon, by instruments executed and delivered in the name of the
Corporation.
Section 8.5. Deposits. Any funds of the Corporation may be deposited from
time to time in such banks, trust companies or other depositaries as may be
determined by the Board of Directors or the President, or by such officers or
agents as may be authorized by the Board of Directors or the President or any
Vice President to make such determination.
<PAGE>
Section 8.6. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such agent or agents
of the Corporation, and in such manner, as the Board of Directors or the
President or any Vice President from time to time may determine.
Section 8.7. Sale, Transfer, etc. of Securities. To the extent authorized
by the Board of Directors or by the President, any Vice President, the Secretary
or Acting Secretary or the Treasurer or any other officers designated by the
Board of Directors or the President may sell, transfer, endorse, and assign any
shares of stock, bonds or other securities owned by or held in the name of the
Corporation, and may make, execute and deliver in the name of the Corporation,
under its corporate seal, any instruments that may be appropriate to effect any
such sale, transfer, endorsement or assignment.
Section 8.8. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the President or any Vice President or the
Secretary or Acting Secretary shall have full power and authority on behalf of
the Corporation to attend any meeting of stockholders of any corporation in
which the Corporation may hold stock, and to act, vote (or execute proxies to
vote) and exercise in person or by proxy all other rights, powers and privileges
incident to the ownership of such stock. Such officers acting on behalf of the
Corporation shall have full power and authority to execute any instrument
expressing consent to or dissent from any action of any such corporation without
a meeting. The Board of Directors may by resolution from time to time confer
such power and authority upon any other person or persons.
Section 8.9. Fiscal Year. The fiscal year of the Corporation shall commence
on the first day of January of each year and shall terminate in each case on
December 31.
Section 8.10. Seal. The seal of the Corporation shall be circular in form
and shall contain the name of the Corporation, the year of its incorporation and
the words "Corporate Seal" and "Delaware". The form of such seal shall be
subject to alteration by the Board of Directors. The seal may be used by causing
it or a facsimile thereof to be impressed, affixed or reproduced, or may be used
in any other lawful manner.
Section 8.11. Books and Records; Inspection. Except to the extent otherwise
required by law, the books and records of the Corporation shall be kept at such
place or places within or without the State of Delaware as may be determined
from time to time by the Board of Directors.
ARTICLE 9.
AMENDMENT OF AMENDED BY-LAWS
Section 9.1. Amendment. These Amended By-Laws may be amended, altered or
repealed
9.1.1. by resolution adopted by a majority of the Board of Directors at any
special or regular meeting of the Board if, in the case of such special meeting
only, notice of such amendment, alteration or repeal is contained in the notice
or waiver of notice of such meeting; or 9.1.2. at any regular or special meeting
of the stockholders upon the affirmative vote of a majority of the combined
voting power of the then outstanding stock of the Corporation entitled to vote
generally in the election of Directors. In the case of such special meeting
only, notice of such amendment, alteration or repeal must be contained in the
notice or waiver of notice of such meeting. [Section 109(a).]
ARTICLE 10.
CONSTRUCTION
Section 10.1. Construction. In the event of any conflict between the
provisions of these Amended By-Laws as in effect from time to time and the
provisions of the Restated Certificate of Incorporation of the Corporation as in
effect from time to time, the provisions of such Restated Certificate of
Incorporation shall be controlling.
<PAGE>
AMERICAN STANDARD INC.
