UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
--------------------------------
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 1-9143
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RODMAN & RENSHAW CAPITAL GROUP, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 36-3111956
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
233 S. Wacker Drive, Suite 4500, Chicago, IL 60606
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 312/526-2000
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120 S. LaSalle St., Chicago, IL 60603
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(Former name, former address, and former fiscal year,
if changed since last report)
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
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
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Shares of common stock outstanding at August 4, 1995: 6,645,802
par value $.09.
<PAGE>
RODMAN & RENSHAW CAPITAL GROUP, INC. AND SUBSIDIARIES
INDEX
PAGE
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements -
Condensed Consolidated Statements of Financial Condition
as of June 24, 1995 (unaudited) and December 31, 1994.
Condensed Consolidated Statements of Operations (unaudited)
for the three and six months ended June 30, 1995 and
June 24, 1994.
Condensed Consolidated Statements of Cash Flows (unaudited)
for the six months ended June 30, 1995 and
June 24, 1994.
Notes to Condensed Consolidated Financial Statements
(unaudited) - June 30, 1995.
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RODMAN & RENSHAW CAPITAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(in thousands)
<TABLE>
<CAPTION>
June 30
1995 December 31
(Unaudited) 1994
------------ -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 5,447 $ 7,011
Securities purchased under
agreements to resell 5,403 35,054
Cash and short-term investments
required to be segregated under
federal regulations (including
reverse repurchase agreements:
6/30/95 - $16,650; 12/31/94 -
$35,200) 37,748 39,215
Receivables:
Customers 53,733 47,036
Brokers, dealers, and clearing
organizations 79,003 155,408
Miscellaneous 13,639 10,607
Securities owned - at market 104,485 144,500
Memberships in securities and
commodities exchanges - at cost
(market value 06/30/95 - $4,012;
12/31/94 - $6,227) 2,285 3,850
Furniture, fixtures, and leasehold
improvements - at cost, less
accumulated depreciation and
amortization (06/30/95 - $5,974;
12/31/94 - $5,396) 8,148 2,298
Prepaid expenses and other assets 10,072 5,213
Recoverable income taxes 49 1,379
Deferred income taxes - (Net of
valuation allowance; - $5,246) 3,823 2,760
------------ ----------
$ 323,835 $ 454,331
============ ===========
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings from
banks $ 59,074 $ 54,331
Short-term note payable
to affiliate 10,000 10,000
Payables:
Customers 59,121 89,878
Brokers, dealers, and clearing
organizations 40,841 158,151
Miscellaneous 8,389 661
Securities sold but not yet
purchased - at market 98,644 97,844
Accrued commissions 3,287 2,066
Accounts payable and accrued
expenses 21,765 11,101
------------ -----------
301,121 424,032
Liabilities subordinated to the
claims of general creditors 2,500 3,874
Stockholders' equity:
Convertible non-voting preferred
stock, 5,000,000 shares authorized;
none issued at 06/30/95 and 150 shares
Series A, $.01 par value issued at
at 12/31/94 - -
Common stock, $.09 par value:
20,000,000 shares authorized;
6,646,000 issued at 06/30/95
and 4,577,000 issued at 12/31/94 598 412
Additional paid-in capital 30,749 30,935
Accumulated deficit (11,133) (4,922)
------------ ------------
20,214 26,425
------------ ------------
$ 323,835 $ 454,331
============ ============
</TABLE>
See Notes to Condensed Consolidated Financial Statements<PAGE>
RODMAN & RENSHAW CAPITAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
June 30, June 24, June 30, June 24,
1995 1994 1995 1994
----------- ------------ --------- ----------
<S> <C> <C> <C> <C>
REVENUES: $ $ $ $
Commissions 8,115 6,428 14,574 13,413
Principal 6,263 3,207 11,830 8,069
Interest 3,635 2,580 7,238 4,383
Fee Income 1,850 1,098 2,983 1,612
Other 662 72 1,379 502
----------- ------------ ----------- ----------
TOTAL
REVENUES 20,525 13,385 38,004 27,979
EXPENSES:
Employee
compensation
and benefits 13,824 12,560 25,348 21,519
Commissions,
floor
brokerage
and clearing 1,318 1,374 2,526 3,093
Interest 2,720 1,537 5,680 2,722
Occupancy
and
equipment 1,593 1,624 2,975 3,021
Com-
munications 2,455 1,447 4,275 3,008
Professional
fees 1,392 1,572 2,315 2,267
Other
operating
expenses 1,228 5,545 2,115 7,734
Restructuring
charge -- 3,815 -- 3,815
------------ ------------ ----------- -----------
TOTAL
EXPENSES 24,530 29,474 45,234 47,179
------------ ------------ ----------- ------------
<PAGE>
Loss
before taxes (4,005) (16,089) (7,230) (19,200)
Tax benefit (458) (1,019) (1,483)
------------ ------------ ----------- ------------
NET LOSS $ (4,005) $ (15,631) (6,211) (17,717)
============ ============ =========== =============
Loss per Share Data:
Net loss
per share
and common
equivalent
Primary
and Fully
Diluted ($0.60) ($3.42) ($0.99) ($3.87)
Weighted
Average
Shares and
Common Share
Equivalents 6,646 4,577 6,291 4,573
</TABLE>
See Notes to Condensed Consolidated Financial Statements<PAGE>
RODMAN & RENSHAW CAPITAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 24,
1995 1994
------------- ------------
<S> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $ (6,211) $ (17,717)
Adjustments to reconcile net
loss to net cash flows
provided by (used in)
operating activities:
(Gain) loss on sale of exchange
memberships (380) 102
Deferred income taxes (2,364) 566
Depreciation and amortization 578 528
Net changes in operating assets
and liabilities:
Securities purchased under
agreements to resell 29,651 12,500
Cash and short-term investments
required to be segregated under
federal regulations 1,467 (493)
Receivables from and payables
to customers, brokers, dealers
and clearing organizations (78,359) (19,869)
Miscellaneous receivables (3,032) 12,245
Recoverable income taxes and
income taxes payable 2,631 (1,979)
Securities owned 40,015 27,124
Prepaid expenses and other
assets (4,859) (2,740)
Miscellaneous payables 7,728 (566)
Securities sold but not
yet purchased 800 (17,929)
Accrued commissions 1,221 (429)
Accounts payable and accrued
expenses 10,664 6,919
------------ -------------
NET CASH FLOWS FROM
OPERATING ACTIVITIES (450) (1,840)
<PAGE>
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchase) sale of furniture,
fixtures and leasehold
improvements (6,428) 337
Sale of exchange memberships 1,945 415
------------ -------------
NET CASH FLOWS FROM
INVESTING ACTIVITIES (4,483) 752
CASH FLOWS FROM FINANCING
ACTIVITIES
Net increase (decrease) in short-term
borrowings from banks 4,743 13,151
Proceeds from short-term note
payable to affiliate 10,000
Payment of liabilities
subordinated to claims of
general creditors (1,374) -
Proceeds from issuance of
common stock in connection
with stock option plan - 1,139
Proceeds from issuance of
convertible non-voting
preferred stock 15,000
------------ -------------
NET CASH FLOWS FROM
FINANCING ACTIVITIES 3,369 12,988
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,564) 12,002
Cash and cash equivalents at
beginning of period 7,011 1,996
------------ -------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 5,447 $ 13,998
============ =============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
RODMAN & RENSHAW CAPITAL GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1995 (UNAUDITED)
NOTE A - BASIS OF PRESENTATION
------------------------------
The unaudited condensed consolidated financial statements of Rodman
& Renshaw Capital Group, Inc. and subsidiaries (collectively, the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management of the
Company, all adjustments considered necessary for a fair
presentation of the financial condition and results of operations of
the Company for the periods presented have been included. Certain
reclassifications have been made to prior periods' amounts to
conform with current period presentations. Although the Company has
stock options outstanding such stock options do not have a dilutive
effect on earnings per share; accordingly the primary and fully
diluted loss per share calculations are not different. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Transition Report on
Form 10-K for the period from June 25, 1994 through December 31,
1994.
NOTE B - ASSETS SEGREGATED UNDER FEDERAL AND OTHER REGULATIONS
--------------------------------------------------------------
The Company is holding in safekeeping $20,585,000 and $83,370,000 of
securities owned by customers as of June 30, 1995, and December 31,
1994, respectively. In accordance with applicable regulations,
these securities are not included in the Condensed Consolidated
Statement of Financial Condition.
