<PAGE> 1
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
QUARTERLY REPORT
Pursuant to Section 13 or 15 (d) of
the Securities Exchange Act of 1934
For the quarter ended June 30, 1995 Commission file number 1-11013
SPECIALTY CHEMICAL RESOURCES, INC.
----------------------------------------------------
Exact name of registrant as specified in its charter
Delaware 34-1366838
---------------------- ------------------------
State of incorporation I.R.S. Employer I.D. No.
9100 Valley View Road; Macedonia, Ohio 44056
---------------------------------------------------
Address of principal executive offices and zip code
(216) 468-1380
---------------------------------------------------
Registrant's telephone number, including area code
Indicate by a 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 (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 ninety
(90) days. Yes__X__ No_____.
The number of outstanding shares of the Registrant's common stock as
of August 1, 1995 was 3,932,774. The Registrant has no other class of
stock outstanding.
=============================================================================
Page 1 of 16
<PAGE> 2
Specialty Chemical Resources, Inc.
Form 10-Q
For the quarter ended June 30, 1995
Index
<TABLE>
<CAPTION>
<S> <C>
Page
Part I Financial Information
Item 1. Financial Statements.......................................... 3
Condensed Balance Sheets...................................... 3
Condensed Statements of Operations, 3 Months.................. 5
Condensed Statements of Operations, 6 Months.................. 6
Condensed Statements of Cash Flows, 3 Months.................. 7
Condensed Statements of Cash Flows, 6 Months.................. 8
Notes to Financial Statements................................. 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................ 10
Part II Other Information
Item 1. Legal Proceedings............................................ 13
Item 4. Submission of Matters to a Vote of Security Holders.......... 13
Item 6. Exhibits & Reports on Form 8-K............................... 15
</TABLE>
2 of 16
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Specialty Chemical Resources, Inc.
Condensed Balance Sheets
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
(Unaudited) (Audited)
------------- -----------------
<S> <C> <C>
Current assets
Cash and cash equivalents $ 5,283 $ 15,025
Accounts Receivables 7,109,788 6,873,256
Inventories (Note B) 8,329,828 6,832,213
Prepaid expenses 345,454 383,084
Refundable Income Taxes 51,898 51,898
------------ ------------
Total current assets 15,842,251 14,155,476
Property, plant and equipment
At cost 12,722,032 10,813,702
Less accumulated depreciation
and amortization (3,108,356) (2,739,671)
------------ ------------
9,613,676 8,074,031
Other assets
Goodwill 20,662,440 20,970,474
Other 1,232,826 1,358,471
------------ -------------
21,895,266 22,328,945
------------ -------------
Total assets $ 47,351,193 $ 44,558,452
</TABLE> ============ ============
See accompanying Notes to Financial Statements.
3 of 16
<PAGE> 4
Specialty Chemical Resources, Inc.
Condensed Balance Sheets
(continued)
<TABLE>
<CAPTION>
June 30, 1995 December 31, 1994
(Unaudited) (Audited)
---------------- -----------------
<S> <C> <C>
Current liabilities
Accounts payable $ 5,997,885 $ 5,764,259
Deferred Income Taxes 217,508 242,219
Accrued expenses 1,129,439 787,333
Accrued costs related to
Restructuring Plan (Note C) 269,980 941,460
----------- -----------
Total current liabilities 7,614,812 7,735,271
Long-term obligations 8,886,101 4,512,247
Deferred Income Taxes 1,708,680 1,871,586
---------- ----------
Total non-current liabilities 10,594,781 6,383,833
Stockholders' equity
Preferred stock - $.01 par value;
authorized 2,000,000 shares
Common Stock - $.10 par value;
authorized 13,000,000 shares;
issued and outstanding 3,932,774
and 3,932,780 393,277 393,277
Additional paid in capital 41,878,575 41,878,575
Accumulated deficit (13,130,252) (11,832,504)
----------- -----------
29,141,600 30,439,348
----------- -----------
$ 47,351,193 $ 44,558,452
</TABLE> ============ ============
See accompanying Notes to Financial Statements.
4 of 16
<PAGE> 5
Specialty Chemical Resources, Inc.
Condensed Statements of Operations
(Unaudited)
For the 3 month periods ended:
<TABLE>
<CAPTION>
June 30, 1995 June 30, 1994
--------------- --------------
<S> <C> <C>
Net Sales $12,250,008 $10,864,139
Cost of Goods Sold 10,176,961 9,141,817
----------- -----------
Gross profit 2,073,047 1,722,322
Selling, general and administrative
expenses 1,672,708 1,731,445
Amortization of intangibles 217,173 218,448
Proxy contest expenses 650,000 -0-
----------- -----------
Operating profit (loss) (446,834) (227,571)
Other (income) expense
Interest expense 187,109 191,860
Other (16,714) 158
----------- -----------
170,395 192,018
----------- -----------
Earnings (loss) before income
taxes and extraordinary items (637,229) (419,589)
Income taxes (benefit) -0- ( 63,000)
----------- -----------
Earnings (loss) before extra-
ordinary items (637,229) (356,589)
Extraordinary gain from insurance
settlement (net of income taxes) -0- 2,994,797
----------- -----------
Net earnings(loss) $ (637,229) $ 2,638,208
----------- -----------
Earnings (loss) per common share:
Earnings (loss) before extra-
ordinary item $ (.16) $ (.09)
Extraordinary item $ -0- $ .76
---------- ----------
Net earnings(loss) $ (.16) $ .67
========== ==========
Weighted average shares outstanding 3,974,961 3,932,778
</TABLE>
See accompanying Notes to Financial Statements.
5 of 16
<PAGE> 6
Specialty Chemical Resources, Inc.
Condensed Statements of Operations
(Unaudited)
For the 6 month periods ended:
<TABLE>
<CAPTION>
June 30, 1995 June 30, 1994
--------------- --------------
<S> <C> <C>
Net Sales $21,468,954 $20,494,879
Cost of Goods Sold 18,096,197 17,181,447
----------- -----------
Gross profit 3,372,757 3,313,432
Selling, general and administrative
expenses 3,290,779 3,309,394
Amortization of intangibles 434,346 436,896
Proxy contest expenses 650,000 -0-
---------- ----------
Operating profit (loss) (1,002,368) (432,858)
Other (income) expense
Interest expense 321,445 320,647
Other (26,065) (3,089)
----------- -----------
295,380 317,558
----------- -----------
Earnings (loss) before income
taxes and extraordinary items (1,297,748) (750,416)
Income taxes (benefit) -0- ( 63,000)
----------- -----------
Earnings (loss) before extra-
ordinary items (1,297,748) (687,416)
Extraordinary gain from insurance
settlement (net of income taxes) -0- 2,994,797
----------- -----------
Net earnings(loss) $(1,297,748) $ 2,307,381
=========== ===========
Earnings (loss) per common share:
Earnings (loss) before extra-
ordinary item $ (.33) $ (.17)
Extraordinary item $ -0- $ .76
----------- ----------
Net earnings(loss) $ (.33) $ .59
=========== ===========
Weighted average shares outstanding 3,955,793 3,932,778
</TABLE>
See accompanying Notes to Financial Statements.
6 of 16
<PAGE> 7
Specialty Chemical Resources, Inc.
Condensed Statements of Cash Flows
(Unaudited)
For the 3 month periods ended:
<TABLE>
<CAPTION>
June 30, 1995 June 30, 1994
-------------- --------------
<S> <C> <C>
Net cash provided (used) by operating
activities $ (927,828) $ 5,429,680
Cash flows from investing activities:
Expenditures for property, plant and
equipment - net (1,144,116) ( 44,299)
----------- -----------
Net cash provided (used) by
investing activities (1,144,116) ( 44,299)
Cash flows from financing activities:
Payments on revolver (1,460,000) (8,085,000)
Proceeds on revolver 3,525,000 2,695,000
----------- -----------
Net cash provided (used) by
financing activities 2,065,000 (5,390,000)
----------- -----------
Net increase (decrease) in cash
and cash equivalents ( 6,944) (4,619)
Cash and cash equivalents at beginning
of period 12,227 27,511
---------- -----------
Cash and cash equivalents at end
of period $ 5,283 $ 22,892
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
7 of 16
<PAGE> 8
Specialty Chemical Resources, Inc.
Condensed Statements of Cash Flows
(Unaudited)
For the 6 month periods ended:
<TABLE>
<CAPTION>
June 30, 1995 June 30, 1994
-------------- --------------
<S> <C> <C>
Net cash provided (used) by operating
activities $(2,365,857) $ 5,877,356
Cash flows from investing activities:
Expenditures for property, plant and
equipment - net (2,018,885) ( 95,155)
----------- -----------
Net cash provided (used) by
investing activities (2,018,885) ( 95,155)
Cash flows from financing activities:
Payments on revolver (2,535,000) (13,295,000)
Proceeds on revolver 6,910,000 7,503,000
----------- -----------
Net cash provided (used) by
financing activities 4,375,000 (5,792,000)
----------- -----------
Net increase (decrease) in cash
and cash equivalents (9,742) (9,799)
Cash and cash equivalents at beginning
of period 15,025 32,691
----------- -----------
Cash and cash equivalents at end
of period $ 5,283 $ 22,892
=========== ===========
</TABLE>
See accompanying Notes to Financial Statements.
