<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the quarterly period ended March 31, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the transition period from N/A to N/A .
Commission File Number: 0-497
NEW MEXICO AND ARIZONA LAND COMPANY
(Exact name of registrant as specified in its charter)
ARIZONA 43-0433090
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3033 N. 44TH STREET, SUITE 270, PHOENIX, ARIZONA 85018-7228
(Address of principal executive offices) (Zip Code)
602/952-8836
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months, or for such shorter period that the registrant was required
to file such reports, and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<S> <C>
COMMON STOCK, NO PAR VALUE 2,734,538
Class Outstanding at April 30, 1996
</TABLE>
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NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
For the Quarter Ended March 31, 1996
Page
Number
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Statements of Income for the
three months ended March 31, 1996 and 1995 3
Consolidated Balance Sheets as of
March 31, 1996 and December 31, 1995 4
Consolidated Statements of Cash Flows for the
three months ended March 31,1996 and 1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION 8
SIGNATURES 8
</TABLE>
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three months ended March 31,
(in thousands, except per share data) 1996 1995
- -------------------------------------------------------------------------------
<S> <C> <C>
Revenue:
Property sales $ 3,446 $ 2,769
Property rentals 749 754
Investment income 341 529
Other 72 43
- --------------------------------------------------------------------------------
4,608 4,095
- --------------------------------------------------------------------------------
Expenses:
Cost of property sales 2,029 1,421
Rental property 249 255
General and administrative 322 291
Interest 255 244
Depreciation, depletion and amortization 118 122
- --------------------------------------------------------------------------------
2,973 2,333
Income Before Joint Ventures, Minority
Interests and Income Taxes 1,635 1,762
Gain (loss) from joint ventures 7 893
Minority interests (246) (255)
- --------------------------------------------------------------------------------
Income Before Income Taxes 1,396 2,400
Income taxes 559 954
- --------------------------------------------------------------------------------
Net Income $ 837 $ 1,446
================================================================================
Earnings per Share of Common Stock $ 0.31 $ 0.53
================================================================================
Weighted Average Number of Common Shares 2,735 2,728
================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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New Mexico and Arizona Land Company and Subsidiaries Form 10-Q
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
UNAUDITED
MARCH 31, December 31,
(in thousands) 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Properties, net $ 41,937 $ 41,327
Receivables, net 10,137 9,690
Cash and cash equivalents 6,558 5,301
Other 1,318 1,364
- --------------------------------------------------------------------------------------
Total assets $ 59,950 $ 57,682
======================================================================================
Liabilities and Shareholders' Equity
Notes payable and lines of credit $ 15,236 $ 14,080
Accounts payable and accrued liabilities 1,356 999
Deferred revenue 5,371 5,330
Deferred income taxes 4,315 4,188
- --------------------------------------------------------------------------------------
Total liabilities 26,278 24,597
- --------------------------------------------------------------------------------------
Minority interests 2,114 2,364
- --------------------------------------------------------------------------------------
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares
authorized; none issued
Common stock, no par value; 30,000,000 shares
authorized; 2,739,446 shares issued;
2,734,538 shares outstanding 10,051 10,051
Additional paid-in capital 966 966
Retained earnings 20,573 19,736
Treasury stock, at cost, 4,908 shares (32) (32)
- --------------------------------------------------------------------------------------
Total shareholders' equity 31,558 30,721
- --------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 59,950 $ 57,682
======================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31,
(in thousands) 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 837 $ 1,446
Non-cash items included above:
Depreciation, depletion and amortization 118 122
Deferred revenue (157) (117)
Deferred income taxes 127 44
(Gain) loss from joint ventures (7) (893)
Minority interests 246 255
Employee restricted stock plan -- 8
Net change in:
Receivables (32) 105
Land held for sale (504) (365)
Other assets 53 6
Accounts payable and accrued liabilities 357 288
- --------------------------------------------------------------------------------
Net cash flow from operating activities 1,038 899
- --------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to properties (224) (123)
Proceeds from sale of properties -- 198
Proceeds from notes receivable 231 250
Addition to notes receivable (448) --
Distribution to minority interest partners (496) (137)
Distributions from joint ventures -- 918
- --------------------------------------------------------------------------------
Net cash flow from investing activities (937) 1,106
- --------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from debt 1,637 923
Payment of debt (481) (520)
- --------------------------------------------------------------------------------
Net cash flow from financing activities 1,156 403
- --------------------------------------------------------------------------------
Net increase in cash and cash equivalents 1,257 2,408
- --------------------------------------------------------------------------------
Cash and cash equivalents at beginning of year 5,301 5,111
- --------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 6,558 $ 7,519
================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present fairly the
financial position, the results of operations and cash flows for the periods
presented. The accompanying statements do not include all disclosures
considered necessary for a fair presentation in conformity with generally
accepted accounting principles. Therefore, it is recommended that these
accompanying statements be read in conjunction with the consolidated
financial statements appearing in the Company's 1995 annual report on Form
10-K
2. The results of operations for the three months ended March 31, 1996 and
1995, are not necessarily comparable and may not be indicative of the
results which may be expected for future quarters or future years.
3. During the three months ended March 31, 1996 and 1995, the Company sold land
in exchange for notes receivable in the amount of $646,000 and $178,000,
respectively, of which $198,000 and $178,000, respectively, was deferred.
4. The Company's consolidated financial statements include those of its
wholly-owned subsidiaries, NZ Properties, Inc., NZ Development Corporation
and NZU Inc., along with five joint ventures in which the Company holds a
majority ownership.
5. Certain amounts have been reclassified for comparative purposes.
6. Earnings per share computations are based on the weighted average number of
shares outstanding of 2,734,538 and 2,727,538 in 1996 and 1995 respectively.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
Cash flow from sales of land, single-family and recreational lots, distributions
from its joint ventures and other ongoing operations, along with unused
borrowing capacity, should be adequate for continuing operations and
considerable future investments.
Financing, at the joint venture level, is being utilized to develop
single-family lots. These loans are secured by the property involved, along with
guarantees from the Company and its partner. At March 31, 1996, there was
$130,000 borrowed against a $2,800,000 development loan and $1,519,000 borrowed
against a $3,850,000 development line of credit. The Company has a $1,000,000
line of credit, which matures October 31, 1996, and is secured by certain real
estate holdings. At March 31, 1996, there were no funds borrowed on this line.
