<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 June 30, 1997.
[ ] 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>
<CAPTION>
COMMON STOCK, NO PAR VALUE 3,313,818 SHARES
<S> <C> <C>
Class Outstanding at July 28, 1997
</TABLE>
<PAGE> 2
NEW MEXICO AND ARIZONA LAND COMPANY AND SUBSIDIARIES FORM 10-Q
For the Quarter Ended June 30, 1997
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three
and six months ended June 30, 1997 and 1996 3
Consolidated Balance Sheets as of
June 30, 1997 and December 31, 1996 4
Consolidated Statements of Cash Flows for the
six months ended June 30,1997 and 1996 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>
-2-
<PAGE> 3
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
- -------------------------------------------------------------------------------------------------------------------
Three months ended June 30, Six months ended June 30,
(in thousands, except per share data) 1997 1996 1997 1996
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenue:
Property sales $2,277 $2,005 $4,250 $5,451
Property rentals 784 750 1,562 1,499
Investment income 310 307 603 648
Other 57 59 137 131
- -------------------------------------------------------------------------------------------------------------------
3,428 3,121 6,552 7,729
- -------------------------------------------------------------------------------------------------------------------
Expenses:
Cost of property sales 1,318 1,165 2,428 3,194
Rental property 310 270 614 519
General and administrative 460 324 860 646
Interest 262 212 516 467
Depreciation, depletion and amortization 122 116 241 234
- -------------------------------------------------------------------------------------------------------------------
2,472 2,087 4,659 5,060
- -------------------------------------------------------------------------------------------------------------------
Income Before Joint Ventures, Minority
Interests and Income Taxes 956 1,034 1,893 2,669
Gain from joint ventures 15 1 31 8
Minority interests (177) (116) (320) (362)
- -------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes 794 919 1,604 2,315
Income taxes 318 368 644 927
- -------------------------------------------------------------------------------------------------------------------
Net Income $ 476 $551 $ 960 $1,388
===================================================================================================================
Earnings per Share of Common Stock $ 0.14 $ 0.17 $ 0.29 $ 0.42
===================================================================================================================
Weighted Average Number of Common Shares 3,314 3,309 3,314 3,309
===================================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
Shares and earnings per share for 1996 have been restated to reflect a 10% stock
dividend declared May 16, 1997.
-3-
<PAGE> 4
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
UNAUDITED
JUNE 30, December 31,
(in thousands) 1997 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Properties, net $51,256 $47,478
Receivables, net 9,412 9,848
Cash and cash equivalents 3,484 7,142
Other 2,041 1,860
Total assets $66,193 $66,328
========================================================================================================
Liabilities and Shareholders' Equity
Notes payable and lines of credit $14,872 $16,036
Accounts payable and accrued liabilities 1,813 1,542
Deferred revenue 4,677 5,002
Deferred income taxes 5,543 5,685
Total liabilities 26,905 28,265
Minority interests 2,705 2,435
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares
authorized; none issued
Common stock, no par value; 30,000,000 shares
authorized; 3,313,818(1) shares
issued and outstanding at June 30, 1997 and
December 31, 1996 18,102 13,738
Additional paid-in capital 967 967
Retained earnings 17,514 20,923
Total shareholders' equity 36,583 35,628
Total liabilities and shareholders' equity $66,193 $66,328
========================================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
(1) Restated to reflect a 10% stock dividend declared May 16, 1997.
-4-
<PAGE> 5
New Mexico and Arizona Land Company and Subsidiaries FORM 10-Q
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30,
(in thousands) 1997 1996
- ------------------------------------------------------------------------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 960 $ 1,388
Deduct: Gain from sale of investment properties (1,102) (1,724)
Non-cash items included above:
Depreciation, depletion and amortization 241 234
Deferred revenue (666) (294)
Deferred income taxes (142) 159
Gain from joint ventures (31) (8)
Minority interests 320 362
Net change in:
Receivables (85) 46
Properties under development (15) (1,423)
Other assets (172) (244)
Accounts payable and accrued liabilities 266 350
- ------------------------------------------------------------------------------------------
Net cash flow from operating activities (426) (1,154)
- ------------------------------------------------------------------------------------------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to properties (4,003) (411)
Proceeds from sale of properties 1,101 1,724
Proceeds from notes receivable 862 752
Addition to notes receivable -- (827)
Distribution to minority interests partners (50) (506)
Distribution from joint ventures 22 3
- ------------------------------------------------------------------------------------------
Net cash flow from investing activities (2,068) 735
- ------------------------------------------------------------------------------------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from debt 637 2,599
Payment of debt (1,801) (1,173)
- ------------------------------------------------------------------------------------------
Net cash flow from financing activities (1,164) 1,426
- ------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents (3,658) 1,007
- ------------------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 7,142 5,301
- ------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 3,484 $ 6,308
==========================================================================================
</TABLE>
See accompanying Notes to Consolidated Financial Statements.
