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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-8287
LINDBERG CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-1391480
------------------------ ------------------------
(State of Incorporation) (IRS Identification No.)
6133 North River Road, Suite 700 Rosemont, Illinois 60018
(847) 823-2021
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(Address and telephone number of registrant's principal executive offices)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [ X ] No [ ]
The number of shares of the registrant's common stock, $.01 par value,
outstanding as of November 8, 1999 was 5,925,061.
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LINDBERG CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Part I Financial Information: Page No.
--------
Item 1. Consolidated Statements of Earnings - Three Months
and Nine Months Ended September 30, 1999 and 1998..........3
Consolidated Balance Sheets - As of September 30, 1999
and December 31, 1998 .....................................4
Consolidated Statements of Cash Flows - Nine Months
Ended September 30, 1999 and 1998 .........................5
Notes to the Consolidated Financial Statements .............6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations .......................7
Part II Other Information:
Item 1. Legal Proceedings .........................................11
Item 3. Quantitative and Qualitative Disclosures about
Market Risk ..............................................11
Item 5. Other Information .........................................11
Item 6. Exhibits and Reports on Form 8-K ..........................12
Signatures ................................................13
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<TABLE>
PART I FINANCIAL INFORMATION
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------------- ---------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Sales $ 29,010,315 $ 31,365,152 $ 92,735,118 $ 95,270,799
Cost of Sales (21,156,538) (21,680,600) (65,678,777) (65,628,244)
------------ ------------ ------------ ------------
Gross Profit 7,853,777 9,684,552 27,056,341 29,642,555
Selling and
Administrative Expense (4,532,767) (5,215,129) (14,331,087) (15,016,364)
------------ ------------ ------------ ------------
Operating Earnings 3,321,010 4,469,423 12,725,254 14,626,191
Interest Expense - Net (545,612) (510,388) (1,647,835) (2,056,067)
Investment Earnings 44,430 -- 74,050 --
------------ ------------ ------------ ------------
Earnings Before
Income Taxes 2,819,828 3,959,035 11,151,469 12,570,124
Provision for Income
Taxes (1,157,123) (1,603,398) (4,571,545) (5,091,655)
------------ ------------ ------------ ------------
Net Earnings $ 1,662,705 $ 2,355,637 $ 6,579,924 $ 7,478,469
============ ============ ============ ============
Basic Net Earnings
Per Share $ .28 $ .43 $ 1.12 $ 1.47
============ ============ ============ ============
Weighted Average Shares
Outstanding 5,908,312 5,512,901 5,898,529 5,072,119
============ ============ ============ ============
Diluted Net Earnings
Per Share $ .28 $ .41 $ 1.10 $ 1.41
============ ============ ============ ============
Weighted Average Shares
Outstanding and
Equivalents 5,994,410 5,720,087 5,984,842 5,300,075
============ ============ ============ ============
Cash Dividends Declared
and Paid $ .08 $ .08 $ .24 $ .24
============ ============ ============ ============
</TABLE>
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<TABLE>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1999 1998
ASSETS (Unaudited)
- - ------ ------------- -------------
<S> <C> <C>
Current Assets:
Cash $ 161,518 $ 157,391
Receivables (Net) 18,973,112 19,281,571
Other Current Assets 3,270,056 2,312,127
Net Assets of Discontinued Operations -- 2,142,719
------------- -------------
Total Current Assets 22,404,686 23,893,808
Property and Equipment:
Cost 137,447,369 125,918,525
Accumulated Depreciation (63,888,390) (59,181,581)
------------- -------------
Net Property and Equipment 73,558,979 66,736,944
Goodwill (Less Accumulated Amortization) 29,536,298 19,922,274
Notes Receivable 3,773,136 3,250,000
Other Non-Current Assets 1,714,671 1,686,776
------------- -------------
Total Assets $ 130,987,770 $ 115,489,802
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
Current Liabilities:
Current Maturities of Long-Term Debt $ 2,014,743 $ 2,077,271
Accounts Payable 3,251,140 4,187,398
Accrued Expenses 7,256,310 9,006,770
------------- -------------
Total Current Liabilities 12,522,193 15,271,439
Non-Current Liabilities:
Deferred Income Taxes 13,271,691 7,055,718
Long-Term Debt (Less Current Maturities) 39,568,977 32,683,630
Other Non-Current Liabilities 4,357,392 4,685,851
------------- -------------
Total Non-Current Liabilities 57,198,060 44,425,199
Stockholders' Equity:
Preferred Stock, $0.01 par value:
Authorized 1,000,000 shares.
No shares issued. -- --
Common Stock, $0.01 par value:
Authorized 25,000,000 shares.
