UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 August 26, 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: 1-8509
------
NANTUCKET INDUSTRIES, INC.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 58-0962699
- -------- ----------
(State of other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
105 Madison Avenue, New York, New York 10016
- -------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(212)889-5656
-------------
(Registrant's telephone number, including area code)
_________________________________________________________________
(Former name, former address and former fiscal year, if changed since last
report)
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 twelve 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 ninety days. X YES ___ NO
-----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDING DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant had filed all documents and
reports required to be filed by Sections 12,13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. ___ YES ___ NO
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date. As of September 28, 1995, the
Registrant had outstanding 2,986,296 shares of common stock.
<PAGE>
NANTUCKET INDUSTRIES, INC. AND SUBSIDIARIES
-------------------------------------------
QUARTERLY REPORT
----------------
QUARTER ENDED AUGUST 26, 1995
-----------------------------
I N D E X
---------
PAGE
----
Part I.- FINANCIAL INFORMATION
----------------------
Consolidated balance sheets 3
Consolidated statements of operations 4
Consolidated statements of cash flows 5
Notes to consolidated financial statements 6 - 8
Management's discussion and analysis of
financial condition and results of operations 9 - 10
Part II.- OTHER INFORMATION 11 - 14
-----------------
Signature 15
Exhibit Index 16
<PAGE>
<TABLE><CAPTION>
Nantucket Industries, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
August 26, February 25,
1995 1995
------------- ---------------
(unaudited) (1)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash $31,953 $32,049
Accounts receivable, less allowance for
doubtful accounts of $239,000 and $194,000,
respectively 5,690,996 6,472,148
Inventories (Note 2) 11,500,081 10,984,196
Other current assets 628,086 760,054
------------- --------------
Total current assets 17,851,116 18,248,447
PROPERTY, PLANT AND EQUIPMENT - NET 3,658,083 3,766,871
OTHER ASSETS,NET 104,826 168,194
------------- --------------
$21,614,025 $22,183,512
============= ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $1,475,000 $975,000
Accounts payable 1,206,095 2,405,989
Accrued salaries and employee benefits 421,315 811,882
Accrued unusual charge (Note 5) 465,000 465,000
Accrued expenses and other liabilities 443,150 358,267
Accrued royalties 241,027 399,546
Income taxes payable 2,640 2,640
------------- --------------
Total current liabilities 4,254,227 5,418,324
LONG-TERM DEBT 10,412,546 9,941,799
ACCRUED UNUSUAL CHARGE (Note 5) 868,745 1,058,330
NOTE PAYABLE TO RELATED PARTY 300,000 300,000
------------- --------------
15,835,518 16,718,453
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value; 500,000 shares authorized,
of which 5,000 shares have been designated as non-voting
convertible and are issued and outstanding 500 500
Common stock, $.10 par value; authorized
6,000,000 shares; issued 2,991,848 299,185 299,185
Additional paid-in capital 11,576,898 11,576,898
Accumulated deficit (6,036,062) (6,340,135
------------- --------------
5,840,521 5,536,448
Less 8,052 shares (10,552 at 2/25/95) shares of
common stock held in treasury, at cost 62,014 71,389
------------- --------------
5,778,507 5,465,059
------------- --------------
$21,614,025 $22,183,512
============= ==============
</TABLE>
(1) Derived from audited financial statements
The accompanying notes are an integral part of these statements.