NOTE C - NET CAPITAL REQUIREMENT AND DIVIDEND RESTRICTIONS
----------------------------------------------------------
The Company's primary subsidiary, Rodman & Renshaw, Inc.("Rodman"),
a registered broker-dealer and futures commission merchant, is
subject to the minimum net capital rules of the Securities and
Exchange Commission (the "SEC") (Rodman has elected to use the
alternative net capital method permitted by the SEC rule), Commodity
Futures Trading Commission (the "CFTC"), and the capital rules of
the New York Stock Exchange, Inc. (the "NYSE"), of which Rodman is a
member. These rules require that Rodman maintain minimum net
capital, as defined in such rules, equal to the greater of 2% of
aggregate debits arising from customer securities transactions or
$1,000,000, or 4% of the funds required to be segregated for
customers pursuant to the Commodity Exchange Act. The NYSE may
require a member firm to reduce its business if its net capital is
less than the greater of $125,000 or 6% of the funds required to be
segregated and may prohibit a member firm from expanding its
business or paying cash dividends if resulting net capital would be
less than the greater of $150,000 or 7% of the funds required to be
segregated. At June 30, 1995, and December 31, 1994, Rodman had net
capital of $7.61 million and $16.64 million, respectively, or $6.11
million and $11.04 million, respectively, in excess of required net
capital.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
The results of operations should be read in conjunction with the
Company's condensed consolidated statements of income. The
Company's principal activities -- securities and commodities
brokerage, principal trading for servicing its customers, and
investment banking services -- are highly competitive and extremely
volatile. The earnings of the Company are subject to wide
fluctuations since many factors over which the Company has little or
no control -- such as the overall volume of activity in the
securities, futures and options markets and the volatility and
general level of market prices and interest rates -- may affect its
operations. In addition, results of operations for any particular
interim period may not be indicative of results to be expected for
the year ending December 31, 1995.
The Company previously had a last Friday in June fiscal year, which
was changed to a calendar fiscal year effective December 31, 1994.
Revenues for the quarter ended June 30, 1995 totalled $20.53
million, up 53% from $13.39 million for the previous year's
comparative quarter. For the most recent quarter, the Company
recorded a net loss of $2.70 million, or $0.41 cents per common
share. For the quarter ended June 24, 1994, the Company reported a
net loss of $15.63 million, or $3.42 per common share and common
share equivalent.
For the six month period ended June 30, 1995, revenues increased 36%
to $38 million from the comparable period one year ago. For the six
month period ended June 30, 1995, the Company reported a net loss of
$4.91 million, or $0.78 cents per share compared to a net loss of
$17.72 million or $3.87 per share for the comparable period last
year.
REVENUES
Commission revenue increased 26% to $8.12 million for the quarter
ended June 30, 1995, from $6.43 million in the corresponding 1994
calendar quarter. The six month period commission revenues
increased 9% to $14.57 million. This is primarily due to additional
floor brokerage generated from Rodman's expanded New York group.
Revenues from principal transactions include mark-ups and realized
and unrealized gains and losses on securities held for resale.
Principal transaction revenues increased 95% to $6.26 million for
the quarter ended June 30, 1995, and 47% to $11.83 million from the
corresponding 1994 calendar quarter and six month period.
Interest revenue is derived primarily from financing customer
security purchases and from investments which are maintained
pursuant to the rules and regulations of the SEC and the CFTC
pertaining to segregation of customer funds. Interest revenues
increased by $1.05 million or 41% for the quarter ended June 30,
1995 as compared to the quarter ended June 24, 1994, due principally
to increases in security inventory positions and higher prevailing
interest rates. For the six month period ended June 30, 1995
interest revenue increased 65% to $7.24 million.
Fee income, which includes the activities of Rodman's Investment
Banking department, increased 68% and 85% for the quarter and six
months ended June 30, 1995, respectively. This is a result of the
expansion of Rodman's Investment Banking department in New York and
the closing of two initial public offerings and three private
placements of securities during the quarter.
EXPENSES
Employee compensation and benefit expense increased by 10% and 18%
for the quarter and six months ended June 30, 1995, respectively.
This increase is attributable to the variable nature of certain
compensation related to increases in commissions, principal revenues
and fee income.
Interest expense increased $1.18 million to $2.72 million for the
three month period ended June 30, 1995, and $2.96 million to $5.68
million for the six month period. This increase is due to interest
paid on the short-term note payable to an affiliate, increased
balances of short term notes payable to banks and higher prevailing
interest rates during the respective periods.
Other operating expenses decreased 78% to $1.20 million for the
quarter ended June 30, 1995, and 73% to $2.09 million for the
comparable six month period of the previous year. The comparable
quarter ended June 24, 1994 included certain significant non-
recurring expenses. The previous year's six month period also
reflected losses resulting from discretionary trading activities in
customer accounts.
LIQUIDITY AND CAPITAL RESOURCES
The Company's assets are substantially comprised of customer-related
receivables and securities inventory, both of which are highly
liquid. The principal sources of financing are stockholders'
equity, customer payables, proceeds from securities lending, short-
term loans from banks and affiliates and other payables.
Additionally, the Company maintains lines of credit with large
financial institutions which include daily demand loans, letters of
credit and reverse repurchase agreements to meet financing needs.
All of these lines of credit require collateral to be pledged, and
the borrowings may not exceed the value of the collateral. The
Company believes that such lines will be available as long as
collateral is available.
As a registered broker-dealer and futures commission merchant,
Rodman is required by the SEC and CFTC to maintain specific amounts
of net capital to meet its customers' obligations. As of June 30,
1995, Rodman's net capital, as defined, was $7.61 million, which was
$6.11 million in excess of the required net capital.
During the quarter ended June 30, 1995, the Company made the
strategic decision to shift its commodities and financial futures
business from a clearing futures commission merchant to that of a
non-clearing futures commission merchant. As a result of this
decision, the Company reduced the number of employees by
approximately 40 and sold two exchange memberships as of June 30.
The Company is in the process of selling an additional six
memberships. The effect on revenues will be a decrease of
approximately $20 million on an annualized basis. The effect of
implementing this strategy also was to increase working capital by
approximately $1.44 million, net capital by approximately $6.12
million, and the amount that net capital exceeds the industry early
warning capital level by $9.49 million.
On June 22, 1994, the Company borrowed $10,000,000 from Confia,
S.A., Institucion de Banca Multiple, Abaco Grupo Financiero
("Confia, S.A."), an affiliated company of the Company's majority
stockholder, Abaco Casa de Bolsa, S.A. de C.V., Abaco Grupo
Financiero ("Abaco"). The loan was renewed most recently on
June 19, 1995 for a six month term. Management of the Company
believes that Confia, S.A. will continue to renew the loan for
additional six month periods. Because of the higher prevailing
interest rates in Mexico, the interest rate is 23%. Management of
the Company is engaged in discussions with Confia, S.A. concerning a
change in the nature of the short-term borrowing. It also has
continued its discussions with third parties concerning potential
replacement financing.
Rodman's subordinated borrowings have maturities at dates within the
next twelve months as follows:
September 30, 1995 $ 2,500,000
December 18, 1995 $10,000,000
The subordinated borrowing due September 30, 1995, which is from an
unrelated party, will either be renewed or repaid, depending on
Rodman's capital needs, renewal terms and other factors. If the
borrowing is repaid, the repayment will be funded from cash
reserves. The $10,000,000 subordinated borrowing is part of a
senior subordinated revolving credit facility between Rodman and the
Company terminating on June 15, 1997, which facility currently is
funded by the Company's borrowing from Confia, S.A. discussed above.
It is the intention of management of the Company and Rodman to
extend this subordinated borrowing through June 1998. To the extent
that such subordinated borrowing is required for Rodman's continued
compliance with minimum net capital requirements, it may not be
repaid.
Rodman also is in discussions with several unrelated parties to
increase its subordinated borrowings and regulatory net capital. If
Rodman is unable to obtain such capital, it may be unable to expand
its businesses but should be able to maintain its current level of
activities provided that it does not sustain substantial additional
losses (and provided that it renews the Confia, S.A. loan or obtains
replacement financing as discussed above). In the event that Rodman
is unable to obtain additional capital and wishes to expand in
certain areas, or in the event that it sustains substantial losses,
it may reduce its activities in areas it identifies as
insufficiently profitable to justify the regulatory capital required
to conduct them.
The Company relocated three of its offices during the second quarter
of 1995. The Company negotiated tenant build-out concessions and is
finalizing an equipment leasing arrangement for approximately $6.0
million in financing in order to minimize the impact of such
relocations on the Company's liquidity. Rodman funded approximately
$3.0 million through June 30, 1995, such amounts should be recouped
when the equipment leasing transaction is completed. The Company
has analyzed the effect of the Mabon transaction on its office space
and equipment requirements and believes that the impact on liquidity
and capital will not be material. The Company does not anticipate
any other material capital expenditures or investments during the
next year. Future expenditures, if any, are expected to be funded
by cash generated from operations and other traditional means of
financing.
In the six months ended June 30, 1995, the Company used cash and
cash equivalents of $29.20 million (exclusive of the decrease in
securities purchased under agreements to resell of $29,651,000) from
operating activities primarily related to the decrease in security
inventory positions. In the six months ended June 30, 1994, the
Company's operations used $1.84 million.
In the six months ended June 30, 1995, the Company's financing
activities provided $3.37 million. In the six months ended June 24,
1994, the Company's financing activities generated $12.99 million.
In the six months ended June 30, 1995, the Company used $4.48
million from investing activities, as compared to the six months
ended June 24, 1994, when the Company provided $752,000 from
investing activities.
RODMAN & RENSHAW CAPITAL GROUP, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held an annual meeting of its stockholders on June 7,
1995. At the meeting, the stockholders elected the following
directors by the number of votes indicated.
