Page 1 of 8
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
/___/ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8368
ROLLINS ENVIRONMENTAL SERVICES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0228924
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Rollins Plaza, Wilmington, Delaware 19803
(Address of principal executive offices) (Zip Code)
(302) 426-2784
(Registrant's telephone number, including area code)
(Former name of registrant)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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 outstanding as
of March 31, 1997 was 60,375,811.
FORM 10-Q Page 2 of 8
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the quarter and six months ended March 31, 1997 are
not necessarily indicative of the results that may be expected for the year
ending September 30, 1997. These statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1996.
ROLLINS ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
($000 Omitted Except for Per Share Amounts)
Quarter Ended Six Months Ended
March 31, March 31,
1997 1996 1997 1996
Revenues $ 46,553 $58,731 $105,937 $120,167
Operating expenses 48,965 54,259 98,112 106,997
Depreciation 7,783 8,419 15,897 15,949
Selling and administrative expenses 7,424 8,720 15,271 17,934
Interest expense 2,126 2,311 4,362 4,674
66,298 73,709 133,642 145,554
Loss before income tax benefit (19,745) (14,978) (27,705) (25,387)
Income tax benefit (7,406) (5,417) (10,198) (9,153)
Net loss $(12,339) $(9,561) $(17,507) $(16,234)
Loss per share $ (.20) $ (.16) $ (.29) $ (.27)
Average common shares and
equivalents outstanding (000) 60,385 60,378
Dividends paid per common share None None None None
<PAGE>
FORM 10-Q Page 3 of 8
ROLLINS ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
($000 Omitted)
March 31, September 30,
ASSETS 1997 1996
Current assets
Cash and cash equivalents (includes
short-term investments of:
$16,988-March; $18,166-September) $ 19,612 $ 27,231
Accounts receivable, net 35,936 42,302
Income taxes recoverable - 7,059
Deferred income taxes 5,101 5,616
Other current assets 6,540 11,356
Total current assets 67,189 93,564
Property and equipment, at cost
Land 31,324 31,324
Buildings 76,129 75,661
Equipment and vehicles 304,027 303,305
Site improvements 40,780 39,978
Construction in progress 5,970 5,525
Accumulated depreciation (198,215) (182,982)
260,015 272,811
Excess of cost over net assets of
businesses acquired 9,080 9,331
Other assets 9,135 9,261
Total assets $345,419 $384,967
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 19,615 $ 21,369
Accrued liabilities 17,488 34,432
Accrued remediation and other costs 2,387 1,970
Income taxes payable 399 -
Current maturities of long-term debt 1,728 1,728
Total current liabilities 41,617 59,499
Long-term debt 131,428 132,453
Accrued remediation and other costs 7,723 9,829
Other liabilities 8,531 7,396
Deferred income taxes 19,144 21,307
Commitments and contingent liabilities
See Part II, Item 1 Legal Proceedings
Shareholders' equity
Preferred stock, $1 par value,
1,000,000 shares authorized; issued and
outstanding - None
Common stock, $1 par value, 120,000,000 shares
authorized; issued and outstanding:
March-60,375,811; September-60,375,811 60,376 60,376
Additional paid-in capital 4,650 4,650
Retained earnings 71,950 89,457
Total shareholders' equity 136,976 154,483
Total liabilities and shareholders' equity $345,419 $384,967
FORM 10-Q Page 4 of 8
ROLLINS ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
($000 Omitted)
Six Months Ended
March 31,
1997 1996
Cash flows from operating activities:
Net loss $(17,507) $(16,234)
Adjustments to reconcile net loss to net cash
used in operating activities:
Expenditures charged to accrued remediation
and other costs (1,689) (1,537)
Depreciation and amortization 16,161 16,362
Changes in assets and liabilities:
Current and deferred income taxes 5,810 728
Accounts receivable 6,366 508
Accounts payable and accrued liabilities (18,698) (6,675)
Other, net 6,064 1,423
Net cash used in operating activities (3,493) (5,425)
Cash flows from investing activities:
Purchase of property and equipment (3,101) (5,788)
Proceeds from sale of equipment - 119
Net cash used in investing activities (3,101) (5,669)
Cash flows from financing activities:
Repayment of long-term debt (1,025) (984)
Net cash used in financing activities (1,025) (984)
Cash and cash equivalents:
Net decrease in cash and cash equivalents (7,619) (12,078)
Beginning of period 27,231 38,691
End of period $ 19,612 $ 26,613
Supplemental information:
Interest paid $ 4,531 $ 4,862
Income taxes recovered $(16,008) $ (9,880)
<PAGE>
FORM 10-Q Page 5 of 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations: Six Months Ended March 31, 1997 vs. Six Months
Ended March 31, 1996
Revenues decreased by $14,230,000 (11.8%) to $105,937,000 from the
$120,167,000 reported last year. Incineration revenues decreased by
$9,580,000, which was the result of higher incineration volumes processed
at lower average prices. Transportation, landfill and other revenues
decreased by $4,650,000 which primarily was the result of the expiration of
a large disposal contract with one customer in December 1996. The
Company's incineration revenues continue to be adversely affected by
industry-wide overcapacity and intense price competition.
