FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark one)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended March 27, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-9109
RAYMOND JAMES FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Florida No. 59-1517485
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
No.)
880 Carillon Parkway, St. Petersburg, Florida 33716
(Address of principal executive offices) (Zip Code)
(813) 573-3800_______
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or 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 registrant's
classes of common stock, as of the close of the latest practicable date.
31,650,874 shares of Common Stock as of_May 6, 1997
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
Form 10-Q for the Quarter Ended March 27, 1997
INDEX
-----
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Statement of Financial Condition as of
March 27, 1997 (unaudited) and September 27, 1996 2
Consolidated Statement of Operations (unaudited) for the
three and six month periods ended March 27, 1997 and
March 29, 1996 3
Consolidated Statement of Cash Flows (unaudited) for the
six months ended March 27, 1997 and March 29, 1996 4
Notes to Consolidated Financial Statements (unaudited) 5
Item 2. Management's Financial Discussion and Analysis 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 3: Amended and Restated Articles of Incorporation
as filed on March 3, 1997
(filed electronically)
Exhibit 11: Computation of Earnings Per Share 11
Exhibit 27: Financial Data Schedule - EDGAR version only
(filed electronically)
(b) Reports on Form 8-K: None
All other items required in Part II have been previously filed or
are not applicable for the quarter ended March 27, 1997.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
(in thousands, except share amounts)
March 27, September 27,
1996 1997
(Unaudited)
----------------------------
ASSETS
Cash and cash equivalents $ 297,719 $ 258,206
Assets segregated pursuant to Federal Regulations:
Cash and cash equivalents 6,332 119
Securities purchased under agreements to resell 619,611 476,945
Securities owned:
Trading and investment account securities 122,836 124,253
Available for sale securities 237,589 208,897
Receivables:
Customers 545,182 459,180
Stock borrowed 1,012,445 864,140
Brokers, dealers and clearing organizations 29,137 24,306
Other 21,185 28,980
Investment in leveraged lease 21,347 20,318
Property and equipment, net 45,727 39,585
Deferred income taxes 21,595 21,189
Deposits with clearing organizations 20,873 22,044
Prepaid expenses and other assets 19,481 18,219
--------------------------
$3,021,059 $2,566,381
==========================
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 20,096 $ 24,898
Payables:
Customers 1,328,503 1,086,406
Stock loaned 995,106 848,595
Brokers, dealers and clearing organizations 65,852 56,928
Trade and other 61,001 54,007
Trading account securities sold but not yet purchased 64,544 57,210
Accrued compensation 86,661 101,300
Income taxes payable 18,675 10,405
--------------------------
2,640,438 2,239,749
Commitments and contingencies
Shareholders' equity:
Preferred stock; $.10 par value; authorized 10,000,000
shares; issued and outstanding -0- shares - -
Common stock; $.01 par value; authorized 50,000,000
shares; issued 32,665,720 shares 326 217
Additional paid-in capital 51,145 50,271
Unrealized gain (loss) on securities available for sale,
net of deferred taxes (901) (791)
Retained earnings 339,443 289,096
--------------------------
390,013 338,793
Less: 1,023,124 and 1,324,165 common
shares in treasury,at cost (9,392) (12,161)
--------------------------
380,621 326,632
--------------------------
$3,021,059 $2,566,381
==========================
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
March 27, March 29, March 27, March 29,
1997 1996 1997 1996
-------------------------------------------
Revenues:
Securities commissions $130,341 $110,572 $241,836 $202,342
Investment banking 24,119 10,593 42,029 21,678
Investment advisory fees 12,139 11,458 26,363 23,030
Interest 37,686 33,183 73,564 59,747
Correspondent clearing 1,202 971 2,236 1,847
Net trading and investment profits 4,022 3,430 8,711 6,209
Financial service fees 5,685 4,500 11,019 8,279
Gain on sale of interest in Liberty
Investment Management, Inc. 30,646 - 30,646 -
Other 4,155 4,012 8,410 7,613
--------------------------------------------
Total revenues 249,995 178,719 444,814 330,745
--------------------------------------------
Expenses:
Employee compensation 132,465 106,060 247,781 195,473
Communications 9,207 7,990 17,068 14,789
Occupancy and equipment 6,633 6,128 12,817 12,199
Clearing and floor brokerage 3,102 2,927 5,505 5,306
Interest 25,068 22,277 48,547 38,913
Business development 4,712 3,859 9,427 7,864
Other 6,680 4,813 13,543 11,247
-------------------------------------------
Total expenses 187,867 154,054 354,688 285,791
-------------------------------------------
Income before provision for
income taxes 62,128 24,665 90,126 44,954
Provision for income taxes 23,998 9,352 34,828 17,100
-------------------------------------------
Net income $ 38,130 $ 15,313 $ 55,298 $ 27,854
===========================================
Net income per share $ 1.18 $ .49 $ 1.72 $ .89
===========================================
Cash dividends declared per
share $ .08 $_ .063 $ .153 $ .126
===========================================
Average common equivalent
shares outstanding 32,273 31,546 32,065 31,442
===========================================
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands)
Six Months Ended
March 27, March 29,
1997 1996
--------------------------
Cash flows from operating activities:
Net income $ 55,298 $ 27,854
--------------------------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 6,224 5,581
(Increase) decrease in assets:
Securities available for sale (28,692) (66,006)
Short-term investments - 24,001
Receivables:
Customers (86,002) (12,559)
Stock borrowed (148,305) (426,746)
Brokers, dealers and clearing organizations (4,831) (9,122)
Other 7,795 3,325
Trading and investment account securities, net 8,751 14,053
Deferred income taxes (406) 449
Prepaid expenses and other assets (1,120) (3,705)
Increase (decrease) in liabilities:
Payables:
Customers 242,097 193,522
Stock loaned 146,511 416,488
Brokers, dealers and clearing organizations 8,924 7,953
Trade and other 6,994 18,681
Accrued compensation (14,639) (9,496)
Income taxes payable 8,270 (3,318)
--------------------------
Total adjustments 151,571 153,101
--------------------------
Net cash provided by operating activities 206,869 180,955
--------------------------
Cash flows from investing activities:
Additions to property and equipment, net (12,366) (2,747)
--------------------------
Cash flows from financing activities:
Repayments on notes (4,802) (86)
Issuance of common stock 3,644 2,427
Cash dividends on common stock (4,838) (3,943)
Cash paid for fractional shares (5) -
Unrealized gain (loss) on
securities available for sale, net (110) (736)
--------------------------
Net cash used in financing activities (6,111) (2,338)
--------------------------
Net increase in cash and cash equivalents 188,392 175,870
Cash and cash equivalents at beginning of period 735,270 420,379
---------------------------
Cash and cash equivalents at end of period $923,662 $596,249
===========================
Supplemental disclosures of cash flow information:
Cash paid for interest $ 47,129 $ 36,188
===========================
Cash paid for taxes $ 26,964 $ 19,969
===========================
See Notes to Consolidated Financial Statements.
RAYMOND JAMES FINANCIAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 27, 1997
Basis of Consolidation
The consolidated financial statements include the accounts of Raymond
James Financial, Inc. and its consolidated subsidiaries (the "Company").
All material intercompany balances and transactions have been eliminated in
consolidation. These statements reflect all adjustments which are, in the
opinion of management, necessary for a fair presentation of the results for
the interim periods presented. All such adjustments made are of a normal,
recurring nature. The nature of the Company's business is such that the
results of any interim period are not necessarily indicative of results for
a full year.