Issued 6,673,397 shares. 66,734 66,734
Additional Paid-In Capital 31,326,150 31,326,023
Retained Earnings 34,363,605 29,200,569
Treasury Shares (748,336 in 1999 and
790,661 in 1998), at Cost (4,287,244) (4,529,767)
Cumulative Foreign Translation Adjustment (25,114) (93,781)
Underfunded Pension Liability Adjustment (176,614) (176,614)
------------- -------------
Total Stockholders' Equity 61,267,517 55,793,164
------------- -------------
Total Liabilities and Stockholders' Equity $ 130,987,770 $ 115,489,802
============= =============
</TABLE>
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<TABLE>
LINDBERG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
Increase (Decrease) in Cash September 30,
------------------------------
1999 1998
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Earnings $ 6,579,924 $ 7,478,469
Adjustments to Reconcile Net Earnings
to Net Cash Provided by Operating
Activities:
Depreciation 5,686,749 4,511,566
Amortization of Goodwill 671,653 438,811
Change in Assets and Liabilities (2,485,021) (1,459,939)
------------ ------------
Total Adjustments to Reconcile Net
Earnings to Net Cash Provided by
Operating Activities 3,873,381 3,490,438
------------ ------------
Net Cash Provided by Operating Activities 10,453,305 10,968,907
Cash Flows from Investing Activities:
Capital Expenditures (8,294,630) (7,679,284)
Cash Received from Sale of Discontinued
Operations 2,299,411 10,403,974
Cash Payments for Acquisitions, Net of Cash
Acquired (9,937,072) (24,112,588)
------------ ------------
Net Cash Used in Investing Activities (15,932,291) (21,387,898)
Cash Flows from Financing Activities:
Net Borrowings Under Revolving Credit
Agreement 6,900,000 3,800,000
Issuance of Common Stock -- 16,000,000
Repayment of Notes Payable -- (8,220,000)
Dividends Paid (1,416,887) (1,244,821)
------------ ------------
Net Cash Provided by Financing Activities 5,483,113 10,335,179
------------ ------------
Net Increase (Decrease) in Cash 4,127 (83,812)
Cash at Beginning of Period 157,391 283,270
------------ ------------
Cash at End of Period $ 161,518 $ 199,458
============ ============
Supplemental Disclosures of Cash Flow
Information:
Interest Paid $ 1,946,492 $ 2,302,378
Income Taxes Paid (Net of Refunds) 4,633,108 4,726,578
</TABLE>
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LINDBERG CORPORATION AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 Condensed Financial Statements
The condensed consolidated financial statements
included herein have been prepared by the company,
without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain
information and footnote disclosures normally included
in financial statements prepared in accordance with
generally accepted accounting principles have been
condensed or omitted pursuant to such rules and
regulations, although the company believes that the
disclosures are adequate to make the information
presented not misleading. It is suggested that these
condensed financial statements be read in conjunction
with the consolidated financial statements and the
notes thereto included in the company's latest annual
report on Form 10-K.
Statements for the three month and nine month periods
ended September 30, 1999 and September 30, 1998
reflect, in the opinion of the company, all adjustments
(consisting only of normal recurring accruals)
necessary to present fairly the results of these
periods. Results for interim periods are not
necessarily indicative of results for a full year.
NOTE 2 Acquisitions
On February 17, 1999, the company acquired all of the
outstanding shares of Metal-Lab of Wisconsin, Inc.
("Metal-Lab"), located in Sturtevant, Wisconsin, for
$9.9 million. Metal-Lab primarily serves the tool and
die industry. The cost of the acquisition has been
allocated to the assets and liabilities based on their
estimated fair market value. Goodwill is amortized
using the straight line method over 30 years. The
acquisition was funded with borrowings under the
revolving credit agreement.
NOTE 3 Debt
In February 1999, the company's revolving credit
facility with its banks was amended to increase the
borrowing capacity from $45 million to $70 million.
Additionally, the amendment extended the maturity date
of the agreement relating to the facility to December
2001 and adjusted certain loan covenants.
NOTE 4 Material Changes
No material changes have occurred with respect to the
company's contingent liabilities outlined in the
company's 1998 Form 10-K through the date of this
report.
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"Safe Harbor" Statement: This report contains "forward-
looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are those that are not statements of historical
fact, including statements regarding future revenues,
expenses and profits. These forward-looking statements are
subject to known and unknown risks, uncertainties or other
factors which may cause the actual results of the company
to be materially different from the historical results or
from any results expressed or implied by the forward-
looking statements. Such risks and factors include, but
are not limited to, those discussed in Exhibit 99.1 of the
company's most recently filed Form 10-K with the Securities
Exchange Commission
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION:
At September 30, 1999, the Company's total debt was $41.6
million, an increase of $6.8 million from $34.8 million
outstanding at December 31, 1998. The Company's total debt to
capitalization ratio was 40% at the end of the third quarter
of 1999 as compared to 38% at the end of 1998. During the
third quarter of 1999, total debt was reduced by $700,000.
The level of debt increased as of September 30, 1999 in
comparison to the level at the end of 1998 primarily as a
result of the acquisition of Metal-Lab of Wisconsin, Inc. on
February 17, 1999 for a purchase price, net of cash received,
of $9.9 million. This transaction was funded with additional
borrowings under the Company's revolving credit agreement. The
cash effect of this purchase was offset to a degree by cash
generated from the sale of the last discontinued Precision
Products operation - Arrow Acme Company - during the first
quarter of 1999, which was used to repay debt.
In February 1999, the Company amended its revolving credit
facility to increase the total borrowing capacity from $45
million to $70 million, extend the maturity date of the
agreement relating to the facility to December 2001 and to
adjust certain loan covenants. At September 30, 1999, the
Company had $37 million of available capacity under the
amended revolving credit facility.
Capital expenditures for the first nine months of 1999 were
$8.3 million as compared to $7.7 million in the corresponding
period of 1998. The spending in the first nine months of 1999
related primarily to the addition of furnace capacity and
ancillary equipment at certain of the Company's facilities.
On July 22, 1999, the Board of Directors declared a cash
dividend of $.08 on each share of the Company's common stock,
payable on September 1, 1999. The total cash dividends paid
on the latter date were $473,000. This compared to a dividend
payout of $.08 per share of common stock, or $470,000 in the
same quarter of 1998.
The Company believes that its borrowing capacity and funds
generated through operations will be sufficient to meet
currently foreseen capital investment and working capital
needs in support of existing businesses for the balance of
1999 and in the longer term.
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OF RESULTS OF OPERATIONS:
Quarter ended September 30, 1999 and 1998
Net sales for the quarter ended September 30, 1999 were $29.0
million, down $2.4 million, or 8%, from $31.4 million for the
corresponding period in 1998. For the third quarter of 1999,
excluding the effect of acquisitions made subsequent to
September 30, 1998, the Company's operations reported reduced
net sales of approximately 15% overall. The decline in net
sales at previously existing operations resulted from weakness
in orders at facilities serving customers in the commercial
aerospace and oilfield equipment markets.
Gross profit for the third quarter of 1999 was $7.9 million,
down $1.8 million, or 19%, from $9.7 million in the third
quarter of 1998. The Company's gross margin in the third
quarter of 1999 was 27.1%, compared to 30.9% in the
corresponding period of 1998. The gross profit decrease in
the third quarter of 1999 versus the same quarter of last year
related mainly to the lower sales volume and a shift in sales
mix toward somewhat reduced margin business.