-5-
<PAGE> 6
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
1996 annual report on Form 10-K
2. The results of operations for the six months ended June 30, 1997 and
1996, 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 six months ended June 30, 1997 and 1996, the Company sold
land in exchange for notes receivable in the amount of $341,000 and
$1,154,000, respectively, of which $341,000 and $327,000, respectively,
was deferred.
4. The Company's consolidated financial statements include those of its
wholly-owned subsidiaries, NZ Properties, Inc., NZ Development
Corporation, NZU Inc. and Great Vacations International 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 3,313,818 and 3,308,568 in 1997 and 1996
respectively.
-6-
<PAGE> 7
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 some
investments during the 1997 fiscal year. When construction and marketing begins
on the Sedona project, financing from outside sources will be required to fund
this project. (See Developments in Item 7 of the Company's 1996 Annual Report on
Form 10-K.)
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 June 30, 1997, there was
$1,177,000 borrowed against a $3,850,500 development line of credit. The Company
has a $1,000,000 working capital line of credit, which matures April 24, 1998,
and is secured by certain real estate holdings. At June 30, 1997 there was
$250,000 borrowed against this line.
RESULTS OF OPERATIONS
For the six months ended June 30, 1997, net income was $960,000 (29(cent) per
share) compared to $1,388,000 (42(cent) per share) for the same period of 1996.
Earnings from property sales were down by about $435,000 for the six month
period ended June 30, 1997 as compared to the same period of 1996. The major
factor in the decrease in property sales was from the sale of recreational lots;
the southern Arizona lot sales program was sold out by the end of 1996. General
and administrative expenses increased by about $215,000 during the six months
ended June 30, 1997 due to increased personnel, increased consulting services,
legal fees and office expenses associated with the increase in personnel.
-7-
<PAGE> 8
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 six month period ended June 30, 1997, requiring a response to Items 1
through 5.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits
Exhibit 3 Articles of Incorporation of Registrant
amended May 16, 1997 and By-laws of
Registrant revised May 16, 1997.
Exhibit 27 Financial Data Schedule
(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/R. Randy Stolworthy
- --------------------------------------
R. Randy Stolworthy,
Executive President and Chief Operating Officer
Date: July 28, 1997
-8-
<PAGE> 1
EXHIBIT 3
New Mexico and Arizona Land Company
Exhibit 3 (i) Restated Articles Of Incorporation of Registrant (AS OF MAY 16,
1997)
Pursuant to Section 10-1006 and 10-1007, Arizona Revised Statutes, the
undersigned corporation adopts the following Articles of Amendment to its
Articles of Incorporation:
1. The name of the corporation is NEW MEXICO AND ARIZONA LAND COMPANY.
2. Attached hereto as Exhibit A, is a copy of the articles of incorporation of
the corporation fully restated to include all amendments to the articles of
incorporation through the date of filing of this document.
3. The restatement does contain an amendment requiring shareholder approval. The
amendment does not provide for an exchange, reclassification or cancellation of
issued shares.
4. The amendment was approved by the shareholders on May 16, 1997. There is one
voting group entitled to vote separately on the amendment. The designation and
number of outstanding shares in each voting group entitled to vote separately on
the amendment, the number of votes entitles to be cast by each, the number of
votes of each such voting group represented at the meeting at which the
amendment was adopted and the votes cast for and against the amendment were as
follows:
The voting group consisting of 3,012,886 outstanding shares of common
stock is entitled to 3,012,886 votes. There were 2,592,011 votes present at the
meeting. The voting group cast 2,571,613 votes for and 9,894 votes against
approval of the amendment adding a new Article Eighth as set forth on Exhibit A.
10,504 votes abstained from voting for or against approval of the amendment.