RESULTS OF OPERATIONS
For the three months ended March 31, 1996, net income was $837,000 (31 cents per
share) compared to $1,446,000 (53 cents per share) for the same period of 1995.
Earnings from sales of single-family lots were approximately the same for both
three month periods in 1996 and 1995.
Investment income is less in 1996 as compared to the same time frame in 1995 due
to the sale of a note receivable in 1995. In 1995, gain from joint ventures
included a $900,000 cash distribution from the sale a property located in Tempe,
Arizona.
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New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
PART II - OTHER INFORMATION
There were no proceedings, changes, occurrences or other matters occurring
during the three month period ended March 31, 1996, requiring a response to
Items 1 through 5.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(3) (ii) By-Laws
(b) No reports of Form 8-K were filed during the reporting quarter.
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.
New Mexico and Arizona Land Company
/s/ E.M.Bedewi
--------------------------------------
E. M. Bedewi,
Sr. Vice President and Treasurer
/s/ William A. Pope
--------------------------------------
William A. Pope,
President and Chief Executive Officer
Date: May 8, 1996
-8-
<PAGE> 1
EXHIBIT 3(ii)
BYLAWS
OF
NEW MEXICO AND ARIZONA LAND COMPANY
AMENDED AND RESTATED
AS OF MARCH 8, 1996
<PAGE> 2
AMENDED AND RESTATED
BYLAWS
OF
NEW MEXICO AND ARIZONA LAND COMPANY
I. REFERENCES TO CERTAIN TERMS AND CONSTRUCTION
1.01. Certain References. Any reference herein made to law will be
deemed to refer to the law of the State of Arizona, including any applicable
provision of Chapters 1 through 17 of Title 10 of the Arizona Revised Statutes,
or any successor statute, as from time to time amended and in effect (sometimes
referred to herein as the "Arizona Business Corporation Act"). Any reference
herein made to the corporation's Articles will be deemed to refer to its
Articles of Incorporation and all amendments thereto as at any given time on
file with the Arizona Corporation Commission. Except as otherwise required by
law and subject to any procedures established by the corporation pursuant to
Arizona Revised Statutes Section 723, the term "shareholder" as used herein
shall mean one who is a holder of record of shares of the corporation.
References to specific sections of law herein made shall be deemed to refer to
such sections, or any comparable successor provisions, as from time to time
amended and in effect.
1.02. Seniority. The law and the Articles (in that order of
precedence) will in all respects be considered senior and superior to these
Bylaws, with any inconsistency to be resolved in favor of the law and such
Articles (in that order of precedence), and with these Bylaws to be deemed
automatically amended from time to time to eliminate any such inconsistency
which may then exist.
1.03. Computation of Time. The time during which an act is
required to be done, including the time for the giving of any required notice
herein, shall be computed by excluding the first day or hour, as the case may
be, and including the last day or hour.
II. OFFICES
2.01. Principal Office. The principal office of the corporation shall
be located at any place either within or outside the State of Arizona as
designated in the corporation's most current Annual Report filed with the
Arizona Corporation Commission or in any other document executed and delivered
to the Arizona Corporation Commission for filing. If a principal office is not
so designated, the principal office of the corporation shall mean the known
place of business of the corporation. The corporation may have such other
offices, either within or without the State of Arizona, as the Board of
Directors may designate or as the business of the corporation may require from
time to time.
2.02. Known Place of Business. A known place of business of the
corporation shall be located within the State of Arizona and may be, but need
not be, the address of the statutory agent of the corporation. The corporation
may change its known place of business from time to time in accordance with the
relevant provisions of the Arizona Business Corporation Act.
III. SHAREHOLDERS
3.01. Annual Shareholder Meeting. The annual meeting of the
shareholders shall be held on or before June 30th in each year, at such time and
place, either within or without the State of Arizona, as shall be fixed by the
Board of Directors or, in the absence of action by the Board, as set forth in
the notice given or waiver signed with respect to such meeting pursuant to
Section 3.03 below, for the purpose of electing directors and for the
transaction of such other business as may properly come before the meeting. If
any annual meeting is for any reason not held on the date determined as
aforesaid, a deferred annual meeting may thereafter be called and held in lieu
thereof, at which the
<PAGE> 3
same proceedings may be conducted. If the day fixed for the annual meeting shall
be a legal holiday in the State of Arizona such meeting shall be held on the
next succeeding business day.
3.02. Special Shareholder Meetings. Special meetings of the
shareholders may be held whenever and wherever, either within or without the
State of Arizona, called for by or at the direction of the Chairman of the
Board, the President, or the Board of Directors.
3.03. Notice of Shareholders Meetings.
(a) Required Notice. Notice stating the place, day and hour
of any annual or special shareholders meeting shall be given not less than ten
(10) nor more than sixty (60) days before the date of the meeting by or at the
direction of the person or persons calling the meeting, to each shareholder
entitled to vote at such meeting and to any other shareholder entitled to
receive notice of the meeting by law or the Articles. Notices to shareholders
shall be given in accordance with, and shall be deemed to be effective at the
time and in the manner described in, Arizona Revised Statutes Section 10-141. If
no designation is made of the place at which an annual or special meeting will
be held in the notice for such meeting, the place of the meeting will be at the
principal place of business of the corporation.
(b) Adjourned Meeting. If any shareholders meeting is
adjourned to a different date, time, or place, notice need not be given of the
new date, time, and place, if the new date, time, and place is announced at the
meeting before adjournment. But if a new record date for the adjourned meeting
is fixed or must be fixed in accordance with law or these Bylaws, then notice of
the adjourned meeting shall be given to those persons who are shareholders as of
the new record date and who are entitled to such notice pursuant to Section
3.03(a) above.
(c) Waiver of Notice. Any shareholder may waive notice of a
meeting (or any notice of any other action required to be given by the Arizona
Business Corporation Act, the corporation's Articles, or these Bylaws), at any
time before, during, or after the meeting or other action, by a writing signed
by the shareholder entitled to the notice. Each such waiver shall be delivered
to the corporation for inclusion in the minutes or filing with the corporate
records. Under certain circumstances, a shareholder's attendance at a meeting
may constitute a waiver of notice, unless the shareholder takes certain actions
to preserve his/her objections as described in the Arizona Business Corporation
Act.