8 of 16
<PAGE> 9
Specialty Chemical Resources, Inc.
Notes to Financial Statements
Note A - Summary of Significant Accounting Policies
The accompanying audited and unaudited financial statements have been
prepared in conformity with generally accepted accounting principles and all
adjustments are of a normal recurring nature and are, in the opinion of
management, necessary to present fairly the financial position of Specialty
Chemical Resources, Inc. (the "Company") at December 31, 1994 and June 30, 1995
and the results of operations and cash flows for the interim periods ended June
30, 1995.
Any other significant accounting policies employed in the preparation of
the financial statements are included in the Company's most recent Form 10-K.
Note B - Inventories
Inventories are stated at the lower of cost or market determined by the
last-in, first-out (LIFO) method for raw materials and the first- in, first-out
(FIFO) method for finished goods.
The Company's inventories consisted of the following at:
<TABLE>
<CAPTION>
June 30, December 3l,
1995 1994
----------- -----------
<S> <C> <C>
Raw materials $5,939,530 $4,368,396
Finished goods 2,992,280 3,049,421
---------- ----------
Total FIFO cost 8,931,810 7,417,817
Less: Excess of FIFO cost over
LIFO (601,982) (585,604)
---------- ----------
Total LIFO cost $8,329,828 $6,832,213
---------- ----------
</TABLE>
Note C - Restructuring Plan
In the fourth quarter of 1994, the Company's Board of Directors approved a
plan to reduce the Company's cost structure and to improve operations through
the consolidation of facilities and reductions in the number of employees.
During the six months ended June 30, 1995 the Company charged $671,000 against
the Restructuring Plan accrual. These charges were composed of $260,000 for
the discontinuation of a product line, $2,000 for employee termination
benefits, $317,000 for the abandonment of certain equipment, and $92,000 for
the abandonment of leasehold improvements.The manufacturing facilities
consolidation is substantially completed. The Company anticipates the remainder
of the Restructuring Plan will be completed by September, 1995.
9 of 16
<PAGE> 10
Note D - Legal Proceedings
There have been no material changes in the status of legal proceedings
pending against the Company other than that which was reported on the Company's
most recent Form 10-K.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table sets forth, for the periods indicated, the percentage
relationship to net sales of certain items included in the Company's Statement
of Operations.
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
----------------- ------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net sales......................................... 100.0% 100.0% 100.0% 100.0%
Cost of goods sold................................ 84.3% 83.8% 83.1% 84.1%
Gross profit.................................... 15.7% 16.2% 16.9% 15.9%
Selling, general and administrative expenses...... 15.3% 16.1% 13.7% 15.9%
Operating profit.(loss)......................... (4.4%) (2.1%) (3.4%) (2.1%)
Interest expense.................................. 1.5% 1.6% 1.5% 1.8%
</TABLE>
Net sales of $21,469,000 for the six-month period ended June 30, 1995,
were $974,000, or 4.8%, above the comparable period in the prior year. This
increase was a result of higher unit volume across all product lines and
increased sales prices across most product lines.
For the second quarter ended June 30, 1995, net sales of $12,250,000 were
$1,386,000, or 12.8%, above the comparable period in the prior year. This
increase was mainly attributable to the same factors discussed above with
respect to the six-month period ended June 30, 1995.
Cost of goods sold for the six-month period ended June 30, 1995, increased
by $916,000 as compared to the same period in the prior year. This increase
was due principally to increased sales during the six-month period ended June
30, 1995. Cost of goods sold increased as a percentage of net sales from 83.8%
to 84.3% for the six-month periods ended June 30, 1994 and 1995, respectively.
The increase in percent of sales was due to higher costs for raw materials.
10 of 16
<PAGE> 11
Cost of goods sold increased by $1,035,000 for the three-months ended June
30, 1995. This increase was due principally to increased sales. Cost of goods
sold decreased as a percentage of net sales from 84.1% to 83.1% for the
three-months ended June 30, 1995 as compared to the same period in the prior
year. The decrease as a percentage of net sales was due to reduced overhead
charges and increased sales unit volume.
Selling, general and administrative expenses were $3,291,000 for the
six-month period June 30, 1995, or 15.3% of net sales. Selling, general and
administrative expenses were $3,309,000 or 16.1% of net sales for the same
period in 1994. The decrease as a percentage of net sales is due to increased
sales during the six months ended June 30, 1995
Selling, general and administrative expenses were $1,673,000 for the
quarter ended June 30, 1995, or 13.7% of net sales. Selling, general, and
administrative expenses were $1,731,000, or 15.9% of net sales for the same
period in 1994. The decrease of $58,000 is due primarily to reduced staffing
levels in the marketing department. The decrease as a percentage of net sales
is due to increased sales during the three months ended June 30, 1995.
During the second quarter of 1995, a group of stockholders (the
"Committee") solicited proxies in opposition to the Company's nominees for its
Board of Directors (the "Proxy Contest"). The purpose of the Proxy Contest was
to attempt to remove, by stockholder vote, the then-current Board of Directors
and to replace them with a slate of new directors nominated by the Committee.
The Proxy Contest was unsuccessful and the Company's incumbent Board nominees
were reelected. The Company incurred charges of $650,000 in responding to the
Proxy Contest. See Part II, Item 4.
Interest expense for the six-months ended June 30, 1995, was 1.5% of net
sales versus 1.6% for the comparable period in the prior year. Interest
expense was $321,000 for the six-months ended June 30, 1995. See "Liquidity
and Capital Resources".
Interest expense for the quarter ended, June 30, 1995, was 1.5% of net
sales versus 1.8% for the comparable period in the prior year. Interest
expense was $187,000 for the quarter ended June 30, 1995 as compared to
$192,000 for the comparable period in 1994. See "Liquidity and Capital
Resources".
The Company recorded a net loss for the six-months ended June 30, 1995, of
$1,297,748, or $.33 per share on weighted average shares outstanding of
3,955,793. This compared to a net earnings of $2,307,381, or $.59 per share on
weighted average shares outstanding of 3,932,778 for the same period in the
prior year. The loss for six-months ended June 30, 1995 was partially the
result of expenses totaling $650,000 related to the proxy contest discussed
above. Had the proxy contest not occurred the net
11 of 16
<PAGE> 12
loss would have been $647,748 or $.16 per share on weighted average shares
outstanding of 3,955,793. The earnings for the six-month period ended June 30,
1994 were the result of an extraordinary gain of $2,994,797 (net of taxes).
The extraordinary gain resulted from the insurance settlement on the property
and business interruption costs related to the December, 1992 fire at the
Macedonia, Ohio plant. Had the Company not recognized the extraordinary gain,
a net loss would have been reported of $687,416 or $.17 per share on 3,932,778
weighted average shares outstanding. Had the proxy contest not occurred and
the extraordinary gain not been recognized, the Company would have experienced
an earnings improvement of $39,668 over last year.
For the quarter ended June 30, 1995, the Company lost $.16 per share on
weighted average shares outstanding of 3,974,961 as compared to earnings of
$.67 per share on weighted average shares outstanding of 3,932,778 for the same
period in the prior year. The loss for the three-month period ended June 30,
1995 was the result of expenses totaling $650,000 related to the proxy contest
discussed above. Had the proxy contest not occurred, the Company would have
experienced net earnings of $12,771; a 102% improvement over current operating
results. The earnings for the quarter ended June 30, 1994 were the result of
the recognition of the extraordinary gain discussed above. Had the Company not
recognized the extraordinary gain, a net loss would have been reported of
$356,589, or $.09 per share on 3,932,778 weighted average shares outstanding.
Had the proxy contest not occurred and the extraordinary gain not been
recognized, the Company would have experienced an earnings improvement of
$369,360 over last year.
Liquidity and Capital Resources
As of June 30, 1995, the Company's ratio of current assets to current
liabilities was 2.09 to 1 and the quick ratio (cash, cash equivalents, and
accounts receivable, divided by current liabilities) was .95 to 1.
During the six-months ended June 30, 1995, the Company incurred $321,445
in interest expense and made interest payments totaling $383,918. Accrued
interest at June 30, 1995 was $1,124. Substantially all of the Company's
interest expense was related to the "Credit Agreement" discussed below.
The Company, as borrower, is a party to a credit agreement (the "Credit
Agreement") that provides for a $10,000,000 revolving line of credit at an
interest rate equal to the prime rate. The Credit Agreement, entered into on
March 30, 1992 and expiring on May 31, 1997, is a facility that allows for
borrowings based upon a formula comprised of inventory, accounts receivable and
fixed assets, less environmental compliance reserve, if any. No compliance
reserve has been required.