FOR WITHHELD
Alexander C. Anderson 6,288,615 26,795
Paul C. Blackman 6,290,291 25,119
Peter Boneparth 6,290,883 24,527
Eduardo Camarena Legaspi 6,288,515 26,895
Charles W. Daggs, III 6,287,337 28,073
Jorge Antonio Garcia Garza 6,288,227 27,183
Francis L. Kirby 6,288,396 27,014
Jorge Lankenau Rocha 6,288,315 27,095
Thomas E. Meade 6,288,052 27,358
Richard Pigott 6,290,883 24,527
Keith F. Pinsoneault 6,288,252 27,158
Federico Richardson Lamas 6,288,466 26,944
David S. Ruder 6,291,015 24,395
Joseph P. Shanahan 6,289,527 25,883
David H. Shulman 6,289,824 25,586
The stockholders also ratified the appointment of Coopers & Lybrand
L.L.P. as the Company's independent auditors for the year ending
December 31, 1995. The results of the voting were as follows:
For Against Abstain Non-Vote
6,291,413 22,039 1,958 0
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - The following exhibits are included
herein or are incorporated by reference
(3.1) Amended and Restated Bylaws of Rodman
& Renshaw Capital Group, Inc.
(10.2) Employment Agreement dated as of
April 1, 1995, between Rodman &
Renshaw, Inc. and Edwin J. McGuinn,
Jr. (Management Contract)
(27.1) Financial Data Schedule
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the
quarter ended June 30, 1995.<PAGE>
SIGNATURES
----------
Pursuant to the requirement of Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
RODMAN & RENSHAW CAPITAL GROUP, INC.
(Registrant)
Date: August 11, 1995 By: /s/ John T. Hague
---------------------------------
John T. Hague
Chief Financial Officer
Date: August 11, 1995 By: /s/ Charles W. Daggs, III
----------------------------------
Charles W. Daggs, III
President and Chief Executive
Officer
EXHIBIT 3.1
AMENDED AND RESTATED
BY-LAWS
OF
RODMAN & RENSHAW, INC.
ARTICLE I
OFFICES
SECTION 1.1. Registered Office. The registered office of
the corporation in the State of Delaware shall be located at the
office of The Corporation Trust Company in the City of Wilmington,
County of New Castle. The name of the corporation's registered
agent at such address shall be The Corporation Trust Company. The
registered office and registered agent of the corporation may be
changed from time to time by action of the board of directors.
SECTION 1.2. Other Offices. The corporation also may have
offices at such other places both within or without the State of
Delaware as the board of directors may from time to time determine
or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 2.1. Annual Meeting. The annual meeting of the
stockholders shall be held at such time as may be provided in a
resolution of the board of directors, for the purposes of electing
directors and for the transaction of such other business as may
come before the meeting. The time and place of the annual meeting
shall be determined by the president of the corporation; provided,
however, that if the president does not act, the board of directors
shall determine the time and place of such meeting.
SECTION 2.2. Special Meetings. Except as otherwise
prescribed by statute, special meetings of the stockholders for any
purpose or purposes may be called and the location thereof
designated by the board of directors.
SECTION 2.3. Place of Meetings. Each meeting of the
stockholders shall be held at the principal executive office of the
corporation, unless the board of directors shall by resolution
designate any other place, within or without the State of Delaware,
as the place of such meeting.
SECTION 2.4. Notice. Written or printed notice stating the
place, date and time of each annual or special meeting of the
stockholders and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given to each
stockholder entitled to vote thereat not less than ten (10) days
nor more than sixty (60) days before the date of the meeting.
Whenever under the provisions of applicable law, the certificate of
incorporation or these by-laws notice is required to be given to
any stockholder, director or member of any committee designated by
the board of directors, it shall not be construed to require
personal delivery and such notice may be given in writing by
depositing it in the United States mails, air mail or first class,
postage prepaid, (or by telefax) addressed to such stockholder,
director or member either at the address of such stockholder,
director or member as it appears on the books of the corporation
or, in the case of such a director or member, at his business
address; and such notice shall be deemed to be given at the time
when it is thus deposited in the United States mails (or delivered
by telefax over the telephone lines).
SECTION 2.5. Waiver of Notice. Whenever any notice is
required to be given under the provisions of the statutes, the
certificate of incorporation, or these by-laws, a waiver thereof in
writing signed by the person or persons entitled to such notice,
whether before, at or after the time stated therein, shall be
deemed equivalent thereto. Attendance by a person at a meeting
shall constitute a waiver of notice of such meeting, except when
the person attends a meeting for the express purpose of objecting,
at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any regular
or special meeting of the stockholders, directors or committee of
directors need be specified in any written waiver of notice unless
so required by statute, the certificate of incorporation or these
by-laws.
SECTION 2.6. Stockholders List. At least ten (10) days
before every meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in
alphabetical order, and showing the address of each such
stockholder and the number of shares registered in the name of each
such stockholder, shall be prepared by the officer having charge of
the stock ledger. Such list shall be open to examination of any
stockholder of the corporation during ordinary business hours, for
any purpose germane to the meeting, for a period of at least ten
(10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which shall be specified in the
notice of the meeting or, if not so specified, at the place where
the meeting is to be held. The list shall also be produced and
kept at the time and place of meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
The stock ledger shall be the only evidence as to who are the
stockholders entitled to examine the stock ledger, the list
required by this section or the books of the corporation, or to
vote in person or by proxy at any meeting of stockholders.
SECTION 2.7. Quorum. The holders of a majority of the
outstanding shares of capital stock entitled to vote, present in
person or represented by proxy, shall be requisite for, and shall
constitute, a quorum at all meetings of the stockholders of the
corporation for the transaction of business, except as otherwise
provided by statute, the certificate of incorporation or these
by-laws. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders
entitled to vote thereat present in person or represented by proxy
shall have power to adjourn the meeting from time to time until a
quorum shall be present or represented. At such adjourned meeting
at which a quorum shall be present or represented, any business may
be transacted which might have been transacted at the meeting as
originally notified.
SECTION 2.8. Adjourned Meetings. When a meeting is
adjourned to another time and place, notice need not be given of
the adjourned meeting if the time and place thereof are announced
at the meeting at which the adjournment is taken. At the adjourned
meeting the corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for
more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, a notice of the
adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
SECTION 2.9. Vote Required. When a quorum is present, the
affirmative vote of a majority of shares present in person or
represented by proxy at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless the
question is one upon which by express provisions of an applicable
law or of the certificate of incorporation a different vote is
required, in which case such express provision shall govern and
control the decision of such question.
SECTION 2.10. Voting Rights. Except as otherwise provided by
the General Corporation Law of the State of Delaware or by the
certificate of incorporation of the corporation or any amendments
thereto and subject to Section 7.6 of ARTICLE VII hereof, every
stockholder shall be entitled to one vote for each share of common
stock held by such stockholder.
SECTION 2.11. Proxies. Each stockholder entitled to vote at
a meeting of stockholders or to express consent or dissent to
corporate action in writing without a meeting may authorize another
person or persons to act for him or her by proxy, but no such proxy
shall be voted or acted upon after three (3) years from its date,
unless the proxy provides for a longer period. At each meeting of
the stockholders, and before any voting commences, all proxies
filed at or before the meeting shall be submitted to and examined
by the secretary or a person designated by the secretary, and no
shares may be represented or voted under a proxy that has been
found to be invalid or irregular.
SECTION 2.12. Voting of Certain Shares. Shares standing in
the name of another corporation, domestic or foreign, and entitled
to vote may be voted by such officer, agent, or proxy as the
by-laws of such corporation may prescribe or, in the absence of
such provision, as the board of directors of such corporation may
determine.
SECTION 2.13. Action by Written Consent. Unless otherwise
provided in the certificate of incorporation, any action required
to be taken at any annual or special meeting of stockholders of the
corporation, or any action which may be taken at any annual or
special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken and bearing
the dates of signature of the stockholders who signed the consent
or consents, shall be signed by the holders of outstanding capital
stock of the corporation having not less than the minimum number of
votes that would be necessary to authorize or take such action at
a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered to the corporation by delivery to
its registered office in the state of Delaware, the principal place
of business of the corporation, or an officer or agent of the
corporation having custody of the book or books in which
proceedings of meetings of the stockholders are recorded. Delivery
made to the registered office of the corporation shall be by hand
or by certified or registered mail, return receipt requested. All
consents properly delivered in accordance with this section shall
be deemed to be recorded when so delivered. No written consent
shall be effective to take the corporate action referred to therein
unless, within sixty (60) days of the earliest dated consent
delivered to the corporation as required by this section, written
consents signed by the holders of a sufficient number of shares to
take such corporate action are so recorded. Prompt notice of the
taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who
have not consented in writing. Any action taken pursuant to such
written consent or consents of the stockholders shall have the same
force and effect as if taken by the stockholders at a meeting
thereof.
SECTION 2.14. Treasury Stock. Shares of its own stock
belonging to the corporation or to another corporation, if a
majority of the shares entitled to vote in the election of
directors of such other corporation is held, directly or
indirectly, by such corporation, shall not be entitled to vote nor
counted for quorum purposes. Nothing in this section shall be
construed to limit the right of this corporation to vote shares of
its own stock held by it in a fiduciary capacity.
<PAGE>
ARTICLE III
DIRECTORS
SECTION 3.1. The number of directors shall be established
from time to time by resolution of the board of directors. The
directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy at the meeting and
entitled to vote in the election of directors. The directors shall
be elected in this manner at the annual meeting of the stockholders
in accordance with Section 2.1. of these by-laws, except as
provided in Section 3.3. of this ARTICLE III. Each director shall
hold office until a successor is duly elected and qualified or
until his earlier death, resignation or removal as hereinafter
provided.