(d) Contents of Notice. The notice of each special
shareholders meeting shall include a description of the purpose or purposes for
which the meeting is called. Except as required by law, this Section 3.03(d), or
the corporation's Articles, the notice of an annual shareholders meeting need
not include a description of the purpose or purposes for which the meeting is
called.
3.04. Fixing of Record Date. For the purpose of determining
shareholders of any voting group entitled to notice of or to vote at any meeting
of shareholders, or shareholders entitled to receive any distribution or
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board of Directors may fix in advance a date as the record
date. Such record date shall not be more than seventy (70) days prior to the
date on which the particular action requiring such determination of shareholders
is to be taken. If no record date is so fixed by the Board of Directors, the
record date for the determination of shareholders shall be as provided in the
Arizona Business Corporation Act.
When a determination of shareholders entitled to notice of or to
vote at any meeting of shareholders has been made as provided in this Section,
such determination shall apply to any adjournment thereof, unless the Board of
Directors fixes a new record date, which it must do if the meeting is adjourned
to a date more than one hundred twenty (120) days after the date fixed for the
original meeting.
3.05. Shareholder List. The corporation shall make a complete
record of the shareholders entitled to notice of each meeting of shareholders
thereof, arranged in alphabetical order, listing the address and the number of
shares held by each. The list shall be arranged by voting group and within each
voting group by class or series of shares.
2
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The shareholder list shall be available for inspection by any shareholder,
beginning two (2) business days after notice of the meeting is given for which
the list was prepared and continuing through the meeting. The list shall be
available at the corporation's principal office or at another place identified
in the meeting notice in the city where the meeting is to be held. Failure to
comply with this section shall not affect the validity of any action taken at
the meeting.
3.06. Shareholder Quorum and Voting Requirements.
(a) If the Articles or the Arizona Business Corporation Act
provide for voting by a single voting group on a matter, action on that matter
is taken when voted upon by that voting group.
(b) If the Articles or the Arizona Business Corporation Act
provide for voting by two (2) or more voting groups on a matter, action on that
matter is taken only when voted upon by each of those voting groups counted
separately.
(c) Shares entitled to vote as a separate voting group may
take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Unless the Articles or the Arizona Business
Corporation Act provide otherwise, a majority of the votes entitled to be cast
on the matter by the voting group constitutes a quorum of that voting group for
action on that matter.
(d) Once a share is represented for any purpose at a
meeting, it is deemed present for quorum purposes for the remainder of the
meeting and for any adjournment of that meeting, unless a new record date is or
must be set for that adjourned meeting.
(e) If a quorum exists, action on a matter (other than the
election of directors) by a voting group is approved if the votes cast within
the voting group favoring the action exceed the votes cast opposing the action,
unless the Articles or the Arizona Business Corporation Act require a greater
number of affirmative votes.
(f) Voting will be by ballot on any question as to which a
ballot vote is demanded prior to the time the voting begins by any person
entitled to vote on such question; otherwise, a voice vote will suffice. No
ballot or change of vote will be accepted after the polls have been declared
closed following the ending of the announced time for voting.
3.07 Manner of Bringing Business Before Meetings.
(a) At any annual or special meeting of shareholders only
such business shall be conducted as shall have been properly brought before the
meeting. In order to be properly brought before the meeting, such business must
be a proper subject for shareholder action and must have been (i) specified in
the written notice of the meeting (or any supplement thereto) given to
shareholders who were shareholders on the record date for such meeting by or at
the direction of the Board of Directors, (ii) brought before the meeting at the
direction of the Board of Directors or the Chairman of the meeting, selected as
provided in Section 3.12 hereof, or (iii) specified in a written notice given by
or on behalf of a shareholder who was a shareholder on the record date for such
meeting entitled to vote thereat or a duly authorized proxy for such
shareholder, in accordance with Section 3.07(b) and (c) hereof.
(b) A shareholder notice referred to in Section 3.07(a)(iii)
hereof must be delivered personally to, or mailed to and received at, the
principal executive office of the corporation, addressed to the attention of the
Secretary, not more than ten (10) days after the date of the initial notice
referred to in Section 3.07(a)(i) hereof, in the case of business to be brought
before a special meeting of shareholders, and not less than thirty (30) days
prior to the anniversary date of the initial notice referred to in Section
3.07(a)(i) hereof with respect to the previous year's annual meeting, in the
case of business to be brought before an annual meeting of shareholders.
(c) A shareholder notice referred to in Section 3.07(a)(iii)
hereof shall set forth:
(i) a full description of each item of business proposed to
be brought before the meeting and the reasons for conducting
such business at such meeting;
3
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(ii) the name and address of the person proposing to bring
such business before the meeting;
(iii) the class and number of shares held of record, held
beneficially, and represented by proxy by such person as of
the record date for the meeting, if such date has been made
publicly available, or as of a date not later than thirty
(30) days prior to the delivery of the initial notice
referred to in Section 3.07(a)(i) hereof, if the record date
has not been made publicly available;
(iv) if any item of business involves a nomination for
director, all information regarding each such nominee that
would be required to be set forth in a definitive proxy
statement filed with the Securities and Exchange Commission
pursuant to Section 14 of the Securities Exchange Act of
1934, as amended, or any successor thereto, and the written
consent of each such nominee to serve if elected;
(v) any material interest of such shareholder in the
specified business;
(vi) whether or not such shareholder is a member of any
partnership, limited partnership, syndicate, or other group
pursuant to any agreement, arrangement, relationship,
understanding, or otherwise, whether or not in writing,
organized in whole or in part for the purpose of acquiring,
owning, or voting shares of the corporation; and
(vii) all other information that would be required to be
filed with the Securities and Exchange Commission, if, with
respect to the business proposed to be brought before the
meeting, the person proposing such business was a
participant in a solicitation subject to Section 14 of the
Securities Exchange Act of 1934, as amended, or any
successor thereto.
No business shall be brought before any meeting of the shareholders of the
corporation otherwise than as provided in this Section 3.07.
(d) Notwithstanding the provisions of this Section 3.07, the
Board of Directors shall not be obligated to include information as to any
shareholder nominee for director or any other shareholder proposal in any proxy
statements or other communication sent to shareholders.