3
<PAGE>
<TABLE><CAPTION>
Nantucket Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Twenty-six Weeks Ended Thirteen Weeks Ended
-------------------------------- -------------------------------
August 26, August 27, August 26, August 27,
1995 1994 1995 1994
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Net sales $17,853,238 $17,717,372 $7,360,502 $9,208,664
Cost of sales 13,121,959 13,907,887 5,235,817 7,059,314
------------- ------------- ------------ ------------
Gross profit 4,731,279 3,809,485 2,124,685 2,149,350
Selling, general and administrative
expenses 3,771,712 3,721,856 1,752,686 1,840,642
Unusual charge (Note 5) - 1,252,400 - 1,252,400
------------- ------------- ------------ ------------
Operating profit (loss) 959,567 (1,164,771) 371,999 (943,692)
Interest expense 655,494 580,747 324,167 353,245
------------- ------------- ------------ ------------
Net income (loss) 304,073 (1,745,518) 47,832 (1,296,937)
============= ============= ============ ============
Net income (loss) per share $0.10 ($0.70) $0.02 ($0.51)
============= ============= ============ ============
Weighted average common shares outstanding 2,982,296 2,509,950 2,983,318 2,521,104
============= ============= ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
<TABLE><CAPTION>
Nantucket Industries, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twenty-six Weeks Ended
-----------------------------------
August 26, August 27,
1995 1994
------------- --------------
<S> <C> <C>
Cash flows from operating activities
Net income (loss) $304,073 ($1,745,518)
Adjustments to reconcile net income (loss)
to net cash provided by (used in)
operating activities
Depreciation and amortization 181,903 149,773
Provision for doubtful accounts 60,000 66,407
Unusual charge - 1,252,400
Treasury stock issued in compliance with credit agreement 9,125 -
Provision for obsolete and slow moving inventory 120,000 120,000
Decrease (increase) in assets
Accounts receivable 721,152 (2,156,303)
Refundable income taxes - 480,972
Inventories (635,885) (1,640,631)
Other current assets 131,968 (39,290)
(Decrease) increase in liabilities
Accounts payable (1,199,894) (1,297,508)
Accrued expenses and other liabilities (464,203) (1,516,228)
Income taxes payable - (7,544)
Accrued unusual charge (189,585) (568,979)
-------------- --------------
Net cash used in operating activities (961,346) (6,902,449)
-------------- --------------
Cash flows from investing activities
Additions to property, plant and equipment (73,115) (261,064)
Decrease (Increase) in other assets 63,368 (66,241)
------------ --------------
Net cash used in investing activities (9,747) (327,305)
-------------- --------------
Cash flows from financing activities
Payments of previous line of credit agreement - (5,090,294)
Payments of long-term debt and capital lease obligations - (500,000)
Issuance of convertible preferred stock - 1,000,000
Net proceeds from sale of treasury stock 250 2,939,990
Borrowings under line of credit agreement, net 970,747 8,325,055
-------------- --------------
Net cash provided by financing activities 970,997 6,674,751
------------- --------------
NET DECREASE IN CASH ($96) ($555,003)
Cash at beginning of period 32,049 595,918
------------- --------------
Cash at end of period $31,953 $40,915
============= ==============
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION:
Cash paid during the period:
Interest $610,601 $460,041
============= ==============
Income taxes - $36,880
============= ==============
</TABLE>
The accompanying notes are an integral part of these statements
5
<PAGE>
NANTUCKET INDUSTRIES, INC.
--------------------------
AND SUBSIDIARIES
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
TWENTY-SIX WEEKS ENDED AUGUST 26, 1995 AND AUGUST 27, 1994
----------------------------------------------------------
(unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
The consolidated balance sheet as of August 26, 1995 and the consolidated
statements of operations for the twenty-six and thirteen week periods and
statements of cash flows for the twenty-six weeks ended August 26, 1995 and
August 27, 1994 have been prepared by the Company without audit. In the
opinion of management, all adjustments (consisting of only normal recurring
accruals) necessary for a fair presentation of the financial position of
the Company and its subsidiaries at August 26, 1995 and the results of
their operations for the twenty-six and thirteen week periods and cash
flows for the twenty-six weeks ended August 26, 1995 and August 27, 1994
have been made on a consistent basis.
The consolidated balance sheet as of August 27, 1994 and the consolidated
statements of operations for the twenty-six and thirteen week periods and
statements of cash flows for the twenty-six weeks ended August 27, 1994
have been restated and an amended Form 10-Q filed with regards to the
unusual charge discussed in Note 5 Unusual Charge.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these consolidated financial statements be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's 1995 Annual Report on Form 10-K.
The results of operations for the periods presented are not necessarily
indicative of the operating results for the full year.
2. INVENTORIES
Inventories are summarized as follows:
August 26, February 25,
1995 1995
-------------- --------------
Raw materials $ 1,895,724 $ 1,960,413
Work in process 5,848,226 5,594,387
Finished goods 3,756,131 3,429,396
____________ ____________
$ 11,500,081 $ 10,984,196
============ ============
6
<PAGE>
NANTUCKET INDUSTRIES, INC.
--------------------------
AND SUBSIDIARIES
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
TWENTY-SIX WEEKS ENDED AUGUST 26, 1995 AND AUGUST 27, 1994
----------------------------------------------------------
(continued)
(unaudited)
3. INCOME TAXES
At August 26, 1995 the Company had a net deferred tax asset in excess of
$4,600,000 which is fully reserved until it can be utilized to offset
deferred tax liabilities or realized against taxable income. In addition,
the Company had a net operating loss carryforward for book and tax purposes
of approximately $12,000,000 and $9,000,000 respectively. Accordingly, no
provision for income taxes has been reflected in the accompanying financial
statements.