SECTION 3.2. Management of Affairs of Corporation. The
property and business of the corporation shall be managed by or
under the direction of its board of directors, which may exercise
all such powers of the corporation and do all such lawful acts and
things as are not by statute or by the certificate of incorporation
or by these by-laws directed or required to be exercised or done by
stockholders. In case the corporation shall transact any business
or enter into any contract with a director, or with any firm of
which one or more of its directors are members, or with any trust,
firm, corporation or association in which any director is a
stockholder, director or officer or otherwise interested, the
officers of the corporation and directors in question shall be
severally under the duty of disclosing all material facts as to
their interest to the remaining directors promptly if and when such
interested officers or such interested directors in question shall
become advised of the circumstances. In the case of continuing
relationships in the normal course of business such disclosure
shall be deemed effective, when once given, as to all transactions
and contracts subsequently entered into.
SECTION 3.3. Resignations and Vacancies. Any director may
resign at any time by giving written notice to the board of
directors or to the president. Any such resignation shall take
effect at the date of the receipt of such notice or at any later
time specified therein; and, unless otherwise specified therein,
the acceptance of such resignation shall not be necessary to make
it effective. If, at any other time than the annual meeting of the
stockholders, any vacancy occurs in the board of directors caused
by resignation, death, retirement, disqualification or removal from
office of any director or otherwise, or any new directorship is
created by an increase in the authorized number of directors, a
majority of the directors then in office, although less than a
quorum, may choose a successor, or fill the newly created
directorship, and the director so chosen shall hold office until
the next annual election of directors by the stockholders and until
his successor shall be duly elected and qualified, unless sooner
displaced.
SECTION 3.4. Removal. Any director or the entire board of
directors may be removed, with or without cause, by the affirmative
vote of the holders of a majority of the shares then entitled to
vote at an election of directors.
SECTION 3.5. Annual Meetings. The annual meeting of the
board of directors shall be held, without other notice than this
by-law, immediately after, and at the same place as, the annual
meeting of the stockholders.
SECTION 3.6. Special Meetings. Special meetings of the
board of directors may be called by the president and shall be
called by the secretary at the request of any director[s], to be
held at such time and place, either within or without the State of
Delaware, as shall be designated by the call and specified in the
notice of such meeting. Notice thereof shall be given as provided
in Section 3.7 of these by-laws.
SECTION 3.7. Notice of Meetings. Regular meetings, other
than the annual meeting, of the board of directors may be held
without notice at such time and at such place as shall from time to
time be determined by resolution of the board. Special meetings of
the board of directors may be called on at least twenty-four (24)
hours' notice to each director, either personally, by telephone, by
mail or by telefax. Any director may waive notice of any meeting.
SECTION 3.8. Quorum Required Vote and Adjournment. At each
meeting of the board of directors, the presence of not less than a
majority of the whole board shall be necessary and sufficient to
constitute a quorum, and the act of a majority of a whole board
shall be the act of the board of directors, except as may be
otherwise specifically provided by statute or these by-laws. If a
quorum shall not be present at any meeting of directors, the
directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until
a quorum shall be present.
SECTION 3.9. Communications Equipment. Unless otherwise
restricted by the certificate of incorporation, any member of the
board of directors or of any committee designated by the board may
participate in a meeting of the directors or committee by means of
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
other, and participation in a meeting by means of such equipment
shall constitute presence in person at such meeting.
SECTION 3.10. Presumption of Assent. Unless otherwise
provided by statute, a director of the corporation who is present
at a meeting of the board of directors at which action is taken on
any corporate matter shall be presumed to have assented to the
action taken unless his dissent shall be entered in the minutes of
the meeting or unless he shall file his written dissent to such
action with the person acting as secretary of the meeting before
the adjournment thereof or shall forward such dissent by registered
mail to the secretary of the corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply
to a director who voted in favor of such action.
SECTION 3.11. Action By Written Consent. Unless otherwise
restricted by the certificate of incorporation or these by-laws,
any action required or permitted to be taken at any meeting of the
board of directors, or of any committee thereof, may be taken
without a meeting, if a written consent thereto is signed by all
members of the board or of such committee, as the case may be, and
such written consent is filed with the minutes of proceedings of
the board or committee.
SECTION 3.12. Presiding Officer. The presiding officer at
any meeting of the board of directors shall be the president or, in
his absence, any other director elected chairman by vote of a
majority of the directors present at the meeting.
SECTION 3.13. Executive Committee. The board of directors
may, by resolution passed by a majority of the whole board,
designate two or more directors of the corporation to constitute an
executive committee, which, to the extent provided in the
resolution and by Delaware law, shall have and may exercise all the
powers and authority of the board of directors in the management of
the business and affairs of the corporation and may authorize the
seal of the corporation to be affixed to all papers which may
require it.
SECTION 3.14. Other Committees. The board of directors may,
by resolution passed by a majority of the whole board, designate
such other committees as it may from time to time determine. Each
such committee shall consist of one or more directors and shall
serve for such term and shall have and may exercise, during
intervals between meetings of the board of directors, such duties,
functions and powers as the board of directors may from time to
time prescribe, subject to the limitations of Delaware law.
SECTION 3.15. Quorum and Manner of Acting - Committees. The
presence of a majority of members of any committee shall constitute
a quorum for the transaction of business at any meeting of such
committee, and the act of a majority of those present shall be
necessary for the taking of any action thereat.
SECTION 3.16. Committee Chairman Books and Records. Etc. The
chairman of each committee shall be selected from among the members
of the committee by the board of directors.
Each committee shall keep a record of its acts and
proceedings, and all actions of each committee shall be reported to
the board of directors at its next meeting.
Each committee shall fix its own rules of procedure not
inconsistent with these by-laws or the resolution of the board of
directors designating such committee and shall meet at such times
and places and upon such call or notice as shall be provided by
such rules.
SECTION 3.17. Fees and Compensation of Directors. Directors
shall not receive any stated salary for their services as such;
but, by resolution of the board of directors, a fixed fee, with or
without expenses of attendance, may be allowed for attendance at
each regular or special meeting of the board. Members of the board
shall be allowed their reasonable traveling expenses when actually
engaged in the business of the corporation. Members of any
committee may be allowed like fees and expenses for attending
committee meetings. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
SECTION 3.18. Reliance Upon Records. Every director of the
corporation, 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 records of the
corporation and upon such information, opinions, reports or
statements presented to the corporation by any of the corporation's
officers or employees, or committees of the board of directors, or
by any other person as to matters the director reasonably believes
are within such other person's professional or expert competence
and who has been selected with reasonable care by or on behalf of
the corporation.
SECTION 3.19. Dividends and Reserves. Dividends upon stock
of the corporation may be declared by the board of directors at any
regular or special meeting, pursuant to law. Dividends may be paid
in cash, in property, in shares of stock or otherwise in the form,
and to the extent, permitted by law. The board of directors may
set apart, out of any funds of the corporation available for
dividends, a reserve or reserves for working capital or for any
other lawful purpose, and also may abolish any such reserve in the
manner in which it was created.
ARTICLE IV
OFFICERS
SECTION 4.1. Offices and Official Positions. The officers
of the corporation shall consist of a president, a secretary, and
a treasurer, and may consist of a chief operating officer, chief
financial officer and such vice presidents, assistant secretaries,
assistant treasurers, and other officers as the board of directors
shall determine. Any two or more offices may be held by the same
person. The board of directors may choose not to fill any office
for any period as it may deem advisable. None of the officers need
be a director, a stockholder of the corporation or a resident of
the State of Delaware. The board of directors may from time to
time establish, and abolish, official positions within the
divisions into which the business and operations of the corporation
are divided, pursuant to Section 5.1 of these by-laws, and assign
titles and duties to such positions. Those appointed to official
positions within divisions may, but need not, be officers of the
corporation. The board of directors shall appoint officers to
official positions within a division and may with or without cause
remove from such a position any person appointed to it. In any
event, the authority incident to an official position within a
division shall be limited to acts and transactions within the scope
of the business and operations of such division.
SECTION 4.2. Election and Term of Office. The officers of
the corporation shall be elected annually by the board of directors
at their first meeting held after each regular annual meeting of
the stockholders. If the election of officers shall not be held at
such meeting of the board, such election shall be held at a regular
or special meeting of the board of directors as soon thereafter as
may be convenient. Each officer shall hold office until his
successor is elected and qualified or until his death, resignation
or removal as hereinafter provided.
SECTION 4.3. Removal and Resignation. Any officer may be
removed, either with or without cause, by a majority of the
directors then in office at any regular or special meeting of the
board; but such removal shall be without prejudice to the contract
rights, if any, of such person so removed. Any officer may resign
at any time by giving written notice to the board of directors, to
the president or to the secretary of the corporation. Any such
resignation shall take effect at the date of the receipt of such
notice or at any later time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 4.4. Vacancies. A vacancy in any office because of
death, resignation, removal, or any other cause may be filled for
the unexpired portion of the term by the board of directors.