DATED as of the 16 day of May, 1997.
NEW MEXICO AND ARIZONA LAND COMPANY
By /s/E. M. Bedewi
--------------------------------------------
E. M. Bedewi, Sr. Vice President, Treasurer and Secretary
<PAGE> 2
EXHIBIT A
RESTATED ARTICLES OF INCORPORATION OF
NEW MEXICO AND ARIZONA LAND COMPANY
(AS OF MAY 16, 1997)
KNOW ALL MEN BY THESE PRESENTS that we, whose hands are hereunto affixed, do
hereby associate ourselves together for the purpose of forming a corporation
under the laws of the State of Arizona and, to that end, do adopt the following
articles of incorporation:
FIRST: The name of the corporation shall be NEW MEXICO AND ARIZONA LAND
COMPANY.
SECOND: This corporation is organized for the purpose of transacting any or all
lawful business for which corporations may be incorporated under the laws of the
State of Arizona, as amended from time to time. The corporation is presently
engaged in the business of holding and managing land for investment purposes,
leasing real property and interests therein, and developing mineral resources.
THIRD: The corporation shall have authority to issue a total of forty million
(40,000,000) shares of capital stock, consisting of:
(1) Thirty million (30,000,000) shares of common stock, no par value
per share; and
(2) Ten million (10,000,000) shares of serial preferred stock, no par
value per share.
Each issued and outstanding share of common stock will entitle the holder
thereof to one (1) vote on any matter submitted to a vote of or for consent of
shareholders. Issued and outstanding shares of serial preferred stock will
entitle the holders thereof only to those votes, if any, which may expressly be
fixed as hereinafter provided for the respective series thereof and to voting
rights on certain matters, and in certain circumstances, as set forth in this
Article.
The Board of Directors is authorized to provide from time to time for the
issuance of shares of serial preferred stock in series and to fix from time to
time before issuance the designation, preferences, privileges and voting powers
of the shares of each series of serial preferred stock and the restrictions or
qualifications thereof, including, without limiting the generality of the
foregoing, the following:
a) The serial designation and authorized number of shares;
b) The dividend rate, the date or dates on which such dividends
will be payable, and the extent to which such dividends may be
cumulative;
c) The amount or amounts to be received by the holders in the event
of voluntary or involuntary dissolution or liquidation of the
Corporation;
d) The price or prices at which shares may be redeemed and any
terms, conditions and limitations upon such redemption;
e) Any sinking fund provisions for redemption or purchase of shares
of such series; and
f) The terms and conditions, if any, on which shares may be
converted into shares of
1
<PAGE> 3
other capital stock, or of other series of serial preferred stock of the
Corporation.
Each series of serial preferred stock, in preference to the common stock, may be
entitled to dividends, from funds or other assets legally available therefor, at
such rates, payable at such times and cumulative to such extent as may be fixed
by the Board of Directors pursuant to the authority herein conferred upon it. In
the event of dissolution or liquidation of the Corporation, voluntary or
involuntary, the holders of the serial preferred stock, in preference to the
common stock, may be entitled to receive such amount or amounts as may be fixed
by the Board of Directors pursuant to the authority herein conferred upon it.
Preferred stock of any series redeemed, converted, exchanged, purchased or
otherwise acquired by the Corporation shall be cancelled by the Corporation and
returned to the status of authorized but unissued preference stock.
All shares of any series of serial preferred stock, as between themselves, shall
rank equally and be identical except as set forth in resolutions of the board of
directors authorizing the issuance of the series.
FOURTH: All directors of the corporation must be shareholders of the
corporation. The number of directors of the corporation shall be set by the
Board of Directors from time to time; provided, however, that the number of
directors so designated shall be no less than five (5) nor more than nine (9).
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 (2) 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 (2) years at the annual
meeting of shareholders of the corporation held in every even numbered year.
When an even number of directors has been set by the Board of Directors, there
shall be an even number of Class A and Class B directors. When an odd number of
directors has been set by the Board of Directors, there shall be one more Class
B director than there are Class A directors.
FIFTH: The Board of Directors may, from time to time, cause the corporation to
purchase its own shares to the extent of the unreserved and unrestricted capital
surplus of the corporation.