Selling and administrative expenses for the third quarter of
1999 were $4.5 million, compared to $5.2 million in the third
quarter of 1998. The decrease resulted largely from cost
reduction efforts within the Company, a lower level of expense
associated with the management bonus for the 1999 period and
higher bad debt related expense recorded in the 1998 period.
Selling and administrative expenses as a percentage of sales
were 15.6% for the third quarter of 1999, a decrease from
16.6% in the corresponding period of 1998.
Interest expense net of interest income in the third quarter
of 1999 was $546,000, compared to $510,000 in the third
quarter of 1998. The increase resulted from a higher level of
debt in the 1999 period related primarily to acquisitions made
subsequent to September 30, 1998.
Reflecting the above, net earnings in the third quarter of
1999 were $1.7 million, down from $2.4 million for the
corresponding period of 1998. Diluted earnings per share in
the third quarter of 1999 were $.28 as compared to $.41 per
share in the third quarter of 1998. The number of weighted
average shares outstanding and equivalents was higher in the
third quarter of 1999 by 274,000 as a result of the sale of
shares of common stock in a public offering in the third
quarter of 1998.
Nine Months ended September 30, 1999 and 1998
Net sales for the nine months ended September 30, 1999 were
$92.7 million, a decrease from the $95.3 million reported in
the corresponding period in 1998. The decline in net sales
resulted from weakness in orders at facilities serving
customers in the commercial aerospace and oilfield equipment
markets.
Gross profit for the first nine months of 1999 was $27.1
million, down $2.6 million, or 9%, from $29.6 million for the
same period of 1998 as a result of the lower net sales and a
shift in sales mix toward somewhat reduced margin business.
The Company's gross margin in the first nine months of 1999
was 29.2%, compared to 31.1% in the corresponding period of
1998.
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Selling and administrative expenses for the first nine months
of 1999 were $14.3 million, 5% below the $15.0 million
reported in the first nine months of 1998. The decrease
resulted largely from cost reduction efforts within the
Company and a lower level of expense associated with the
management bonus for 1999. Selling and administrative
expenses as a percentage of sales were 15.5% for the first
nine months of 1999, down from 15.8% in the corresponding
period of 1998.
Interest expense net of interest income in the first nine
months of 1999 was $1.6 million, compared to $2.1 million in
the first nine months of 1998. This decrease resulted from
lower average borrowing levels during the 1999 period, and
from an increased level of interest income related to notes
receivable received during 1998 and early 1999 from the
divestiture of the discontinued Precision Products operations.
Reflecting the above, net earnings in the first nine months of
1999 were $6.6 million, down from $7.5 million for the
corresponding period of 1998. Diluted earnings per share in
the first nine months of 1999 were $1.10 as compared to $1.41
per share in the first nine months of 1998. The number of
weighted average shares outstanding and equivalents was higher
by 685,000 in the 1999 period as a result of the sale of
1,000,000 shares of common stock in a public offering in the
third quarter of 1998.
Possible Effects of Year 2000:
The Company categorizes its exposure to Year 2000 issues as
follows; information technology (IT) systems at its operating
facilities; IT systems at its corporate office; embedded
technology; customers; and suppliers.
The Company's IT systems at its operating facilities are,
generally, maintained by Company personnel. The Company has
upgraded its existing software used for order entry, billing,
plant routing, shipping and process management to make it Year
2000 compliant. No additional employees were hired, nor were
any additional costs with outside vendors incurred, to revise
the existing software for compliance or to install upgrades.
The Company's corporate office utilizes IT systems supplied
primarily by third party vendors for accounting functions and
payroll processing. All such vendors have stated that their
software is now Year 2000 compliant, and the Company has
verified compliance as of the end of the third quarter of
1999. The Company pays annual maintenance fees for the use of
this software, and no additional costs have been incurred
related to this area.
The Company's operations primarily involve furnaces and
ancillary equipment. Some of these use embedded technology
such as microprocessor-based process controllers. It has been
determined that the embedded technology used in the operations
is not date sensitive in many cases, or is Year 2000 compliant
in others.
No single customer accounts for more than 3% of the Company's
sales. In addition, the Company serves over 10,000 customers.
The effect on the Company of the loss of sales from a single
customer due to a Year 2000 issue, therefore, will largely be
mitigated due to the Company's diversified customer base.
However, there can be no assurance that individual plants will
not be adversely affected by the temporary loss of one or more
major customers.
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With respect to suppliers, the Company's largest costs,
excluding labor, are electricity and natural gas. In the
event a utility supplier cannot provide its service for an
extended period due to a Year 2000 issue, the locations
involved would be adversely affected. It is not feasible for
the Company to arrange alternative power sources due to the
level of demand involved. Short-term disruptions are not
expected to have a significant impact on the Company due to
geographic dispersion of the Company's facilities. Other
purchased items used in the operations are available from many
suppliers and there is little or no product differentiation.
A disruption related to these suppliers would have little
impact on the Company.
While subject to speculation, the most reasonably likely worst
case scenario is currently considered by the Company to be the
loss of either electric or gas power at an operating facility.
However, the Company believes that this would be localized
and tend to be of a short duration.
The Company also benefits from having over 99% of its sales
generated within the United States, which has given the Year
2000 issue a high focus.
The Company has designated a group of management personnel to
coordinate Year 2000 activities. This group is establishing
Year 2000 contingency plans in advance of the Year 2000.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
The company was the subject of a pending investigation by
the government and a qui-tam (whistle-blower) lawsuit
regarding alleged violations of the Federal False Claims
Act and wrongful termination. The company learned of the
lawsuit in May 1998. The activities that were the
subject of the investigation and lawsuit related to only
one plant, and in the fourth quarter 1998, the company
established reserves for the potential settlement of this
claim. In the first quarter of 1999, the company reached
a settlement in principle with the government and the
plaintiff on terms consistent with the reserves
previously established. The company completed the
settlement in the second quarter of 1999.