SECTION 4.5. President. The president shall be the chief
executive officer of the corporation. He shall have authority to
designate the duties and powers of other officers and delegate
special powers and duties to specified officers, so long as such
designation shall not be inconsistent with the statutes, these
by-laws or action of the board of directors. He shall also have
power to execute, and shall execute, deeds, mortgages, bonds,
contracts or other instruments of the corporation except where
required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be
expressly delegated by the board of directors or by the president
to some other officer or agent of the corporation. The president
may sign with the secretary or an assistant secretary, or the
treasurer or an assistant treasurer, certificates for shares of
stock of the corporation the issuance of which shall have been duly
authorized by the board of directors, and shall vote, or give a
proxy to any other person to vote, all shares of the stock of any
other corporation standing in the name of the corporation. The
president in general shall have all other powers and shall perform
all other duties which are incident to the chief executive office
of a corporation or as may be prescribed by the board of directors
from time to time.
SECTION 4.6. Chief Operating Officer. Subject to direction
from the president, the chief operating officer shall have such
general powers and duties of direction and control of the business
of the corporation as shall be necessary to carry out and give
effect to the corporate policies and purposes adopted by the board
of directors. The chief operating officer shall report to the
board of directors through, and shall be responsible to, the
president.
SECTION 4.7. Chief Financial Officer. The chief financial
officer shall have overall responsibility for the financial affairs
of the corporation, including the preparation of all financial
reports, audits and returns of the corporation. He also shall have
responsibility for making recommendations concerning the
corporation's fiscal policies and all financial matters affecting
the corporation. The chief financial officer shall report to the
board of directors through, and shall be responsible to, the
president.
SECTION 4.8. Vice Presidents.
(a) Each executive vice president shall have power to
execute, and shall execute, deeds, mortgages, bonds, contracts
or other instruments of the corporation except where required
or permitted by law to be otherwise signed and executed and
except as otherwise directed by the board of directors, the
president or the chief operating officer. In the absence of
the president, at his request or in the event of his inability
or refusal to act, the executive vice presidents in order of
their rank as fixed by the board of directors or, if not
ranked, the executive vice president designated by the board
of directors or the president, shall perform all duties of the
president and, when so acting, shall have all the powers of,
and be subject to all the restrictions upon, the president.
Any executive vice president may sign, with the secretary or
an assistant secretary, or the treasurer or an assistant
treasurer, certificates for shares of stock of the corporation
the issuance of which shall have been duly authorized by the
board of directors. Executive vice presidents shall have such
other powers and perform such other duties, not inconsistent
with the statutes, these by-laws, or action of the board of
directors, as from time to time may be prescribed for them,
respectively, by the board of directors or the president.
(b) Each senior vice president shall have power to execute,
and shall execute, deeds, mortgages, bonds, contracts or other
instruments of the corporation except where required or
permitted by law to be otherwise signed and executed and
except as otherwise directed by the board of directors, the
president or the chief operating officer, provided, however,
that such power shall be limited to instruments within the
scope of the business and operations of the department within
which such senior vice president works. Senior vice
presidents shall have such other powers and perform such other
duties, not inconsistent with the statutes, these by-laws, or
action of the board of directors, as from time to time may be
prescribed for them, respectively, by the board of directors,
the president or other appropriate officer of the corporation.
(c) Vice presidents shall have such powers and perform such
duties, not inconsistent with the statutes, these by-laws, or
action of the board of directors, as from time to time may be
prescribed for them, respectively, by the board of directors
or the president.
SECTION 4.9. Secretary. The secretary shall: (a) keep the
minutes of the meetings of the stockholders, the board of directors
and committees of directors, in one or more books provided for that
purpose; (b) see that all notices are duly given in accordance with
the provisions of these by-laws or as required by law; (c) have
charge of the corporate records and of the seal of the corporation;
(d) affix the seal of the corporation, if any, or a facsimile
thereof, or cause it to be affixed, to all certificates for shares
prior to the issue thereof and to all documents the execution of
which on behalf of the corporation under its seal is duly
authorized by the board of directors or otherwise in accordance
with the provisions of these by-laws; (e) keep a register of the
post office address of each stockholder, director and committee
member which shall from time to time be furnished to the secretary
by such stockholder, director or member; (f) sign with the
president or an executive vice president, certificates for shares
of stock of the corporation, the issuance of which shall have been
duly authorized by resolution of the board of directors; (g) have
general charge of the stock transfer books of the corporation; and
(h) 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 by the president or by the board of directors. He
may delegate such details of the performance of duties of his
office as may be appropriate in the exercise of reasonable care to
one or more persons in his stead, but shall not thereby be relieved
of responsibility for the performance of such duties.
SECTION 4.10. Treasurer. The treasurer shall: (a) be
responsible to the board of directors for the receipt, custody and
disbursement of all funds and securities of the corporation; (b)
receive and give receipts for monies due and payable to the
corporation from any source whatsoever and deposit all such monies
in the name of the corporation in such banks, trust companies or
other depositories as shall from time to time be selected in
accordance with the provisions of Section 6.4. of these by-laws;
(c) disburse the funds of the corporation as ordered by the board
of directors, the president or the chief financial officer or as
otherwise required in the conduct of the business of the
corporation; (d) render to the president, the chief financial
officer or the board of directors, upon request, an account of all
his transactions as treasurer and on the financial condition of the
corporation; and (e) in general, perform all the duties incident to
the office of treasurer and such other duties as from time to time
may be assigned to him by the president, the chief financial
officer, the board of directors or these by-laws. He may sign,
with the president, or an executive vice president, certificates
for shares of stock of the corporation, the issuance of which shall
have been duly authorized by resolution of the board of directors.
He may delegate such details of the performance of duties of his
office as may be appropriate in the exercise of reasonable care to
one or more persons in his stead, but shall not thereby be relieved
of responsibility for the performance of such duties. If required
by the board of directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum, and with such surety
or sureties, as the board of directors shall determine.
SECTION 4.11. Assistant Treasurers and Assistant Secretaries.
The assistant treasurers and assistant secretaries shall perform
all functions and duties which the secretary or treasurer, as the
case may be, may assign or delegate; but such assignment or
delegation shall not relieve the principal officer from the
responsibilities and liabilities of his office. In addition, an
assistant secretary or an assistant treasurer, as thereto
authorized by the board of directors, may sign with the president,
or an executive vice president, certificates for shares of the
corporation, the issuance of which shall have been duly authorized
by resolution of the board of directors; and the assistant
secretaries and assistant treasurers shall, in general, perform
such duties as shall be assigned to them by the secretary or the
treasurer, respectively, or by the president or by the board of
directors. The assistant treasurers shall, if required by the
board of directors, give bonds for the faithful discharge of their
duties in such sums, and with such surety or sureties, as the board
of directors shall determine.
SECTION 4.12. Salaries. The salaries of the officers shall
be fixed from time to time by the board of directors or by such
officer as it shall designate for such purpose or as it shall
otherwise direct. No officer shall be prevented from receiving a
salary or other compensation by reason of the fact that he is also
a director of the corporation.
ARTICLE V
DIVISIONS
SECTION 5.1. Divisions of the Corporation. The board of
directors shall have the power to create and establish such
operating divisions of the corporation as it may from time to time
deem advisable.
SECTION 5.2. Official Positions Within a Division. The
president may appoint individuals, whether or not they are officers
of the corporation, to, and may, with or without cause, remove them
from, official positions established within a division, but not
filled by the board of directors. (See also Section 4.1 of these
by-laws.)
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 6.1. Contracts and Other Instruments. The board of
directors may authorize any officer(s), agent(s) or employee(s) to
enter into any contract or execute and deliver any instrument in
the name of and on behalf of the corporation, or of any division
thereof, and such authority may be general or confined to specific
instances.
SECTION 6.2. Loans. No loans shall be contracted on behalf
of the corporation, and no evidence of indebtedness shall be issued
in the name of the corporation, unless authorized by a resolution
of the board of directors. Such authority may be general or
confined to specific instances.
SECTION 6.3. Checks, Drafts, etc. All checks, demands,
drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation,
shall be signed by such officer or officers, agent or agents of the
corporation, and in such manner, as shall from time to time be
authorized by the board of directors.
SECTION 6.4. Deposits. All funds of the corporation, not
otherwise employed shall be deposited from time to time to the
credit of the corporation in such banks, trust companies or other
depositories as the board of directors may select.
ARTICLE VII
CERTIFICATES OF STOCK AND THEIR TRANSFER
SECTION 7.1. Certificates of Stock. The certificates of
stock of the corporation shall be in such form as may be determined
by the board of directors, shall be numbered and shall be entered
in the books of the corporation as they are issued. They shall
exhibit the holder's name and number of shares and shall be signed
by the president or an executive vice president and by the
treasurer or an assistant treasurer or the secretary or an
assistant secretary. If any stock certificate is signed (a) by a
transfer agent or an assistant transfer agent or (b) by a transfer
clerk acting on behalf of the corporation and a registrar, the
signature of any officer of the corporation may be facsimile. In
case any such officer whose facsimile signature has thus been used
on any such certificate shall cease to be such officer, whether
because of death, resignation or otherwise, before such certificate
has been issued, such certificate may nevertheless be issued with
the same effect as if he were such officer at the date of issue.