Commitments and Contingencies
The Company has committed to lend to, or guarantee other debt for,
Raymond James Tax Credit Funds, Inc. ("RJTCF") up to $10 million upon
request. RJTCF, a wholly-owned subsidiary of the Company, is a sponsor of
limited partnerships qualifying for low income housing tax credits. The
borrowings are secured by properties under development. The commitment
expires on November 30, 1997, at which time any outstanding balances will
be due and payable. At March 27, 1997, there were loans of $700,000
outstanding.
The Company is a defendant or co-defendant in various lawsuits
incidental to its securities business. The Company is contesting the
allegations in these cases and believes that there are meritorious defenses
in each of these lawsuits. In view of the number and diversity of claims
against the Company, the number of jurisdictions in which litigation is
pending and the inherent difficulty of predicting the outcome of litigation
and other claims, the Company cannot state with certainty what the eventual
outcome of pending litigation or other claims will be. In the opinion of
management, based on discussions with counsel, the outcome of these matters
will not result in a material adverse effect on the financial position or
results of operations.
Capital Transactions
The Company's Board of Directors has, from time to time, adopted
resolutions authorizing the Company to repurchase its common stock for the
funding of its incentive stock option and stock purchase plans and other
corporate purposes. As of March 27, 1997, management has Board
authorization to purchase up to 1,500,000 shares.
At their meeting on February 14, 1997, the Company's Board of
Directors declared a 3-for-2 stock split. The additional shares were
distributed on April 3, 1997, to shareholders of record on March 7, 1997.
All references in the consolidated financial statements to amounts per
share and to the average number of shares outstanding have been restated to
give retroactive effect to the stock split. Also at their meeting on
February 14, 1997, the Board of Directors of the Company increased the
quarterly cash dividend to $.08 per post-split share.
Net Capital Requirements
The broker-dealer subsidiaries of the Company are subject to the
requirements of Rule 15c3-1 under the Securities Exchange Act of 1934.
This rule requires that aggregate indebtedness, as defined, not exceed
fifteen times net capital, as defined. Rule 15c3-1 also provides for an
"alternative net capital requirement" which, if elected, requires that net
capital be equal to the greater of $250,000 or two percent of aggregate
debit items computed in applying the formula for determination of reserve
requirements. The New York Stock Exchange may require a member
organization to reduce its business if its net capital is less than four
percent of aggregate debit items and may prohibit a member firm from
expanding its business and declaring cash dividends if its net capital is
less than five percent of aggregate debit items. The net capital positions
of the Company's broker-dealer subsidiaries at March 27, 1997 were as
follows (dollar amounts in thousands):
Raymond James & Associates, Inc.:
(alternative method elected)
Net capital as a percent of aggregate debit items 21.00%
Net capital $121,739
Required net capital $11,453
Investment Management & Research, Inc.:
Ratio of aggregate indebtedness to net capital 1.40
Net capital $6,540
Required net capital $610
Robert Thomas Securities, Inc.:
Ratio of aggregate indebtedness to net capital 3.12
Net capital $2,490
Required net capital $518
MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS
(Any statements containing forward looking information should be read in
conjunction with Management's Discussion and Analysis of Results of
Operations and Financial Condition in the Company's Annual Report on Form
10-K for the year ended September 27, 1996.)
Results of Operations - Three months ended March 27, 1997 compared with
three months ended March 29, 1996.
As previously announced, the Company completed the sale of its
interest in Liberty Investment Management, Inc. ("Liberty") during the
current quarter. Pursuant to an agreement executed in 1994, the Company
was to receive, for the five years ending December 31, 1999, 50% of the
revenues derived from institutional growth equity accounts previously
managed by its Eagle Asset Management subsidiary. Liberty assumed
management of approximately $4.3 billion of such accounts effective January
1, 1995, and this arrangement generated an average of approximately $2.4
million per quarter for the Company during calendar years 1995 and 1996.
Liberty was sold to Goldman Sachs Asset Management in early January 1997,
and the Company received $30.6 million, shown as a separate line item on
the statement of operations, for its remaining three years' interest in
account revenues and its option to purchase a 20% interest in Liberty at a
future date. This transaction generated net income of $18.8 million, or
$.58 per share. Excluding the one-time effect of the Liberty sale,
revenues were $219,349,000, representing a 23% increase over last year's
$178,719,000. Net income, also excluding the one-time gain on the sale of
Liberty, was $19,341,000, the Company's second highest ever and a 26%
increase over the $15,313,000 in the prior year.
The Company's transaction volume set a record for the quarter;
accordingly, securities commission revenues increased 18% over the same
quarter of the prior year. Sales of equities and annuities were
exceptionally strong. The 11% increase in number of account executives was
complemented by increased productivity to attain the overall increase.
Investment banking revenues increased as the number of offerings
managed or co-managed doubled from 6 in the quarter ended March 1996 to 12
in the current quarter, with the dollar volume underwritten rising from
$473 million to $733 million, a 55% increase. This quarter's investment
banking revenues were further augmented by the recognition of revenues from
the final settlements on some of the deals completed in the first quarter
of this fiscal year.
Beginning in the quarter ended March 1997, investment advisory fees no
longer include the aforementioned fees received from Liberty. Excluding
the fees recorded from Liberty in the prior year's quarter, investment
advisory fees have increased approximately 28% due to increased assets
under management as shown below. Both asset appreciation and record retail
sales volumes have contributed to the increases.
March 27, March 29, % Increase
1997 1996 (Decrease)
------------------------------------------
Assets Under Management (000's):
Eagle Asset Management, Inc. $2,705,000 $2,104,000 29%
Heritage Family of Mutual Funds 2,816,000 2,256,000 25%
Investment Advisory Services 1,169,000 914,000 28%
Awad and Associates Asset Mgnt. 545,000 432,000 26%
Carillon Asset Management 43,000 60,000 (28)%
------------------------------------------
Total Financial Assets Under
Management $7,279,000 $5,766,000 26%
==========================================
Tangible Assets Under Mgnt. $1,843,909 $1,529,000 21%
==========================================
Net interest income of $12.6 million was 16% higher than the prior
year and established an eleventh consecutive quarterly record. Growth in
customer deposit balances, in both the brokerage and banking subsidiaries,
has continued at a rapid pace.
Financial service fees continue to increase with the growth in the
number of accounts which generate administrative fees for the Company such
as IRA accounts, trust accounts and Passport (wrap fee) accounts.
The largest portion of the increase in employee compensation continues
to be in registered representative compensation, a direct result of
increased securities commissions and investment banking revenues. In
addition, departmental and Company-wide profit-based incentive compensation
accruals increased commensurate with increased profitability (excluding the
one-time Liberty gain), while administrative and clerical compensation
continued to rise as additional staff were hired in order to support the
Company's growth.
Communications expenses include the expenses related to communicating
with a larger sales force and client base, reflected in increased postage
and printing costs and increased expenditures on computer equipment.
Other expenses reflect increases resulting from overall firm growth.
Results of Operations - Six months ended March 27, 1997 compared with six
months ended March 29, 1996.
Revenues for the six months ended March 27, 1997, exclusive of the
Liberty sale, were up 25% to $414,168,000, while net income increased 31%
to $36,509,000, or $1.14 per share.
(The underlying reasons for most of the variances to the prior year
period are substantially the same as the comparative quarterly discussion
above and the statements contained in such foregoing discussion also apply
to the six month comparison. Therefore, this section is limited to the
discussion of additional factors influencing the comparative six month
results.)
Investment banking revenues are markedly higher in the current year as
a result of two strong underwriting quarters. For the six months, the
Company has managed or co-managed 33 offerings for a total of $3.4 billion
raised versus 38 offerings with $2.7 billion raised in all of fiscal 1996.
Due to the growth of assets under management, investment advisory fees
exceeded the prior year figure in spite of the fact the prior year includes
two quarters of fees from Liberty, while the current year includes only one
quarter of these fees.