Operating expenses decreased by $8,885,000 (8.3%) to $98,112,000 from
the $106,997,000 reported last year. The decrease was the result of lower
transportation, insurance and maintenance costs offset in part by higher
costs related to the increased incineration volumes and the use of
subcontractors to dispose of various waste streams outside the Company's
permitted capabilities. Operating expenses as a percentage of revenues
increased to 92.6% in 1997 from 89.0% in 1996.
Depreciation expense for the six months ended March 31, 1997 was
essentially the same as last fiscal year.
Selling and administrative expenses decreased $2,663,000 (14.8%). The
decrease is attributed to the continued integration of various acquisitions
into the existing business and continued Company-wide costs containment
efforts. As a percentage of revenues, selling and administrative expenses
decreased to 14.4% in 1997 from 14.9% in 1996.
Interest expense decreased by $312,000 (6.7%) primarily as the result
of the reduction in long-term debt from the same period last year.
The effective rates of income tax benefit for the six months ended
March 31, 1997 and 1996 were 36.8% and 36.1%, respectively.
Results of Operations: Quarter Ended March 31, 1997 vs. Quarter Ended
March 31, 1996.
Revenues decreased by $12,178,000 (20.7%) to $46,553,000 from the
$58,731,000 reported last year. Incineration revenues decreased by
$7,116,000 which was the result of lower incineration volumes processed at
lower average prices. Transportation, landfill and other revenues
decreased by $5,062,000 which was the result of lower incineration volumes
and the expiration of a large disposal contract with one customer in
December 1996. The Company's incineration revenues continue to be
adversely affected by industry-wide overcapacity and intense price
competition.
FORM 10-Q Page 6 of 8
Operating expenses decreased by $5,294,000 (9.8%) to $48,965,000 from
the $54,259,000 reported last year. The decrease in operating expense
reflects the lower levels of incineration volumes and lower transportation
costs. Operating costs as a percentage of revenues increased to 105.2% in
1997 from 92.4% in 1996 mainly due to the large component of the Company's
cost structure which is fixed.
Depreciation expense decreased $636,000 (7.6%) mainly due to a
decrease in the amortization of airspace which resulted from lower landfill
revenues.
Selling and administrative expenses decreased by $1,296,000 (14.9%).
The decrease is attributed to the continued integration of various
acquisitions into the existing business and continued Company-wide costs
containment efforts. As a percentage of revenues, selling and
administrative expenses increased to 15.9% in 1997 from 14.8% in 1996
mainly due to the lower levels of revenues.
Interest expense decreased by $185,000 (8.0%) primarily as a result of
the reduction in long-term debt from the same period last year.
The effective rates of income tax benefit for the three months ended
March 31, 1997 and 1996 were 37.5% and 36.2%, respectively.
Liquidity and Capital Resources
The cash used in operations during the first six months of fiscal 1997
is not representative of the Company's expectations for future quarters due
to the unfavorable working capital changes experienced. The decrease in
cash was mainly due to RES (NJ) and the EPA settling the outstanding claims
with the Bridgeport Rental & Oil Services Superfund Site for a payment of
$13,035,000.
During the first six months of fiscal 1997 and 1996, expenditures for
property and equipment were $3,101,000 and $5,788,000, respectively. In
addition, expenditures on remediation projects at the Company's facilities
for the first six months of fiscal 1997 and 1996 were $1,689,000 and
$1,537,000, respectively. The Company financed its capital and remediation
expenditures from available cash resources which included income tax
refunds.
The Company's projected capital and remediation expenditures for the
remainder of fiscal 1997 are approximately $3,864,000. Capital and
remediation expenditures are expected to be financed from available cash
balances.
For the remainder of fiscal year 1997, the Company anticipates lower
operating cash requirements as it realizes the benefits of cost reductions
and a lower capital spending. The Company believes that existing cash
balances and cash expected to be generated from operations will be
sufficient to meet the Company's cash requirements for the remainder of
fiscal 1997. For further details, see pages 8 and 9 of the Company's 1996
Annual Report on Form 10-K.
FORM 10-Q Page 7 of 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There have been no additional significant legal proceedings nor any
material changes in the legal proceedings reported on pages 4 and 5 of the
Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1996.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders was held on January 31,
1997. With regard to Proposal No. 1 of the NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 31, 1997 to elect three Class III
Directors to the Board of Directors, Nicholas Pappas, John W. Rollins and
Don S. Stansberry, Jr. were elected. At the meeting, 48,263,782,
48,259,102 and 48,564,299 affirmative votes were cast for Nicholas Pappas,
John W. Rollins and Don C. Stansberry, Jr., respectively. There were no
votes cast against any nominee and 4,075,968, 4,080,648 and 3,775,451 votes
were withheld from Nicholas Pappas, John W. Rollins and Don C. Stansberry,
Jr., respectively.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 3(ii) - By-Laws.
By-Laws of Rollins Environmental Services, Inc. as last amended
on January 31, 1997
(b) Reports on Form 8-K.
On January 6, 1997, a report on Form 8-K was filed reporting that
Rollins Environmental Services, Inc. ("Rollins") had entered into
a letter of intent with Laidlaw, Inc. (("Laidlaw") which provides
for the sale to Rollins of 100% of the outstanding stock of the
United States and Canadian subsidiaries conducting the hazardous
and industrial waste operations of Laidlaw. The full text of the
letter of intent was disclosed.
FORM 10-Q Page 8 of 8
(b) Reports on Form 8-K (continued).