All certificates properly surrendered to the corporation for
transfer shall be cancelled and no new certificate shall be issued
to evidence transferred shares until the former certificate for at
least a like number of shares shall have been surrendered and
cancelled and the corporation reimbursed for any applicable taxes
on the transfer, except that in the case of a lost, destroyed or
mutilated certificate a new one may be issued therefor upon such
terms, and with such indemnity (if any) to the corporation, as the
board of directors may prescribe specifically or in general terms
or by delegation to a transfer agent for the corporation. (See
Section 7.2.).
SECTION 7.2. Lost, Stolen or Destroyed Certificates. The
board of directors in individual cases, or by general resolution or
by delegation to the transfer agent, may direct a new certificate
or certificates or uncertificated shares to be issued in place of
any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen or destroyed, upon
the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates, the
board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or to
give the corporation a bond sufficient to indemnify it against any
claim that may be made against the corporation on account of the
alleged loss, theft or destruction of such certificate or the
issuance of a new certificate or uncertificated shares.
SECTION 9510 Transfers of Stock. Upon surrender to the
corporation or the transfer agent of the corporation of a
certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, and
upon payment of applicable taxes with respect to such transfer, and
in compliance with any restrictions on transfer applicable to the
certificate or shares represented thereby of which the corporation
shall have notice and subject to such rules and regulations as the
board of directors may from time to time deem advisable concerning
the transfer and registration of certificates for shares of capital
stock of the corporation, the corporation shall issue a new
certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon its books. Transfers
of shares shall be made only on the books of the corporation by the
registered holder thereof or by his attorney or successor duly
authorized as evidenced by documents filed with the secretary or
transfer agent of the corporation.
SECTION 7.4. Restrictions on Transfer. Any stockholder may
enter into an agreement with other stockholders or with the
corporation providing for reasonable limitation or restriction on
the right of such stockholder to transfer shares of capital stock
of the corporation held by him, including, without limiting the
generality of the foregoing, agreements granting to such other
stockholders or to the corporation the right to purchase for a
given period of time any of such shares on terms equal to terms
offered such stockholders by any third party. Any such limitation
or restriction on the transfer of shares of this corporation must
be set forth conspicuously on certificates representing shares of
capital stock or, in the case of uncertificated shares, contained
in a notice sent pursuant to Section 151(f) of the General
Corporation Law of Delaware, in which case the corporation or the
transfer agent shall not be required to transfer such shares upon
the books of the corporation without receipt of satisfactory
evidence of compliance with the terms of such limitation or
restriction.
SECTION 7.5. Fixing Record Date. In order that the
corporation may determine the stockholders entitled to notice of or
to vote at any meeting of stockholders or any adjournment thereof,
the board of directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the
record date is adopted by the board of directors, and which record
date shall not be more than sixty (60) nor less than ten (10) days
before the date of such meeting. If no record date is fixed by the
board of directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on
which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is
held. A determination of stockholders of record entitled to notice
of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the board of
directors may fix a new record date for the adjourned meeting.
In order that the corporation may determine the stockholders
entitled to consent to corporate action in writing without a
meeting, the board of directors may fix a record date, which record
date shall not precede the date upon which the resolution fixing
the record date is adopted by the board of directors, and which
date shall not be more than ten days after the date upon which the
resolution fixing the record date is adopted by the board of
directors. If no record date has been fixed by the board of
directors, the record date for determining stockholders entitled to
consent to corporate action in writing without a meeting, when no
prior action by the board of directors is required, shall be the
first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the
corporation by delivery to its registered office, its principal
place of business, or an officer or agent of the corporation having
custody of the book in which proceedings of meetings of
stockholders are recorded.
In order that the corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution
or allotment of any rights or the stockholders entitled to exercise
any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the board of
directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date
is adopted, and which record date shall be not more than 60 days
prior to such action. If no record date is fixed, the record date
for determining stockholders for any such purpose shall be at the
close of business on the day on which the board of directors adopts
the resolution relating thereto.
SECTION 7.6. Stockholders of Record. The corporation shall
be entitled to treat the holder of record of any share or shares of
stock as the holder in fact thereof and accordingly, shall not be
bound to recognize any equitable or other claim to or interest in
such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as
otherwise provided by the laws of Delaware.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. In General. Each person who at any time is or
shall have been a director, officer, employee or agent of the
corporation, or is or shall have been serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
and his heirs, executors and administrators, shall be indemnified
by this corporation in accordance with and to the full extent
permitted by the Delaware General Corporation Law as in effect at
the time of adoption of this by-law or as amended from time to
time.
SECTION 8.2. Insurance. If authorized by the board of
directors, the corporation may purchase and maintain insurance on
behalf of any person to the full extent permitted by the General
Corporation Law of Delaware as in effect at the time of the
adoption of this by-law or as amended from time to time.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1. Fiscal Year. The fiscal year of the
corporation shall be fixed by resolution of the board of directors.
SECTION 9.2. Corporate Seal. The board of directors may
adopt a corporate seal which shall have inscribed thereon the name
of the corporation, and the words "CORPORATE SEAL" and "DELAWARE;"
and it shall otherwise be in the form approved by the board of
directors. Such seal may be used by causing it, or a facsimile
thereof, to be impressed or affixed or otherwise reproduced.
ARTICLE X
AMENDMENTS
These by-laws may be amended, altered, or repealed and new
by-laws adopted at any meeting of the board of directors by a
majority vote. The fact that the power to adopt, amend, alter, or
repeal the by-laws has been conferred upon the board of directors
shall not divest the stockholders of the same powers.
Adopted January 10, 1994
Amended November 17, 1994
Amended June 7, 1995
EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT dated as of the 1st day of April, 1995, by and
between RODMAN & RENSHAW, INC., a Delaware corporation with its
principal place of business at 120 South LaSalle Street, Chicago,
Illinois 60603 (the "Company"), and EDWIN J. MCGUINN, JR., an
individual residing at 103 Doubling Road, Greenwich, Connecticut
06830 (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to secure the employment of the
Executive with the Company on the terms and conditions set forth in
this Agreement; and
WHEREAS, the Executive desires to be so employed;
NOW, THEREFORE, in consideration of the promises and the
mutual agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. Employment, Term.
1.1 Employment. The Company agrees to employ the
Executive, and the Executive agrees to serve in the employ of the
Company, for the term set forth in Section 1.2, in the positions
and with the responsibilities, duties and authority set forth in
Section 2 and on the other terms and conditions set forth in this
Agreement.
1.2 Term. The period of the Executive's employment
under this Agreement (herein referred to as the "term of this
Agreement") shall commence on April 1, 1995 (the "Commencement
Date") and shall terminate on the second anniversary of the
Commencement Date, unless sooner terminated in accordance with this
Agreement. This Agreement shall be automatically renewed for
successive one-year terms unless either party provides written
notice to the other party of its or his desire not to renew within
30 days prior to the expiration of the initial term or any renewal
term, as the case may be, or the parties reach a written agreement
for a successive period of employment prior to the expiration of
the term hereof.
1.3 Place of Employment. The Executive's principal
place of employment shall be at the Company's principal office in
the State of New York, which office shall at all times during the
term hereof be located within a 25 mile radius of New York City;
the Executive shall travel as the rendering of the services
hereunder may require.
2. Positions, Duties. The Executive shall serve in the
position of Head of Equity Department and Co-head of Capital
Markets. The Executive shall have authority and responsibilities
appropriate and customary to such position (including the ability
to hire and fire employees in consultation with the General
Counsel, the Human Resources Department and other appropriate
senior management personnel) and shall perform, faithfully and
diligently, such duties as are consistent with such authority and
responsibilities. The Executive shall report directly to the Chief
Operating Officer of the Company. The Executive shall devote his
complete and undivided attention to the performance of his duties
and responsibilities hereunder during the normal working hours of
executive employees of the Company.
3. Salary, Bonus.
3.1 Salary. During the term of this Agreement, in
consideration of the performance by the Executive of the services
set forth in Section 2 and his observance of the other covenants
set forth herein, the Company shall pay the Executive, and the
Executive shall accept, a guaranteed base salary at the rate of
$200,000 per annum. Executive's base salary shall be payable in
accordance with the standard payroll practices of the Company.
3.2 Signing Bonus. Within fourteen (14) days of the
execution of this Agreement, the Company shall pay the Executive
$200,000.
3.3 Bonus.
(a) Minimum Guaranteed Bonus; Equity Profit Bonus. For
each full or partial fiscal year of the Company during the term of
this Agreement, the Company shall pay to the Executive the greater
of (i) the finder's fee referred to in that certain letter
agreement dated March 13, 1995 between Executive and Capital Group
(as hereinafter defined) for the first fiscal year of the Company
during the term hereof, and in subsequent years during the term
hereof an amount equal to $300,000 ("Minimum Guaranteed Bonus"), or
(ii) a bonus in an amount equal to the sum of one and one-half
percent (1.5%) of revenues as hereinafter defined, ten percent
(10%) of Equity Profit, as hereinafter defined, six percent (6%) of
the Pre-Tax Profit of the Investment Banking Group, as defined in
Schedule A attached hereto, and twenty-five (25%) of any net profit
from any business group not in existence at the Company for the
first year of its operation at the time of execution of this
Agreement and brought in to the Company due to the efforts of the
Executive, but which shall be defined as revenues of said business
group, minus direct expenses of such group as defined in Section
3.3(d)(2) below. The bonus defined in this Section 3.3(a)(ii) is
hereafter referred to as the "Formula" for the first year. For the
second fiscal year of the Company during the term of this
Agreement, the Company shall pay to the Executive a bonus in an
amount equal to the sum of one percent (1%) of revenues, as
hereinafter defined, ten percent (10%) of Equity Profit, as
hereinafter defined, six percent (6%) of the Pre-Tax Profit of the
Investment Banking Group, as defined in Schedule A attached hereto,
and twenty-five (25%) of any profit for the first year of its
operation from any business group not in existence at the Company
and brought into the company due to the efforts of the executive at
the time of execution of this Agreement, but which shall be defined
as revenues of said business group, minus direct expenses of such
group as defined in Section 3.3(d)(2) below. Thereafter, any
sharing arrangement would be based on negotiations between the
Executive and the Company. In addition, the Company shall pay such
bonuses in respect of periods subsequent to the termination of the
Executive's employment as provided in Sections 6.1, 6.2, 6.4 and
6.5 hereof. Within twenty (20) days of demand therefore, the
Executive and his representatives shall have the right to inspect
the Company's books and records for the purposes of verifying the
calculation of the bonuses herein.