12 of 16
<PAGE> 13
Under the terms of the Credit Agreement, the Company is required to comply
with various covenants, the most restrictive of which relate to restrictions on
distributions from the Company to its stockholders, maintenance of certain
financial ratios and levels of tangible net worth and limits on capital
expenditures. As a result of the foregoing, as of June 30, 1995, approximately
$1.1 million was unused and available under the Credit Agreement.
The increase in the amount borrowed under the Credit Agreement at June 30,
1995 in comparison to the amount borrowed at December 31, 1994 is due to
increased uses of cash to fund expenditures for capital improvements,
inventory, expenditures related to the Proxy Contest, and operating losses.
The Company spent $2,019,000 on capital improvements during the period
ended June 30, 1995. In addition, the Company expects to spend approximately
$381,000 on capital improvements during the balance of the current fiscal year
principally as a result of the consolidation of its manufacturing facilities in
Macedonia. Such expenditures are expected to be funded from cash generated by
operations and borrowings under the Credit Agreement.
Part II - Other Information
Item 1. Legal Proceedings
There have been no material changes in the status of legal proceedings
pending against the Company.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held its Annual Meeting of Stockholders on June 8, 1995
(the "Annual Meeting"). The purposes of the Annual Meeting included stockholder
votes (i) to elect six Directors of the Company for the ensuing year, and (ii)
to ratify the appointment of the independent accountants for the Company.
As indicated in Part I, Item 2 , the Committee initiated the Proxy Contest
during the second quarter of 1995. At the Annual Meeting, each of the
Company's nominees for the Board was duly elected as a Director of the Company.
The Company's nominees for the Board included Edwin M. Roth, Corey B. Roth,
George N. Aronoff, Victor Gelb, Norton W. Rose and Lionel N. Sterling.
The holders of a total of 3,587,992 shares of the Company's common stock
entitled to vote were present in person or by proxy at the Annual Meeting
(representing 91.24% of the total common stock issued and outstanding and
entitled to vote at the Annual Meeting). The following list indicates the
number of votes received by each nominee for the Board:
13 of 16
<PAGE> 14
<TABLE>
<CAPTION>
Company Nominees
----------------
<S> <C>
Edwin M. Roth 1,854,201
Corey B. Roth 1,854,201
George N. Aronoff 1,854,201
Victor Gelb 1,854,201
Norton W. Rose 1,854,201
Lionel N. Sterling 1,854,201
Committee Nominees
------------------
Charles L. Woolley 1,706,882
Leonard P. Judy 1,706,882
Jeffrey A. Bott 1,706,882
Michael A. Wolf 1,706,882
John a. Adams 1,706,882
Donald O. Daley 1,706,882
</TABLE>
The vote on the proposal to ratify the appointment of Grant Thornton LLP
as the Company's certified public accountants was 3,550,094 FOR, 7,606 AGAINST,
and 30,292 ABSTAINED.
The Company, the Directors, the Committee and the individual members of
the Committee entered into an Agreement of Settlement and Release dated July
21, 1995 (the "Agreement"). Pursuant to the Agreement, the Company increased
the size of its Board of Directors from six members to seven members and
appointed Leonard P. Judy, a member of the Committee, to the Company's Board of
Directors. The Agreement provides standstill provisions that prohibit, for a
two-year period, certain enumerated activities including, but not limited to,
certain acquisitions of securities of the Company, solicitation of proxies
(except as a Company nominee for the Board) or other participation in any
election contest with respect to the Company, or activities relating to written
consent in lieu of a meeting of stockholders of the Company (unless such
consent is solicited by the Company) or stockholder proposals. The Agreement
also provides for a mutual release of claims arising out of or in connection
with the Proxy Contest or related litigation, including the action filed by the
Company in the United States District Court for the Northern District of Ohio
captioned SPECIALTY CHEMICAL RESOURCES, INC. V. COMMITTEE FOR REVITALIZATION OF
STOCKHOLDER VALUE OF SPECIALTY CHEMICAL RESOURCES, INC., ET AL, No. 5:95 CV
1082, seeking preliminary and injunctive relief with respect to the Proxy
Contest. Also pursuant to the Agreement, the Company will reimburse the
Committee for expenses incurred in connection with the Proxy Contest in the
amount of $135,000, to be paid in three installments of $45,000 each, the last
of which will be paid within thirty (30) days after the final adjournment of
the Company's 1997 Annual Meeting of Stockholders.
14 of 16
<PAGE> 15
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: 3.01 The Amended and Restated By-Laws of the Company as
amended on June 8, 1995.
4.01 Amendment to Credit Agreement, dated as of August 1,
1995, between the Company and National City Bank.
10.01 Agreement of Settlement and Release, dated as of
July 21, 1995, among the Company, the Directors, the
Committee and the individual members of the Committee.
27 Financial Data Schedule
(b) The Company filed a report on Form 8-K on June 8, 1995 relating to the
adoption by the Board of Directors of the Company of two amendments to the
Amended and Restated By-Laws of the Company.
15 of 16
<PAGE> 16
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.
Specialty Chemical Resources, Inc.
By: /s/ COREY ROTH August 11, 1995
-----------------------------
Corey Roth
Vice President, and Treasurer
(Principal Financial Officer)
<PAGE> 17
INDEX TO EXHIBITS
Exhibit
Number
- --------
3.01 The Amended and Restated By-Laws of the Company, as amended on
June 8, 1995.
4.01 Amendment to Credit Agreement, dated as of August 1, 1995,
between the Company and National City Bank.
10.01 Agreement of Settlement and Release dated as of July 21, 1995,
among the Company, the Directors, the Committee and the
individual members of the Committee.
27 Financial Data Schedule.
<PAGE> 1
Exhibit 3.01
AMENDED AND RESTATED
BY-LAWS
OF
ELECTRONIC THEATRE RESTAURANTS CORPORATION
(now known as SPECIALTY CHEMICAL RESOURCES, INC.)
ARTICLE I
STOCKHOLDERS
Section 1. Place of Stockholders' Meetings. All meetings
of the stockholders of the Corporation shall be held at such place
or places, within or outside the State of Delaware, as may be
fixed by the Board of Directors, the Chairman of the Board or the
President from time to time or as shall be specified in the respec-
tive notices of the meetings or in waivers of notice thereof. If
the place of any meeting is not so fixed, it shall be held at the
registered office of the Corporation in the State of Delaware.
Section 2. Date, Hour and Purpose of Annual Meetings of
Stockholders. Annual Meetings of Stockholders shall be held on
such day and at such time each year as the Directors may determine
from time to time by resolution, at which meeting the stockholders
shall elect, by a majority of the votes cast at such election, a
Board of Directors, and transact such other business as may properly
be brought before the meeting. If for any reason a Board of Direc-
tors shall not be elected at the Annual Meeting of Stockholders,
or if it appears that such Annual Meeting is not held on such
date as may be fixed by the Directors in accordance with the pro-
visions of the By-Laws, then in either such event the Directors
shall cause the election to be held as soon thereafter as convenient.
Section 3. Special Meetings of Stockholders. Special
meetings of the stockholders entitled to vote may be called by
the Chairman of the Board or the President, shall be called by
the President or the Secretary at the request in writing of the
stockholder or stockholders owning a majority of the common stock
of the Corporation issued and outstanding and entitled to vote.
Special meetings may also be called for such purpose or purposes
and in such manner as shall be provided for in the Certificate of
Incorporation of the Corporation. Such request shall state the
purpose or purposes of the meeting.
Section 4. Notice of Meetings of Stockholders. Except
as otherwise required or permitted by law, whenever the stockholders
are required or permitted to take any action at a meeting, written
notice thereof shall be given, stating the place, date and time
of the meeting and, unless it is the annual meeting, by or at
<PAGE> 2
whose direction it is being issued. The notice also shall designate
the place where the stockholders' list is available for examination,
unless the list is kept at the place where the meeting is to be
held. Notice of a special meeting also shall state the purpose
or purposes for which the meeting is called. A copy of the notice
of any meeting shall be delivered personally or shall be mailed,
not less than ten (10) nor more than sixty (60) days before the
date of the meeting, to each stockholder entitled to vote at the
meeting. If mailed, the notice shall be deemed given when deposited
in the United States mail, postage prepaid, and shall be directed
to each stockholder at his address as it appears on the records
of the Corporation, unless he shall have filed with the Secretary
of the Corporation a written request that notices to him be mailed
to some other address, in which case it shall be directed to him
at the other address. Notice of any meeting of stockholders shall
not be required to be given to any stockholder who shall attend
the meeting, except for the express purpose of objecting at the
beginning thereof to the transaction of any business because the
meeting is not lawfully called or convened, or who shall submit,
either before or after the meeting, a signed waiver of notice.
All notices with respect to any shares which are held jointly by
two (2) or more persons may be given to that one (1) of such persons
who is named first upon the transfer books of the Corporation and
notice so given shall be sufficient notice to all the holders of
such shares.