(e) The Chairman of the meeting may, if the facts warrant,
determine that any proposed item of business was not brought before the meeting
in accordance with the provisions of this Section 3.07, and if he or she should
so determine, he or she shall so declare to the meeting and the defective item
of business shall be disregarded.
3.08. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy duly executed in writing by the shareholder or the
shareholder's duly authorized attorney-in-fact. Such proxy shall comply with law
and shall be filed with the Secretary of the corporation or other person
authorized to tabulate votes before or at the time of the meeting. No proxy
shall be valid after eleven (11) months from the date of its execution unless
otherwise provided in the proxy. The burden of proving the validity of any
undated, irrevocable, or otherwise contested proxy at a meeting of the
shareholders will rest with the person seeking to exercise the same. A facsimile
appearing to have been transmitted by a shareholder or by such shareholder's
duly authorized attorney-in-fact may be accepted as a sufficiently written and
executed proxy.
3.09. Voting of Shares. Unless otherwise provided in the Articles
or the Arizona Business Corporation Act, each outstanding share entitled to vote
shall be entitled to one (1) vote upon each matter submitted to a vote at a
meeting of shareholders.
4
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3.10. Voting for Directors. Unless otherwise provided in the
Articles, directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting at which a quorum is present at
the time of such vote. As provided by law, shareholders shall be entitled to
cumulative voting in the election of directors.
3.11. Election Inspectors. The Board of Directors, in advance of
any meeting of the shareholders, may appoint an election inspector or inspectors
to act at such meeting (and at any adjournment thereof). If an election
inspector or inspectors are not so appointed, the chairman of the meeting may,
or upon request of any person entitled to vote at the meeting will, make such
appointment. If any person appointed as an inspector fails to appear or to act,
a substitute may be appointed by the chairman of the meeting. If appointed, the
election inspector or inspectors (acting through a majority of them if there be
more than one) will determine the number of shares outstanding, the
authenticity, validity, and effect of proxies, the credentials of persons
purporting to be shareholders or persons named or referred to in proxies, and
the number of shares represented at the meeting in person and by proxy; will
receive and count votes, ballots, and consents and announce the results thereof;
will hear and determine all challenges and questions pertaining to proxies and
voting; and, in general, will perform such acts as may be proper to conduct
elections and voting with complete fairness to all shareholders. No such
election inspector need be a shareholder of the corporation.
3.12. Organization and Conduct of Meetings. Each meeting of the
shareholders will be called to order and thereafter chaired by the Chairman of
the Board of Directors if there is one, or, if not, or if the Chairman of the
Board is absent or so requests, then by the President, or if both the Chairman
of the Board and the President are unavailable, then by such other officer of
the corporation or such shareholder as may be appointed by the Board of
Directors. The corporation's Secretary or in his or her absence, an Assistant
Secretary will act as secretary of each meeting of the shareholders. If neither
the Secretary nor an Assistant Secretary is in attendance, the chairman of the
meeting may appoint any person (whether a shareholder or not) to act as
secretary for the meeting. After calling a meeting to order, the chairman
thereof may require the registration of all shareholders intending to vote in
person and the filing of all proxies with the election inspector or inspectors,
if one or more have been appointed (or, if not, with the secretary of the
meeting). After the announced time for such filing of proxies has ended, no
further proxies or changes, substitutions, or revocations of proxies will be
accepted. If directors are to be elected, a tabulation of the proxies so filed
will, if any person entitled to vote in such election so requests, be announced
at the meeting (or adjournment thereof) prior to the closing of the election
polls. Absent a showing of bad faith on his or her part, the chairman of a
meeting will, among other things, have absolute authority to fix the period of
time allowed for the registration of shareholders and the filing of proxies, to
determine the order of business to be conducted at such meeting, and to
establish reasonable rules for expediting the business of the meeting and
preserving the orderly conduct thereof (including any informal, or question and
answer portions thereof).
3.13. Shareholder Approval or Ratification. The Board of Directors
may submit any contract or act for approval or ratification of the shareholders
at a duly constituted meeting of the shareholders. Except as otherwise required
by law, if any contract or act so submitted is approved or ratified by a
majority of the votes cast thereon at such meeting, the same will be valid and
as binding upon the corporation and all of its shareholders as it would be if it
were the act of its shareholders.
3.14. Informalities and Irregularities. All informalities or
irregularities in any call or notice of a meeting of the shareholders or in the
areas of credentials, proxies, quorums, voting, and similar matters, will be
deemed waived if no objection is made at the meeting.
3.15. Shareholder Action by Written Consent. Any action required
or permitted to be taken at a meeting of the shareholders may be taken without a
meeting if one (1) or more consents in writing, setting forth the action so
taken, shall be signed by all of the shareholders entitled to vote with respect
to the subject matter thereof. The consents shall be delivered to the
corporation for inclusion in the minutes or filing with the corporate record.
Action taken by consent is effective when the last shareholder signs the
consent, unless the consent specifies a different effective date, except that
if, by law, the action to be taken requires that notice be given to shareholders
who are not entitled to vote on the matter, the effective date shall not be
prior to ten (10) days after the corporation shall give such shareholders
written notice of the proposed action, which notice shall contain or be
accompanied by the same material that would have been required if a formal
meeting had been called to consider the action. A consent signed under this
section has the effect of a meeting vote and may be described as such in any
document.
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IV. BOARD OF DIRECTORS
4.01. General Powers. All corporate powers shall be exercised by
or under the authority of, and the business and affairs of the corporation shall
be managed under the direction of, the Board of Directors.
4.02. Number, Tenure, and Qualification of Directors. Unless
otherwise provided in the Articles of Incorporation, the authorized number of
directors shall be not less than five (5) nor more than nine (9). The number of
directors in office from time to time shall be within the limits specified
above, as prescribed from time to time by resolution adopted by either the
shareholders or the Board of Directors. The Board of Directors shall consist of
Class A Directors and Class B Directors. The Class A directors shall be elected
for a term of two years at the annual meeting of shareholders of the corporation
held in every odd numbered year. The Class B directors shall be elected for a
term of two years at the annual meeting of shareholders of the corporation held
in every even numbered year. When an uneven number of directors has been set by
the Board of Directors, there shall be an even number of Class A directors and
Class B directors. All directors of the corporation shall be shareholders of the
corporation and no person who has attained the age of seventy (70) years shall
be eligible for election or appointment to the Board of Directors.