(b) Calculation of Bonuses. Each bonus to which the
Executive (or his estate or other legal representative) shall be
entitled in respect of any partial fiscal year shall be in an
amount equal to the product of (i) the total bonus which would have
been payable to the Executive for the whole of such fiscal year,
multiplied by (ii) a fraction, the numerator of which is the number
of days in such partial fiscal year, and the denominator of which
is 365. In the event of the termination of the employment of the
Executive pursuant to Section 6.3 of this Agreement during the
first year, the Executive shall not be entitled to any bonus except
for the greater of the Minimum Guaranteed Bonus or the Formula in
respect of the part of the first fiscal year of the Company during
which the Executive was employed by the Company. In the event of
the termination of the employment of the Executive pursuant to
Section 6.3 of this Agreement during the second year, the Executive
shall not be entitled to the minimum guaranteed bonus, or any other
bonus except for the bonus in respect of the part of the fiscal
year of the Company during which the Executive was employed by the
Company. Each bonus payable to the Executive (or his estate or
other legal representative) for any full or partial fiscal year of
the Company pursuant to this Section 3.3 shall be paid by the
Company within 45 days following the end of such fiscal year.
Notwithstanding the foregoing, the bonuses for January 1, 1997
through March 31, 1997 shall be paid within 45 days of March 31,
1997.
(c) Revenues. "Revenues" shall mean:
(1) 100% of all listed equity commissions received by
the Company (exclusive of retail commissions
generated by the Company's retail brokerage
operation, but including institutional accounts
covered by retail brokerage people);
(2) Realized revenues for over-the-counter trading on
behalf of the Company and/or customers of the
Company;
(3) 65% of all sales credits received by December 31,
1995 in connection with any public offerings;
(4) 70% of all sales credits received from January 1,
1996 through December 31, 1996 in connection with
any public offerings;
(5) 75% of all sales credits received during the term
remaining in connection with any public offerings;
(6) 100% of all sales credits received in connection
with any public underwriting of securities not
underwritten by the Corporate Finance Department;
(7) 100% of all department revenues generated by the
New York Stock Exchange Direct Access Group and/or
the "Valente Group";
(8) 100% of all monies earned or received by the
Company through, or arising out of, any business
relationship with Abaco International Corporation;
(9) 100% of all New York Stock Exchange related floor
brokerage revenues, otherwise referred to as "$2
Floor Brokerage" business.
(d) Equity Profit. For each fiscal year, the Company shall
arrive at the Equity Profit, which shall be "Revenues", as
hereinafter defined, minus all "direct expenses", as hereinafter
defined, and "certain allocated expenses", as hereinafter defined.
(1) Revenues. Revenues shall be as defined in 3.3(c) above.
(2) Direct Expenses. Direct expenses" shall mean:
(a) Salary, benefits and bonuses of all non-research
equity personnel (exclusive of signing bonuses or
other bonuses or amounts paid to personnel prior to
or reasonably contemporaneous with the commencement
of employment); With regard to Research Department
personnel, 75% of their Salary, Benefits and
Bonuses attributable to April 1, 1995 through
December 31, 1995 for fiscal year 1995 shall be
considered a "Direct Expense," 70% of their Salary,
Benefits and Bonuses earned for fiscal year 1996
shall be considered a "Direct Expense and 65% of
their Salary, Benefits and Bonuses earned for the
remaining term hereof shall be considered a "Direct
Expense;" In addition, for all years of the term of
this agreement the retail department shall bear, at
a minimum 10% of the Research Department
personnel's salary Benefits and Bonuses, (the
parties, as needed, may determine to increase this
amount as the Retail Department grows).
(b) All Travel and Entertainment expenses; Office Space
attributable to the Equity Group; Postage,
overnight, messenger and courier services,
Printing, Statistical and Subscriptions; Stationary
and PC Supplies; Consulting Fees; Advertising,
Insurance, Telephone, Market Data Services;
Equipment rental; Legal fees, settlements or legal
liabilities that arise out of events subsequent to
April 1, 1995; NYSE Seat leases; Soft Dollar
expense; Outside brokerage; NYSE dues and exchange
fees; First call expenses; Conferences.
(3) Non-Cash Compensation. Non-cash compensation received by
the Equity Department (e.g. stocks, warrants, options, etc.)
shall not be included in the calculation of Equity Profit.
Fifty percent (50%) of such non-cash compensation will be
distributed to the Equity Department to be allocated by the
Executive in his sole discretion. Said non-cash compensation
will be available for distribution within 90 days of receipt.
(4) Minimum Payments. Notwithstanding the foregoing, the
Executive shall receive, at the least, his signing bonus,
guaranteed base salary, benefits and minimum guaranteed bonus
for the first year of this Agreement, and, at the least, his
guaranteed base salary, benefits and whatever bonus the
Executive is entitled to under Section 3.3 above for the
second year of this Agreement.
(e) In the event of any change in the fiscal year of the
Company, appropriate adjustments shall be made to the provisions of
Sections 3.1 and 3.3 in order to carry out the essential intent and
principles of such Sections and in the event of the assumption of
this Agreement by any successor to the Company pursuant to a "sale
of the Company" (as defined in Section 6.4 of this Agreement),
appropriate adjustments shall be made to the definition of bonuses
in order to carry out the essential intent and principles of
Sections 3.1 and 3.3.
4. Expense Reimbursement. During the term of this
Agreement, the Company shall reimburse the Executive for all
reasonable out-of-pocket expenses incurred by him in connection
with the performance of his duties hereunder, upon the presentation
of proper invoices therefor in accordance with the Company's
policies.
5. Vacation Benefits Life Insurance.
5.1 Vacation. During the term of this Agreement, the
Executive will be entitled to vacation consistent with the policy
the company maintains for its most senior executives.
5.2 Benefits/Life Insurance. During the term of this
Agreement, the Executive will be eligible to participate in any
stock option or purchase plan, any profit-sharing or pension plan,
any deferred compensation plan, any group medical, dental, and life
or disability insurance and all other employee benefit plans and
programs offered by the Company from time to time to its senior
executive employees, subject to the provisions of such plans and
programs as in effect from time to time. Upon termination of the
employment of the Executive with the Company for any reason, the
Executive shall be entitled to purchase from the Company any life
insurance policy then owned by the Company on the life of the
Executive, for a purchase price equal to the cash surrender value
of such policy.
5.3 Stock Options. Following the execution of this
Agreement, the Company shall cause to be granted to the Executive
such stock options at such time or times options are granted to
other executives, as are (i) commensurate with his position as a
senior executive of the Company and (ii) comparable in number to
those granted to other similarly situated senior executives of the
Company.
6. Termination of Employment.
6.1 Death. In the event of the death of the Executive
during the term of this Agreement, the Company shall continue to
pay to his estate or other legal representative of the Executive
the guaranteed base salary provided for in Section 3 (at the annual
rate then in effect) until the first to occur of (i) the expiration
of a period of one (1) year from the date of the Executive's death
or (ii) the second anniversary of the Commencement Date. During
such period, the Company shall also pay to the Executive the
Minimum Guaranteed Bonus in accordance with Section 3.3 hereof.
Rights and benefits of the estate or other legal representative of
the Executive under the benefit plans and programs of the Company
shall be determined in accordance with the provisions of such plans
and programs.
6.2 Disability. If the Executive shall become
incapacitated by reason of physical or mental disability and shall
be unable to perform his normal duties hereunder for a period of
more than three (3) consecutive months, the employment of the
Executive hereunder may be terminated by the Company or the
Executive upon 30 days notice to the other. In the event of such
termination, the Company shall continue to pay to the Executive the
base salary provided for in Section 3 (at the annual rate then in
effect) until the earlier of (a) the expiration of a period of one
(1) year from the date of such termination, or (b) the second
anniversary of the Commencement Date. During such period, the
Company shall also pay to the Executive the Minimum Guaranteed
Bonus or the percentages as defined in accordance with Section 3.3
hereof, whichever bonus formula is applicable. The Company shall
continue to provide the Executive, at the expense of the Company,
with the medical insurance then provided generally to employees of
the Company, for a period of one (1) year following the termination
of the employment of the Executive. Rights and benefits of the
Executive under the benefit plans and programs of the Company shall
be determined in accordance with the provisions of such plans and
programs.