On February 7, 1997, a report on Form 8-K was filed reporting
that on February 6, 1997, Rollins Environmental Services, Inc.
had entered into a stock purchase agreement with Laidlaw, Inc.,
among others, which provides for the sale to Rollins of 100% of
the outstanding stock of the United States and Canadian
subsidiaries conducting the hazardous and industrial waste
operations of Laidlaw. The stock purchase agreement among
Rollins Environmental Services, Inc., Laidlaw, Inc. and Laidlaw
Transportation, Inc. dated as of February 6, 1997 was filed as
Exhibit 2.1 to the Form 8-K.
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.
DATE: May 9, 1997 ROLLINS ENVIRONMENTAL SERVICES, INC.
(Registrant)
/s/ John V. Flynn, Jr.
John V. Flynn, Jr.
President and Chief Operating Officer
/s/ Frank H. Minner, Jr.
Frank H. Minner, Jr.
Group Vice President-Finance and Treasurer
Chief Financial Officer
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 19,612
<SECURITIES> 0
<RECEIVABLES> 35,936
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 67,189
<PP&E> 458,230
<DEPRECIATION> 198,215
<TOTAL-ASSETS> 345,419
<CURRENT-LIABILITIES> 41,617
<BONDS> 131,428
0
0
<COMMON> 60,376
<OTHER-SE> 76,600
<TOTAL-LIABILITY-AND-EQUITY> 345,419
<SALES> 46,553
<TOTAL-REVENUES> 46,553
<CGS> 0
<TOTAL-COSTS> 56,748
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,126
<INCOME-PRETAX> (19,745)
<INCOME-TAX> (7,406)
<INCOME-CONTINUING> (12,339)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,339)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> (.20)
</TABLE>
BY-LAWS
OF
ROLLINS ENVIRONMENTAL SERVICES, INC.
------------------------------------------------------------------
ARTICLE I
The Corporation
Section 1.1 Name. The title of this Corporation is Rollins
Environmental Services, Inc.
Section 1.2 Office. The registered office of this Corporation
shall be located at One Rollins Plaza, Wilmington, County of New Castle,
State of Delaware, or at such other place as the Board of Directors may
designate in accordance with Section 133 of the Delaware Corporation Law.
Section 1.3 Seal. The corporate seal of the Corporation shall have
inscribed thereon the name of the Corporation and the year of its creation
(1978) and the words "Incorporated Delaware".
ARTICLE II
Stockholders
Section 2.1 Annual Meeting. The annual meeting of stockholders
shall be held at such place within or without the State of Delaware as the
Board of Directors from time to time determine.
A majority of the amount of the stock issued and outstanding and
entitled to vote shall constitute a quorum for the transaction of all
business, except as otherwise provided by law, the charter of the
corporation or these by-laws. Each stockholder shall be entitled to one
vote, either in person or by proxy, for each share of stock standing
registered in his or her name on the books of the Corporation on the record
date selected by the Board of Directors in accordance with these by-laws,
unless more or less than one vote per share is, by the terms of the
instrument creating special or preferred shares, conferred upon the holders
thereof.
Notice of the annual meeting shall be mailed by the Secretary to each
stockholder at his or her last known post office address no less than ten
days and no more than fifty days prior thereto.
Section 2.2 Special Meetings. Special meetings of stockholders for
any purpose or purposes may be called at any time by the Chairman of the
Board of Directors, the Vice Chairman of the Board of Directors, the
Chairman of the Executive Committee or the President and not by any other
person.
Section 2.3 Notice of Meetings. Whenever stockholders are required
or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the written
notice of any meeting shall be given not less than ten nor more than sixty
days before the date of the meeting to each stockholder entitled to vote at
such meeting. If mailed, such notice shall be deemed to be given when
deposited in the mail, postage prepaid, directed to the stockholder at his
address as it appears on the records of the Corporation.
Section 2.4 Adjournments. Any meeting of the stockholders, annual
or special, may adjourn from time to time to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if
the time and place thereof are announced at the meeting at which the
adjournment is taken. At the adjourned meeting the Corporation may
transact any business which might have been transacted at the original
meeting. 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 2.5 Quorum. At each meeting of stockholders, except where
otherwise provided by law or the certificate of incorporation or these
by-laws, the holders of a majority of the outstanding shares of stock
entitled to vote at the meeting, present in person or by proxy, shall
constitute a quorum. In the absence of a quorum, the stockholders so
present may, by majority vote, adjourn the meeting from time to time in the
manner provided in Section 2.4 of these by-laws until a quorum shall
attend.
Section 2.6 Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board, if any, or in his absence by
the Chairman of the Executive Committee, if any, or in his absence by the
President, or in his absence by a Vice President, or in the absence of the
foregoing persons by a chairman designated by the Board of Directors, or in
the absence of such designation by a chairman chosen at the meeting. The
Secretary shall act as secretary of the meeting, but in his absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.7 Voting; Proxies. Unless otherwise provided in the
certificate of incorporation, each stockholder entitled to vote at any
meeting of stockholders shall be entitled to one vote for each share of
stock held by him which has voting power upon the matter in question. Each
stockholder entitled to vote at a meeting of stockholders may authorize
another person or persons to act for him by proxy, but no such proxy shall
be voted or acted upon after three years from its date, unless the proxy
provides for a longer period. A duly executed proxy shall be irrevocable
if it states that it is irrevocable and if, and only as long as, it is
coupled with an interest sufficient in law to support an irrevocable power.