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
There has been no material change during the first nine
months ended September 30, 1999 from the disclosures about
market risk provided in the company's latest annual report
on Form 10-K.
ITEM 5. Other Information
On October 22, 1999, the Board of Directors adopted
amendments to the company's By-laws. The effect of the
amendments was to:
. Change the date of the annual stockholders' meeting to
the last Friday in April.
. Change the advance notice provision that requires a
stockholder to notify the company of his or her
intention to present a proposal at the annual
stockholders' meeting a specified number of days prior
to the annual meeting or the mailing of proxies. Under
the amended By-laws, in order for a notice of a proposal
to be timely it must be received by the company not less
than 60 days nor more than 90 days prior to the anniversary
date of the immediately preceding annual meeting. Failure
to meet this timeline allows the company to exercise
discretionary voting authority on the proposal when and if
raised at the annual meeting.
This is only a summary of the amendments. Interested parties
should read the relevant provisions of the By-laws for a
complete explanation of the notice requirements. The amended
By-laws are included in their entirety as Exhibit 3 to this
report.
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ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K
The following exhibits are attached to the copies of
this report filed with the Securities and Exchange
Commission:
Number and Description of Exhibit
---------------------------------
3. By-laws
11. Statement Re Computation of Net Earnings Per Common Share
27. Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed in the quarter ended
September 30, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
LINDBERG CORPORATION
Principal Financial and Accounting Officer: By /s/ Stephen S. Penley
---------------------
Stephen S. Penley
Senior Vice President
and Chief Financial
Officer
Dated: November 8, 1999
<PAGE> 1
Exhibit 3
BY-LAWS
OF
LINDBERG CORPORATION
[As amended through October 22, 1999]
ARTICLE I
Offices
-------
Section 1. The registered office of the corporation in
Delaware shall be in the City of Wilmington, County of New
Castle.
Section 2. The corporation may also have offices at
such other places both within and without the State of Delaware
as the board of directors may from time to time determine or the
business of the corporation may require.
ARTICLE II
Meetings of Stockholders
------------------------
Section 1. All meetings of the stockholders for the
election of directors shall be held in the City of Chicago, State
of Illinois, at such place as may be fixed from time to time by
the board of directors, or at such other place either within or
without the State of Delaware as shall be designated from time to
time by the board of directors and stated in the notice of the
meeting. Meetings of stockholders for any other purpose may be
held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a
duly executed waiver of notice thereof.
Section 2. Annual meetings of stockholders shall be
held at 9:00 A.M. on the last Friday in April of each year if not
a legal holiday, or if a legal holiday, then on the next secular
day following, or at such other date and time as shall be
designated from time to time by the board of directors and stated
in the notice of the meeting. At each annual meeting,
stockholders shall elect by such vote as is required by Article
Tenth of the corporation's certificate of incorporation a board
of directors, and transact such other business as may properly be
brought before the meeting. Elections of directors need not be
by written ballot.
Section 3. For business properly to be brought before
any meeting of stockholders by a stockholder, the stockholder
must have given timely notice thereof in proper written form to
the secretary of the corporation, which notice is not withdrawn
by such stockholders at or prior to such meeting. To be timely,
a stockholder's notice to the secretary of the corporation must
be delivered to or mailed and received at the principal executive
offices of the corporation not less than 60 days nor more than 90
days prior to the anniversary date of the immediately preceding
annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not
within 30 days before or after such anniversary date, notice by
the stockholder in order to be timely must be so received not
later
<PAGE> 2
than the close of business on the 10th day following the
day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date of the annual
meeting was made, whichever occurs first. To be in proper
written form, a stockholder's notice to the secretary must set
forth in writing as to each matter the stockholder proposes to
bring before the meeting: (i) a brief description of the
business desired to be brought before the meeting and the reasons
for conducting such business at the meeting; (ii) the name and
address, as they appear on the corporation's books, of the
stockholder proposing such business; (iii) the class or series
and the number of the shares of capital stock of the corporation
which are owned by the stockholder, beneficially or of record;
(iv) a description of all arrangements or understandings between
such stockholder and any other person or persons (including their
names) in connection with the proposal of such business by such
stockholder and any material interest of the stockholder in such
business; and (v) a representation that such stockholder intends
to appear in person or by proxy at the annual meeting to bring
such business before the meeting. The chairman of the meeting
shall have the sole authority to determine whether business was
properly brought before the meeting in accordance with the
provisions of this Section 3 of Article II and, if the chairman
of the meeting should determine that any such business was not so
properly brought, he or she shall so declare to the meeting, and
any such business not properly brought before the meeting shall
not be transacted.
Section 4. Written notice of the annual meeting
stating the place, date and hour of the meeting shall be given to
each stockholder entitled to vote at such meeting not less than
ten nor more than 60 days (or in the case a vote of stockholders
on a merger or consolidation is one of the stated purposes of the
annual meeting, not less than 20 or more than 60 days) before the
date of the meeting.
Section 5. The officer who has charge of the stock
ledger of the corporation shall prepare, or cause to be prepared,
at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order and showing the address
of each stockholder and the number of shares registered in the
name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any stockholder who
is present.
Section 6. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute
or by the certificate of incorporation, may be called by the
chairman of the board or the president and shall be called by the
president or secretary at the request in writing of a majority of
the board of directors. Such request shall state the purpose or
purposes of the proposed meeting.
Section 7. Written notice of a special meeting stating
the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less
than ten or more than 60 days (or in the case of a merger or
consolidation, not less than 20 or more than 60 days) before the
date of the meeting, to each stockholder entitled to vote at such
meeting.
Section 8. Business transacted at any special meeting
of stockholders shall be limited to the purposes stated in the
notice.