An Affidavit of the Secretary or an Assistant Secretary or of a
transfer agent of the Corporation that the notice has been given
shall, in the absence of fraud, be prima facie evidence of the
facts stated therein.
Section 5. Quorum of Stockholders. (a) Unless otherwise
provided by the laws of Delaware, at any meeting of the stock-
holders the presence in person or by proxy of stockholders entitled
to cast one-third (1/3) of the votes thereat shall constitute
a quorum.
(b) At any meeting of the stockholders at which a quorum
shall be present, a majority of those present in person or by
proxy may adjourn the meeting from time to time without notice
other than announcement at the meeting. In the absence of a quorum,
the officer presiding thereat shall have power to adjourn the
meeting from time to time until a quorum shall be present. Notice
of any adjourned meeting other than announcement at the meeting
shall not be required to be given, except as provided in paragraph
(d) below and except where expressly required by law.
(c) At any adjourned meeting at which a quorum shall be
present, any business may be transacted which might have been
transacted at the meeting as originally called, but only those
stockholders entitled to vote at the meeting as originally noticed
shall be entitled to vote at any adjournment or adjournments thereof,
unless a new record date is fixed by the Board of Directors.
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(d) If an adjournment is for more than thirty (30) days, or
if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote at the
adjourned meeting.
Section 6. Chairman and Secretary of Meeting. The
Chairman of the Board, or in his absence, the President, or in his
absence, any Vice President, shall preside at meetings of the
stockholders. The Secretary shall act as secretary of the meeting,
or in his absence an Assistant Secretary shall act, or if neither is
present, then the presiding officer shall appoint a person to act as
secretary of the meeting.
Section 7. Voting by Stockholders. Except as may be
otherwise provided by the Certificate of Incorporation or by these
By-Laws, at every meeting of the stockholders each stockholder
shall be entitled to one (1) vote for each share of stock standing in
his name on the books of the Corporation on the record date for
the meeting. All elections, including the election of Directors,
and questions shall be decided by the vote of a majority in interest
of the stockholders present in person or represented by proxy and
entitled to vote at the meeting, except as otherwise permitted or
required by the laws of Delaware, the Certificate of Incorporation
or these By-Laws. Written ballots shall not be required for voting
on any matter unless order by the Chairman of the meeting.
Section 8. Proxies. Any stockholder entitled to vote at
any meeting of stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize another
person or persons to act for him by proxy. Every proxy shall be
in writing, subscribed by the stockholder or his duly authorized
attorney-in-fact, but need not be dated, sealed, witnessed or
acknowledged and submitted to the secretary of the meeting at or
before such meeting.
Section 9. List of Stockholders. (a) At least ten (10)
days before every meeting of stockholders, the Secretary shall
prepare or cause to be prepared 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.
(b) During ordinary business hours, for a period of at least
ten (10) days prior to the meeting, such list shall be open to
examination by any stockholder for any purpose germane 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.
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(c) The list shall also be produced and kept at the time
and place of the meeting during the whole time of the meeting,
and it may be inspected by any stockholder who is present.
(d) The stock ledger shall be the only evidence as to who
are the stockholders entitled to examine the stock ledger, the
list required by this Section or the books of the Corporation, or
to vote in person or by proxy at any meeting of stockholders.
Section 10. Consent of Stockholders in Lieu of Meeting.
Unless otherwise provided in the Certificate of Incorporation of
the Corporation, any action which may be taken at any annual or
special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing,
setting forth the action so taken,shall be signed, in person or
by proxy, by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to author-
ize or take the action at a meeting at which all shares entitled
to vote thereon were present and voted in person or by proxy.
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to
those stockholders who have not consented in writing, but who
were entitled to vote on the matter.
ARTICLE II
DIRECTORS
Section 1. Powers of Directors. The property, business
and affairs of the Corporation shall be managed by its Board of
Directors, which may exercise all the powers of the Corporation
except such as are by the laws of Delaware or the Certificate of
Incorporation or these By-Laws required to be exercised by the
stockholders.
Section 2. Number, Method of Election, Terms of Office of
Directors. The number of Directors which shall constitute the
whole Board of Directors shall be such as from time to time shall
be determined by resolution of the Board of Directors, but the
number shall not be less than one (1) provided that the tenure of
a Director shall not be affected by any decrease in the number of
Directors so made by the Board. Each Director shall hold office
until his successor is elected and qualified, provided however
that a Director may resign at any time.
Section 3. Vacancies on Board of Directors. (a) Any
Director may resign his office at any time by delivering his resigna-
tion in writing to the Chairman or the President or the Secretary.
It will take effect at the time specified therein, or if no time
is specified, it will be effective at the time of its receipt by
the Corporation. The acceptance of a resignation shall not be
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necessary to make it effective, unless expressly so provided in
the resignation.
(b) Any vacancy or newly created Directorship resulting
from any increase in the authorized number of Directors may be
filled by vote of a majority of the Directors then in office,
though less than a quorum, or by a sole remaining director and
any Director so chosen shall hold office until the next annual
election of Directors by the stockholders and until his successor
is duly elected and qualified, or until his earlier resignation
or removal.
Section 4. Meetings of the Board of Directors. (a) The
Board of Directors may hold their meetings, both regular and
special, either within or outside the State of Delaware.
(b) Regular meetings of the Board of Directors may be held
without notice at such time and place as shall from time to time
be determined by resolution of the Board of Directors.
(c) The first meeting of each newly elected Board of Directors
except the initial Board of Directors shall be held (1) as soon
as practicable after the Annual Meeting of the stockholders or
(2) without notice immediately after the Annual Meeting of stock-
holders or such date and at such time and place as the Board deter-
mines.
(d) Special meetings of the Board of Directors shall be
held whenever called by direction of the Chairman or the President
or at the request of Directors constituting one-third (1/3) of
the number of Directors then in office, but not less than two (2)
Directors.
(e) The Secretary shall give notice to each Director of any
meeting of the Board of Directors by mailing the same at least
two (2) days before the meeting or by telegraphing or delivering
the same not later than the day before the meeting. Such notice
need not include a statement of the business to be transacted at,
or the purpose of, any such meeting. Any and all business may be
transacted at any meeting of the Board of Directors. Notice of
any adjourned meeting including the place, date, and time of the
new meeting, shall be given to all Directors not present at the
time of the adjournment, as well as to the other Directors unless
the place, date and time of the new meeting is announced at the
adjourned meeting. No notice to or waiver by any Director shall
be required with respect to any meeting at which the Director is
present.
Section 5. Quorum. Except as otherwise provided by
law or in these By-Laws, at all meetings of the Board a majority
of the entire Board shall constitute a quorum for the transaction
of business, and the affirmative vote of a majority of the entire
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Board at such a meeting shall be required for the taking of any
action by the Board. A majority of the Directors present,
whether or not a quorum is present, may adjourn any meeting to
another place, date and time.
Section 6. Presiding Officer and Secretary of Meeting.
The Chairman or, in his absence, a member of the Board of
Directors selected by the members present, shall preside at
meetings of the Board. The Secretary shall act as secretary of
the meeting, but in his absence the presiding officers shall
appoint a secretary of the meeting.
Section 7. Action by Consent Without Meeting. 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 records of the Board or committee.
Section 8. Executive Committee. The Board of Directors
may appoint from among its members and from time to time may fill
vacancies in an Executive Committee to serve during the pleasure
of the Board. The Executive Committee shall consist of such
number of members as the Board of Directors may by resolution
from time to time fix. One (1) of such members shall be the
Chairman of the Board who shall be the presiding officer of the
Committee. During the intervals between the meetings of the
Board, the Executive Committee shall possess and may exercise all
of the powers of the Board in the management of the business and
affairs of the Corporation conferred by these By-Laws or
otherwise. The Committee shall keep a record of all its
proceedings and report the same to the Board. A majority of the
members of the Committee shall constitute a quorum. The act of a
majority of the members of the Committee present at any meeting
at which a quorum is present shall be the act of the Committee.
Section 9. Other Committees. The Board of Directors may
also appoint from among its members such other committees, of
such number of members as it may by resolution fix, as it may
from time to time deem desirable, and may delegate to such
committees such powers of the Board as it may consider
appropriate.
Section 10. Compensation of Directors. Directors shall
receive such reasonable compensation for their service on the
Board of Directors or any committees thereof, whether in the form
of salary or a fixed fee for attendance at meetings, or both,
with expenses, if any, as the Board of Directors may from time to
time determine. Nothing herein contained shall be construed to
preclude any Director from serving in any other capacity and
receiving compensation therefor.
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Section 11. Telephonic Meetings. To the extent permitted,
by law, members of the Board of Directors or any Committee
thereof may participate in a meeting of such body through the use
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
Section shall constitute presence in person at such meeting.
ARTICLE III
OFFICERS
Section 1. Executive Officers of the Corporation. The
executive officers of the Corporation shall be chosen by the
Board of Directors and shall be a Chairman of the Board, a
President, a Vice President, a Secretary, a Treasurer and a
Controller.