4. STOCKHOLDERS' EQUITY
On March 22, 1994, the Company sold to its Management Group 5,000 shares
of non-voting convertible preferred stock for $1,000,000. These shares are
convertible into 200,000 shares of common stock at the rate of $5.00 per
share. These shares provide for cumulative dividends at a floating rate
equal to the prime rate and approximate $116,000 at August, 1995. Such
dividends are convertible into common stock at the rate of $5.00 per share.
These preferred shares are redeemable, at the option of the Company, on or
after February 28, 1999 and have a liquidation preference of $200 per
share.
On August 22, 1994, the Company sold 490,000 shares of its common
treasury stock to GUESS?, Inc. and certain of its affiliates at $6.00 per
share. The treasury stock issued had an average cost of $6.52 per share.
Accordingly the difference between the net proceeds, approximating
$2,900,000 and the treasury share's cost of $3,196,000 was applied to the
Company's Retained Earnings.
In connection with the Company's refinancing on March 22, 1994, the
Company entered into a $2,000,000 Term Loan Agreement with Chemical Bank.
This loan is payable in scheduled installments of $500,000 on December 14,
1994, June 15, 1995, December 15, 1995 and March 15, 1996. This agreement
also provides for mandatory prepayments of $500,000 due September 15, 1994
and December 15, 1994, $250,000 due February 15, 1995 and June 15, 1995 and
$500,000 due September 15, 1995. In fiscal 1995, the Company prepaid
$1,000,000, which pursuant to the agreement were applied to the scheduled
installments of December 15, 1994 and June 15, 1995. Accordingly, the next
schedule installment will be due December 15, 1995. Pursuant to the
agreement, the Company issued 2,500 treasury common shares related to the
mandatory prepayment not made on February 15, 1995 and an additional 2,500
treasury common shares related to the mandatory prepayment not made on June
15, 1995. The agreement requires the Company to issue additional common
shares at the rate of 1 share for every $100 of mandatory prepayment if
such prepayments are not made in accordance with the schedule payment
dates.
7
<PAGE>
NANTUCKET INDUSTRIES, INC.
--------------------------
AND SUBSIDIARIES
----------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
TWENTY-SIX WEEKS ENDED AUGUST 26, 1995 AND AUGUST 27, 1994
----------------------------------------------------------
(continued)
(unaudited)
5. UNUSUAL CHARGE
In the fourth quarter of fiscal 1994, the Company formulated plans to
close its Puerto Rico facility, discontinue a portion of its women's
innerwear business, reduce costs and streamline operations. In fiscal
1994, the Company provided for the costs associated with these matters as
an unusual charge. The closing of the Puerto Rico facility required
additional write-offs, reflected as an unusual charge of $1,252,400 in the
period ended August 27, 1994.
Simultaneously, the Company also terminated the employment contracts of
its Chairman and Vice Chairman. In accordance with the underlying
agreement, they will be paid an aggregate of approximately $400,000 per
year in severance, as well as certain other benefits, through February 28,
1999. The present value of these payments, $1,915,000, was accrued at
February 26, 1994. Through August 26, 1995 $581,000 of this accrual has
been paid; $391,000 during fiscal year 1995 and $190,000 through August 26,
1995.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operation
- --------------------
Sales
Net sales for the six months ended August 26, 1995 increased $136,000 from prior
year levels to $17,853,000. Second quarter sales of $7,361,000 were 20% lower
from prior year levels reflecting a soft retail environment and earlier than
expected shipments at the end of the first fiscal quarter. The year to date and
second quarter also reflect the impact of:
Increase (Decrease)
6 Months 2nd Quarter
--------- -----------
Elimination of unprofitable product lines ($1,469,000) ($533,000)
GUESS? product line increased sales $1,140,000 $912,000
Second quarter and six months net sales were impacted favorably by the
introduction of the JC Penney Arizona line.
Gross Margin
Gross profit margins continued to improve to from prior year levels as follows:
6 Months 2nd Quarter
-------- -----------
Current fiscal year 26.5% 28.9%
Prior fiscal year 21.5% 23.3%
This is a result of the improved product mix from the increased sales of the
higher margin GUESS? Innerwear line and the elimination of the unprofitable
products, improved plant efficiencies and lower cost product sources.
Selling, general and administrative expenses
Selling, general and administrative expenses for the second quarter declined 5%
to $1,753,000 compared to $1,841,000 for the second quarter of the prior year.
For the six months, there was a slight increase of $50,000. These changes are
generally due to the variable selling costs related to the changes in net
sales. In addition, selling, general and administrative expenses for the second
quarter and the six months have been reduced by a $102,000 settlement of a
insurance claim expensed in the fourth quarter of the prior fiscal year.