4.03. Regular Meetings of the Board of Directors. A regular annual
meeting of the Board of Directors is to be held as soon as practicable after the
adjournment of each annual meeting of the shareholders, either at the place of
the shareholders meeting or at such other place as the directors elected at the
shareholders meeting may have been informed of at or prior to the time of their
election. Additional regular meetings may be held at regular intervals at such
places and at such times as the Board of Directors may determine.
4.04. Special Meetings of the Board of Directors. Special meetings
of the Board of Directors may be held whenever and wherever called for by the
Chairman of the Board or, at the request of three members of the Board of
Directors, by the Secretary.
4.05. Notice of, and Waiver of Notice for, Directors Meetings. No
notice need be given of regular meetings of the Board of Directors. Notice of
the time and place of any special directors meeting shall be given at least 48
hours prior thereto. Notice shall be given in accordance with and shall be
deemed to be effective at the time and in the manner described in Arizona
Revised Statutes Section 10-141. Any director may waive notice of any meeting
and any adjournment thereof at any time before, during, or after it is held.
Except as provided in the next sentence below, the waiver must be in writing,
signed by the director entitled to the notice, and filed with the minutes or
corporate records. The attendance of a director at or participation of a
director in a meeting shall constitute a waiver of notice of such meeting,
unless the director at the beginning of the meeting (or promptly upon his/her
arrival) objects to holding the meeting or transacting business at the meeting,
and does not thereafter vote for or assent to action taken at the meeting.
4.06. Director Quorum. A majority of the number of directors
prescribed according to Section 4.02 above, or if no number is so prescribed,
the number in office immediately before the meeting begins, shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors,
unless the Articles require a greater number.
4.07. Directors, Manner of Acting.
(a) If a quorum is present when a vote is taken, the
affirmative vote of a majority of the directors present shall be the act of the
Board of Directors unless the Articles require a greater percentage.
(b) Unless the Articles provide otherwise, any or all
directors may participate in a regular or special meeting by, or conduct the
meeting through the use of, any means of communication by which all directors
participating may simultaneously hear each other during the meeting. A director
participating in a meeting by this means is deemed to be present in person at
the meeting.
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<PAGE> 8
(c) A director who is present at a meeting of the Board of
Directors or a committee of the Board of Directors when corporate action is
taken is deemed to have assented to the action taken unless: (1) the director
objects at the beginning of the meeting (or promptly upon his/her arrival) to
holding it or transacting business at the meeting; or (2) his/her dissent or
abstention from the action taken is entered in the minutes of the meeting; or
(3) he/she delivers written notice of his/her dissent or abstention to the
presiding officer of the meeting before its adjournment or to the corporation
before 5:00 p.m. on the next business day after the meeting. The right of
dissent or abstention is not available to a director who votes in favor of the
action taken.
4.08. Director Action Without a Meeting. Unless the Articles
provide otherwise, any action required or permitted to be taken by the Board of
Directors at a meeting may be taken without a meeting if the action is taken by
unanimous written consent of the Board of Directors as evidenced by one (1) or
more written consents describing the action taken, signed by each director and
filed with the minutes or corporate records. Action taken by consent is
effective when the last director signs the consent, unless the consent specifies
a different effective date. A signed consent has the effect of a meeting vote
and may be described as such in any document.
4.09. Removal of Directors by Shareholders. The shareholders may
remove one (1) or more directors at a meeting called for that purpose if notice
has been given that a purpose of the meeting is such removal. The removal may be
with or without cause unless the Articles provide that directors may only be
removed with cause. If a director is elected by a voting group of shareholders,
only the shareholders of that voting group may participate in a shareholder vote
to remove him. If less than the entire Board of Directors is to be removed, a
director may not be removed if the number of votes sufficient to elect the
director under cumulative voting is voted against the director's removal.
4.10. Board of Director Vacancies.
(a) Unless the Articles provide otherwise, if a vacancy
occurs on the Board of Directors, including a vacancy resulting from an increase
in the number of directors, either the shareholders or the Board of Directors
may fill the vacancy.
(b) If the vacant office was held by a director elected by a
voting group of shareholders, only the holders of shares of that voting group
are entitled to vote to fill the vacancy if it is filled by the shareholders.
(c) A vacancy that will occur at a specific later date (by
reason of resignation effective at a later date) may be filled before the
vacancy occurs, but the new director may not take office until the vacancy
occurs.
(d) The term of a director elected to fill a vacancy expires
at the next shareholders meeting at which directors are elected.
4.11. Director Compensation. Unless otherwise provided in the
Articles by resolution of the Board of Directors, each director may be paid
his/her expenses, if any, of attendance at each meeting of the Board of
Directors or any committee thereof, and may be paid a stated salary as director
or a fixed sum for attendance at each meeting of the Board of Directors or any
committee thereof, or both. No such payment shall preclude any director from
serving the corporation in any capacity and receiving compensation therefor.
4.12. Director Committees.
(a) Creation of Committees. In addition to the committees
set forth in this Article IV and unless the Articles provide otherwise, the
Board of Directors may create one (1) or more other committees and appoint
members of the Board of Directors to serve on them. Each committee shall have
one (1) or more members, who serve at the pleasure of the Board of Directors.
(b) Selection of Members. The creation of a committee and
appointment of members to it shall be approved by the greater of (1) a majority
of all the directors in office when the action is taken or (2) the number of
directors required by the Articles to take such action.
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<PAGE> 9
(c) Required Procedures. Sections 4.03 through 4.08 of this
Article IV, which govern meetings, action without meetings, notice and waiver of
notice, and quorum and voting requirements of the Board of Directors, apply to
committees and their members.
(d) Authority. Unless limited by the Articles, each
committee may exercise those aspects of the authority of the Board of Directors
which the Board of Directors confers upon such committee in the resolution
creating the committee, provided, however, that a committee may not: (1)
authorize distributions; (2) approve or propose to shareholders action that
requires shareholder approval under the Arizona Business Corporation Act; (3)
fill vacancies on the Board of Directors or on any of its committees; (4) amend
the Articles of Incorporation without shareholder action as provided by law; (5)
adopt, amend or repeal these Bylaws; (6) approve a plan of merger not requiring
shareholder approval; (7) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the Board of Directors; (8)
authorize or approve the issuance or sale or contract for sale of shares or
determine the designation and relative rights, preferences, and limitations of a
class or series of shares, except within limits specifically prescribed by the
Board of Directors; or (9) fix the compensation of directors for serving on the
Board of Directors or any committee of the Board of Directors.