A stockholder may revoke any proxy which is not irrevocable by attending
the meeting and voting in person or by filing an instrument in writing
revoking the proxy or another duly executed proxy bearing a later date with
the Secretary of the Corporation. Voting at meetings of stockholders need
not be by written ballot and need not be conducted by inspectors unless the
holders of a majority of the outstanding shares of all classes of stock
entitled to vote thereon present in person or by proxy at such meeting
shall so determine. At all meetings of stockholders for the election of
directors a plurality of the votes cast shall be sufficient to elect. All
other elections and questions shall, unless otherwise provided by law or by
the certificate of incorporation or these by-laws, be decided by the vote
of the holders of a majority of the outstanding shares of stock entitled to
vote thereon present in person or by proxy at the meeting, provided that
(except as otherwise required by law or by the certificate of incorporation
or these by-laws) the Board of Directors may require a larger vote upon any
election or question.
Section 2.8 Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion of exchange or 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 such meeting, nor more than sixty days prior to
any other action. If no record date is fixed: (1) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held;
and (2) the record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. 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.
Section 2.9 List of Stockholders Entitled To Vote. The Secretary
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 the time and place of the meeting during the
whole time thereof and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the stockholders
entitled to examine the stock ledger, the list of stockholders or the books
of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 2.10 Action by Consent Of Stockholders. No action required
to be taken or which may be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting, and the
power of stockholders to consent in writing, without a meeting, to the
taking of any action is specifically denied.
ARTICLE III
Board of Directors
Section 3.1 Number; Qualifications. The Board of Directors shall
consist eight members. Directors need not be stockholders.
Section 3.2 Election; Resignation; Removal; Vacancies. At each
annual meeting of stockholders, the stockholders shall elect Directors to
replace those Directors whose terms then expire. Any Director may resign
at any time upon written notice to the Corporation. Stockholders may
remove Directors only for cause. Any vacancy occurring in the Board of
Directors for any cause may be filled only by the Board of Directors,
acting by vote of a majority of the Directors then in office, although less
than quorum. Each Director so elected shall hold office until the
expiration of the term of office of the Director whom he has replaced.
Section 3.3 Notice Of Nomination Of Directors. Nominations for the
election of directors may be made by the Board of Directors or by any
stockholder entitled to vote for the election of directors. Such
nominations shall be made by notice in writing, delivered or mailed by
first class United States mail, postage prepaid, to the Secretary of the
Corporation not less than fourteen days nor more than fifty days prior to
any meeting of the stockholders called for the election of directors;
provided, however, that if less than twenty-one days' notice of the meeting
is given to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than the close
of the seventh day following the day on which notice of the meeting was
mailed to stockholders. Notice of nominations which are proposed by the
Board of Directors shall be given by the Chairman on behalf of the Board.
Each such notice shall set forth (i) the name, age, business address and,
if known, residence address of each nominee proposed in such notice, (ii)
the principal occupation or employment of each such nominee and (iii) the
number of shares of stock of the Corporation which are beneficially owned
by each such nominee. The Chairman of the meeting may, if the facts
warrant, determine and declare to the meeting that a nomination was not
made in accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective nomination
shall be disregarded.
Section 3.4 Non-Discrimination Statement. Consistent with the
Corporation's equal employment opportunity policy, nominations for the
election of directors shall be made by the Board of Directors and accepted
from stockholders in a manner consistent with these By-Laws and without
regard to the nominee's race, color, ethnicity, religion, sex, age,
national origin, veteran status, handicap or disability.
Section 3.5 Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of
Delaware and at such times as the Board of Directors may from time to time
determine, and if so determined notices thereof need not be given.
Section 3.6 Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, the Chairman of the Board of
Directors, the Vice Chairman of the Board of Directors, or by the Chairman
of the Executive Committee. Reasonable notice thereof shall be given by
the person calling the meeting, not later than the second day before the
date of the special meeting.
Section 3.7 Telephonic Meetings Permitted. Members of the Board of
Directors, or any committee designated by the Board, may participate in any
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 a
meeting pursuant to this by-law shall constitute presence in person at such
meeting.
Section 3.8 Quorum; Vote Required For Action; Informal Action. At
all meetings of the Board of Directors a majority of the whole Board shall
constitute a quorum for the transaction of business. Except in cases in
which the certificate of incorporation or these by-laws otherwise provide,
the vote of a majority of the directors present at a meeting at which a
quorum is present shall be the act of the Board of Directors. 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 such committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes
of the proceedings of the Board or committee.
Section 3.9 Organization. Meetings of the Board of Directors shall
be presided over by the Chairman of the Board, if any, or in his absence by
the Chairman of the Executive Committee, if any, or in his absence by the
President, or in their absence by a chairman chosen at the meeting. The
Secretary shall act as a secretary of the meeting, but in his absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 3.10 Compensation Of Directors. The Directors and members
of standing committees shall receive such fees or salaries as fixed by
resolution of the Executive Committee and in addition will receive expenses
in connection with attendance or participation in each regular or special
meeting.