Section 9. The holders of a majority of the shares of
stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the
certificate of incorporation. Abstentions shall be counted as
present in person or represented by proxy for
<PAGE> 3
purposes of
determining the existence of a quorum. If, however, such quorum
shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
If the adjournment is for more than 30 days, or if after the
adjournment a new record date is fixed for the adjourned meeting,
a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
Section 10. When a quorum is present at any meeting,
the vote of the holders of a majority of the stock having voting
power present in person or represented by proxy shall decide any
question brought before such meeting (other than the election of
directors, which shall be determined by a plurality vote), unless
the question is one upon which, by express provision of statute,
these by-laws or of the certificate of incorporation, a different
vote is required, in which case such express provision shall
govern and control the decision of such question. Abstentions
shall not be included in calculating the number of votes cast on,
in favor of, or in opposition to any questions.
Section 11. Unless otherwise provided in the
certificate of incorporation or these by-laws, each stockholder
shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall
be voted or acted upon after eleven months from its date, unless
the proxy expressly provides for a longer period.
ARTICLE III
Directors
---------
Section 1. The number of directors which shall
constitute the whole board of directors shall be a maximum of
seven. The number of directors may be changed from time to time,
as provided by Article Tenth of the corporation's certificate of
incorporation. Directorships, the terms of which expire as
provided in said Article Tenth, shall be filled at each annual
meeting of the stockholders, except as provided in Section 2 of
this Article III, and each director elected shall hold office
until his successor is elected and qualified or until his earlier
resignation or removal. Directors need not be stockholders.
Section 2. Any vacancies occurring in the board of
directors and newly-created directorships resulting from an
increase in the authorized number of directors may be filled by a
majority of the remaining directors though less than a quorum of
the board of directors, and any director so chosen shall hold
office until the next election of the class for which he was
chosen and until his successor is duly elected and qualified.
Section 3. Nominations for any election of a director
may be made by the board of directors, a committee appointed by
the board of directors, or by any stockholder entitled to vote
generally in the election of directors who complies with the
procedures set forth in this Section 3 of Article III. All
nominations by stockholders must be made pursuant to timely
notice in proper written form to the secretary of the
corporation. To be timely, a stockholder's notice to the
secretary of the corporation must be delivered to or mailed and
received at the principal executive offices of the corporation
(i) in the case of an annual meeting, not less than 60 days nor
more than 90 days prior to the anniversary date of the
immediately preceding annual meeting of stockholders; provided,
however, that in the event that the annual meeting is called for
a date that is not within 30 days before or after such
anniversary date, notice by the stockholder in order to be timely
must be so received not later than the close of business on the
10th day following the day on which such notice of the date of
the annual meeting was mailed or such public
<PAGE> 4
disclosure of the
date of the annual meeting was made, whichever occurs first, and
(ii) in the case of a special meeting of stockholders called for
the purpose of electing directors, not later than the close of
business on the 10th day following the day on which notice of the
date of the special meeting was mailed or public disclosure of
the date of the special meeting was made, whichever occurs first.
To be in proper written form, such stockholder's notice shall
set forth in writing (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director,
all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, including,
without limitation, such person's written consent to being named
in the proxy statement as a nominee and to serving as a director
if elected; and (b) as to the stockholder giving the notice (i)
the name and address, as they appear on the corporation's books,
of such stockholder, (ii) the class or series and number of
shares of capital stock of the corporation which are owned by
such stockholder, beneficially or of record, as of the record
date for the meeting, (iii) a description of all arrangements or
understandings between such stockholder and each proposed nominee
and any other person or persons (including their names) pursuant
to which the nomination(s) are to be made by such stockholder,
(iv) a representation that such stockholder intends to appear in
person or by proxy at the meeting to nominate the persons named
in its notice and (v) any other information relating to such
stockholder that would be required to be disclosed in
solicitations of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended. At the request
of the board of directors, any person nominated by the board of
directors, or a committee appointed by the board of directors,
for election as a director shall furnish to the secretary of the
corporation the information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee.
The chairman of the meeting shall, if the facts warrant,
determine and declare to the meeting that a nomination was not
made in accordance with the procedures prescribed by this Section
3 of Article III, and the defective nomination shall thereupon be
disregarded.
Section 4. The business of the corporation shall be
managed by its board of directors, which may exercise all such
powers of the corporation and do all such lawful acts and things
as are not by statute or by the certificate of incorporation or
by these by-laws directed or required to be exercised or done
only by the stockholders.
Meetings of the Board of Directors
----------------------------------
Section 5. The board of directors of the corporation
may hold meetings, both regular and special, either within or
without the State of Delaware.
Section 6. The first meeting of each newly elected
board of directors shall be held without other notice than this
by-laws, immediately after, and at the same place as, the annual
meeting of stockholders, provided a quorum shall be present. In
the event of the failure to hold the first meeting of a newly
elected board at such time and place, the meeting may be held at
such time and place as shall be specified in a notice given as
hereinafter provided for special meetings of the board of
directors, or as shall be specified in a written waiver signed by
all of the directors.
Section 7. Regular meetings of the board of directors
may be held without notice at such time and at such place as
shall from time to time be determined by the board.
Section 8. Special meetings of the board may be called
by the chairman of the board or the president on two days' notice
to each director, either personally or by mail or by telegram;
special meetings shall be called by the president or secretary in
like manner and on like notice at the written request of two
directors.
<PAGE> 5
Section 9. At all meetings of the board a majority of
the total number of directors then constituting the whole board
shall constitute a quorum for the transaction of business and the
vote of a majority of the directors present at any meeting at
which there is a quorum shall be the act of the board of
directors, except as may be otherwise specifically provided by
statute or by the certificate of incorporation. If a quorum
shall not be present at any meeting of the board of directors, a
majority of the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 10. Unless otherwise restricted by the
certificate of incorporation or these by-laws, any action
required or permitted to be taken at any meeting of the board of
directors or of any committee thereof may be taken without a
meeting, if all members of the board or committee, as the case
may be, consent thereto in writing, and the writing or writings
are filed with the minutes of proceedings of the board or
committee; and any member of the board of directors or of any
committee thereof may participate in a meeting of such board or
committee by means of conference telephone or similar
communications equipment by means of which all persons
participating in the meeting can hear each other, and
participation in such meeting shall constitute present in person
at such meeting.