9
<PAGE>
Unusual charge in prior year
Prior year results reflect an unusual charge of $1,252,400 related to additional
costs incurred with the shutdown of the Puerto Rico facility discussed in detail
in Note 5 Unusual Charge.
Interest expense
The increase in interest expense of $75,000 for the six months is primarily due
to the higher prime rates in effect during fiscal year 1996. The $29,000
decrease in the second fiscal quarter reflects the $1,000,000 of prepayments of
the Chemical Term Loan Agreement
Liquidity and Capital Resources
- -------------------------------
During fiscal 1994 the Company's liquidity and capital resources were adversely
affected by its operating losses and reduced borrowing availability under the
existing credit facilities. Additionally, the Company had difficulty receiving
delivery of raw materials for its domestic production and an absence of
availability to open letters of credit for its imported products.
The Company was successful in refinancing its credit agreements with (i) a three
year $15,000,000 revolving credit facility, including a $3,000,000 letter of
credit facility, with Congress Financial, (ii) a $2,000,000 Term Loan Agreement
with Chemical Bank and (iii) an additional $1,500,000 Term Loan with Congress
replacing the Industrial Revenue Bond financing of the Cartersville, Georgia
manufacturing plant. Additionally, the $1,000,000 investment in the Company by
the Management Group and the sale of 490,000 shares of common treasury stock to
GUESS?, Inc. and certain of its affiliates increased the Company's liquidity and
capital resources. The net proceeds of $2.9 million from the sales of treasury
shares was used to prepay $500,000 of bank debt and the balance provided
additional working capital resources. The Company believes that the credit
facility provides adequate financing flexibility to fund its operations.
Working capital increased $767,000 from year-end levels to $13,597,000. This
increase reflects an increase in inventory levels in preparation for historical
seasonal sales increases during the Christmas season and a reduction of accounts
payable and accrued liabilities. These increases were offset by a decrease in
accounts receivable and current maturities of debt to Chemical Bank.
The Company believes that the moderate rate of inflation over the past few years
has not had significant impact on sales or profitability.
10
<PAGE>
PART II
--------
Item 1. Legal Proceedings
- --------------------------
None
Item 2. Changes in Securities
- ------------------------------
None
Item 3. Defaults Upon Senior Securities
- ----------------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
(a) The Company held a special meeting of stockholders in lieu of annual
meeting on August 2, 1995.
(b) Not applicable.
(c) At the meeting:
(i) the number of the directors was set at eight, by a vote of
1,530,072 shares for and 3,976 against:
(ii) the Company's nominees for director were re-elected by the
following votes:
Votes to
Votes withhold
Nominee in favor authority
------- -------- ---------
George J. Gold 1,525,877 8,171
Raymond L. Wathen 1,530,072 3,976
(iii) the Stockholders approved the appointment of Grant Thornton LLP
as auditors of the Company for the current fiscal year. Such motion
was approved by vote of 1,531,730 shares in favor, 1,364 shares
against and 954 shares abstaining.
11
<PAGE>
Item 5. Other Information
- --------------------------
On August 2, 1995, at a special meeting of the Board of Directors of the
Company (the "Board") in lieu of annual meeting, the Board unanimously voted,
pursuant to Article VI, Section 1 of the By-laws, to the amend the By-laws of
the Company by replacing Article IX in its entirety with the following:
ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or an
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than such law permitted
the corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgment, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 3 of this Article IX with respect to proceedings
to enforce rights to indemnification, the corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the corporation.
Section 2. The right to indemnification conferred in Section 1 of this
Article IX shall include the right to be paid by the corporation the expenses
(including attorney's fees) incurred in defending any such proceeding in advance
of its final disposition (hereinafter an "advancement of expenses"); provided,
however, that, if the Delaware General Corporation Law requires, an advancement
of expenses incurred by an indemnitee in his or her 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 any employee benefit
plan) shall be made only upon delivery to the corporation of any undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication") that such indemnitee is not entitled to be indemnified for such
expenses under this Section 2 or otherwise. The rights to indemnification and
to the advancement of expenses conferred in Sections 1 and 2 of this Article IX
shall be contract rights and such rights shall continue as to an indemnitee who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
12
<PAGE>
Section 3. If a claim under Section 1 or 2 of this Article IX is not paid
in full by the corporation within sixty (60) days after a written claim has been
received by the corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty (20) days, the
indemnitee may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met any
applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article IX or otherwise shall be on the
corporation.