Financial Condition
The Company's total assets have increased significantly since fiscal
year end, the combined result of increased matched-book stock loan program
balances and increased customer cash balances, particularly in the client
interest program. Customer cash balances are reflected as a customer
payable, and the corresponding assets are either customer receivables
(margin loans) or assets segregated pursuant to Federal Regulations.
Liquidity and Capital Resources
Net cash provided by operating activities for the six months was
$206,869,000. The primary source of this increase was the aforementioned
increased customer cash balances, which does not give rise to cash
available for use in normal operations due to regulatory segregation
requirements, and the proceeds received from the sale of Liberty.
Investing and financing activities used $18,477,000 during the six
months, the primary uses being the payment of cash dividends, repayments on
bank loans and purchases of property and equipment, with an offsetting
source being employee stock purchases and exercises of stock options.
The Company has debt in the amount of $12,814,000 in the form of a
mortgage on the first of its two current headquarters buildings. The
second building was constructed using internally generated funds. During
the current quarter, the Company commenced construction of a third building
at its headquarters complex. The 270,000 square foot tower, including an
adjacent parking garage, is scheduled for completion during the first
quarter of calendar 1998. Construction will be financed with internal
funds, and longer term financing plans have not yet been finalized.
The Company has two committed lines of credit. During 1995, the
parent company obtained an unsecured $50 million line for general corporate
purposes. In addition, a $50 million line was established to finance
Raymond James Credit Corporation, a Regulation G subsidiary organized to
provide loans collateralized by restricted or control shares of public
companies. The balance of $7,282,000 outstanding on this line is included
in bank notes payable. In addition, Raymond James & Associates, Inc. has
uncommitted lines of credit aggregating $255 million.
The Company's broker-dealer subsidiaries are subject to requirements
of the Securities and Exchange Commission relating to liquidity and capital
standards (see Notes to Consolidated Financial Statements).
Effects of Inflation
The Company's assets are primarily liquid in nature and are not
significantly affected by inflation. Management believes that the changes
in replacement cost of property and equipment would not materially affect
operating results. However, the rate of inflation affects the Company's
expenses, including employee compensation, communications and occupancy,
which may not be readily recoverable through charges for services provided
by the Company.
Item 4. Submission of Matters to a Vote of Security Holders
The following matters were approved by shareholders at the Company's
Annual Meeting of Shareholders held on February 13, 1997:
1. Election of Directors:
Director For Against Abstain
Jonathan A. Bulkley 16,621,455 8,319 36,369
Thomas S. Franke 16,620,805 8,969 36,369
Francis S. Godbold 16,620,635 9,139 36,369
M. Anthony Greene 16,621,723 8,051 36,369
Harvard H. Hill, Jr. 16,620,191 9,583 36,369
Huntington A. James 16,614,399 15,375 36,369
Thomas A. James 16,621,172 8,602 36,369
Paul W. Marshall 16,625,931 3,843 36,369
J. Stephen Putnam 16,620,436 9,338 36,369
Robert F. Shuck 16,621,834 7,940 36,369
Dennis W. Zank 16,597,896 31,878 36,369
2. Proposal to ratify Incentive Compensation Criteria for certain of
the Company's executive officers:
For 16,383,878
Against 170,824
Abstain 111,141
3. Proposal to ratify the selection of Price Waterhouse LLP as
independent accountants of the Company for the fiscal year ending
September 26, 1997:
For 16,549,103
Against 32,867
Abstain 84,173
EXHIBIT 11
RAYMOND JAMES FINANCIAL, INC.
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
March 27, March 29, March 27, March 29,
1997 1996 1997 1996
-------------------------------------------------
Net income $38,130 $15,313 $55,298 $27,854
=================================================
Average number of common
shares and equivalents
outstanding during the
period 31,575 31,203 31,486 31,082
Additional shares assuming
exercise of stock
options (1) 698 343 579 360
-------------------------------------------------
Average number of
common shares used
to calculate earnings
per share 32,273 31,546 32,065 31,442
=================================================
Net income per share $ 1.18 $ .49 $ 1.72 $ .89
=================================================
(1) Represents the number of shares of common stock issuable on the
exercise of dilutive employee stock options less the number of shares
of common stock which could have been purchased with the proceeds from
the exercise of such options. These purchases were assumed to have
been made at the average market price of the common stock during the
period, or that part of the period for which the option was
outstanding.
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.
RAYMOND JAMES FINANCIAL, INC.
(Registrant)
Date: May 9, 1997 /s/ THOMAS A. JAMES_______
Thomas A. James
Chairman and Chief
Executive Officer
/s/ JEFFREY P. JULIEN______
Jeffrey P. Julien
Vice President - Finance
and Chief Financial
Officer
<TABLE> <S> <C>
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<CIK> 0000720005
<NAME> RAYMOND JAMES FINANCIAL, INC.
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> SEP-26-1997 SEP-29-1997
<PERIOD-START> DEC-28-1996 SEP-28-1997
<PERIOD-END> MAR-27-1997 MAR-27-1997
<CASH> 164686000 164686000
<RECEIVABLES> 595504000 595504000
<SECURITIES-RESALE> 758976000 758976000
<SECURITIES-BORROWED> 1012445000 1012445000
<INSTRUMENTS-OWNED> 360425000 360425000
<PP&E> 45727000 45727000
<TOTAL-ASSETS> 3021059000 3021059000
<SHORT-TERM> 20096000 20096000
<PAYABLES> 1455356000 1455356000
<REPOS-SOLD> 0 0
<SECURITIES-LOANED> 995106000 995106000
<INSTRUMENTS-SOLD> 64544000 64544000
<LONG-TERM> 0 0
0 0
0 0
<COMMON> 326000 326000
<OTHER-SE> 380295000 380295000
<TOTAL-LIABILITY-AND-EQUITY> 3021059000 3021059000
<TRADING-REVENUE> 4022000 8711000
<INTEREST-DIVIDENDS> 37686000 73564000
<COMMISSIONS> 130341000 241836000
<INVESTMENT-BANKING-REVENUES> 24119000 42029000
<FEE-REVENUE> 17824000 37382000
<INTEREST-EXPENSE> 25068000 48547000
<COMPENSATION> 132465000 247781000
<INCOME-PRETAX> 62128000 90126000
<INCOME-PRE-EXTRAORDINARY> 62128000 90126000
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 38130000 55298000
<EPS-PRIMARY> 1.18 1.72
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</TABLE>
CERTIFICATE OF
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
RAYMOND JAMES FINANCIAL, INC.
The undersigned officers of Raymond James Financial, Inc.
(the Company) do hereby certify that at a regular meeting of
the Board of Directors of the Company held on February 13,
1997, at which meeting a quorum was present and acting
throughout, the Board of Directors authorized the
preparation and filing of the Amended and Restated Articles
of Incorporation of Raymond James Financial, Inc., in the
form annexed hereto;
We do further certify that the amendments to the Articles of
Incorporation reflected therein were approved and adopted by
the Board of Directors, and the amendments did not require a
vote of the shareholders of the Company.
IN WITNESS WHEREOF, we have executed this certificate for
and on behalf of the Company this ____ day of February,
1997.
RAYMOND JAMES FINANCIAL, INC.
By______________________________
Francis S. Godbold, President
By______________________________
Barry S. Augenbraun, Secretary
(Corporate Seal)
c:\aoi-1.doc
STATE OF FLORIDA
COUNTY OF PINELLAS
I HEREBY CERTIFY, that on this _____ day of ______, 1997,
before me personally appeared Francis S. Godbold and Barry
S. Augenbraun, known to me to be the President and
Secretary, respectively, of Raymond James Financial, Inc.,
the persons described in and who executed the foregoing
Certificate of Amended and Restated Articles of
Incorporation of Raymond James Financial, Inc., and they
acknowledged before me the execution thereof to be their
free act and deed as such, for the use and purposes therein
mentioned.