Committees of Directors
-----------------------
Section 11. The board of directors may have any
executive committee, an audit committee, an executive
compensation committee, a finance committee, a nominating
committee, an incentive stock option committee, a directors stock
option committee, and such other committees as they may designate
by resolution passed by a majority of the whole board, each
committee to consist of one or more of the directors of the
corporation. The board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such
committee, to the extent provided in the resolution of the board
of directors, when the board of directors is not in session,
shall have and may exercise the powers of the board of directors
in the management of the business and affairs of the corporation
and may authorize the seal of the corporation to be affixed to
all papers which may require it; provided, however, that in the
absence or disqualification of any member of such committee or
committees or alternate members designated by the board, 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. Notwithstanding the foregoing provisions
of this Section 10 of this Article III, no such committee shall
have the power or authority in reference to amending the
certificate of incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease
or exchange of all or substantially all of the corporation's
property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of the
dissolution, or amending the by-laws of the corporation; and,
unless the resolution or the certificate of incorporation
expressly so provide, no such committee shall have the power or
authority to declare a dividend or to authorize the issuance of
stock. Such committee or committees shall have such name or
names as may be determined from time to time by resolution
adopted by the board of directors.
Section 12. Each committee shall have a chairman,
appointed by the board of directors, who shall preside at all
meetings of such committee. Each committee shall keep regular
minutes of its meetings and report the same to the board of
directors when required.
Compensation of Directors
-------------------------
Section 13. Unless otherwise restricted by the
certificate of incorporation or these by-laws, the board of
directors shall have authority to fix the compensation of
directors. The directors may be
<PAGE> 6
paid their expenses, if any, of
attendance at each meeting of the board of directors and may be
paid a fixed sum for attendance at each meeting of the board of
directors or a stated salary as director. No such payment shall
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor. Members of special
or standing committees may be allowed like compensation for
attending committee meetings, and the chairmen of such committees
may be paid an additional fixed sum for their services as
chairmen.
ARTICLE IV
Notices
-------
Section 1. Notices to directors and stockholders shall
be in writing and delivered personally or mailed to the directors
or stockholders at their addresses appearing on the books of the
corporation. Notice by mail shall be deemed to be given at the
time when the same shall be mailed. Notice to directors may also
be given by telegram or by electronic facsimile transmission and
shall be deemed to be given at the time of delivery to the
telegraph company or at the time of electronic facsimile
transmission.
Section 2. Whenever any notice is required to be given
by statute or by the certificate of incorporation or these by-
laws, a waiver thereof in writing signed by the person or persons
entitled to said notice, whether before or after the time stated
therein, shall be deemed equivalent thereto.
ARTICLE V
Officers
--------
Section 1. The officers of the corporation shall
include a chairman of the board, a president, one or more vice
presidents (the number and designation thereof to be determined
by the board of directors), a secretary, a treasurer, a
controller and such assistant secretaries, assistant treasurers
or other officers as may be elected or appointed by the board of
directors. Any two or more offices may be held by the same
person.
Section 2. The board of directors at its first meeting
after each annual meeting of stockholders shall elect a chairman
of the board and president from among the directors and shall
elect one or more vice presidents, a secretary, a treasurer and
such assistant officers or other officers as it shall deem
advisable.
Section 3. The board of directors may from time to
time appoint such other officers and agents as it shall deem
advisable, who shall hold their offices for such terms and shall
perform such duties as from time to time may be prescribed by the
board of directors or the president.
Section 4. The salaries of all officers of the
corporation shall be fixed by the board of directors.
Section 5. Each officer of the corporation shall hold
office until his successor is chosen and qualified or until his
earlier death, resignation or removal. Any officers elected or
appointed by the board of directors may be removed at any time by
the affirmative vote of a majority of the board of directors.
Election or appointment as an officer or agent shall not of
itself create contract rights. Any vacancy occurring in any
office of the corporation may be filled by the board of
directors.
<PAGE> 7
Chairman of the Board
---------------------
Section 6. The chairman of the board shall preside at
all meetings of the stockholders and the board of directors. He
may sign certificates for shares of the corporation and any
deeds, mortgages, bonds, contracts, or other instruments which
the board of directors has authorized to be executed, whether or
not under the seal of the corporation, except in cases where the
signing and execution thereof shall be expressly delegated by the
board of directors or by these by-laws to some other officer or
agent of the corporation, and he shall perform such other duties
and have such other powers as from time to time may be prescribed
by the board of directors.
President
---------
Section 7. The president shall be the chief executive
officer of the corporation. Subject to the direction of the
board of directors, he shall have general and active management
responsibility for the business of the corporation and general
supervision of the other officers, agents and employees of the
corporation and shall see that all orders and resolutions of the
board of directors are carried into effect. In the absence of
the chairman of the board, or in the event of his inability to
act, he shall preside at all meetings of the stockholders and of
the board of directors. He may sign certificates for shares of
the corporation, and any deeds, mortgages, bonds, contracts, or
other instruments, whether or not under the seal of the
corporation, except in cases where the signing and execution
thereof shall be expressly delegated by the board of directors or
by these by-laws to some other officer or agent of the
corporation, and shall perform such other duties and have such
other powers as from time to time may be prescribed by the board
of directors.
Vice Presidents
---------------
Section 8. In the absence of the president, or in the
event of his inability to act, the vice president (or if there be
more than one, the executive vice presidents, senior vice
presidents or the vice presidents in the order designated, or in
the absence of any designation then in the order named in the
most recent resolution providing for the annual election of
officers) shall perform the duties of the president and when so
acting shall have all the powers of, and be subject to all the
restrictions upon, the president. The vice presidents shall
perform such other duties and have such other powers as from time
to time may be prescribed by the board of directors or the
president.