4.13. Executive Committee. The Board of Directors shall appoint an
executive committee, consisting of at least three directors, including the
Chairman of the Board, who shall be the chairman of the Committee. The committee
shall have and exercise all lawfully delegable powers of the Board of Directors
while the Board is not in session, except as such delegation of powers may be
limited from time to time by resolution of the Board of Directors.
4.14. Audit Committee. The Board of Directors shall appoint an
audit committee, consisting of at least two directors, provided, however, that
directors who are also officers of the corporation shall not be eligible for
membership on the committee. The audit committee shall:
(a) recommend the auditors;
(b) review the overall scope of the audit and the final
opinion of the external auditors;
(c) review the financial and accounting policies and
procedures used by the corporation;
(d) approve the organization and procedures of the internal
accounting and auditing departments;
(e) prepare a report of the Board of Directors;
(f) assure compliance with ethical standards.
4.15. Compensation and Nominating Committee. The Board of
Directors shall appoint a compensation and benefits committee, consisting of a
least two non-officer directors. The committee shall recommend to the Board
candidates for membership on the Board of Directors, and shall be empowered to
administer and make final decisions concerning:
a) employees' salaries and bonuses;
b) the company's Restricted Stock Plan;
c) the company's Incentive Bonus Plan;
d) all other company compensation and benefit plans.
4.16. Retirement Plan Administrative Committee. The Board of
Directors shall appoint an administrative committee consisting of three
individuals to establish and maintain the corporation's funding policy for its
Retirement Plan and Trust for Salaries employees and to act a fiduciary
thereunder. Individuals may be eligible for membership on the administrative
committee without being directors of the corporation.
4.17. Director Resignations. Any director or committee member may
resign from his or her office at any time by written notice delivered to the
Board of Directors, the Chairman of the Board, or the corporation at its known
place of business. Any such resignation will be effective upon its receipt
unless some later time is therein fixed, and then from that time. The acceptance
of a resignation will not be required to make it effective.
8
<PAGE> 10
V. OFFICERS
5.01. Number of Officers. The officers of the corporation shall be
a President, a Secretary, and a Treasurer, each of whom shall be appointed by
the Board of Directors. Such other officers and assistant officers as may be
deemed necessary, including any Vice Presidents, may be appointed by the Board
of Directors. If specifically authorized by the Board of Directors, an officer
may appoint one (1) or more other officers or assistant officers. The same
individual may simultaneously hold more than one (1) office in the corporation.
5.02. Appointment and Term of Office. The officers of the
corporation shall be appointed by the Board of Directors for a term as
determined by the Board of Directors. The designation of a specified term grants
to the officer no contract rights, and the Board of Directors can remove the
officer at any time prior to the termination of such term. If no term is
specified, an officer of the corporation shall hold office until he or she
resigns, dies, or until he or she is removed in the manner provided by law or in
Section 5.03 of this Article V. The regular election or appointment of officers
will take place at each annual meeting of the Board of Directors, but elections
of officers may be held at any other meeting of the Board.
5.03. Resignation and Removal of Officers. An officer may resign
at any time by delivering written notice to the corporation at its known place
of business. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date or event. Any officer may be removed by
the Board of Directors at any time, with or without cause. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer shall not of itself create contract rights.
5.04. Duties of Officers. Officers of the corporation shall have
authority to perform such duties as may be prescribed from time to time by law,
in these Bylaws, or by the Board of Directors, the President, or the superior
officer of any such officer. Each officer of the corporation (in the order
designated herein or by the Board) will be vested with all of the powers and
charged with all of the duties of his or her superior officer in the event of
such superior officer's absence, death, or disability.
5.05. Bonds and Other Requirements. The Board of Directors may
require any officer to give bond to the corporation (with sufficient surety and
conditioned for the faithful performance of the duties of his or her office) and
to comply with such other conditions as may from time to time be required of him
or her by the Board of Directors.
5.06. Chairman of The Board. The Chairman shall be appointed by
the Board of Directors and shall preside at all meetings of the shareholders and
of the Board of Directors. He shall have such other powers and perform such
other duties as may be assigned to him by the Board of Directors. Unless he also
serves as the Chief Executive Officer, the Chairman shall not be considered an
employee of the corporation.
5.07. Chief Executive Officer. The Chief Executive Officer shall
be appointed by the Board of Directors and shall be responsible for the general
supervision of the business and property of the corporation. He shall possess
the same power as the president to sign all documents authorized by the Board
of Directors, unless restricted by law. In the absence of the Chairman, the
Chief Executive Officer shall preside at meetings of the shareholders and of the
Board. He shall have the power, subject to the authority of the Board of
Directors, to appoint and discharge all officers (except those required by these
bylaws to be appointed by the Board), employees, and agents; to define their
duties, and to fix their compensation, provided that any compensation over
$50,000 per year must first be approved by the Board. In the absence of the
Chairman, or the President, or both, the Chief Executive Officer shall undertake
those duties and responsibilities, if so directed by the Board. The Chief
Executive Officer shall have such other powers and responsibilities as may be
assigned to him by the Board.
5.08. President. Unless otherwise specified by resolution of the
Board of Directors, the President shall be the corporation's Chief Operating
Officer and, subject to the control of the Board of Directors, shall supervise
and control all of the business and affairs of the corporation and the
performance by all of its other officers of their respective duties and in
general shall perform all duties incident to the office of President and such
other duties as may be prescribed by the Board of Directors from time to time.
The President shall, when present, and in the absence of a Chairman of the Board
and the Chief Executive Officer, preside at all meetings of the shareholders and
of the Board of
9
<PAGE> 11
Directors. The President will be a proper officer to sign on behalf of the
corporation any deed, bill of sale, assignment, option, mortgage, pledge, note,
bond, evidence of indebtedness, application, consent (to service of process or
otherwise), agreement, indenture, contract, or other instrument, except in each
such case where the signing and execution thereof shall be expressly delegated
by the Board of Directors or by these Bylaws to some other officer or agent of
the corporation, or shall be required by law to be otherwise signed or executed.