_________________________
Notary Public
My commission expires________________________
c:\aoi-1.doc
8
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
RAYMOND JAMES FINANCIAL, INC.
ARTICLE I
Name
The name of this corporation shall be: RAYMOND JAMES
FINANCIAL, INC.
ARTICLE II
Term of Existence
The duration of this corporation is to be perpetual.
ARTICLE III
Purposes
The principal purposes of the corporation shall be:
To engage in and carry on a general securities
brokerage and financial business.
To underwrite, subscribe for, buy, sell, pledge,
mortgage, hold and otherwise deal in stocks, bonds,
obligations or securities of any private or public
corporation, government or municipality, trusts, syndicates,
partnerships or individuals and to do any other act or thing
permitted by law for the preservation, protection,
improvement or enhancement of the value of such shares of
stock, bonds, securities or other obligations including the
right to vote thereon.
To undertake and carry on any business transaction or
operation commonly carried on or undertaken by capitalists,
promoters, financiers, contractors, merchants, commission
men or agents.
To promote or assist financially or otherwise,
corporations, syndicates, partnerships, individuals or
associations of all kinds and to give any guarantee in
connection therewith for the payment of money or for the
performance of any obligation or undertaking.
To deal in shares, stocks, bonds, notes, debentures, or
other evidence of indebtedness or securities of any domestic
or foreign corporations, or mutual investment companies,
either as principal, or as agent or broker, or otherwise.
To acquire by lease, purchase, gift, devise, contract,
concession, or otherwise, and to hold, own, develop,
explore, exploit, improve, operate, lease, enjoy, control,
manage, or otherwise turn to account, mortgage, grant, sell,
exchange, convey, or otherwise dispose of, wherever
situated, within or without the State of Florida, any and
all real estate, lands, options, concessions, grants, land
patents, franchises, rights, privileges, easements,
tenements, estates, hereditaments, interests, and properties
of every kind, nature and description whatsoever.
To acquire, and to make payment therefor in cash or the
stock or bonds of the corporation, or by undertaking or
assuming the obligations and liabilities of the transferor,
or in any other way, the good will, rights and property, the
whole or any part of the assets, tangible or intangible, and
to undertake or assume the liabilities of, any person, firm,
association or corporation, to hold or in any manner dispose
of the whole or any part of the property so purchased, to
conduct in any lawful manner the whole or any part of the
business so acquired and to exercise all of the powers
necessary or convenient for the conduct and management
thereof.
To adopt, apply for, obtain, register, produce, take,
purchase, exchange, lease, hire, acquire, secure, own, hold,
use, operate, contract, or negotiate for, take licenses or
other rights in respect of, sell, transfer, grant licenses
and rights in respect of, manufacture under, introduce,
sell, assign, collect the royalties on, mortgage, pledge,
create liens upon, or otherwise dispose of, deal in, and
turn to account, letters patent, patents, patent rights,
patents applied for or to be applied for, trade-marks, trade
names and symbols, distinction marks and indications of
origin or ownership, copyrights, syndicate rights,
inventions, discoveries, devices, machines, improvements,
licenses, processes, data, and formulae of any and all kinds
granted by, or recognized under or pursuant to laws of the
United States of America, or of any other country or
countries whatsoever, and with a view to the working and
development of the same, to carry on any business, whether
manufacturing or otherwise, which the corporation may think
calculated, directly or indirectly, to effectuate these
objects.
To manufacture, purchase, or otherwise acquire, hold,
own, sell, assign, transfer, lease, exchange, invest in,
mortgage, pledge, or otherwise encumber or dispose of and
generally deal and trade in and with, both within and
without the State of Florida, and in any part of the world,
goods, wares, merchandise, and property of every kind,
nature and description.
To enter into, make and perform contracts of every kind
and description with any person, firm, association or
corporation, municipality, body politic, country, territory,
state, government or colony or dependency thereof.
To borrow or raise money for any of the purposes of the
corporation, without limit as to amount, and in connection
therewith to grant collateral or other security either alone
or jointly with any other person, firm or corporation, and
to make, execute, draw, accept, endorse, discount, pledge,
issue, sell or otherwise dispose of promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and
other evidences of indebtedness, negotiable or non-
negotiable, transferable or non-transferable, and to confer
upon the holders of any of its obligations such powers,
rights and privileges as from time to time may be deemed
advisable by the Board of Directors, to the extent permitted
under the General Corporation Law of the State of Florida;
to lend and advance money, extend credit, take notes, open
accounts and every kind and nature of evidence of
indebtedness and collateral security in connection
therewith.
To purchase or otherwise acquire, hold, sell, pledge,
transfer or otherwise dispose of shares of its own capital
stock, provided that the funds or property of the
corporation shall not be used for the purchase of its own
shares of capital stock when such use would cause any
impairment of the capital of the corporation and provided
further, that shares of its own capital stock belonging to
the corporation shall not be voted upon directly or
indirectly.
To have one or more offices, conduct and carry on its
business and operations and promote its objects within and
without the State of Florida, in other states, the District
of Columbia, the territories, colonies and dependencies of
the United States, and in foreign countries, without
restriction as to place or amount, but subject to the laws
of such state, district, territory, colony, dependency or
country.
To engage in any other business or businesses, whether
related thereto or not, as may be approved by the Board of
Directors and which businesses are permitted by law.
In general to do any or all of the things herein set
forth to the same extent as natural persons might or could
do and in any part of the world, as principals, agents,
contractors, trustees, or otherwise, within or without the
State of Florida, either alone or in company with others,
and to carry on any other business in connection therewith,
whether manufacturing or otherwise, and to do all things not
forbidden, and with all the powers conferred upon
corporations by the laws of the State of Florida.
It is the intention that each of the objects, purposes
and powers specified in each of the paragraphs of this third
article of this Certificate of Incorporation shall, except
where otherwise specified, be nowise limited or restricted
by reference to or inference from the terms of any other
paragraph or of any other article in this Certificate of
Incorporation, but that the objects, purposes and powers
specified in this article and in each of the articles or
paragraphs of this Certificate shall be regarded as
independent objects, purposes and powers, and the
enumeration of specific purposes and powers shall not be
construed to restrict in any manner the general terms and
powers of this corporation, nor shall the expression of one
thing be deemed to exclude another, although it be of like
nature. The enumeration of objects or purposes herein shall
not be deemed to exclude or in any way limit by inference
any powers, objects, or purposes which this corporation is
empowered to exercise, whether expressly by force of the
laws of the State of Florida, now or hereafter in effect, or
impliedly by any reasonable construction of said law.
ARTICLE IV
Stock Clause
Shares Authorized. The aggregate number of shares of
stock which this corporation shall have authority to issue
shall be fifty million (50,000,000) shares of common stock,
each with a par value of one cent ($.01) and ten million
(10,000,000) shares of preferred stock, each with a par
value of ten cents ($.10).
ARTICLE V
Vote to Effect Business Combination
The affirmative vote of two-thirds (2/3) of all the
shares outstanding and entitled to vote shall be required to
approve any of the following:
(a). any merger or consolidation of the
corporation with or into any other corporation;
(b). any share exchange in which a corporation,
person, or entity acquires the issued or outstanding shares
of stock of this corporation pursuant to a vote of
stockholders;
(c). any sale, lease, exchange or other transfer
of all, or substantially all, of the assets of this
corporation to any other corporation, person or entity;
(d). any transaction similar to, or having a
similar effect as, any of the foregoing transactions.
Such affirmative vote shall be in lieu of the vote of
stockholders otherwise required by law.