ARTICLE IV
Committees
Section 4.1 Committees. 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 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. In the absence or disqualification of a
member of the committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he or they
constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in place of any such absent or disqualified
member. Any such committee, to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and
authority 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; but no such committee
shall have power or authority in reference to amending the certificate of
incorporation of the Corporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or exchange
or all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of dissolution, or amending these by-laws. The Board of
Directors shall, at the annual organization meeting thereof, elect an
Executive Committee which shall consist of not more than four members, all
of whom shall be members of the Board of Directors. The Executive
Committee shall have and may exercise all of the powers and authority of
the Board of Directors in the management of business and affairs of the
Corporation to the fullest extent permitted by law (as presently allowed
under Section 141 (c) to the Delaware General Corporation Law as revised
effective July 1, 1996, and as may be allowed in the future pursuant to
amendments or revisions to applicable law).
Section 4.2 Committee Rules. Unless the Board of Directors
otherwise provides, each committee designated by the Board may make, alter
and repeal rules for the conduct of its business. In the absence of such
rules each committee shall conduct its business in the same manner as the
Board of Directors conducts its business pursuant to Article III of these
by-laws.
ARTICLE V
Officers
Section 5.1 Executive Officers; Election; Qualifications; Term of
Office; Resignation; Removal; Vacancies. The officers of the Corporation
shall consist of a Chairman, Vice Chairmen, President, Vice Presidents,
Secretary, Assistant Secretaries, Treasurer, Assistant Treasurers, General
Counsel, and such other officers as may from time to time be elected or
appointed by the Board of Directors. The President shall be elected from
the Board of Directors. Any officer may resign at any time upon written
notice to the Corporation. The Board of Directors may remove any officer
with or without cause at any time, but such removal shall be without
prejudice to the contractual rights of such officer, if any, with the
Corporation. Any number of offices may be held by the same person. Any
vacancy occurring in any office of the Corporation by death, resignation,
removal or otherwise may be filled for the unexpired portion of the term by
the Board of Directors at any regular or special meeting. In the absence
of any officer, the Board of Directors may delegate his power and duties to
any other officer or to any director for the time being.
Section 5.2 Duties Of The Chairman Of The Board And The Chairman Of
The Executive Committee. The Chairman shall be the Chief Executive Office
of the Corporation, shall preside at all meetings of the Board, shall have
general and active management of the business of the Corporation and shall
see that all orders and resolutions of the Board are carried into effect.
He shall submit a complete report of the operations and condition of the
Corporation for the year to the stockholders at their annual meeting. In
all cases, where a Chairman of the Executive Committee is elected, the
Chairman of the Executive Committee shall, in the absence of the Chairman
of the Board of Directors, act in the latter's capacity.
Section 5.3 President. The President shall be the Chief Operating
Officer of the Corporation, shall execute in the name of the Corporation
all contracts and agreements authorized by the Board or the Executive
Committee, and shall affix the seal to any instrument requiring the same,
which shall always be attested by the signature of the President, the Vice
President or the Secretary or any Assistant Secretary or the Treasurer. He
may sign certificates of stock; he shall have general supervision and
direction of all the other officers of the Corporation; he shall submit a
complete report of the operations and condition of the Corporation for the
year to the Chairman and to the directors at their regular meetings, and
from time to time shall report to the directors all matters which the
interest of the Corporation may require to be brought to their notice. He
shall have the general powers and duties usually vested in the office of a
President of a corporation.
Section 5.4 Vice President Finance. The Vice President Finance
shall be Chief Accounting and Chief Financial Officer of the Corporation
and shall be responsible to the Board of Directors, the Executive Committee
and the President for all financial control and internal audit of the
Corporation and its subsidiaries. He shall perform such other duties as
may be assigned to him by the Board of Directors, the Executive Committee
or the President.
Section 5.5 Vice Presidents. The Vice Presidents elected or
appointed by the Board of Directors shall perform such duties and exercise
such powers as may be assigned to them from time to time by the Board of
Directors, the Executive Committee or the President. In the absence or
disability of the President, the Vice President designated by the Board of
Directors, the Executive Committee, or the President shall perform the
duties and exercise the powers of the President. A Vice President may sign
and execute contracts and other obligations pertaining to the regular
course of his duties.
Section 5.6 Secretary. The Secretary shall be ex-officio Secretary
of the Board of Directors and of the standing committees. He shall attend
all sessions of the Board, act as clerk thereof, record all votes and keep
the minutes of all proceedings in a book to be kept for that purpose. He
shall perform like duties for the standing committees when required. He
shall see that the proper notices are given of all meetings of stockholders
and directors, and perform such other duties as may be prescribed from time
to time by the Board of Directors, the Executive Committee, Chairman or
President, and shall be sworn to the faithful discharge of his duties.
He shall keep the accounts of stock registered and transferred in such
form and manner and under such regulations as the Board of Directors or
Executive Committee may prescribe.
Section 5.7 Treasurer. The Treasurer shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all monies 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 or Executive Committee. He shall
disburse the funds of the Corporation as may be ordered by the Board, the
Executive Committee or the President, taking proper vouchers therefor, and
shall render to the President and the Executive Committee and Directors,
whenever they may require it, an account of all his transactions as
Treasurer, and of the financial condition of the Corporation, and at the
annual organization meeting of the Board a like report for the preceding
year.
Section 5.8 General Counsel. The General Counsel shall be the
legal adviser of the Corporation and shall perform such services as the
Chairman, President, Board of Directors or Executive Committee may require.