The President may represent the corporation at any meeting of the shareholders
or members of any other corporation, association, partnership, joint venture, or
other entity in which the corporation then holds shares of capital stock or has
an interest, and may vote such shares of capital stock or other interest in
person or by proxy appointed by him or her, provided that the Board of Directors
may from time to time confer the foregoing authority upon any other person or
persons.
5.09. The Vice-President. If appointed, in the absence of the
President or in the event of his/her death or disability, the Vice-President (or
in the event there be more than one Vice-President, the Vice-Presidents in the
order designated at the time of their election, or in the absence of any such
designation, then in the order of their appointment) shall perform the duties of
the President, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the President. If there is no Vice-President or in
the event of the death or disability of all Vice-Presidents, then the Treasurer
shall perform such duties of the President in the event of his or her absence,
death, or disability. Each Vice-President will be a proper officer to sign on
behalf of the corporation any deed, bill of sale, assignment, option, mortgage,
pledge, note, bond, evidence of indebtedness, application, consent (to service
of process or otherwise), agreement, indenture, contract, or other instrument,
except in each such case where the signing and execution thereof shall be
expressly delegated by the Board of Directors or by these Bylaws to some other
officer or agent of the corporation, or shall be required by law to be otherwise
signed or executed. Any Vice-President may represent the corporation at any
meeting of the shareholders or members of any other corporation, association,
partnership, joint venture, or other entity in which the corporation then holds
shares of capital stock or has an interest, and may vote such shares of capital
stock or other interest in person or by proxy appointed by him or her, provided
that the Board of Directors may from time to time confer the foregoing authority
upon any other person or persons. A Vice-President shall perform such other
duties as from time to time may be assigned to him/her by the President or by
the Board of Directors.
5.10. The Secretary. The Secretary shall: (a) keep the minutes of
the proceedings of the shareholders and of the Board of Directors and any
committee of the Board of Directors and all unanimous written consents of the
shareholders, Board of Directors, and any committee of the Board of Directors in
one (1) or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these Bylaws or as required by
law; (c) be custodian of the corporate records and of any seal of the
corporation; (d) when requested or required, authenticate any records of the
corporation; (e) keep a register of the address of each shareholder which shall
be furnished to the Secretary by such shareholder; and (f) in general perform
all duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him/her by the President or by the Board of
Directors. Except as may otherwise be specifically provided in a resolution of
the Board of Directors, the Secretary will be a proper officer to take charge of
the corporation's stock transfer books and to compile the voting record pursuant
to Section 3.05 above, and to impress the corporation's seal, if any, on any
instrument signed by the President, any Vice President, or any other duly
authorized person, and to attest to the same. In the absence of the Secretary, a
secretary pro tempore may be chosen by the directors or shareholders as
appropriate to perform the duties of the Secretary.
5.11. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the corporation;
(b) receive and give receipts for moneys due and payable to the corporation from
any source whatsoever, and deposit all such moneys in the name of the
corporation in such bank, trust companies, or other depositories as shall be
selected by the Board of Directors or any proper officer; (c) keep full and
accurate accounts of receipts and disbursements in books and records of the
corporation; and (d) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to
him/her by the President or by the Board of Directors. The Treasurer will render
to the President, the directors, and the shareholders at proper times an account
of all his or her transactions as Treasurer and of the financial condition of
the corporation. The Treasurer shall be responsible for preparing and filing
such financial reports, financial statements, and returns as may be required by
law.
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<PAGE> 12
5.12. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries and the Assistant Treasurers, when authorized by the Board
of Directors, may sign with the President or a Vice-President certificates for
shares of the corporation, the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Secretaries and Assistant
Treasurers, in general, shall perform such duties as shall be assigned to them
by the Secretary or the Treasurer, respectively, or by the President or the
Board of Directors.
5.13. Chairman of the Board. The Board of Directors may elect a
Chairman to serve as a general executive officer of the corporation, and, if
specifically designated as such by the Board of Directors, as the chief
executive officer of the corporation. If elected, the Chairman will preside at
all meetings of the Board of Directors and be vested with such other powers and
duties as the Board of Directors may from time to time delegate to him or her.
5.14. Salaries. The salaries of the officers of the corporation
may be fixed from time to time by the Board of Directors or (except as to the
President's own) left to the discretion of the President. No officer will be
prevented from receiving a salary by reason of the fact that he or she is also a
director of the corporation.
5.15. Additional Appointments. In addition to the officers
contemplated in this Article V, the Board of Directors may appoint other agents
of the corporation with such authority to perform such duties as may be
prescribed from time to time by the Board of Directors.
VI. EXECUTION OF DOCUMENTS
6.01. Contracts, Etc. All contracts, conveyances, leases or other
corporate instruments shall be executed on behalf of the corporation by the
Chairman of the Board, by the President or by such other officer or officers of
the corporation to whom the Chairman of the Board, the President or the Board of
Directors may delegate such authority, subject to the following:
(a) No loan greater than $1,000,000 shall be contracted on
behalf of the corporation unless authorized by the Board
of Directors.
(b) No real property of the corporation may be sold for more
than $1,000,000, nor exchanged for other property valued
at more than $1,000,000 unless authorized by the Board
of Directors.
(c) A capital expenditure in excess of $1,000,000 for any
one purpose or project shall be authorized by the Board
of Directors.
(d) In matters of auction bidding for property or property
rights, no bids totalling over $1,000,000 per auction
shall be made without the authorization of the Board of
Directors.
The Chairman or President shall report to the Board the total capital
expenditures, the total dollar amount of sales or exchanges, and the total
dollar amount of auction bids made which did not require Board approval.
6.02. Proxies. Unless otherwise provided by resolution of the
Board of Directors, the Chairman of the Board may in the name and on behalf of
the corporation appoint an attorney or attorneys, agent or agents of the
corporation (who may be or include himself or herself), in the name and on
behalf of the corporation to cast the votes which the corporation may be
entitled to cast as a shareholder or otherwise in any other corporation any of
whose shares or other securities may be held by the corporation, at meetings of
the holders of the shares or other securities of such other corporation, or to
consent in writing to any action by such other corporation, may instruct the
person or persons so appointed as to the manner of casting such votes or giving
such consent, and may execute or cause to be executed in the name of, on behalf
of, and under the corporate seal of, the corporation all written proxies or
other instruments as may be necessary or proper to evidence the appointment of
such attorneys and agents.