ARTICLE VI
Pre-Emptive Rights
No holder of any shares of stock of the corporation
shall have any pre-emptive rights whatsoever to subscribe
for or acquire additional shares of the corporation of any
class, whether such shares shall be hereby or hereafter
authorized; and no holder of shares shall have any right to
subscribe to or acquire any shares which may be held in the
treasury of the corporation; nor shall any holder have a
right to subscribe to or acquire any bonds, certificates of
indebtedness, debentures or other securities convertible
into stock, or carrying any right to purchase stock. All
such additional or treasury shares or securities convertible
into stock or carrying any right to purchase stock may be
sold for such consideration, at such time, on such terms and
to such person or persons, firms, corporations or
associations as the Board of Directors may from time to time
determine.
ARTICLE VII
Directors
A. Number
The business of the corporation shall be managed
initially by a board of not less than three (3) directors.
The number of directors may, as provided in the by-laws, be
from time to time increased or decreased, but shall never be
less than three (3) nor more than thirteen (13).
B. Interested Directors
No contract or other transaction between this
corporation and any other corporation, whether or not a
majority of the shares of the capital stock of such other
corporation is owned by this corporation, and no act of this
corporation, shall in any way be affected or invalidated by
the fact that any of the directors of this corporation are
pecuniarily or otherwise interested in, or are directors or
officers of, such other corporation. Any director
individually, or any firm of which such director may be a
member, may be a party to, or may be pecuniarily or
otherwise interested in, any contract or transaction of the
corporation, provided that the fact that he or such firm is
so interested shall be disclosed or shall have been known to
the Board of Directors, or a majority thereof. Any director
of this corporation who is also a director or officer of
such other corporation, or who is so interested, may be
counted in determining the existence of a quorum at any
meeting of the Board of Directors of this corporation that
shall authorize such contract or transaction, and may vote
thereat to authorize such contract or transaction, with like
force and effect as if he were not such director or officer
of such other corporation or not so interested.
C. Authority to Make Long-Term Employment Contracts
The Board of Directors may authorize the
corporation to enter into employment contracts with any
executive officer for periods longer than one year, and any
charter or by-law provision for annual election shall be
without prejudice to the contract rights, if any, of any
executive officer under such contract.
D. Reliance on Corporation Books
Each officer, director, or member of any committee
designated by the Board of Directors shall, in the
performance of his duties, be fully protected in relying in
good faith upon the books of account or reports made to the
company by any of its officials or by an independent public
accountant or by an appraiser selected with reasonable care
by the Board of Directors or by any such committee or in
relying in good faith upon other records of the company.
ARTICLE VIII
Amendment
These Articles of Incorporation may be amended in the
manner provided by law. Every amendment shall be approved
by the Board of Directors, proposed by them to the
stockholders, and approved at a stockholders' meeting by a
majority of the stock entitled to vote thereon; provided,
however, that the provisions set forth in Article V may not
be altered, amended or repealed unless such alteration,
amendment or repeal is approved by the affirmative vote of
two-thirds (2/3) of all of the shares outstanding and
entitled to vote.
c:\aoi.doc
18
c:\bylaws-3.doc
As Approved by the Board of
Directors on February 14, 1997
AMENDED AND RESTATED
BY-LAWS
OF
RAYMOND JAMES FINANCIAL, INC.
ARTICLE I
Offices
The Company shall maintain a principal office in the State
of Florida, and may also have offices in such other places either
within or without the State of Florida as the Board of Directors
may from time to time designate or as the business of the Company
may require.
ARTICLE II
Seal
The seal of the Company shall be circular in form and shall
have the name of the Company on the circumference and the words
"Corporate Seal Florida" in the center.
ARTICLE III
Stockholders
Section 1. All meetings of the stockholders shall be
held at the principal office of the Company in the City of St.
Petersburg, County of Pinellas, State of Florida, or at such
other place as shall be determined, within or outside the State
of Florida, from time to time, by the Board of Directors, and the
place at which such meeting shall be held shall be stated in the
notice of the meeting. A change in the place of meeting shall
not be made within sixty (60) days next before the day on which
an election of directors is to be held, and a notice of any
change shall be sent to each stockholder at least twenty (20)
days before the election is to be held.
Section 2. The annual meeting of the stockholders
of the Company for the election of directors, and for the
transaction of such other business as may properly come before
the meeting, shall be held each year on the date and at the time
set by the Board of Directors. If the annual meeting of the
stockholders be not held as herein prescribed, the election of
directors may be held at any meeting thereafter called pursuant
to these By-laws.
At the annual meeting of the stockholders of the
Company, only such business shall be conducted as shall have been
properly brought before the meeting. To be properly brought
before an annual meeting, business must either be specified in
the notice of meeting given by or at the direction of the Board
of Directors, otherwise brought before the meeting by or at the
direction of the Board of Directors, or otherwise properly
brought before the meeting by a stockholder. For business to be
properly brought before an annual meeting by a stockholder, the
stockholder must have given timely notice thereof in writing to
the Secretary of the Company. To be timely, a stockholder's
notice must be received at the principal business office of the
Company no later than the date designated for receipt of
stockholders' proposals in a prior public disclosure made by the
Company. If there has been no such prior public disclosure, then
to be timely, a stockholder's notice must be received at the
principal business office of the Company not less than sixty (60)
days nor more than ninety (90) days prior to the annual meeting
of stockholders; provided, however, that in the event that less
than seventy (70) days' notice of the date of the meeting is
given to stockholders by notice or prior public disclosure,
notice by the stockholder, to be timely, must be received by the
Company not later than the close of business on the tenth day
following the day on which the Company gave notice or made a
public disclosure of the date of the annual meeting of
stockholders. A stockholder's notice to the Secretary shall set
forth as to each matter the stockholder proposes to bring before
the annual meeting: (a) a brief description of the business or
proposal desired to be brought before the annual meeting and the
reasons for conducting such business or making such proposal at
the annual meeting, (b) the name and address, as they appear on
the Company's records, of the stockholder proposing such
business, (c) the class and number of shares of the Company's
stock which are beneficially owned by the stockholder, (d) any
material interest of the stockholder or any associate of the
stockholder in such business or proposal and (e) the same
information required by clauses (b), (c) and (d) above with
respect to any other stockholder that, to the knowledge of the
stockholder proposing such business, supports such proposal.
Subject to the discretion vested in the chairman of the meeting
under Section 8 below, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth
in this Section 2. The chairman of an annual meeting shall, if
he so determines, declare to the annual meeting that a matter of
business was not properly brought before the meeting in
accordance with the provisions of this Section 2, and upon such
determination and declaration any such business not properly
brought before the meeting shall not be transacted.
Section 3. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute,
may be called by the Chairman of the Board of Directors, or, upon
authorization by the Board of Directors, by the President, or any
Vice President and shall be called at any time by the Chairman of
the Board of Directors, the President, or any Vice President, or
the Secretary or the Treasurer, upon the request of stockholders
owning twenty-five per cent (25%) of the outstanding stock of the
Company entitled to vote at such meeting. Business transacted at
all special meetings shall be confined to the objects stated in
the notice of meeting.
Section 4. Notice of the time and place of the annual
meeting of stockholders or any special meeting of stockholders
shall be given by mailing notice of the same at least ten (10)
days and not more than sixty (60) days prior to the meeting, with
postage prepaid, to each stockholder of record of the Company
entitled to vote at such meeting at the address appearing on the
record books of the Company. The Board of Directors may fix in
advance a date, not exceeding seventy (70) days preceding the
date of any meeting of stockholders, as a record date for the
determination of the stockholders entitled to notice of and to
vote at any such meeting.
Section 5. A quorum at any annual or special meeting
of stockholders shall consist of stockholders representing,
either in person or by proxy, a majority of the outstanding
capital stock of the Company entitled to vote at such meeting,
except as otherwise specially provided by law or in the
Certificate of Incorporation.