Section 4. The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
corporation's Certificate of Incorporation, By-laws, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 5. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
Section 6. The corporation may, to the extent authorized from time to time
by the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the corporation to the
fullest extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of officers and directors of the
corporation."
13
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
3(b) - By-laws of the Company as currently in effect Filed herewith
(b) Reports on Form 8-K - None.
14
<PAGE>
SIGNATURE
---------
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.
NANTUCKET INDUSTRIES, INC.
(Registrant)
By:
s/Ronald S. Hoffman
--------------------
October 6, 1995 Ronald S. Hoffman,
Vice President - Finance
(Chief Accounting Officer)
15
<PAGE>
Exhibit Index
-------------
3(b) - By-laws of the Company
as currently in effect Filed herewith
16
Exhibit 3(b)
------------
NANTUCKET INDUSTRIES, INC.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
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 as 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 Boston, Commonwealth of Massachusetts, 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, commencing with the year 1970,
shall be held on the third Friday of June if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 11:00 a.m., 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 which they shall elect a board of
directors, and transact such other business as may properly be brought before
the meeting.
Section 3. 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 fifty days before the date of the
meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, 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 a time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present. The original stock ledger shall be the only evidence as to who are
stockholders entitled to examine such list or to vote in person or by proxy at
such election.
<PAGE>
Section 5. 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 and shall be called by
the chairman of the board or secretary at the request in writing of a majority
of the board of directors, or at the request in writing of stockholders owning a
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Such request shall state the purpose or
purposes of the proposed meeting.
Section 6. 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 nor more than fifty days before the date of the
meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the entire capital 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, by the
certificate of incorporation, or by these by-laws. 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 thirty
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 9. When a quorum for the election of any director is present at
any meeting, a plurality of the votes of the capital stock having voting power
properly cast for election to such office shall elect such office. When a
quorum for the consideration of a question is present at any meeting, a majority
of the votes of the capital stock having voting power properly cast upon the
question shall decide the question, except in any case where larger vote is
required by statute, by the certificate of incorporation or by these by-laws.
Section 10. 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 not proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken for or in connection with any corporate
action, by any provision of the statutes, the meeting and vote of stockholders
may be dispensed with if all of the stockholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to such
corporate action being taken; or if the certificate of incorporation authorizes
the action to be taken with the written consent of the holders of less than all
of the stock who would have been entitled to vote upon the action if a meeting
were held, then on the written consent of the stockholders having not less than
such percentage of the number of votes as may be authorized in the certificate
of incorporation; provided that in no case shall the written consent be by the
holders of stock having less than the minimum percentage of the vote required by
statute for the proposed action, and provided that prompt notice must be given
to
2
<PAGE>
all stockholders of the taking of corporate action without a meeting and by
less than unanimous written consent.
ARTICLE III
DIRECTORS
Section 1. The number of Directors which shall constitute the whole Board
shall not be less than three (3) nor more than twelve (12). Within such limits
the total number of Directors for the ensuing year shall be fixed at each annual
meeting by the requisite vote of the stockholders; but if the number is not so
fixed, the number shall remain as it stood immediately prior to such meeting.
Initially upon adoption of this paragraph the total number of Directors shall be
eight (8). The requisite vote of the stockholders for fixing the number of
Directors shall be (a) a majority of the shares of stock issued and outstanding
if the stockholders are setting the number of Directors which was previously
proposed by the Board of Directors and (b) two-thirds (66 2/3%) of the shares of
stock issued and outstanding in all other cases.
The Directors shall be divided into three classes. Each Director elected
at the 1984 Special Meeting in Lieu of Annual Meeting of Stockholders shall be
assigned to a class as determined by the Board of Directors within thirty days
after the effective date of this amendment and shall serve for terms expiring as
follows: the terms of office of Directors of the first class shall expire at
the first Annual meeting of Stockholders (or special meeting in lieu thereof)
after their election, that of the second class shall expire at the second Annual
Meeting of Stockholders (or special meeting in lieu thereof) after their
election, and that of the third class shall expire at the third Annual Meeting
of Stockholders (or special meeting in lieu thereof) after their election, or
thereafter when their respective successors in each case are elected and have
qualified. At each Annual Meeting of Stockholders (or special meeting in lieu
thereof) held subsequent to the 1984 Special Meeting in Lieu of Annual Meeting,
the Directors chosen to succeed those whose terms expire shall be elected for a
term expiring at the third succeeding Annual Meeting of Stockholders (or special
meeting in lieu thereof) or thereafter when their respective successors in each
case are elected and have qualified.