Secretary
---------
Section 9. The secretary shall: (a) keep the minutes
of the stockholders' and the board of directors' meetings in one
or more books provided for that purpose; (b) see that all notices
are duly given in accordance with the provisions of these by-laws
or as required by law; (c) be custodian of the corporate records
and of the seal of the corporation and see that the seal of the
corporation or a facsimile thereof is affixed to, and attested
to, all certificates for shares prior to the issue thereof and
that the seal of the corporation is affixed to, and attested to,
all documents, the execution of which on behalf of the
corporation under its seal is duly authorized in accordance with
the provisions of these by-laws; (d) keep or cause to be kept a
register of the mailing address of each stockholder which shall
be furnished to the secretary or any transfer agent of the
corporation by such stockholder; (e) sign, with the chairman of
the board, the president or a vice president, certificates for
shares of the corporation, the issue of which shall have been
authorized by resolution of the board of directors; (f) have
general charge of the stock transfer books of the corporation;
and (g) in general perform all duties incident to the office of
the secretary and such other duties as from time to time may be
prescribed by the board of directors or the president.
<PAGE> 8
Treasurer
---------
Section 10. The treasurer shall have charge and
custody of and be responsible for all funds and securities of the
corporation, the receipt and disbursement, subject to the
direction of the board of directors, of all moneys due and
payable to or by the corporation and to deposit funds and
securities of the corporation in such banks, trust companies or
other depositaries as shall be selected in accordance with these
by-laws; and (b) in general perform all the duties incident to
the office of treasurer and such other duties as from time to
time may be prescribed by the board of directors, the president
or the chief financial officer. If required by the board of
directors, the treasurer shall give a bond for the faithful
discharge of his duties in such sum and with such surety or
sureties as the board of directors shall determine.
Assistant Treasurers and Assistant Secretaries
----------------------------------------------
Section 11. The assistant secretaries as thereunto
authorized by the board of directors may sign with the chairman
of the board, the president or a vice president certificates for
shares of the corporation, the issue of which shall have been
authorized by a resolution of the board of directors. The
assistant treasurers shall, if required by the board of
directors, give bonds for the faithful discharge of their duties
in such sums and with such sureties as the board of directors
shall determine. The assistant secretaries and assistant
treasurers in general shall perform such duties as from time to
time may be prescribed by the secretary or the treasurer,
respectively, or by the board of directors or the president.
Controller
----------
Section 12. The controller shall: (a) have
responsibility to record the transactions of the corporation in
the books of account of the corporation; (b) report the results
of operations and financial condition of the corporation to
stockholders, directors, and officers of the corporation; (c)
maintain proper internal controls over the assets of the
corporation, and (d) in general perform such other duties as from
time to time may be prescribed by the chief financial officer, by
the board of directors, or by the president.
ARTICLE VI
Contracts, Loans, Checks, Deposits and Investments
--------------------------------------------------
Section 1. The board of directors may authorize any
officer or officers, agent or agents, to enter into any contract
or execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or
confined to specific instances.
Section 2. No loans shall be contracted on behalf of
the corporation and no evidence of indebtedness shall be issued
in its name unless authorized by a resolution of the board of
directors. Such authority may be general or confined to specific
instances.
Section 3. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued
in the name of the corporation shall be signed by such officer or
officers, agent or agents of the corporation, and in such manner,
as shall from time to time be determined by resolution of the
board of directors.
Section 4. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of
the corporation in such banks, trust companies or other
depositaries as the board of directors may authorize.
<PAGE> 9
ARTICLE VII
Certificates for Shares and Their Transfer
------------------------------------------
Section 1. Each holder of stock in the corporation
shall be entitled to have a certificate in such form as may be
determined by the board of directors, signed by or in the name of
the corporation by the chairman of the board, the president or a
vice president and by the secretary or an assistant secretary, or
the treasurer or an assistant treasurer of the corporation, and
sealed with the seal or a facsimile of the seal of the
corporation. All certificates for shares shall be consecutively
numbered or otherwise identified. The name of the person to who
the shares represented thereby are issued, and with the number of
shares and date of issue, shall be entered on the book of the
corporation.
Section 2. Upon surrender to any transfer agent of the
corporation of a certificate for shares of the corporation, duly
endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, the corporation shall issue
a new certificate to the person entitled thereto and cancel the
old certificate and record the transaction on the books of the
corporation. The person in whose name shares stand on the books
of the corporation shall be deemed the owner thereof for all
purposes as regards the corporation.
Section 3. The board of directors may appoint one or
more transfer agents and registrars of transfers, and may require
all stock certificates to be countersigned by such transfer agent
and registered by such registrar. The board of directors shall
have authority to make or approve rules and regulations
concerning the issue, transfer and registration of certificates
for shares.
Section 4. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if such
officer, transfer agent or registrar were still authorized at the
date of issue.
Section 5. The board of directors may authorize the
issuance of a new certificate in lieu of a certificate alleged by
the holder thereof to have been stolen, lost mutilated or
destroyed, upon compliance by such holder, or his legal
representatives, with such requirements as the board of directors
may impose or authorize. Such authorization by the board of
directors may be general or confined to specific instances.
ARTICLE VIII
Fixing Record Date
------------------
In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or 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 to 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 shall be given not less
than ten nor more than sixty days (or in the case of a merger or
consolidation, not less than twenty or more than sixty days)
before the date of such meeting, nor more than sixty days prior
to any other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of stockholders
shall apply to any adjournment of the meeting; provided, however,
that the board of directors may fix a new record date for the
adjourned meeting.
<PAGE> 10
ARTICLE IX
Dividends
---------
The board of directors may from time to time, declare,
and the corporation may pay, dividends on its outstanding shares
in the manner and upon the terms and conditions provided by law
and its certificate of incorporation.
ARTICLE X
General Provisions
------------------
Seal
----
Section 1. The corporate seal shall have inscribed
thereon the name of the corporation, the year of its organization
and the words "Corporate Seal, Delaware." The seal may be used
by causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.
Fiscal Year
-----------
Section 2. The fiscal year of the corporation shall
begin on the first day of January in each year and end on the
thirty-first day of December in each year.
ARTICLE XI
Amendments
----------
Section 1. Subject to the provisions of Article Tenth
of the corporation's certificate of incorporation, these by-laws
may be altered, amended or repealed and new by-laws may be
adopted at any meeting of the board of directors or at any
meeting of stockholders, held pursuant to notice duly given.