Section 6. If a quorum be not present at a properly
called stockholders' meeting, the meeting may be adjourned by
those present, and if a notice of such adjourned meeting, sent to
all stockholders entitled to vote thereat, contains the time and
place of holding such adjourned meeting and a statement of the
purpose of the meeting, that the previous meeting failed for lack
of a quorum, and that under the provisions of this section it is
proposed to hold the adjourned meeting with a quorum of those
present, then, at such adjourned meeting, except as may be
otherwise required by law or provided in the Certificate of
Incorporation, any number of stockholders entitled to vote
thereat, represented in person or by proxy, shall constitute a
quorum, and the votes of a majority in interest of those present
at such meeting shall be sufficient to transact business.
Section 7. At all meetings of the stockholders every
registered owner of shares entitled to vote may vote in person or
by proxy and shall have one vote for each such share standing in
his name on the books of the Company. At all elections of
directors the voting shall be by ballot. The Board of Directors,
or, if the Board shall not have made the appointment, the
chairman presiding at any meeting of stockholders, shall have
power to appoint one or more persons to act as inspectors or
tellers to receive, canvass, and report the votes cast by the
stockholders at such meeting; but no candidate for the office of
director shall be appointed as inspector or teller at any meeting
for the election of directors.
Section 8. The Chairman of the Board or the President
or, in their absence, a Vice President shall preside at all
meetings of the stockholders; and, in the absence of the
Chairman, the President and Vice President, the Board of
Directors may appoint any officer to act as chairman of the
meeting. The chairman of the meeting shall have broad discretion
in determining the order of business at a stockholders' meeting.
The chairman's authority to conduct the meeting shall include,
but in no way be limited to, opening and adjourning the meeting,
recognizing stockholders entitled to speak, allowing for and
terminating questions by stockholders, calling for reports,
stating questions and putting them to a vote, calling for
nominations, determining whether any business or proposal is
properly before the meeting and announcing the results of voting.
The chairman also shall take such actions as are necessary and
appropriate to preserve order at the meeting. The rules of
parliamentary procedure need not be observed in the conduct of
stockholders' meetings.
Section 9. The Secretary of the Company shall act as
secretary of all meetings of the stockholders; and, in his
absence, the Chairman may appoint any person to act as secretary
of the meeting.
ARTICLE IV
Directors
Section 1. The management of all the affairs,
property, and business of the Company shall be vested in a Board
of Directors, consisting of the number of persons authorized
under the Certificate of Incorporation, who shall be elected at
the annual meeting of the stockholders by a plurality vote, for a
term of one year, and shall hold office until their successors
are elected and qualify. In addition to the powers and
authorities by these By-laws and the Certificate of Incorporation
expressly conferred upon it, the Board of Directors may exercise
all powers of the Company and do all lawful acts and things which
are not by statute or by the Certificate of Incorporation or by
these By-laws directed or required to be exercised or done by the
stockholders.
Section 2. Subject to the Certificate of
Incorporation, the number of directors may at any time be
increased or decreased by vote of a majority of the Board of
Directors at any regular or special meeting, if the notice of
such meeting contains a statement of the proposed increase or
decrease. In case of any such increase, the Board of Directors
at any meeting shall have power to elect such additional
directors to hold office until the next annual meeting of the
stockholders, and until their successors are elected and qualify.
Section 3. All vacancies in the Board of Directors,
whether caused by increase in number of directors, resignation,
death, or otherwise, may be filled by a majority of the remaining
directors attending a meeting, even though less than a quorum be
present. A director thus elected to fill any vacancy shall hold
office for the unexpired term of his predecessor, and until his
successor is elected and qualifies.
Section 4. The Board of Directors may hold meetings
and keep the books of the Company outside the State of Florida.
Section 5. The annual meeting of the board of
Directors, of which no notice shall be necessary, shall be held
immediately following the annual meeting of the stockholders, or
immediately following any adjournment thereof, for the purpose of
the organization of the Board and the election or appointment of
officers for the ensuing year and for the transaction of such
other business as may be brought before such meeting.
Section 6. Regular meetings of the Board of Directors
may be held without notice at the principal office of the Company
or at such other place or places, within or without the State of
Florida, as the Board of Directors may from time to time
designate.
Section 7. Special meetings of the Board of Directors
may be called at any time by the Chairman of the Board of
Directors, or the President, or, in their absence, by any Vice
President, or by any two directors, to be held at the principal
office of the Company, or at such other place or places, within
or without the State of Florida, as the directors may from time
to time designate.
Section 8. Notice of all special meetings of the Board
of Directors shall be given to each director by two (2) days'
service of the same by telecopier transmission, by mail, or
personally.
Section 9. At meetings of the Board of Directors the
Chairman of the Board, or, in his absence, the President, or a
designated Vice President shall preside. A majority of the
members of the Board of Directors shall constitute a quorum for
the transaction of business, but less than a quorum may adjourn
any meeting from time to time until a quorum shall be present,
whereupon the meeting may be held, as adjourned, without further
notice. At any meeting at which every director shall be present,
even though without any notice, any business may be transacted.
Section 10. The Board of directors may establish, from
time to time, a schedule of compensation for members of the Board
of Directors, as well as a fixed sum and expenses of attendance
for attendance at each regular or special meeting of the Board;
provided that nothing herein contained shall be construed to
preclude any director from serving the Company in any other
capacity and receiving compensation therefor. Members of special
or standing Committees may be allowed compensation for attending
Committee meetings. Unless otherwise determined by the Board of
Directors, directors who are employees of the Company shall not
receive any compensation for service on the Board of Directors,
but shall be reimbursed for expenses of attendance at meetings.
Section 11. No contract or other transaction between
the Company and one or more of its directors, or any other
corporation, firm, association, or entity in which one or more of
its directors are directors or officers, or are financially
interested, shall be either void or voidable because of such
relationship or interest, because such director or directors are
present at the meeting of the Board of Directors or a Committee
thereof which authorizes, approves, or ratifies such contract or
transaction, or because his or their votes are counted for such
purpose, if:
(a) The fact of such relationship or interest is
disclosed or known to the Board of Directors or Committee which
authorizes, approves, or ratifies the contract or transaction by
a vote or consent sufficient for the purpose without counting the
votes or consents of such interested directors; or
(b) The fact of such relationship or interest is
disclosed or known to the shareholders entitled to vote and they
authorize, approve, or ratify such contract or transaction by
vote or written consent; or
(c) The contract or transaction is fair and reasonable
as to the Company at the time it is authorized by the Board of
Directors, a Committee or the shareholders.
An interested director may be counted in determining the presence
of a quorum at a meeting of the Board of Directors or a Committee
thereof which authorizes, approves, or ratifies such contract or
transaction.
Section 12. The Company shall:
(a) Indemnify any person made a party to an
action by or in the right of the Company to procure a judgment in
its favor by reason of his being or having been a director or
officer of the Company, or of any other corporation, firm,
association or entity which he served as such at the request of
the Company, against the reasonable expenses, including
attorneys' fees, incurred by him in connection with the defense
or settlement of such action, or in connection with an
appeal therein, except in any case where such person is adjudged
in a final adjudication to have been guilty of conduct as to
which, as a matter of law, no such indemnification may be made;
(b) Indemnify any person made a party to an
action, suit or proceeding, other than one by or in the right of
the Company to procure a judgment in its favor, whether civil or
criminal, brought to impose a liability or penalty on such person
for an act alleged to have been committed by such person in his
capacity of director or officer of the Company, or of any other
corporation, firm, association or entity which he served as such
at the request of the Company, against judgments, fines, amounts
paid in settlement and reasonable expenses, including attorneys'
fees, incurred as a result of such action, suit or proceeding, or
any appeal therein, unless the Board of Directors determines that
such person did not act in good faith in the reasonable belief
that such action was in the best interests of the Company. The
termination of any such civil or criminal action, suit or
proceeding by judgment, settlement, conviction or upon a plea of
nolo contendere shall not in itself disqualify such person from
indemnification except in any case where such person is adjudged
in a final adjudication to have been guilty of conduct as to
which, as a matter of law, no such indemnification may be made;
(c) Advance the payment of expenses, including
attorneys' fees, to any person entitled to indemnification
hereunder during the pendency of any claim, action or proceeding,
unless otherwise determined by the Board of Directors in any
case.