Section 2. Choosing of Executive Officers. The Board of
Directors at its first meeting after each Annual Meeting of
Stockholders shall choose a Chairman of the Board, a President, a
Vice President, a Secretary and a Treasurer, none of whom need be
a member of the Board, except the Chairman of the Board and the
President.
Section 3. Additional Officers. The Board of Directors
may appoint additional Vice Presidents, Assistant Secretaries,
Assistant Treasurers and such other officers and agents as it
shall deem necessary, who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall
be determined from time to time by the Board.
Section 4. Salaries. The salaries of all officers and
agents of the Corporation specially appointed by the Board shall
be fixed by the Board of Directors or the President.
Section 5. Term, Removal and Vacancies. The officers of
the Corporation shall hold office until their respective
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 by death,
resignation, removal or otherwise shall be filled by the Board of
Directors.
Section 6. Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the Board of Directors and
of the stockholders at which he is present. He shall perform
such additional duties as the Board of Directors may from time to
time prescribe.
Section 7. President. The President shall be the chief
executive officer of the Corporation. He shall have general
charge and supervision of the business of the Corporation and
shall perform
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all the duties incident to the office of chief executive
officer. He shall have direct supervision of the other officers,
other than the Chairman of the Board, and shall also exercise and
perform such other powers and duties as may be assigned to him by
the Board of Directors. In the absence of the Chairman of the
Board, the President shall preside at all meetings of the Board
of Directors and the stockholders.
Section 8. Powers and Duties of Vice Presidents. In the
absence, disability, or inability to act of the President, the
Board of Directors shall designate a Vice President to perform
all duties and exercise all the powers of the President and to
perform such other duties as the Board may from time to time pre-
scribe. Each Vice President shall have such powers and shall
perform such duties as may be assigned to him by the Board.
Section 9. Powers and Duties of Treasurer and Assistant
Treasurers. (a) The Treasurer shall have the care and custody
of all the funds and securities of the Corporation except as may
be otherwise ordered by the Board of Directors, and shall cause
such funds to be deposited to the credit of the Corporation in
such banks or depositories as may be designated by the Board of
Directors, the Chairman, the President or the Treasurer, and shall
cause such securities to be placed in safekeeping in such manner
as may be designated by the Board of Directors, the Chairman, the
President or the Treasurer.
(b) The Treasurer, or an Assistant Treasurer, or such other
person or persons as may be designated for such purpose by the
Board of Directors, the Chairman, the President or the Treasurer,
may endorse in the name and on behalf of the Corporation all instru-
ments for the payment of money, bills of lading, warehouse receipts,
insurance policies and other commercial documents requiring such
endorsement.
(c) The Treasurer, or an Assistant Treasurer, or such other
person or persons as may be designated for such purpose by the
Board of Directors, the Chairman, the President or the Treasurer,
may sign all receipts and vouchers for payments made to the Corpora-
tion; he shall render a statement of the cash account of the Corpora-
tion to the Board of Directors as often as it shall require the
same; he shall enter regularly in books to be kept by him for
that purpose full and accurate accounts of all moneys received
and paid by him on account of the Corporation and of all securities
received and delivered by the Corporation.
(d) Each Assistant Treasurer shall perform such duties as
may from time to time be assigned to him by the Treasurer or by
the Board of Directors. In the event of the absence of the Treasurer
or his incapacity or inability to act, then any Assistant Treasurer
may perform any of the duties and may exercise any of the powers
of the Treasurer.
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Section 10. The Controller and Assistant Controllers. The
Controller shall prescribe the system of accounts. He shall have
immediate charge of all books and records of account, except as
otherwise provided for by resolution of the Board of Directors,
and he shall have the supervision and direction of all other
accounts of the Corporation and of any company which the Cor-
poration controls by ownership of stock or otherwise. He shall
require reports from the Treasurer and from all other officers
and agents of the Corporation who receive or disburse funds for
its account, at such time and in such form as he may deem advisable.
He shall compile and maintain such accounting and statistical
records and data as may be required, and shall prepare and submit
to the executive officers, including the Treasurer, and to the
Board of Directors such periodical and special financial statements
as may be called for by them. He shall perform such other duties
as from time to time may be assigned to him by the Board of Directors
or the President. The Assistant Controller, or if there shall be
more than one, the Assistant Controllers in the order prescribed
by the Board of Directors, shall, in the absence or disability of
the Controller, perform the duties and exercise the powers of the
Controller and shall perform such other duties and have such other
powers as the Board of Directors may from time to time prescribe.
Section 11. Powers and Duties of Secretary and Assistant
Secretaries. (a) The Secretary shall attend all meetings of
the Board, all meetings of the stockholders, and shall keep the
minutes of all proceedings of the stockholders and the Board of
Directors in proper books provided for that purpose. The Secretary
shall attend to the giving and serving of all notices of the Corpora-
tion in accordance with the provisions of these By-Laws and as required
by the laws of Delaware. The Secretary may, with the President,
a Vice President or other authorized officer, sign all contracts
and other documents in the name of the Corporation. He shall
perform such other duties as may be prescribed in these By-Laws
or assigned to him and all other acts incident to the position of
Secretary.
(b) Each Assistant Secretary shall perform such duties as
may from time to time be assigned to him by the Secretary or by
the Board of Directors. In the event of the absence of the Secretary
or his incapacity or inability to act, then any Assistant Secretary
may perform any of the duties and may exercise any of the powers
of the Secretary.
(c) In no case shall the Secretary or any Assistant Secretary,
without the express authorization and direction of the Board of
Directors, have any responsibility for, or any duty or authority
with respect to, the withholding or payment of any federal, state
or local taxes of the Corporation, or the preparation or filing
of any tax return.
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ARTICLE IV
CAPITAL STOCK
Section 1. Stock Certificates. (a) Every holder of
stock in the Corporation shall be entitled to have a certificate
signed in the name of the Corporation by the Chairman, the
President or a Vice President, and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary, certifying
the number of shares owned by him.
(b) If such a certificate is countersigned by a transfer
agent other than the Corporation or its employee, or by a registrar
other than the Corporation or its employee, the signatures of the
officers of the Corporation may be facsimiles and, if permitted
by Delaware law, any other signature on the certificate may be a
facsimile.
(c) In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to
be such officer before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such officer
at the date of issue.
(d) Certificates of stock shall be issued in such form not
inconsistent with the Certificate of Incorporation as shall be
approved by the Board of Directors. They shall be numbered and
registered in the order in which they are issued. No certificate
shall be issued until fully paid.
Section 2. Record Ownership. A record of the name and
address of the holder of each certificate, the number of shares
represented thereby, and the date of issue thereof shall be made
on the Corporation's books. The Corporation shall be entitled to
treat the holder of record of any share of stock as the holder in
fact thereof, and accordingly shall not be bound to recognize any
equitable or other claim to or interest in any share on the part
of any other person, whether or not it shall have express or other
notice thereof, except as required by the laws of Delaware.
Section 3. Transfer of Record Ownership. Transfers of
stock shall be made on the books of the Corporation only by direction
of the person named in the certificate or his attorney, lawfully
constituted in writing, and only upon the surrender of the certi-
ficate therefor and a written assignment of the shares evidenced
thereby. Whenever any transfer of stock shall be made for colla-
teral security, and not absolutely, it shall be so expressed in
the entry of the transfer if, when the certificates are presented
to the Corporation for transfer, both the transferor and transferee
request the Corporation to do so.
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Section 4. Lost, Stolen or Destroyed Certificates.
Certificates representing shares of the stock of the Corporation
shall be issued in place of any certificate alleged to have been
lost, stolen or destroyed in such manner and on such terms and
conditions as the Board of Directors from time to time may authorize.
Section 5. Transfer Agent, Registrar, Rules Respecting
Certificates. The Corporation shall maintain one or more transfer
offices or agencies where stock of the Corporation shall be trans-
ferable. The Corporation shall also maintain one or more registry
offices where such stock shall be registered. The Board of Directors
may make such rules and regulations as it may deem expedient concerning
the issue, transfer and registration of stock certificates.
Section 6. Fixing Record Date for Determination of Stock-
holders of Record. The Board of Directors may fix in advance a
date as the record date for the purpose of determining the stock-
holders entitled to notice of, or to vote at, any meeting of the
stockholders or any adjournment thereof, or the stockholders entitled
to receive payment of any dividend or other distribution or the
allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock, or to
express consent to corporate action in writing without a meeting,
or in order to make a determination of the stockholders for the
purpose of any other lawful action. Such record date in any case
shall not be more than sixty (60) days nor less than ten (10)
days before the date of a meeting of the stockholders, nor more
than sixty (60) days prior to any other action requiring such
determination of the stockholders. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stock-
holders 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.