SIXTH: Elizabeth M. Bedewi, Senior Vice President, Treasurer and Secretary of
New Mexico and Arizona Land Company, 3033 North 44th Street, Suite 270, Phoenix,
Arizona 85018-7228, is hereby appointed statutory agent for the corporation for
the State of Arizona.
SEVENTH: The liability of a director or former director to the corporation or
its shareholders shall be eliminated to the fullest extent permitted by Section
10-202.B.1 of the Arizona Revised Statutes. If the Arizona Business Corporation
Act is amended to authorize corporate action further eliminating or limiting the
liability of directors, the liability of a director of the corporation shall be
eliminated or limited to the fullest extent permitted by the Arizona Business
Corporation Act, as amended.
Any repeal or modification of this Article Seventh shall not adversely affect
any right or protection of a director of the Corporation existing hereunder with
respect to any act or omission
2
<PAGE> 4
occurring prior to or at the time of such repeal or modification.
The provisions of the Article Seventh shall not be deemed to limit or preclude
indemnification of a director by the Corporation for any liability of a director
which has not been eliminated by the provisions of the Article Seventh.
EIGHTH: The Corporation shall indemnify any and all of its existing and former
directors and officers to the fullest extent permitted by Section 10-202b.2 of
the Arizona Business Corporation Act. If the Arizona Business Corporation Act is
amended to authorize corporate action further permitting indemnification of
directors or officers, the Corporation shall indemnify its existing and former
directors and officers to the fullest extent permitted by the Arizona Business
Corporation Act, as amended.
Any repeal or modification of this Article Eighth shall not adversely affect any
right or protection of existing or former directors or officers existing
hereunder with respect to any act or omission occurring prior to or at the time
of such repeal or modification.
3
<PAGE> 5
New Mexico and Arizona Land Company
Exhibit 3 (ii) Bylaws Of Registrant Amended and Restated MAY 16, 1997
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 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.
<PAGE> 6
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.
1
<PAGE> 7
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. 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 any person demands a ballot vote prior to the time the voting begins
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.
2
<PAGE> 8
(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;
(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
3
<PAGE> 9
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.
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).
4
<PAGE> 10
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. Consent signed under this
section has the effect of a meeting vote and may be described as such in any
document.
V. 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 neither 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.
5
<PAGE> 11
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.
(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.
6
<PAGE> 12
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.
(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
7
<PAGE> 13
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
make recommendations to the Board of Directors concerning the following:
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 Salaried Employees, the corporation's 401(k) Plan
and to act as fiduciary thereunder. Individuals may be eligible for membership
on the administrative committee without being directors or officers 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> 14
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 a 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
10
<PAGE> 15
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, 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 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. Chief Operating Officer. Unless otherwise specified by
resolution of the Board of Directors, the Chief Operating Officer, subject to
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 Chief Operating Officer and such other duties as may
be prescribed by the President or the Board of Directors from time to time. The
Chief Operating Officer shall, when present, and in the absence of the Chairman
of the Board, the Chief Executive Officer, and President, preside at all
meetings of the shareholders and of the Board of Directors. The Chief Operating
Officer 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
Chief Operating Officer shall have such other powers and responsibilities as may
be assigned to him by the President or the Board of Directors.
5.10. 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
10
<PAGE> 16
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.
5.11. 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.
5.12. 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 and
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.
5.13. 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.
5.14. 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
11
<PAGE> 17
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, the Executive Vice President, the Sr.
Vice 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.
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,
12
<PAGE> 18
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.
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 indemnities' right to indemnification for acts taken before the
date of repeal or amendment.
13
<PAGE> 19
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.
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.
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 16th day of May, 1997.
/s/ E. M. Bedewi
- ------------------------------------
Secretary
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,484
<SECURITIES> 0
<RECEIVABLES> 9,412
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 56,645
<DEPRECIATION> 5,389
<TOTAL-ASSETS> 66,193
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 18,102
<OTHER-SE> 18,481
<TOTAL-LIABILITY-AND-EQUITY> 66,193
<SALES> 4,250
<TOTAL-REVENUES> 6,552
<CGS> 2,428
<TOTAL-COSTS> 3,042
<OTHER-EXPENSES> 1,101
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 516
<INCOME-PRETAX> 1,604
<INCOME-TAX> 644
<INCOME-CONTINUING> 960
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 960
<EPS-PRIMARY> .29
<EPS-DILUTED> .29
</TABLE>