The foregoing rights of reimbursement or indemnification shall
not be exclusive of other rights to which any such person may
otherwise be entitled and, in the event of his or her death,
shall extend to his or her legal representatives.
Section 13. Each officer, director, or member of any
Committee designated by the Board of Directors shall, in the
performance of his or her duties, be fully protected in relying
on information, opinions, reports, or statements, including
financial statements and other financial data, if prepared or
presented by:
(a) one or more officers or employees of the
Company whom he or she reasonably believes to be reliable and
competent in the matters presented;
(b) legal counsel, public accountants, or other
persons, as to matters he or she reasonably believes are within
the persons' professional or expert competence; or
(c) a Committee of the Board of Directors of
which he or she is not a member, if he or she reasonably believes
the Committee merits confidence.
In discharging his or her duties, a director may consider
such factors as the director deems relevant, including the long-
term prospects and interests of the Company and its shareholders,
and the social, economic, legal, or other effects of any action
on the employees, suppliers, customers of the Company or its
subsidiaries, the communities and society in which the Company or
its subsidiaries operate, and the economy of the state and the
nation.
Section 14. No person shall be liable to the Company
for any loss or damage suffered by it on account of any action
taken or omitted to be taken by him or her as a director or
officer of the Company, or of any other corporation, firm,
association, or entity in which he or she serves in any position
at the request of the Company, if such action was taken:
(a) In good faith;
(b) With the care an ordinarily prudent person in
a like position would exercise under similar circumstances; and
(c) In a manner he or she reasonably believes to
be in the best interests of the Company.
ARTICLE V
Committees
Section 1. The Board of Directors may appoint from
among its members an Executive Committee of not less than two nor
more than nine members, one of whom shall be the Chairman of the
Board, and shall designate one of such members as Chairman of the
Executive Committee. The Board may also designate one or more of
its members as alternates to serve as a member or members of the
Executive Committee in the absence of a regular member or
members. The Board of Directors reserves to itself alone the
power to declare dividends, issue stock, recommend to
stockholders any action requiring their approval, change the
membership of any committee at any time, fill vacancies therein,
and discharge any committee either with or without cause at any
time. Subject to the foregoing limitations, the Executive
Committee shall possess and exercise all other powers of the
Board of Directors during the intervals between meetings.
Section 2. The Board of Directors may also appoint
from among its own members such other committees as the Board may
determine, including an Audit Committee and a Compensation
Committee, which shall in each case consist of not less than two
directors, and which shall have such powers and duties as shall
from time to time be prescribed by the Board.
Section 3. A majority of the members of any committee
may fix its rules of procedure. All actions by any committee
shall be reported to the Board of Directors at a meeting
succeeding such action and shall be subject to revision,
alteration, and approval by the Board of Directors.
ARTICLE VI
Divisions
Section 1. The Board of Directors of the Company may
appoint individuals who may, but need not be directors, officers,
or employees of the Company, to serve as members of an Advisory
Board of Directors of one or more operating divisions of the
company and may fix fees or compensation for attendance at
meetings of any such Advisory Boards. The members of any such
Advisory Board may adopt and from time to time may amend rules
and regulations for the conduct of their meetings and shall keep
minutes which shall be submitted to the Board of Directors of the
Company. The term of office of any member of the Advisory Board
of Directors shall be at the pleasure of the Board of Directors
of the Company and shall expire the day of the annual meeting of
the stockholders of the Company. The function of any such
Advisory Board of Directors shall be to advise with respect to
the affairs of the operating divisions of the Company to which it
is appointed.
Section 2. The Board of Directors of the Company, or
the Chairman, may from time to time confer on the employees of
the company assigned to any operating division of the Company, or
discontinue, the title of President, Vice President, and any
other titles deemed appropriate. Any employee so designated as an
officer of an operating division shall have authorities,
responsibilities, and duties with respect to his operating
division corresponding to those normally vested in the comparable
officer of the Company by these By-laws, subject to such
limitations as may be imposed by the Board of Directors of the
Company or the Chairman. The designation of any such title to an
employee of an operating division of the Company shall not be
permitted to conflict in any way with the executive or
administrative authority of any officer of the Company and shall
not constitute authorization for such person to act as an officer
of the Company or to represent himself or herself as an officer
of the Company.
ARTICLE VII
Officers
Section 1. The Board of Directors shall elect from its
own number a Chairman of the Board and shall elect a President
and such Vice Presidents (who may or may not be directors, and
who may be designated Executive or Senior Vice Presidents) as in
the opinion of the Board the business of the Company requires, a
Chief Financial Officer (who may also be a Vice President,
Treasurer and Controller of the Company), a Treasurer and a
Secretary; and it may elect or appoint from time to time such
other or additional officers, including a Vice Chairman, a
Controller and a General Counsel, and one or more Assistant
Secretaries and Assistant Treasurers, as in its opinion are
desirable for the conduct of the business of the Company. In its
discretion the Board of Directors may leave unfilled any office
except those of President, Chief Financial Officer, Treasurer,
and Secretary. Any individual may hold one or more offices
authorized under these By-laws.
Section 2. The Board of Directors may authorize the
Company to enter into employment contracts with any executive
officer for periods longer than one year, and any provision of
the Certificate of Incorporation or By-laws for annual election
shall be without prejudice to the contract rights if any, of an
executive officer under such a contract. Subject to his rights
under any such employment contract, any officer or agent shall be
subject to removal at any time by the affirmative vote of a
majority of the whole Board of Directors. An officer, agent, or
employee, other than officers appointed by the Board of
Directors, shall hold office at the discretion of the officer
appointing him.
Section 3. The Chairman of the Board of Directors
shall preside at all meetings of the Board of Directors and
stockholders and shall be the Chief Executive Officer of the
Company. He may appoint officers, agents, or employees other
than those appointed by the Board of Directors. He may sign,
execute, and deliver in the name of the Company powers of
attorney, contracts, bonds, and other obligations and shall
perform such other duties as may be prescribed from time to time
by the Board of Directors or by the By-laws.
Section 4. The Vice Chairman shall have such powers
and perform such duties as may be assigned to him by the Board of
Directors or the Chairman.
Section 5. The President shall exercise such duties as
customarily pertain to the office of President and, subject to
the direction of the Chairman and Chief Executive Officer, shall
have general and active supervision over the property, business,
and affairs of the Company and over its several officers. In the
absence of the Chairman of the Board, he shall preside at all
meetings of the stockholders and at meetings of the Board of
Directors.
Section 6. Each Vice President shall have such powers
and perform such duties as may be assigned by the Board of
Directors, the Chairman, or the corporate officer to whom the
Vice President reports. In the absence or disability of the
President, the Board or the Chairman shall designate a Vice
President to perform the duties and exercise the powers of the
President. A Vice President may sign and execute contracts and
other obligations pertaining to the regular course of his duties.
Section 7. The Chief Financial Officer shall be
responsible for the financial reporting on a consolidated basis
of the Company and its subsidiaries. He or she shall perform
such other duties as may be assigned by the Board of Directors or
the Chairman, including duties that may otherwise be assigned to
the Treasurer under these By-laws, and shall be responsible to
the Chairman for the performance of the duties of the office.