At any time during any year the total number of Directors may be increased
or reduced within the aforesaid limits (i) by vote of a majority of the total
number of Directors; or (ii) by the stockholders at a meeting called for that
purpose, by vote of two-thirds (66 2/3%) of the shares of stock issued and
outstanding; provided, however, that, in the case of a reduction by the
Directors or the stockholders which involves the termination of the directorship
of an incumbent Director, such termination may only be for cause.
Each newly created directorship resulting from any increase in the number
of Directors may be filled in the manner provided herein for the filling of a
vacancy in the office of a Director.
No Director need be a stockholder. Each Director shall hold office until
the expiration of his term of office and until his successor is elected and
qualified or until he sooner dies, resigns or is removed.
Any Director or officer may resign at any time by delivering his
resignation in writing to the President or the Secretary or to a meeting of the
Board of Directors, and such resignation shall take effect at the time stated
therein or, if no time be so stated, upon its delivery, and without the
necessity of its being accepted unless the resignation shall so state. The
stockholders may, at any meeting called for the purpose, by vote of two-thirds
(66 2/3%) of the shares of
3
<PAGE>
stock issued and outstanding and entitled to vote at an election of Directors,
remove from office any Director or Directors, provided, however, that such
removal may only be for cause. The Board of Directors may at any time, by vote
of a majority of the Directors then in office, remove from office any officer.
The Board of Directors may at any time, by vote of a majority of the Directors
present and voting, terminate or modify the authority of any agent. No Director
or officer resigning or removed shall have any right to any compensation as such
Director or officer for any period following his resignation or removal, or any
right to damages on account of such removal, whether his compensation be by the
month or by the year or otherwise, except pursuant to the provisions of a
written agreement with the Corporation duly approved by the Board of Directors.
Section 2. If the office of any Director becomes vacant, by reason of
death, resignation, removal or disqualification, or if the authorized number of
Directors shall be increased, such vacancy or newly created directorship may
only be filled by the Board of Directors by vote of a majority of the Directors
then in office, though less than a quorum, except as provided below. If the
office of any officer thus becomes vacant, the Board of Directors may elect a
successor or successors by vote of a majority of the Directors then in office,
though less than a quorum. The Board of Directors shall have and may exercise
all its powers notwithstanding the existence of one or more vacancies in the
total number of Directors, provided there be at least three Directors in office,
subject to any requirements of law or of the Certificate of Incorporation or of
the By-laws as to the number of Directors required for a quorum or for any
specific vote, resolution or other action. Any vacancy in the Board of
Directors which causes the number of Directors in office to be less than three
may be filled by the stockholders at a meeting called for such purpose.
In the case of a vacancy in the office of any Director by reason of death,
resignation, removal or disqualification, such vacancy may be filled for the
balance of the term of the Director formerly holding such position. In the case
of a vacancy by reason of an increase in the number of Directors or otherwise,
such vacancy may be filled for a term of three years commencing as of the most
recent meeting of stockholders at which any Director was elected, provided,
however, that the Board of Directors may specify that such nominee serve only
until the next Annual Meeting of Stockholders (or special meeting in lieu
thereof), at which time the vacancy shall be filled by vote of the stockholders.
Any Director of the Company whose term of office expires at an annual or
special meeting and who is nominated for re-election by the Board of Directors,
whether such Director originally assumed office by vote of the stockholders or
by vote of the Board of Directors, may be re-elected by stockholders.
Reference in Sections 1 and 2 of this Article to the total number of
Directors means the total number fixed as herein provided, irrespective of the
number at the time in office.
The provisions of Sections 1 and 2 of this Article may not be amended or
repealed except upon the affirmative vote of two-thirds (66 2/3%) of the shares
of stock issued and outstanding.
Section 3. 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
by the stockholders.
4
<PAGE>
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. 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. A regular meeting of the board of directors may be held without
call or formal notice immediately after and at the same place as the annual
meeting of stockholders, or any adjournment thereof.
Section 6. Special meetings of the board may be called by the Chairman of
the Board on one day's notice to each director, either personally or by mail or
by telegraph; special meetings shall be called by the Chairman of the Board or
secretary in like manner and on like notice on the written request of two
directors.
Section 7. At all meetings of the board a majority of all of the directors
shall constitute a quorum for the transaction of business and the act 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 law, by the certificate of incorporation, or by these
By-laws. If a quorum shall not be present at any meeting of the board of
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 8. Unless otherwise restricted by law, 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.
COMMITTEES OF DIRECTORS
Section 9. The board of directors may, by resolution passed by a majority
of the whole board, designate one or more committees, each committee to consist
of two 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 said resolution, 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, or the alternate member, if any,
designates as a replacement for such committee or committees, 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. 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 10. Each committee shall keep regular minutes of its meetings and
report the same to the board of directors when required.