ARTICLE XII
Emergency Directors
-------------------
Section 1. The board of directors, by resolution, may
provide for emergency directors and appoint or designate the
manner in which emergency directors shall be determined. To the
extent provided in said resolution and as provided by Section 110
of the Delaware General Corporation Law, such emergency
directors, together with any remaining directors able to perform
their duties, shall have and may exercise the powers of the board
of directors in the management of the business and affairs of the
corporation, and shall thereby be deemed to constitute the board
of directors of the corporation, during any interval commencing
when the board of directors shall be unable to function by reason
of vacancies due to death, incapacity, or catastrophe or other
similar emergency conditions, as a result of which a quorum of
the board of directors or a standing committee thereof cannot
readily be convened for action. Such emergency directors,
including any remaining directors able to perform their duties,
shall, during the term they are authorized to function as
provided herein, have the power to appoint such temporary
officers to fill existing vacancies as the circumstances may
require, to remove officers as the circumstances may require, to
authorize the seal of the corporation to be affixed to all papers
which may require it, and to take any and all other actions as
may be required and permitted in conformity with the provisions
of Section 110 of the Delaware General Corporation Law. The
emergency directors shall consist of any available members of the
board of directors and any other persons in such order as named
by the board of directors on any list as
<PAGE> 11
it may compile from time
to time for purposes of appointing such emergency directors. If
the board of directors shall have failed to compile any list for
purposes of appointing emergency directors, the emergency
directors shall consist of (in the order specified below) any
available members of the board of directors, the chairman of the
board, the president, the vice presidents (in order of
seniority), the secretary, the treasurer, the controller, the
assistant secretaries (in order of seniority), and the assistant
treasurers (in order of seniority) of the corporation. The
chairman of the emergency directors shall be the highest ranking
available person on any list compiled by the board of directors
for purposes of appointing the emergency directors, or, if the
board of directors shall have failed to compile any such list,
the highest ranking available person of the following: the
chairman, the most senior member of the board of directors, the
president, the most senior vice president, the secretary, the
treasurer, the controller, the most senior assistant secretary,
and the most senior assistant treasurer.
Section 2. The emergency directors shall meet as
promptly as possible after the occurrence of the event herein
described which would activate their appointment and at such
subsequent time or times as it may designate until a board of
directors has been duly elected by the stockholders and
qualified. A meeting of the emergency directors may be called by
any emergency director, notice of which meeting need be given
only to such emergency directors as it is feasible to reach at
the time. Such emergency directors shall make their own rules of
procedure except to the extent otherwise provided by resolution
of the board of directors. The emergency directors in attendance
at the meeting shall constitute a quorum.
Section 3. During such times as the emergency
directors shall be required to function pursuant to the
provisions hereof, in the absence of the chief executive officer,
the chairman of said emergency directors shall function as, and
have the powers of, the chief executive officer of the
corporation and shall preside at all meetings of the stockholders
and the emergency directors. The chief executive officer shall
have and exercise, subject to the direction of the emergency
directors, general charge and supervision over the business and
affairs of the corporation.
Section 4. To the extent not inconsistent with the
provisions of this Article XII or Section 110 of the Delaware
General Corporation Law, all other provisions of these bylaws
shall remain in effect during the interval in which the emergency
directors shall be required to function pursuant to the
provisions hereof.
ARTICLE XIII
Indemnification
---------------
Section 1. The right to indemnification conferred by
Article Eighth of the corporation's certificate of incorporation
shall include the right to be paid by the corporation the
expenses (including attorneys' fees) incurred in defending any
such proceeding in advance of its final disposition; provided,
however, that if the Delaware General Corporation Law requires,
an advancement of expenses incurred by an indemnitee in his
capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the corporation of an
undertaking, by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined that
such indemnitee is not entitled to be indemnified for such
expenses under Article Eighth of the corporation's certificate of
incorporation or otherwise. This Article XIII shall not be
amended in a manner which diminishes the rights conferred hereby
upon any then current or former director or officer of the
corporation.
<PAGE> 1
Exhibit 11
<TABLE>
Computation of Net Earnings Per Common Share
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
EARNINGS
--------
Net Earnings $ 1,662,705 $ 2,355,637 $ 6,579,924 $ 7,478,469
=========== =========== =========== ===========
SHARES
------
Weighted Average Number
of Common Shares
Outstanding (See Note) 5,908,312 5,512,901 5,898,529 5,072,119
Additional Shares
Assuming Conversion
of Stock Options 86,098 207,186 86,313 227,956
----------- ----------- ----------- -----------
Weighted Average
Common Shares
Outstanding and
Equivalents 5,994,410 5,720,087 5,984,842 5,300,075
=========== =========== =========== ===========
Basic Net Earnings
Per Share $ .28 $ .43 $ 1.12 $ 1.47
=========== =========== =========== ===========
Diluted Net Earnings
Per Share $ .28 $ .41 $ 1.10 $ 1.41
=========== =========== =========== ===========
Note: All activity during the year has been adjusted for the number of
days in the year that the shares were outstanding.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 161,518
<SECURITIES> 0
<RECEIVABLES> 18,973,112
<ALLOWANCES> 610,909
<INVENTORY> 0
<CURRENT-ASSETS> 22,404,686
<PP&E> 137,447,369
<DEPRECIATION> 63,888,390
<TOTAL-ASSETS> 130,987,770
<CURRENT-LIABILITIES> 12,522,193
<BONDS> 0
0
0
<COMMON> 66,734
<OTHER-SE> 31,326,150
<TOTAL-LIABILITY-AND-EQUITY> 130,987,770
<SALES> 29,010,315
<TOTAL-REVENUES> 29,010,315
<CGS> 21,156,538
<TOTAL-COSTS> 21,156,538
<OTHER-EXPENSES> 4,532,767
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 545,612
<INCOME-PRETAX> 2,819,828
<INCOME-TAX> 1,157,123
<INCOME-CONTINUING> 1,662,705
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,662,705
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28
</TABLE>