ARTICLE V
SECURITIES HELD BY THE CORPORATION
Section 1. Voting. Unless the Board of Directors shall
otherwise order, the Chairman, the President, or any other corporate
officer specifically authorized to do so by the Board of Directors
or by the President shall have full power and authority on behalf
of the Corporation to attend, act and vote at any meeting of the
stockholders of any corporation in which the Corporation may hold
stock and at such meeting to exercise any or all rights and powers
incident to the ownership of such stock, and to execute on behalf
of the Corporation a proxy or proxies empowering another or others
to act as aforesaid.
Section 2. General Authorization to Transfer Securities
Held by the Corporation. (a) The Chairman, the President, or
any other corporate officer specifically authorized by the Board
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of Directors or by the President shall be and are hereby authorized
and empowered to transfer, convert, endorse, sell, assign, set
over and deliver any and all shares of stock, bonds, debentures,
notes, subscription warrants, stock purchase warrants, evidences
of indebtedness, or other securities now or hereafter standing in
the name of or owned by the Corporation, and to make, execute and
deliver under the seal of the Corporation any and all written
instruments of assignment and transfer necessary or proper to
effectuate the authority hereby conferred.
(b) Whenever there shall be annexed to any instrument of
assignment and transfer executed, pursuant to and in accordance
with the foregoing paragraph (a), a certificate of the Secretary
or an Assistant Secretary of the Corporation in office at the
date of such certificate setting forth the provisions hereof and
stating that they are in full force and effect and setting forth
the names of persons who are then officers of the Corporation,
then all persons to whom such instrument and annexed certificate
shall thereafter come shall be entitled, without further inquiry
or investigation and regardless of the date of such certificate,
to assume and to act in reliance upon the assumption that the
shares of stock or other securities named in such instrument were
theretofore duly and properly transferred, endorsed, sold, assigned,
set over and delivered by the Corporation, and that with respect
to such securities the authority of these provisions of these By-
Laws and of such officers is still in full force and effect.
ARTICLE VI
DIVIDENDS
Section 1. Declaration of Dividends. Dividends upon the
capital stock of the Corporation may be declared by the Board of
Directors, by the Executive Committee, or by any other committee
of the Board of Directors that has been specifically delegated, by the
Board of Directors, the power to declare dividends at any regular
or special meeting, of said Board of Directors, Executive Committee
or other committee, respectively. 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. Payment and Reserves. 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 Board of Directors,
the Executive Committee or such other authorized committee, from
time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing divi-
dends, or for repairing or maintaining any property of the Corpora-
tion, or for such other purpose as the Board of Directors, the
Executive Committee or such other authorized committee shall think
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conducive to the interest of the Corporation, and the directors,
the members of the Executive Committee or the members of such
other authorized committee may modify or abolish any such reserves
in the manner in which they were created.
Section 3. Record Date. The Board of Directors, the
Executive Committee or such other authorized committee may, to
the extent provided by law, prescribe a period, in no event in
excess of sixty (60) days, prior to the date for payment of any
dividend, as a record date for the determination of stockholders
entitled to receive payment of any such dividend, and in such
case such stockholders and only such stockholders as shall be
stockholders of record on said date so fixed shall be entitled to
receive payment of such dividend, notwithstanding any transfer of
any stock on the books of the Corporation after any such record
date fixed as aforesaid.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Signatures of Officers. 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. The signature of
any officer upon any of the foregoing instruments may be a facsimile
whenever authorized by the Board.
Section 2. Seal. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its incorporation
and the words "Corporate Seal, Delaware". Said seal may be used
for causing it or a facsimile thereof to be impressed or affixed
or reproduced or otherwise.
Section 3. Indemnification. The Corporation shall indemnify
its officers, directors, employees and agents to the extent permitted
by the General Corporation Law of Delaware.
ARTICLE VIII
WAIVER OF OR DISPENSING WITH NOTICE
Whenever any notice of the time, place or purpose of any
meeting of the stockholders, Directors or a committee is required
to be given under the laws of Delaware, the Certificate of Incor-
poration or these By-Laws, a waiver thereof in writing, signed by
the person or persons entitled to such notice, whether before or
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after the holding thereof, or actual attendance at the meeting in
person, or in the case of the stockholders, by his attorney-in-
fact, shall be deemed equivalent to the giving of such notice to
such persons. No notice need be given to any person with whom
communication is made unlawful by any law of the united States or
any rule, regulation, proclamation or executive order issued under
any such law.
ARTICLE IX
AMENDMENT OF BY-LAWS
These By-Laws, or any of them, may from time to time be supple-
mented, amended or repealed by the Board of Directors, or by the
vote of a majority in interest of the stockholders represented
and entitled to vote at any meeting at which a quorum is present.
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AMENDMENTS TO AMENDED
AND RESTATED BY-LAWS
Section 5. (b) At any meeting of the stockholders at which a quorum
shall be present, the officer presiding thereat or a majority of those present
in person or by proxy may adjourn the meeting from time to time without notice
other than announcement at the meeting. In the absence of a quorum, the officer
presiding thereat shall have the power to adjourn the meeting from time to time
until a quorum shall be present. Notice of any adjourned meeting other than
announcement at the meeting shall not be required to be given, except as
provided in Paragraph (d) below and except where expressly required by law.
Section 10. (a) CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless
otherwise provided in the Certificate of Incorporation of the Corporation, any
action which may be taken at any annual or special meeting of stockholders may
be taken without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed, in
person or by proxy, by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take the
action at a meeting at which all shares entitled to vote thereon were present
and voted in person or by proxy. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be given
to those stockholders who have not consented in writing, but who were entitled
to vote on the matter.
(b) In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted by the Board
of Directors, and which date shall not be more than ten (10) days after the
date upon which the resolution fixing the record date is adopted by the Board
of Directors. Any stockholder of record seeking to have the stockholders
authorize or take corporate action by written consent shall, by written notice
to the Secretary, request the Board of Directors to fix a record date. The
Board of Directors shall promptly, but in all events within ten (10) days after
the date on which such a request is received, adopt a resolution fixing the
record date. If no record date has been fixed by the Board of Directors within
ten (10) days after the date on which such a request is received, the record
date for determining stockholders entitled to consent to corporate action in
writing without a meeting, when no prior action by the Board of Directors is
required by applicable law, shall be the first date on which a signed written
consent setting forth the action taken or proposed to be taken is delivered to
the Corporation by delivery to its registered office in the State of Delaware,
its principal place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of stockholders meetings are
recorded, to the attention of the Secretary of the Corporation. Delivery shall
be by hand or by certified or registered mail, return receipt requested. If no
record date has been fixed by the Board of Directors and prior action by the
Board of Directors is required by applicable law, the record date for
determining stockholders entitled to consent to corporate action in writing
without a meeting shall be at the close of business on the date on which the
Board of Directors adopts the resolution taking such prior action.
<PAGE> 1
Exhibit 4.01
[NATIONAL CITY BANK CORPORATION LOGO]
NATIONAL CITY BANK
National City Center
Post Office Box 5756
Cleveland, OH 44101-0768
216 575-2000
August 1, 1995
Corey Roth
Vice President of Finance
Specialty Chemical Resources, Inc.
9100 Valley View Road
Macedonia, OH 44056
Dear Corey:
National City Bank hereby waives the Interest Coverage Covenant, the Leverage
Covenant, and the Capital Expenditure Covenant (Subsection 3B.04, 3B.02, and
3D.05 respectively in the Credit Agreement dated March 30, 1992) through
December 31, 1995.
In addition, National City Bank hereby amends the Credit Agreement to extend
the maturity date to May 31, 1997.
If you agree to terms of this letter, please sign one copy and return to
National City Bank.
Sincerely,
/s/ Anthony J. DiMare /s/ Martin J. McCormick
Anthony J. DiMare Martin J. McCormick
Vice President Account Officer
MJM:ldp
Agreed and Accepted:
SPECIALTY CHEMICAL RESOURCES, INC.
By: /s/ Corey Roth
---------------------------------
Title: V.P.
---------------------------------
Date: 8/1/95
---------------------------------
<PAGE> 1
Exhibit 10.01
AGREEMENT OF SETTLEMENT AND RELEASE
This AGREEMENT OF SETTLEMENT AND RELEASE, dated
July 21, 1995, is by and among Specialty Chemical Re-
sources, Inc., a Delaware corporation (the "Company"),
the Committee for Revitalization of Stockholder Value of
Specialty Chemical Resources, Inc. (the "Committee"),
Edwin M. Roth ("E. Roth"), Corey B. Roth ("C. Roth"),
George N. Aronoff ("Aronoff"), Victor Gelb ("Gelb"),
Norton W.. Rose ("Rose"), Lionel N. Sterling ("Sterling"),
Charles L. Woolley ("Woolley"), Leonard P. Judy ("Judy"),
Jeffrey A. Bott ("Bott"), Michael A. Wolf ("Wolf"), John
A. Adams ("Adams") and Donald O. Daley ("Daley"). E.
Roth, C. Roth, Aronoff, Gelb, Rose and Sterling consti-
tute all the members of the Company's Board of Directors
(the "Board") and are sometimes referred to herein col-
lectively as "Directors" and individually as a "Direc-
tor." Woolley, Judy, Bott, Wolf, Adams and Daley consti-
tute all the members of the Committee and are sometimes
referred to herein collectively as "Members" and individ-
ually as a "Member."