5
<PAGE>
COMPENSATION OF DIRECTORS
Section 11. The directors may be 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.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these By-laws notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of 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 be chosen by the board of
directors and shall be the chairman of the board, a president, a secretary and a
treasurer and such other officers, if any, as the board of directors may in its
discretion elect or appoint, which may include one or more vice-presidents, one
or more assistant treasurers, a controller, and one or more assistant
controllers, and one or more assistant secretaries. The president need not be a
director. So far as is permitted by law, any number of offices may be held by
the same person.
Section 2. Officers shall be elected or appointed annually by the board of
directors at its first meeting following the annual meeting of stockholders.
Additional officers may be elected or appointed by the board of directors at any
time.
Section 3. The board of directors may appoint such agents as it shall deem
necessary who shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
6
<PAGE>
Section 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer 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. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
CHAIRMAN OF THE BOARD, PRESIDENT
AND VICE PRESIDENT
Section 6. The Chairman of the Board shall be the chief executive officer
of the corporation and shall have general charge and supervision of the business
of the corporation and shall have such other duties and powers as shall be
designated from time to time by the board of directors. He shall preside at all
meetings of the stockholders and of the board of directors at which he is
present, except as otherwise voted by the board of directors.
Section 6A. The President shall have such duties and powers as shall be
designated from time to time by the board of directors and shall be responsible
to and shall report to the chairman of the board.
Section 7. In the absence of the chairman of the board, such officer as
shall be designated by the board of directors for that purpose shall preside at
all meetings of the stockholders and board of directors, except as otherwise
voted by the board of directors.
Section 8. Vice presidents, if any, shall have such duties and powers as
shall be designated from time to time by the board of directors or by the
president, and in any case shall be responsible to and shall report to the
president.
THE SECRETARY AND ASSISTANT SECRETARY
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president. The secretary shall be under the supervision of the president. He
shall have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election), shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.
7
<PAGE>
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the corporation funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 12. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and board of directors, at its
regular meetings, or when the board of directors so requires, an account of all
his transactions as treasurer and of the financial condition of the corporation.
Section 13. if required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
Section 14. The assistant treasurer, or if there shall be more than one,
the assistant treasurers in the order determined by the board of directors (or
if there be no such determination, then in the order of their election), shall,
in the absence of the treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the treasurer and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
CONTROLLER AND ASSISTANT CONTROLLERS
Section 15. If a controller is elected, he shall be the chief accounting
officer of the corporation and shall be in charge of its books of account and
accounting records and of its accounting procedures, and shall have such other
duties and powers as may be designated from time to time by the board of
directors or by the president. The controller shall be responsible to and shall
report to the board of directors but in ordinary conduct of the corporation's
business shall be under the supervision of the president.
Any assistant controllers shall have such duties and powers as shall be
designated from time to time by the board of directors or by the controller, and
shall be responsible to and shall report to the controller.
ARTICLE VI
AMENDMENTS
Section 1. Except as otherwise provided in these By-laws or in the
Certificate of Incorporation, these By-laws may be altered, amended or repealed
or new By-laws may be adopted by the stockholders or by the board of directors
at any regular meetings of the stockholders or of the board of directors, or at
any special meeting of the stockholders or of the board of directors if notice
of such alteration, amendment, repeal or adoption of new By-laws is contained in
the notice of any special meeting.
8
<PAGE>
ARTICLE VII
CERTIFICATES OF STOCK
Section 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
chairman of the board of directors, or the president and the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of the
corporation, certifying the number of shares owned by him in the corporation.
Section 2. Where a certificate is countersigned (1) by a transfer agent
other than the corporation or its employee, or, (2) by a registrar other than
the corporation or its employee, any other signature on the certificate may be
facsimile. 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.
LOST CERTIFICATES
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFERS OF STOCK
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
Section 5. The Board of Directors shall not have power to close the stock
transfer books of the Corporation for any purpose. 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 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 shall not be more than sixty nor less than ten
days before the date of
9
<PAGE>
such meeting, nor more than sixty days prior to any other action.
A determination of stockholders of record entitled to the 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.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the corporation, subject to
the provisions of the certificate of incorporation, if any, may be declared by
the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.
Section 2. Before payment of any dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think 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 directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each annual meeting, and
at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.
CHECKS
Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by resolution
of the board of directors.
10
<PAGE>
SEAL
Section 6. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the word "Delaware". The seal may
be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise.