ARTICLE VI
Stock
Section 6.1 Certificates. Every holder of stock shall be entitled
to have a certificate signed by or in the name of the Corporation by the
Chairman or Vice Chairman of the Board of Directors, if any, or the
President of the Corporation, certifying the number of shares owned by him
in the Corporation. Any of or all the signatures on the certificate may be
a 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.
Section 6.2 Lost, Stolen Or Destroyed Stock Certificates; Issuance
Of New Certificates. The Corporation may issue a new certificate of stock
in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner
of the lost, stolen or destroyed certificate, or his legal representative,
to give the Corporation a bond sufficient to indemnify it against any claim
that may be made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such new
certificate.
ARTICLE VII
Indemnification
Section 7.1. General. The Company shall indemnify, and advance
Expenses (as hereinafter defined) to, Indemnitee (as hereinafter defined)
to the fullest extent permitted by applicable law in effect on July 23,
1986, and to such greater extent as applicable law may thereafter from time
to time permit. The rights of Indemnitee provided under the preceding
sentence shall include, but shall not be limited to, the rights set forth
in the other Sections of this Article.
Section 7.2. Proceedings Other Than Proceedings By Or In The Right
Of The Company. Indemnitee shall be entitled to the indemnification rights
provided in this Section 7.2 if, by reason of his Corporate Status (as
hereinafter defined), he is, or is threatened to be made, a party to any
threatened, pending, or completed Proceeding (as hereinafter defined),
other than a Proceeding by or in the right of the Company. Pursuant to
this Section 7.2, Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with such
Proceeding or any claim, issue or matter therein, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal Proceeding, had
no reasonable cause to believe his conduct was unlawful.
Section 7.3. Proceedings By Or In The Right Of The Company.
Indemnitee shall be entitled to the indemnification rights provided in this
Section 7.3 to the fullest extent permitted by law if, by reason of his
Corporate Status, he is, or is threatened to be made, a party to any
threatened, pending or completed Proceeding brought by or in the right of
the Company to procure a judgment in its favor. Pursuant to this Section
7.3, Indemnitee shall be indemnified against Expenses, judgments,
penalties, fines and amounts paid in settlement actually and reasonably
incurred by him or on his behalf in connection with such Proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Company.
Section 7.4. Indemnification For Expenses Of A Party Who Is Wholly
Or Partly Successful. Notwithstanding any other provision of this Article,
to the extent that Indemnitee is, by reason of his Corporate Status, a
party to and is successful, on the merits or otherwise, in any Proceeding,
he shall be indemnified against all Expenses actually and reasonably
incurred by him or on his behalf in connection therewith. If Indemnitee is
not wholly successful in such Proceeding but is successful, on the merits
or otherwise, as to one or more but less than all claims, issues or matters
in such Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or on his behalf in
connection with each successfully resolved claim, issue or matter. For
purposes of this Section and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim,
issue or matter.
Section 7.5. Indemnification For Expenses Of A Witness.
Notwithstanding any other provision of this Article, to the extent that
Indemnitee is, by reason of his Corporate Status, a witness in any
Proceeding, he shall be indemnified against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 7.6. Advancement Of Expenses. The Company shall advance all
reasonable Expenses incurred by or on behalf of Indemnitee in connection
with any Proceeding within twenty days after the receipt by the Company of
a statement or statements from Indemnitee requesting such advance or
advances from time to time, whether prior to or after final disposition of
such proceeding. Such statement or statements shall reasonably evidence
the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is
not entitled to be indemnified against such Expenses.
Section 7.7. Procedure For Determination Of Entitlement To
Indemnification.
(a) To obtain indemnification under this Article, Indemnitee
shall submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably available to
Indemnitee and is reasonably necessary to determine whether and to what
extent Indemnitee is entitled to indemnification. The determination of
Indemnitee's entitlement to indemnification shall be made not later than 60
days after receipt by the Company of the written request for
indemnification. The Secretary of the Company shall, promptly upon receipt
of such a request for indemnification, advise the Board of Directors in
writing that Indemnitee has requested indemnification.
(b) Indemnitee's entitlement to indemnification under any of
Sections 7.2, 7.3 or 7.4 of this Article shall be determined in the
specific case: (i) by the Board of Directors by a majority vote of a
quorum of the Board consisting of Disinterested Directors (as hereinafter
defined); or (ii) by Independent Counsel (as hereinafter defined), in a
written opinion, if (A) a Change of Control (as hereinafter defined) shall
have occurred and Indemnitee so requests, or (B) if a quorum of the Board
of Directors consisting of Disinterested Directors is not obtainable or,
even if obtainable, such quorum of Disinterested Directors so directs; or
(iii) by the stockholders of the Company; or (iv) as provided in Section
7.8 of this Article.
(c) In the event the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section
7.7(b) of this Article, the Independent Counsel shall be selected as
provided in this Section 7.7(c). If a Change of Control shall not have
occurred, the Independent Counsel shall be selected by the Board of
Directors, and the Company shall give written notice to Indemnitee advising
him of the identity of the Independent Counsel so selected. If a Change of
Control shall have occurred, and if so requested by Indemnitee in his
written request for indemnification, the Independent Counsel shall be
selected by Indemnitee, and Indemnitee shall give written notice to the
Company advising it of the identity of the Independent Counsel so selected.