WHEREAS, on April 28, 1995, the Company filed
with the Securities and Exchange commission (the "SEC")
and mailed to its stockholders a Notice of Annual Meeting
of Stockholders and Proxy Statement, stating that the
Company's 1995 Annual Meeting of Stockholders (the "Annu-
al Meeting") would be held on June 8, 1995 and setting
forth, among other things, the Company's nominees for
election to the Board,
WHEREAS, on May 4, 1995, the Committee filed
with the SEC soliciting materials stating that the Com-
mittee intended to solicit proxies in opposition to the
Company's nominees and to elect each of the Members to
the Board (the Company's solicitation and the Committee's
solicitation in opposition being together referred to
herein as the "Proxy Contest");
WHEREAS, on May 16, 1995, the Company filed an
action in the United States District Court for the North-
ern District of Ohio captioned Specialty Chemical Re-
sources, Inc. v. Committee for Revitalization of Stock-
holder Value of Specialty Chemical Resources, Inc., et
al., No. 5:95CV 1082, seeking preliminary and injunctive
1
<PAGE> 2
relief with respect to the Proxy Contest (the "Litiga-
tion")
WHEREAS, on June 8, 1995, the Company held the
Annual Meeting and the Company's nominees for the Board
were duly elected as directors of the Company;
WHEREAS, following conclusion of the Annual
Meeting, the Committee, through its legal counsel,
threatened to pursue legal action against the Company
relating to the Proxy Contest (the "Threatened Litiga-
tion"); and
WHEREAS, the parties desire to enter into this
Agreement to settle all claims and threatened claims
among them relating to the Proxy Contest, the Litigation
and the Threatened Litigation.
NOW THEREFORE, in consideration of the mutual
promises described herein, the Company, the Committee and
the Members agree as follows:
ARTICLE I
Board of Directors
Section 1.01. Within 30 days of the date of
this Agreement, the Company shall increase the size of
the Board from six (6) members to seven (7) members and
shall appoint Judy to the Board, subject to Section 1.02
below, to serve until the Company's 1996 Annual Meeting
of Stockholders. The Company may further nominate and
recommend Judy to the Company's stockholders for election
to a one-year term as a director at the Company's 1996
Annual Meeting of Stockholders, provided that he is
willing to serve.
Section 1.02. Judy shall, upon such appoint-
ment, serve as a director of the Company until the earli-
er of his death, resignation or removal, or until his
successor has been duly elected. Judy shall have the
same rights, privileges, duties and obligations, includ-
ing rights to indemnification, as all other directors of
the Company.
2
<PAGE> 3
Section 1.03. While serving on the Board, Judy
agrees to act solely in the best interest of the Company
and all of its stockholders in accordance with his fidu-
ciary duties. If a majority of the other directors of
the Company determine at any time that Judy's participa-
tion on the Board is not in the best interest of the
Company and its stockholders, Judy agrees to resign as a
director. Nothing contained herein shall be deemed to
preclude Judy from voluntarily resigning as a director at
any time.
ARTICLE II
Standstill Provisions
Section 2.01. The Committee and each Member
agrees that, from the date of this Agreement through and
including the date on which the Company's 1997 Annual
Meeting of Stockholders is finally adjourned, unless in
any such case specifically authorized in writing to do so
by the Board, it or he shall not, nor shall it or he
permit any present or future affiliates to, in each case
directly or indirectly:
(i) except as a result of a stock split,
stock dividend or similar recapitalization by the Company
or pursuant to a transaction permitted by Section
2.03(b) (iv), acquire, offer to acquire or agree to ac-
quire by purchase, by joining a partnership, limited
partnership, syndicate or other "group" (as such term is
used in Section 13(d) (3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act~), such term to
have such meaning throughout this Agreement) (any such
act, to "acquire"), any securities of the Company enti-
tled to vote generally in the election of directors, or
securities convertible into or exercisable or exchange-
able for such securities (collectively, "Restricted
Securities"); provided, however, that nothing contained
herein shall prohibit any Member from acquiring any Re-
stricted Securities pursuant to the exercise of any
warrant, option or other right to acquire Restricted
Securities ("Rights"), which he receives directly from
the Company pursuant to a distribution to stockholders;
and provided, further, however, that if during the term
of this Agreement, as a result of a business combination
transaction between the Company or an affiliate of the
3
<PAGE> 4
Company and any other entity, any one or more Members
shall acquire beneficial ownership of Restricted Securi-
ties in such business combination, such Members may
continue to own beneficially such Restricted Securities
so acquired and such Restricted Securities shall continue
to be subject to the terms of this Agreement;
(ii) encourage, solicit or in any way
participate in the formation of any "person" (as such
term is defined in Section 13(d) (3) of the exchange Act,
such term to have such meaning throughout this Agreement)
which owns or seeks to acquire beneficial ownership of,
or otherwise acts in respect of, Restricted Securities;
(iii) except as a Company nominee for the
Board, conduct, encourage, solicit or in any way partici-
pate in, any "solicitation" of "proxies" (as such terms
are defined or used in Regulation 14A under the Exchange
Act, such terms to have such meanings throughout this
Agreement) or conduct, encourage, solicit or in any way
participate in any election contest with respect to the
Company;
(iv) initiate, encourage, solicit, exe-
cute, or in any way participate in the execution or
solicitation of, any written consent in lieu of a meeting
of the Company's stockholders, unless such consent is
solicited by the Company;
(v) initiate, propose or otherwise solic-
it the Company's stockholders for the approval of one or
more stockholder proposals with respect to the Company or
encourage, induce or attempt to induce any other person
to initiate any stockholder proposal;
(vi) except as contemplated by Article I
hereof, seek election to or seek to place a representa-
tive on the Board or seek the removal of any director of
the Company;
(vii) call or seek to have called any
meeting of the stockholders of the Company;
(viii) deposit any Restricted Securities
in a voting trust or subject them to a voting agreement
or other agreement or arrangement with respect to the
4
<PAGE> 5
voting of such Restricted Securities, other than this
Agreement;
(ix) encourage, solicit, propose, seek to
effect or negotiate with any other person with respect to
any form of business combination transaction with the
Company or any affiliate thereof, or any restructuring,
recapitalization or similar transaction with respect to
the Company or any affiliate thereof;
(x) encourage, solicit, make, propose,
seek to effect or negotiate with any other person with
respect to, or announce an intent to make, any tender
offer or exchange offer for any Restricted securities, or
disclose an intent, purpose, plan or proposal with re-
spect to the Company or any Restricted Securities incon-
sistent with the provisions of this Agreement, including
an intent, purpose, plan or proposal that is conditioned
on or would require the Company to waive the benefit of
or amend any provision of this Agreement, or assist, in
any way participate in, facilitate, encourage or solicit
any effort or attempt by any person to do or seek to do
any of the foregoing;
(xi) request the Company (or its direc-
tors, officers, employees or agents) to amend or waive
any provision of Article II of this Agreement (including
this Section 2.01(xi)) or otherwise seek any modification
to or waiver of any of the provisions of Article II of
this Agreement;
(xii) except far participation of Judy on
the Board pursuant to Article I hereof, otherwise act,
directly or indirectly, alone or in concert with others,
to seek to influence or control, or make any disclosure
or public statement critical of or in opposition to, the
management, Board, policies or affairs of the Company;
(xiii) encourage or render advice to or
make any recommendation or proposal to any person or
other entity to engage in any of the actions covered by
this Article II of this Agreement (including this Section
2.01 (xiii)).
Section 2.02. During the term of this Agree-
ment, each Member agrees to vote or cause to be voted all
restricted securities beneficially owned by him in con-
5
<PAGE> 6
nection with any action to be taken by the Company's
stockholders in accordance with the recommendation of the
Board.
Section 2.03. (a) Each Member agrees that,
from and after the date hereof, he will not, individually
or in the aggregate, sell, assign, transfer, grant an
option with respect to or otherwise dispose of any inter-
est in any Restricted Securities (or enter into an agree-
ment or understanding with respect to the foregoing)
(collectively, a "Disposition") to any person or group
(i) representing more than 5% of the total voting power
of all Restricted Securities then outstanding (for pur-
poses of this Agreement, all references to the total
voting power of Restricted Securities shall be determined
based upon the most recent calculation announced by the
Company), (ii) which has theretofore filed a Schedule 13D
with the SEC with respect to any class of Restricted
Securities even if, at the time of the Disposition, such
Schedule 13D reflects beneficial ownership of less than
5% of any class of Restricted Securities or (iii) known
to any Member to be accumulating stock on behalf of or
acting in concert with any person or group contemplated
by clauses (i) or (ii) above.