Section 7. In these By-laws, references to the certificate of incorporation
mean the provisions of the certificate of incorporation (as that term is defined
in the General Corporation Law of the State of Delaware) of the corporation as
from time to time in effect, and references to these By-laws or to any
requirement or provision of law mean those By-laws or such requirement or
provision of law as from time to time in effect.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 1. Each person who was or is made a party or is threatened to be
made a party to or is otherwise involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she is or was a director or an
officer of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust or other enterprise, including service
with respect to an employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than such law permitted
the corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgment, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section 3 of this Article IX with respect to proceedings
to enforce rights to indemnification, the corporation shall indemnify any such
indemnitee only if such proceeding (or part thereof) was authorized by the Board
of Directors of the corporation.
Section 2. The right to indemnification conferred in Section 1 of this
Article IX shall include the right to be paid by the corporation the expenses
(including attorney's fees) incurred in defending any such proceeding in advance
of its final disposition (hereinafter an "advancement of expenses"); provided,
however, that, if the Delaware General corporation Law requires, an advancement
of expenses incurred by an indemnitee in his or her 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 any employee benefit
plan) shall be made only upon delivery to the corporation of any undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal (hereinafter a "final
adjudication") that such indemnitee is not entitled to be indemnified for such
expenses under this Section 2 or otherwise. The rights to indemnification and
to the advancement of expenses conferred in Sections 1 and 2 of this Article IX
shall
11
<PAGE>
be contract rights and such rights shall continue as to an indemnitee who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators.
Section 3. If a claim under Section 1 or 2 of this Article IX is not paid
in full by the corporation within sixty (60) days after a written claim has been
received by the corporation, except in the case of a claim for an advancement of
expenses, in which case the applicable period shall be twenty (20) days, the
indemnitee may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, or in a suit brought by the corporation to recover an advancement
of expenses pursuant to the terms of an undertaking, the indemnitee shall be
entitled to be paid also the expense of prosecuting or defending such suit. In
(i) any suit brought by the indemnitee to enforce a right to indemnification
hereunder (but not in a suit brought by the indemnitee to enforce a right to an
advancement of expenses) it shall be a defense that, and (ii) in any suit
brought by the corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met any
applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of the
indemnitee is proper in the circumstances because the indemnitee has met the
applicable standard of conduct set forth in the Delaware General Corporation
Law, nor an actual determination by the corporation (including its Board of
Directors, independent legal counsel, or its stockholders) that the indemnitee
has not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnitee, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article IX or otherwise shall be on the
corporation.
Section 4. The rights to indemnification and to the advancement of
expenses conferred in this Article IX shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute, the
corporation's Certificate of Incorporation, By-laws, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 5. The corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
Section 6. The corporation may, to the extent authorized from time to time
by the Board of Directors, grant rights to indemnification and to the
advancement of expenses to any employee or agent of the corporation to the
fullest extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of officers and directors of the
corporation.
12
<PAGE>
ARTICLE X
AMENDMENTS
Section 1. These By-laws may be altered, amended, or repealed or new By-
laws may be adopted by the stockholders or by the board of directors at any
regular meeting of the stockholders or of the board of directors or at any
special meeting of the stockholders or of the board of directors if notice of
such alteration, amendment, repeal or adoption of new By-laws be contained in
the notice of such special meeting.
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS INFORMATION EXTRACTED FROM THE STATEMENTS DATED AUGUST
26, 1995 AS FILED IN FORM 10-Q FOR THE QUARTERLY PERIOD THEN ENDED AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-25-1995
<PERIOD-END> AUG-26-1995
<CASH> 31,953
<SECURITIES> 0
<RECEIVABLES> 5,929,996
<ALLOWANCES> 239,000
<INVENTORY> 11,500,081
<CURRENT-ASSETS> 17,851,116
<PP&E> 7,418,171
<DEPRECIATION> 3,760,088
<TOTAL-ASSETS> 21,614,025
<CURRENT-LIABILITIES> 4,254,227
<BONDS> 0
<COMMON> 299,185
0
500
<OTHER-SE> 5,478,822
<TOTAL-LIABILITY-AND-EQUITY> 21,614,025
<SALES> 17,853,238
<TOTAL-REVENUES> 17,853,238
<CGS> 13,121,959
<TOTAL-COSTS> 13,121,959
<OTHER-EXPENSES> 3,711,712
<LOSS-PROVISION> 60,000
<INTEREST-EXPENSE> 655,494
<INCOME-PRETAX> 304,073
<INCOME-TAX> 0
<INCOME-CONTINUING> 304,073
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 304,073
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