In either event, Indemnitee or the Company, as the case may be, may, within
7 days after such written notice of selection shall have been given,
deliver to the Company or to Indemnitee, as the case may be, a written
objection to such selection. Such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the
requirements of "Independent Counsel" as defined in Section 7.13 of this
Article, and the objection shall set forth with particularity the factual
basis of such assertion. If such written objection is made, the
Independent Counsel so selected shall be disqualified from acting as such.
If, within 20 days after submission by Indemnitee of a written request for
indemnification pursuant to Section 7.7(a) hereof, no Independent Counsel
shall have been selected, or if selected shall have been objected to, in
accordance with this Section 7.7(c), either the Company or Indemnitee may
petition the Court of Chancery of the State of Delaware for the appointment
as Independent Counsel of a person selected by the Court or by such other
person as the Court shall designate, and the person so appointed shall act
as Independent Counsel under Section 7.7(b) hereof. The Company shall pay
any and all reasonable fees and expenses of Independent Counsel incurred by
such Independent Counsel in acting pursuant to Section 7.7(b) hereof, and
the Company shall pay all reasonable fees and expenses incident to the
procedures of this Section 7.7(c), regardless of the manner in which such
Independent Counsel was selected or appointed.
Section 7.8. Presumptions And Effect Of Certain Proceedings. If a
Change of Control shall have occurred, Indemnitee shall be presumed (except
as otherwise expressly provided in this Article) to be entitled to
indemnification under this Article upon submission of a request for
indemnification in accordance with Section 7.7(a) of this Article, and
thereafter the Company shall have the burden of proof to overcome that
presumption in reaching a determination contrary to that presumption.
Whether or not a Change of Control shall have occurred, if the person or
persons empowered under Section 7.7 of this Article to determine
entitlement to indemnification shall not have made a determination within
60 days after receipt by the Company of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have
been made and Indemnitee shall be entitled to such indemnification unless
(i) Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification, or (ii) such indemnification is
prohibited by law. The termination of any Proceeding described in any of
Sections 7.2, 7.3, or 7.4 of this Article, or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of
nolo contendere or its equivalent, shall not (except as otherwise expressly
provided in this Article) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did
not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Company or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that
his conduct was unlawful.
Section 7.9. Remedies Of Indemnitee.
(a) In the event that (i) a determination is made pursuant to
Section 7.7 of this Article that Indemnitee is not entitled to
indemnification under this Article, (ii) advancement of Expenses is not
timely made pursuant to Section 7.6 of this Article, or (iii) payment of
indemnification is not made within five (5) days after a determination of
entitlement to indemnification has been made or deemed to have been made
pursuant to Sections 7.7 or 7.8 of this Article, Indemnitee shall be
entitled to an adjudication in an appropriate court of the State of
Delaware, or in any other court of competent jurisdiction, of his
entitlement to such indemnification or advancement of Expenses.
Alternatively, Indemnitee, at his option, may seek an award in arbitration
to be conducted by a single arbitrator pursuant to the rules of the
American Arbitration Association. The Company shall not oppose
Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made
pursuant to Section 7.7 of this Article that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant
to this Section 7.9 shall be conducted in all respects as a de novo trial,
or arbitration, on the merits and Indemnitee shall not be prejudiced by
reason of that adverse determination. If a Change of Control shall have
occurred, in any judicial proceeding or arbitration commenced pursuant to
this Section 7.9 the Company shall have the burden of proving that
Indemnitee is not entitled to indemnification or advancement of Expenses,
as the case may be.
(c) If a determination shall have been made or deemed to have
been made pursuant to Sections 7.7 or 7.8 of this Article that Indemnitee
is entitled to indemnification, the Company shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant
to this Section 7.9, unless (i) Indemnitee misrepresented or failed to
disclose a material fact in making the request for indemnification, or (ii)
such indemnification is prohibited by law.
(d) The Company shall be precluded from asserting in any
judicial proceeding or arbitration commenced pursuant to this Section 7.9
that the procedures and presumptions of this Article are not valid, binding
and enforceable and shall stipulate in any such court or before any such
arbitrator that the Company is bound by all the provisions of this Article.
(e) In the event that Indemnitee, pursuant to this Section 7.9,
seeks a judicial adjudication of, or an award in arbitration to enforce his
rights under, or to recover damages for breach of, this Article, Indemnitee
shall be entitled to recover from the Company, and shall be indemnified by
the Company against, any and all expenses (of the types described in the
definition of Expenses in Section 7.13 of this Article) actually and
reasonably incurred by him in such judicial adjudication or arbitration,
but only if he prevails therein. If it shall be determined in said
judicial adjudication or arbitration that Indemnitee is entitled to receive
part but not all of the indemnification or advancement of Expenses sought,
the expenses incurred by Indemnitee in connection with such judicial
adjudication or arbitration shall be appropriately prorated.
Section 7.10. Non-Exclusivity And Survival Of Rights. The rights of
indemnification and to receive advancement of Expenses as provided by this
Article shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the
Certificate of Incorporation, the By-Laws, any agreement, a vote of
stockholders or a resolution of directors, or otherwise. Notwithstanding
any amendment, alteration or repeal of any provision of this Article,
Indemnitee shall, unless otherwise prohibited by law, have the rights of
indemnification and to receive advancement of Expenses as provided by this
Article in respect of any action taken or omitted by Indemnitee in his
Corporate Status and in respect of any claim asserted in respect thereof at
any time when such provision of this Article was in effect. The provisions
of this Article shall continue as to an Indemnitee whose Corporate Status
has ceased and shall inure to the benefit of his heirs, executors and
administrators.