(b) Notwithstanding Section 2.03(a)
hereof, any Member may make a Disposition:
(i) pursuant to a tender or exchange
offer made by a person other than a Member or any affili-
ate of a Member and approved by the Board (a "Third Party
Offer");
(ii) pursuant to a bona fide pledge of
Restricted Securities by Members as security for bona
fide indebtedness for money borrowed to a major brokerage
firm or financial institution or an affiliate thereof not
affiliated with any Member;
(iii) to the Company or to or for the
benefit of any employee benefit plan of the Company;
(iv) to another Member who is or becomes
a signatory to this Agreement.
Section 2.04. If any Member or any affiliate
thereof acquires any Restricted Securities in violation
6
<PAGE> 7
of this Agreement, it will immediately dispose of such
Restricted Securities to persons which are not Members or
affiliates of the Committee in a manner permitted by
Section 2.03; provided, however, that the Company may
also pursue any other available remedy to which it may be
entitled as a result of such violation.
ARTICLE III
Mutual Release
Section 3.01. The Company and each of the
Directors, on behalf of itself or himself and its or his
predecessors, successors, assigns, affiliates, agents and
family members, and their successors, heirs, executors
and administrators, hereby release and forever discharge
the Committee and each of the Members and their finan-
cial, legal and other advisors from all claims, liabili-
ties, suits, indemnities, obligations and damages, pres-
ent and future, known or unknown, which were asserted or
could be asserted, relating to or arising out of the
transactions, occurrences, disclosures, omissions and
facts that are the subjects of the Litigation or the
Threatened Litigation or are related to or arising out of
the Proxy Contest.
Section 3.02. The Committee and each of the
Members, on behalf of itself or himself, and its or his
successors, assigns, affiliates, agents and family mem-
bers, and their successors, heirs, executors and adminis-
trators, hereby release and forever discharge each of the
Company, its directors, executive officers and affiliates
and their financial, legal and other advisors from all
claims, liabilities, suits, indemnities, obligations and
damages, present and future, known or unknown, which were
asserted or that could be asserted, relating to or aris-
ing out of the transactions, occurrences, disclosures,
omissions and facts that are the subjects of the Litiga-
tion or the Threatened Litigation or are related to or
arising out of the Proxy Contest.
Section 3.03. Within five (5) business days of
the date of this Agreement, the parties hereto shall take
all necessary action to dismiss with prejudice the Liti-
gation.
7
<PAGE> 8
ARTICLE IV
Reimbursement of Expenses
Section 4.01. The Company shall reimburse the
Committee the amount of One Hundred Thirty-Five Thousand
Dollars ($135,000.00) for expenses incurred in connection
with the Proxy Contest (the "Reimbursement").
Section 4.02. The Reimbursement shall be paid
by the Company in three installments of Forty-Five Thou-
sand Dollars ($45,000.00) each, the first of which in-
stallments shall be paid by the Company within five (5)
business days of the date of this Agreement. The second
and third installments of the Reimbursement shall be paid
by the Company within thirty (30) days of the final
adjournment of the Company's 1996 Annual Meeting of
Stockholders and within thirty (30) days of the final
adjournment of the Company's 1997 Annual Meeting of
stockholders, respectively.
Section 4.03. All installments of the Reim-
bursement shall be paid by wire transfer to an account
designated in writing by the Committee.
ARTICLE V
Miscellaneous
Section 5.01. Each Member and the Committee,
on the one hand, and each Director and the Company, on
the other, acknowledges and agrees that irreparable
damage would occur if any of the provisions of this
Agreement were not performed in accordance with their
specific terms or were otherwise breached. Accordingly,
the parties will be entitled to an injunctive relief to
prevent breaches of this Agreement and to enforce specif-
ically its provisions in any court of the United States
or any state having jurisdiction, this being in addition
to any other remedy to which they may be entitled at law
or in equity. Each party hereto hereby consents that any
claim or controversy relating to the subject matter of
this Agreement and within the subject matter jurisdiction
of the federal courts of the United States, shall be
submitted, prosecuted and continued in the United States
District Court for the Northern District of Ohio. Each
8
<PAGE> 9
party waives any objection that it or he may have relat-
ing to the choice of forum or the laying of venue in such
court and agrees that service of any court paper may be
made in such manner as may be provided under applicable
laws, or the Federal Rules of Civil Procedure.
Section 5.02. This Agreement constitutes the
entire understanding of the parties with respect to the
transactions contemplated by it and may be amended only
by an agreement in writing executed by all the parties.
Section 5.03. If any provision of this Agree-
ment is held by a court of competent jurisdiction to be
unenforceable, the remaining provisions shall remain in
full force and effect. It is declared to be the inten-
tion of the parties that they would have executed the
remaining provisions without including any that may be
declared unenforceable.
Section 5.04. Descriptive headings are for
convenience only and will not control or affect the
meaning or construction of any provision of this Agree-
ment.
Section 5.05. For the convenience of the par-
ties, any number of counterparts of this Agreement may be
executed by the parties, and each such executed coun-
terpart will be an original instrument.
Section 5.06. All notices, consents, requests,
instructions, approvals and other communications relating
to this Agreement and all legal process in regard to this
Agreement will be validly given, made or served, if in
writing and delivered personally, by facsimile (which is
confirmed) or sent by registered mail postage paid, if to
the Company at:
Specialty Chemical Resources, Inc.
9100 Valley View Road
Macedonia, Ohio 44056
Attn: Mr. Edwin M. Roth
Facsimile No.: (216) 468-0287
9
<PAGE> 10
and if to the Committee at:
1930 North Thoreau Drive
Suite 176
Schaumburg, Illinois 60173
Facsimile No.: (708) 397-6575
Notice given by mail as set out above shall be
deemed delivered five days after the date the same is
postmarked.
Section 5.08. This Agreement shall bind the
successors and assigns of the parties and inure to the
benefit of any successor or assign of any of the parties;
provided, however, in the event of a business combination
between the Company and any other entity, if the stock-
holders of the Company immediately prior to such transac-
tions do not own at least one-third of the aggregate
voting power of the outstanding securities of the surviv-
ing entity immediately after the transaction, the Agree-
ment shall immediately terminate and become null and
void; and provided, further, however, that, subject to
the foregoing proviso, no party may assign this Agreement
without the prior written consent of the other parties
hereto.
Section 5.09. This Agreement shall terminate
upon payment by the Company of the final installment of
the Reimbursement following the final adjournment of the
Company's 1997 Annual Meeting of stockholders other than
the provisions of Sections 3.01 and 3.02 hereof, which
shall not terminate.
Section 5.10. Governing Law. This Agreement
will be governed by and construed and enforced in accor-
dance with the internal laws of the State of Delaware,
without giving effect to the conflict of laws principle
thereof.
10
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed as of the date first
referred to above.
SPECIALTY CHEMICAL COMMITTEE FOR REVITALIZA-
RESOURCES, INC. TION OF STOCKHOLDER VALUE:
OF SPECIALTY CHEMICAL RE-
SOURCES, INC.
By: /s/ Edwin M. Roth By: /s/ Charles L. Woolley
- ------------------------ ----------------------
Name: Edwin M. Roth Charles L. Woolley
Title: President Authorized Signatory
/s/ Edwin M. Roth /s/ Victor Gelb
- ------------------------ ----------------------
Edwin M. Roth Victor Gelb
/s/ Corey B. Roth /s/ Norton W. Rose
- ------------------------ ----------------------
Corey B. Roth Norton W. Rose
/s/ George N. Aronoff /s/ Lionel N. Sterling
- ----------------------- ----------------------
George N. Aronoff Lionel N. Sterling
/s/ Charles L. Wooley /s/ John A. Adams
- ----------------------- ----------------------
Charles L. Woolley John A. Adams
/s/ Leonard P. Judy /s/ Donald O. Daley
- ---------------------- ----------------------
Leonard P. Judy Donald O. Daley
/s/ Jeffrey A. Bott /s/ Michael A. Wolf
- ------------------------ ----------------------
Jeffrey A. Bott Michael A. Wolf
11
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRATED FROM THE CONDENSED
BALANCE SHEET AND CONDENSED STATEMENTS OF OPERATION CONTAINED WITHIN THE FORM
10-Q (QUARTERLY REPORT) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 5,283
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<RECEIVABLES> 7,109,788
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<INVENTORY> 8,329,828
<CURRENT-ASSETS> 15,842,251
<PP&E> 12,722,032
<DEPRECIATION> 3,108,356
<TOTAL-ASSETS> 47,351,193
<CURRENT-LIABILITIES> 7,614,812
<BONDS> 8,886,101
<COMMON> 393,277
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<TOTAL-LIABILITY-AND-EQUITY> 47,351,193
<SALES> 21,468,954
<TOTAL-REVENUES> 21,468,954
<CGS> 18,096,197
<TOTAL-COSTS> 3,290,779
<OTHER-EXPENSES> (26,065)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 321,445
<INCOME-PRETAX> (1,297,748)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,297,748)
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