AMENDED BY-LAWS
As Adopted on May 4, 1995
TABLE OF CONTENTS
PAGE
ARTICLE I
STOCKHOLDERS 1
Section 1.1. Annual Meetings 1
Section 1.2. Special Meetings 1
Section 1.3. Notice of Meetings; Waiver . . . 2
Section 1.4. Quorum 2
Section 1.5. Voting 2
Section 1.6. Voting by Ballot 3
Section 1.7. Adjournment 3
Section 1.8. Proxies 4
Section 1.9. Organization; Procedure 5
Section 1.10. Stockholder Proposals and Nominations
of Directors. . . . . . . . . . . . . . 5
Section 1.11. [Reserved]. . . . . . . . . . . . . . . . 5
Section 1.12. [Reserved]. . . . . . . . . . . . . . . . 5
Section 1.13. Consent of Stockholders in
Lieu of Meeting 5
ARTICLE II
BOARD OF DIRECTORS 6
Section 2.1. General Powers.. . . . . . . 6
Section 2.2. Number and Term of Office 6
Section 2.3. Election of Directors 7
Section 2.4. Annual and Regular Meetings 7
Section 2.5. Special Meetings; Notice 8
Section 2.6. Quorum; Voting . . . 9
Section 2.7. Adjournment 9
Section 2.8. Action Without a Meeting 9
<PAGE>
1
Section 2.9. Organization . . . . . . . . . . . . 9
Section 2.10. Regulations; Manner of Acting 9
Section 2.11. Action by Telephonic Communications 10
Section 2.12. Resignations 10
Section 2.13. Removal of Directors 10
Section 2.14. Vacancies and Newly Created
Directorships 10
Section 2.15. Compensation 11
Section 2.16. Reliance on Accounts and Reports, etc. 11
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES 11
Section 3.1. How Constituted 11
Section 3.2. Powers 12
Section 3.3. Proceedings 13
Section 3.4. Quorum and Manner of Acting 13
Section 3.5. Action by Telephonic Communications 14
Section 3.6. Absent or Disqualified Members 14
Section 3.7. Resignations 14
Section 3.8. Removal 14
Section 3.9. Vacancies 14
ARTICLE IV
OFFICERS 15
Section 4.1. Number 15
Section 4.2. Election 15
Section 4.3. Salaries 15
Section 4.4. Removal and Resignation; Vacancies 16
Section 4.5. Authority and Duties of Officers 16
Section 4.6. The President 16
Section 4.7. Vice Presidents 17
Section 4.8. The Secretary 17
Section 4.9. The Treasurer 18
Section 4.10. Additional Officers 19
Section 4.11. Security 20
ARTICLE V
CAPITAL STOCK 20
Section 5.1. Certificates of Stock, Uncertificated
Shares 20
Section 5.2. Signatures; Facsimile 21
Section 5.3. Lost, Stolen or Destroyed Certificates 21
Section 5.4. Transfer of Stock 21
Section 5.5. Record Date . . . . . . . . . . . . . 22
Section 5.6. Registered Stockholders 23
Section 5.7. Transfer Agent and Registrar 24
ARTICLE VI
INDEMNIFICATION 24
Section 6.1. Nature of Indemnity 24
Section 6.2. Successful Defense 25
Section 6.3. Determination That Indemnification
is Proper 25
Section 6.4. Advance Payment of Expenses 26
Section 6.5. Procedure for Indemnification of
Directors and Officers 26
Section 6.6. Survival; Preservation of Other Rights 27
Section 6.7. Insurance 28
Section 6.8. Severability 28
ARTICLE VII
OFFICES 29
Section 7.1. Registered Office 29
Section 7.2. Other Offices 29
ARTICLE VIII
GENERAL PROVISIONS 29
Section 8.1. Dividends 29
Section 8.2. Reserves 30
Section 8.3. Execution of Instruments 30
Section 8.4. Corporate Indebtedness 30
Section 8.5. Deposits 31
Section 8.6. Checks 31
Section 8.7. Sale, Transfer, etc. of Securities 31
Section 8.8. Voting as Stockholder 31
Section 8.9. Fiscal Year 32
Section 8.10. Seal 32
Section 8.11. Books and Records; Inspection 32
ARTICLE IX
AMENDMENT OF AMENDED BY-LAWS 32
Section 9.1. Amendment 32
ARTICLE X
CONSTRUCTION 33
Section 10.1. Construction 33
-------- 1Citations are to the General Corporation Law of the State of
Delaware as in effect on May 4, 1995 (the "GCL"), and are inserted for reference
only, and do not constitute a part of the Amended By-Laws.