Section 7.11. Severability. If any provision or provisions of this
Article shall be held to be invalid, illegal or unenforceable for any
reason whatsoever:
(a) the validity, legality and enforceability of the remaining
provisions of this Article (including without limitation, each portion of
any Section of this Article containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this
Article (including, without limitation, each portion of any Section of this
Article containing any such provision held to be invalid, illegal or
unenforceable, that is not itself invalid, illegal or unenforceable) shall
be construed so as to give effect to the intent manifested by the provision
held invalid, illegal or unenforceable.
Section 7.12. Certain Persons Not Entitled To Indemnification Or
Advancement Of Expenses. Notwithstanding any other provision of this
Article, no person shall be entitled to indemnification or advancement of
Expenses under this Article with respect to any Proceeding, or any claim
therein, brought or made by him against the Company.
Section 7.13. Definitions. For purposes of this Article:
(a) "Change in Control" means a change in control of the Company
of a nature that would be required to be reported in response to Item 5(f)
of Schedule 14A of Regulation 14A (or in response to any similar item on
any similar schedule or form) promulgated under the Securities Exchange Act
of 1934 (the "Act"), whether or not the Company is then subject to such
reporting requirement; provided, however, that, without limitation, such a
Change in Control shall be deemed to have occurred if (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the
"beneficial owner") (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities without
the prior approval of at least two-thirds of the members of the Board of
Directors in office immediately prior to such person attaining such
percentage interest; (ii) the Company is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy contest,
as a consequence of which members of the Board of Directors in office
immediately prior to such transaction or event constitute less than a
majority of the Board of Directors thereafter; or (iii) during any period
of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors (including for this purpose any new
director whose election or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period)
cease for any reason to constitute at least a majority of the Board of
Directors.
(b) "Corporate Status" describes the status of a person who is
or was a director, officer, employee, agent or fiduciary of the Company or
of any other corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise which such person is or was serving at the
request of the Company.
(c) "Disinterested Director" means a director of the Company who
is not and was not a party to the Proceeding in respect of which
indemnification is sought by Indemnitee.
(d) "Expenses" shall include all reasonable attorneys' fees,
retainers, court costs, transcript costs, fees of experts, witness fees,
travel expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or being or
preparing to be a witness in a Proceeding.
(e) "Indemnitee" includes any person who is, or is threatened to
be made, a witness in or a party to any Proceeding as described in Sections
7.2, 7.3 or 7.4 of this Article by reason of his Corporate Status.
(f) "Independent Counsel" means a law firm, or a member of a law
firm, that is experienced in matters of corporation law and neither
presently is, nor in the past five (5) years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either
such party, or (ii) any other party to the Proceeding giving rise to a
claim for indemnification hereunder. Notwithstanding the foregoing, the
term "Independent Counsel" shall not include any person who, under the
applicable standards of professional conduct then prevailing, would have a
conflict of interest in representing either the Company or Indemnitee in an
action to determine Indemnitee's rights under this Article.
(g) "Proceeding" includes any action, suit, arbitration,
alternate dispute resolution mechanism, investigation, administrative
hearing or any other proceeding whether civil, criminal, administrative or
investigative, except one initiated by an Indemnitee pursuant to Section
7.9 of this Article to enforce his rights under this Article.
Section 7.14. Miscellaneous. Use of the masculine pronoun shall be
deemed to include usage of the feminine pronoun where appropriate.
ARTICLE VIII
Miscellaneous
Section 8.1 Fiscal Year. The fiscal year of the Corporation shall
be determined by resolution of the Board of Directors.
Section 8.2 Waiver Of Notice Of Meetings Of Stockholders,
Directors, And Committees. Any written waiver of notice, signed by the
person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor
the purpose of any regular or special meeting of the stockholders,
directors, or members of a committee of directors need be specified in any
written waiver of notice..
Section 8.3 Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the
meeting of the Board or committee thereof which authorizes the contract or
transaction, or solely because his or their votes are counted for such
purpose, if: (1) the material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the Board
of Directors or the committee, and the Board or the committee in good faith
authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to his
relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and
the contract or transaction is specifically approved in good faith by vote
of the stockholders; or (3) the contract or transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified, by the
Board of Directors, a committee thereof, or the stockholders. Common or
interested directors may be counted in determining the presence of a quorum
at a meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
Section 8.4 Form Of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock
ledger, books of account, and minute books, may be kept on, or be in the
form of, punch cards, magnetic tape, photographs, microphotographs, or any
other information storage device, provided that the records so kept can be
converted into clearly legible form within a reasonable time. The
Corporation shall so convert any records so kept upon the request of any
person entitled to inspect the same.
Section 8.5 Amendment Of By-Laws. The Board of Directors of the
Corporation is expressly authorized to adopt, amend or repeal the by-laws
of the Corporation by a vote of a majority of the entire Board. The
stockholders may make, alter or repeal any by-law whether or not adopted by
them, provided however, that any such additional by-laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of 75% or
more of the outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors (considered for this purpose
as one class), unless such additional by-laws, alterations or repeal shall
have been recommended to the stockholders for adoption by a majority of the
Board of Directors, in which event such additional by-laws, alterations or
repeal may be adopted by the affirmative vote of the holders of a majority
of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this purpose as
one class).