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<PAGE> 13
VII. CERTIFICATES FOR SHARES AND THEIR TRANSFER
7.01. Certificates for Shares.
(a) Content. Certificates representing shares of the
corporation shall, at a minimum, state on their face the name of the issuing
corporation and that it is formed under the laws of the State of Arizona, the
name of the person to whom issued, and the number and class of shares and the
designation of the series, if any, the certificate represents. Such certificates
shall be signed (either manually or by facsimile to the extent allowable by law)
by one or more officers of the corporation, as determined by the Board of
Directors, or, if no such determination is made, by any of the Chairman of the
Board (if any), the President, any Vice-President, the Secretary, or the
Treasurer of the corporation, and may be sealed with a corporate seal or a
facsimile thereof. Each certificate for shares shall be consecutively numbered
or otherwise identified and will exhibit such information as may be required by
law. If a supply of unissued certificates bearing the facsimile signature of a
person remains when that person ceases to hold the office of the corporation
indicated on such certificates, they may still be countersigned, registered,
issued, and delivered by the corporation's transfer agent and/or registrar
thereafter, as though such person had continued to hold the office indicated on
such certificate.
(b) Legend as to Class or Series. If the corporation is
authorized to issue different classes of shares or different series within a
class, the designations, relative rights, preferences, and limitations
applicable to each class and the variations in rights, preferences, and
limitations determined for each series (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the corporation will furnish the
shareholder this information on request in writing and without charge.
(c) Shareholder List. The name and address of the person to
whom shares are issued, with the number of shares and date of issue, shall be
entered on the stock transfer books of the corporation.
(d) Lost Certificates. In the event of the loss, theft, or
destruction of any certificate representing shares of the corporation or of any
predecessor corporation, the corporation may issue (or, in the case of any such
shares as to which a transfer agent and/or registrar have been appointed, may
direct such transfer agent and/or registrar to countersign, register, and issue)
a new certificate, and cause the same to be delivered to the registered owner of
the shares represented thereby; provided that such owner shall have submitted
such evidence showing the circumstances of the alleged loss, theft, or
destruction, and his, her, or its ownership of the certificate, as the
corporation considers satisfactory, together with any other facts that the
corporation considers pertinent; and further provided that, if so required by
the corporation, the owner shall provide a bond or other indemnity in form and
amount satisfactory to the corporation (and to its transfer agent and/or
registrar, if applicable).
7.02. Registration of the Transfer of Shares. Registration of the
transfer of shares of the corporation shall be made only on the stock transfer
books of the corporation. In order to register a transfer, the record owner
shall surrender the shares to the corporation for cancellation, properly
endorsed by the appropriate person or persons with reasonable assurances that
the endorsements are genuine and effective. Unless the corporation has
established a procedure by which a beneficial owner of shares held by a nominee
is to be recognized by the corporation as the owner, the corporation will be
entitled to treat the registered owner of any share of the capital stock of the
corporation as the absolute owner thereof and, accordingly, will not be bound to
recognize any beneficial, equitable, or other claim to, or interest in, such
share on the part of any other person, whether or not it has notice thereof,
except as may expressly be provided by applicable law.
7.03. Shares Without Certificates. The Board of Directors may
authorize the issuance of uncertificated shares by the corporation and may
prescribe procedures for the issuance and registration of transfer thereof and
with respect to such other matters as the Board of Directors shall deem
necessary or appropriate.
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<PAGE> 14
VIII. INDEMNIFICATION OF DIRECTORS AND OFFICERS
8.01. Indemnification. Unless otherwise provided by these bylaws,
the corporation shall hold harmless and indemnify each of its directors and
officers ("indemnities") to the fullest extent permitted by Arizona law.
8.02. Effect of Repeal. No repeal or amendment of this Article
shall diminish indemnitee's right to indemnification for acts taken before the
date of repeal or amendment.
IX. DISTRIBUTIONS
9.01. Distributions. Subject to such restrictions or requirements
as may be imposed by applicable law or the corporation's Articles or as may
otherwise be binding upon the corporation, the Board of Directors may from time
to time declare, and the corporation may pay or make, dividends or other
distributions to its shareholders.
X. CORPORATE SEAL
10.01. Corporate Seal. The Board of Directors may provide for a
corporate seal of the corporation that will have inscribed thereon any
designation including the name of the corporation, Arizona as the state of
incorporation, the year of incorporation, and the words "Corporate Seal."
XI. EXEMPTION
11.02. Exemption From The Arizona Corporate Takeover Act. The
corporation, pursuant to the provisions of ARS 10-1211(A)(2) and 10-1223(A)(2),
and pursuant to the approval of the shareholders on May 10, 1991, has chosen to
exempt itself from the provisions of ARS 10-1211 through 10-1223, concerning
Control Share Acquisitions and Business Combinations. This amendment does not
apply to any "control share acquisition" as defined in ARS 10- 1201(9) made on
or before May 10, 1991, or to any "business combination" as defined in ARS
10-1201(10) whose "share acquisition date" as defined in ARS 10-1201(14) is on
or before May 10, 1991.(1)
XII. AMENDMENTS
12.01. Amendments. The corporation's Board of Directors may amend
or repeal the corporation's Bylaws unless:
(a) the Articles or the Arizona Business Corporation Act
reserve this power exclusively to the shareholders in
whole or part; or
(b) the shareholders in adopting, amending, or repealing a
particular Bylaw provide expressly that the Board of
Directors may not amend or repeal that Bylaw.
The corporation's shareholders may amend or repeal the
corporation's Bylaws even though the Bylaws may also be amended or repealed by
its Board of Directors.
- --------
(1)The statutory references in this Section 11.04 have changed as a result
of the Arizona Business Corporation Act effective January 1, 1996.
13
<PAGE> 15
I certify that the foregoing is a true and correct copy of the bylaws of New
Mexico and Arizona Land Company as last amended.
DATED as of this 8th day of March, 1996.
________________________________
Secretary
14
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</TABLE>