Section 8. The Controller shall be the chief
accounting officer of the Company, unless that responsibility is
also being fulfilled by the Chief Financial Officer. He or she
shall perform such duties as shall be assigned by the Chief
Financial Officer.
Section 9. The Treasurer shall, subject to the
direction of the Chairman or the Chief Financial Officer, have
general custody of all the funds and securities of the Company
and have general supervision of the collection and disbursement
of funds of the Company. He or she shall endorse on behalf of
the Company for collection checks, notes, and other obligations,
and shall deposit the same to the credit of the Company in such
bank or banks or depositories as the Board of Directors may
designate, or shall designate others to do so. He or she may
sign, with the Chairman, the President, the Chief Financial
Officer, or such other person or persons as may be designated for
the purpose by the Board of Directors, all bills of exchange or
promissory notes of the Company. Unless such responsibilities
are being fulfilled by the Chief Financial Officer or the
Controller, he or she shall enter or cause to be entered
regularly in the books of the Company full and accurate account
of all moneys received and paid on account of the Company; shall
at all reasonable times exhibit the books and accounts of the
Company to any director of the Company upon application at the
office of the Company during business hours; and, whenever
required by the Board of Directors or the Chairman, shall render
a statement of accounts. He or she shall perform such other
duties as may be prescribed from time to time by the Board of
Directors or by the By-laws. He or she shall give bond for the
faithful performance of these duties in such sum and with such
surety as shall be approved by the Board of Directors.
Any Assistant Treasurer shall have such authority to
sign and endorse checks, notes and other obligations of the
Company, and open bank accounts, and such other duties and
responsibilities, as shall be authorized by the Treasurer or the
Chief Financial Officer.
Section 10. The Secretary shall keep the minutes of
all meetings of the stockholders and of the Board of Directors,
and to the extent ordered by the Board of Directors or the
Chairman, the minutes of meetings of all committees. He shall
cause notice to be given of meetings of stockholders, of the
Board of Directors, and of any committee appointed by the Board.
He shall have custody of the corporate seal and general charge of
the records, documents, and papers of the Company not pertaining
to the performance of the duties vested in other officers, which
shall at all reasonable times be open to the examination of any
director, and shall authenticate records of the Company as
required from time to time. He may sign or execute contracts
with the Chairman, the President, or a Vice President thereunto
authorized, in the name of the Company, and affix the seal of the
Company thereto. He shall perform such other duties as may be
prescribed from time to time by the Board of Directors or by the
By-laws.
Any Assistant Secretary shall have the authority to
perform the duties of the Secretary and such other duties as may
be assigned by the Chairman or the Secretary.
Section 11. The General Counsel shall advise and
represent the Company generally in all legal matters and
proceedings and shall act as counsel to the Board of Directors
and the Executive Committee. The General Counsel may sign and
execute pleadings, powers of attorney pertaining to legal
matters, and any other contracts and documents in the regular
course of his duties.
Section 12. In addition to such bank accounts as may
be authorized in the usual manner by resolution of the Board of
Directors, the Treasurer or the Controller of the Company, with
the approval of the Chairman, the President, or the Chief
Financial Officer, may authorize such bank accounts to be opened
or maintained in the name and on behalf of the Company as he or
she may deem necessary or appropriate, payments from such bank
accounts to be made upon and according to the check of the
Company which may be signed jointly or singly by either the
manual or facsimile signature or signatures of such officers or
bonded employees of the Company as shall be specified in the
written instruction of the Treasurer or the Controller of the
Company with the approval of the Chairman or the President of the
Company.
Section 13. In case any office shall become vacant,
the Board of Directors shall have power to fill such vacancies.
In case of the absence or disability of any officer, the Board of
Directors may delegate the powers or duties of any officer to
another officer or a director for the time being.
Section 14. Unless otherwise ordered by the Board of
Directors, the Chairman, the President, the Chief Financial
Officer, the Secretary or any officer thereunto duly authorized
by the Chairman shall have full power and authority on behalf of
the Company to attend and to vote at any meeting of stockholders
of any corporation in which the Company may hold stock, and may
exercise on behalf of the Company any and all of the rights and
powers incident to the ownership of such stock at any such
meeting, and shall have power and authority to execute and
deliver proxies and consents on behalf of the Company in
connection with the exercise by the Company of the rights and
powers incident to the ownership of such stock. The Board of
Directors, from time to time, may confer like powers upon any
other person or persons.
Section 15. The salaries of officers, agents, and
employees though the same be directors and/or stockholders, shall
be fixed by the Board of Directors.
ARTICLE VIII
Capital Stock
Section 1. Certificates for stock of the company shall
be in such form as the Board of Directors may from time to time
prescribe and shall be signed by the Chairman of the Board or the
President or a Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an assistant Treasurer,
manually or in facsimile. A stock certificate signed (manually
or in facsimile) by an officer of the Company shall be valid even
though such person no longer holds office when the certificate is
issued.
Section 2. The Board of Directors shall have power to
appoint one or more Registrars and Transfer Agents for the
registration and transfer of certificates of stock of any class,
and may require that stock certificates shall be countersigned
and registered by one or more of such Registrars and Transfer
Agents.
Section 3. Shares of capital stock of the Company
shall be transferable on the books of the Company only by the
holder of record thereof in person or by duly authorized
attorney, upon surrender and cancellation of certificates for a
like number of shares.
Section 4. In case any certificate for shares of the
capital stock of the Company shall be lost, stolen, or destroyed,
the Company may require such proof of the fact and such indemnity
to be given to it and to its Transfer Agent and Registrar, if
any, as shall be deemed necessary or advisable by it.
Section 5. The Company shall be entitled to treat the
holder of record of any share or shares of stock as the holder
thereof in fact, and shall not be bound to recognize any
equitable or other claim to or interest in such shares on the
part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise expressly provided by
law.
Section 6. The Board of Directors may fix in advance a
date, not exceeding 70 days preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the
date when any change or conversion or exchange of capital stock
shall go into effect, as a record date for the determination of
the stockholders entitled to notice of and to vote at any such
meeting, or entitled to receive payment of any such dividends, or
to exercise the rights in respect to any such change, conversion,
or exchange of capital stock, and in such case only stockholders
of record on the date so fixed shall be entitled to such notice
of and to vote at such meeting, or to receive payment of such
dividend, or allotment of rights, or exercise such rights, as the
case may be, and notwithstanding any transfer of any stock on the
books of the Company after any such record date fixed as herein
provided.
ARTICLE IX
Miscellaneous; Dividends
Section 1. The Board of Directors shall have power to
fix, and from time to time change, the fiscal year of the
company.
Section 2. Any notice required to be given under the
provisions of these By-laws or otherwise may be waived by the
stockholder, director, or officer to whom such notice is required
to be given.
Section 3. The Board of Directors or any committee
thereof, may take any action contemplated under these By-laws by
unanimous written consent in lieu of meeting.
Section 4. Dividends may be declared by the Board of
Directors and paid to shareholders to the extent permitted by
law, subject to any conditions and limitations imposed by the
Certificate of Incorporation of the Company.
ARTICLE X
The Board of Directors shall have power to add any
provision to or to amend or repeal any provision of these By-laws
by the vote of a majority of all of the directors at any regular
or special meeting of the Board, provided that a statement of the
proposed action shall have been included in the notice or waiver
of notice of such meeting of the Board. The stockholders may
amend or repeal any provision of these By-laws by the vote of a
majority of the stock at any meeting, provided that a statement
of the proposed action shall have been included in the notice or
waiver of notice of such meeting of stockholders.