6.3 Due Cause. The employment of the Executive
hereunder may be terminated by the Company at any time for Due
Cause (as hereinafter defined), as provided herein. In the event of
such termination, the Company shall pay to the Executive the base
salary provided for in Section 3 (at the annual rate then in
effect) and the Minimum Guaranteed Bonus accrued to the date of
such termination and not theretofore paid to the Executive. Rights
and benefits of the Executive under the benefit plans and programs
of the Company shall be determined in accordance with the
provisions of such plans and programs. For purposes hereof, "Due
Cause" shall mean (a) the Executive's refusal to comply or default
in complying with the Company's reasonable directions, or (b) the
Executive's commission of a felony, or (c) the Executive's
suspension or expulsion from the securities industry; provided,
however, that the Executive shall be given written notice by the
Company that it intends to terminate the Executive's employment for
Due Cause, which notice shall specify the act or acts upon the
basis of which the Company intends so to terminate the Executive's
employment, and the Executive shall then be given the opportunity,
within seventy-two (72) hours (or such longer period as the Company
shall specify in such notice) of his receipt of such notice, to
have a meeting with the Board of Directors of the Company to
discuss such act or acts. If the basis of such written notice is an
act or acts described in clause (a) of the preceding sentence, the
Executive shall be given thirty (30) days after such meeting within
which to cease or correct such problem as herein provided, and
failing to do so, the Executive's employment by the Company shall
automatically be terminated hereunder for Due Cause. Notwith-
standing the foregoing, if there is an identical repetition of the
act or acts described in clause (a) above following the cessation
or correction of said acts to the reasonable satisfaction of the
Board, the Company shall have the right to terminate, without
regard to the thirty (30) day "cease or correct" provision, upon
written notice. In no event shall the amount of revenue generated
by the Executive or the amount of revenue generated by the Equity
Department Banking Group be relevant to a determination of "due
cause" hereunder.
6.4 Sale of the Company. The employment of the
Executive hereunder shall terminate, at the option of the Company,
upon a sale of the Company (as hereinafter defined). In the event
of such termination, the Company shall continue to pay to the
Executive, until the first to occur of (i) the second anniversary
of the Commencement Date or (ii) the expiration of a period of one
(1) year from the date of death of the Executive, the base salary
provided for in Section 3 (at the annual rate then in effect).
During such period, the Company shall also pay the Minimum
Guaranteed Bonus or other applicable bonuses in accordance with
Section 3.3 hereof in respect of the portion of the fiscal year
completed prior to the sale of the Company in accordance with
Section 3.3(b) hereof. Rights and benefits of the Executive under
the benefit plans and programs of the Company shall be determined
in accordance with the provisions of such plans and programs. As
used herein, the term "sale of the Company" shall mean any sale or
other transfer (including by means of a merger or consolidation)
which results in a change of control of the issued and outstanding
shares of voting capital stock of the Company.
6.5 Other Termination by the Company. The Company may
terminate the Executive's employment at any time for whatever
reason it deems appropriate with or without reason on 15 days
notice to the Executive; provided, however, that in the event that
such termination is not pursuant to Section 6.1, 6.2, 6.3 or 6.4,
the Company shall pay to the Executive on the date of such
termination (a) the base salary and Guaranteed Minimum Bonus
provided for in Section 3 which would have been payable from the
date of such termination to the second anniversary of the
Commencement Date (without discount for present value). In
addition, the Company shall pay to the Executive the other
percentage bonuses in respect of the fiscal year in which such
termination occurs in accordance with Section 3.3(b) hereof. The
Executive shall be under no obligation to seek subsequent
employment and upon obtaining subsequent employment shall be under
no obligation to offset any amounts earned from such subsequent
employment (whether as an employee, a consultant or otherwise)
against such payment. The Company shall continue to provide the
Executive, at the expense of the Company, with the medical
insurance then provided generally to employees of the Company, for
a period of one (1) year following the termination of the
employment of the Executive. Rights and benefits of the Executive
under the benefit plans and programs of the Company shall be
determined in accordance with the provisions of such plans
and programs.
6.6 De facto Termination. For purposes hereof, the
following acts and circumstances shall be treated as if the
Executive is terminated under Section 6.5:
(i) De facto or de lure diminution of the
Executive's title, position, responsibilities, or authority;
(ii) Location or relocation of the New York office
of the Company other than within a 25 mile radius of New York, New
York;
(iii) Location of the Executive other than at the
Company's New York office; or
(iv) Breach by the Company of any of its material
obligations hereunder that is not cured within thirty (30) days
after written notice thereof is given by the Executive to the
Company.
7. Board Representation Management Committee.
For the term of the Executive's employment by the
Company, the Executive shall be nominated to serve as a member of
each of Capital Group's Management Committee or any other committee
established to serve a substantially similar management function
within the Capital Group or the Company. The Executive shall be
nominated to serve on Capital Group's Board of Directors at the
next vacancy on such Board of Directors.
8. Successors and Assigns.
8.1 Assignment by the Company. Subject to the
provisions of Section 6.4, the Company shall require any successors
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of the Company to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. As used
in this Section 8.1, the "Company" shall mean the Company as herein
before defined and any successor to its business and/or assets as
aforesaid which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law and this Agreement
shall be binding upon, and inure to the benefit of, the Company, as
so defined.
8.2 Assignment by the Executive. The Executive may not
assign his obligations hereunder; provided, however, that nothing
herein shall preclude one or more beneficiaries of the Executive
from receiving any amount that may be payable following the
occurrence of his legal incompetency or his death and shall not
preclude the legal representative of his estate from receiving such
amount or from assigning any right hereunder to the person or
persons entitled thereto under his will or, in the case of
intestacy, to the person or persons entitled thereto under the laws
of intestacy applicable to his estate. The term "beneficiaries", as
used in this Agreement, shall mean a beneficiary or beneficiaries
so designated to receive any such amount or, if no beneficiary has
been so designated, the legal representative of the Executive (in
the event of his incompetency) of the Executive's estate.
8.3 Other Boards. Subject to written notice and
approval by the Company, the Company hereby agrees that the
Executive retains the right, absent a clearly delineated conflict
of interest, to serve as a member of the Board of Directors of
another company. Any fees or other compensation as a result of such
service shall be assigned by the Executive to the Company and
considered revenues, as defined in 3.3 (c) above, of the Equity
Department, other than fees or options granted to the Executive
prior to the date hereof.
9. Governing Law. This Agreement shall be deemed a contract
made under, and for all purposes shall be construed in accordance
with, the laws of the State of New York applicable to contracts to
be performed entirely within such State.
10. Entire Agreement. This Agreement contains all the
understandings and representations between the parties hereto
pertaining to the subject matter hereof. Effective as of the
Commencement Date, this Agreement supersedes all understandings and
agreements, whether oral or in writing, if any, previously entered
into by the Company with the Executive in any way relating to the
employment of the Executive by the Company.
11. Hold Harmless. The Company shall indemnify and hold the
Executive harmless for any costs, damages or expenses, including
reasonable attorney's fees, of any kind for any legal proceeding
brought during, or arising out of, or related to the Executive's
tenure with the Company. Moreover, the Company shall hold the
Executive harmless for all costs, damages and expenses, including
reasonable attorney's fees, for any claim or legal proceeding
arising out of or relating to the asset purchase agreement, dated
______, 1995 between the Company and Mabon Securities Corp.
12. Amendment, Modification, Waiver. No provision of this
Agreement may be amended or modified unless such amendment or
modification is agreed to in writing and signed by the Executive
and by duly authorized representatives of the Company (other than
the Executive). Except as otherwise specifically provided in this
Agreement, no waiver by either party hereto of any breach by the
other party hereto of any condition or provision of this Agreement
to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or any
prior or subsequent time, nor shall the failure of or delay by
either party hereto in exercising any right, power or privilege
hereunder operate as a waiver thereof to preclude any other or
further exercise thereof or the exercise of any other such right,
power or privilege.
13. Legal Fees. The Company shall indemnify and hold the
Executive harmless from any and all costs and expenses (including
reasonable fees and expenses of counsel) incurred by the Executive
in connection with any proceeding brought to enforce this Agreement
which results in award in the Executive's favor.
14. Arbitration. All disputes or controversies hereunder
shall be settled by arbitration pursuant to the rules of commercial
arbitration of the American Arbitration Association in New York
City, New York. The costs of the arbitration shall be paid by the
Company in the event the arbitration results in an award of damages
in the Executive's favor, with the attorneys fees paid by the
Company pursuant to paragraph 13 above. The determination of the
arbitrator shall be final and binding on the parties hereto and
judgment on it may be entered in any court of competent
jurisdiction.
15. Notices. Any notice to be given hereunder shall be in
writing and delivered personally or sent by certified mail, postage
prepaid, return receipt requested, addressed to the party concerned
at the address indicated below or at such other address as such
party may subsequently designate by like notice:
If to the Company:
Rodman & Renshaw, Inc.
120 S. LaSalle St.
Chicago, IL 60603
Attention: James D. Van De Graaff, Esq.
<PAGE>
If to the Executive:
Haftel & Silverman, P.C.
26 Broadway - 19th Floor
New York, New York 10004
Attention: Richard E. Haftel, Esq.
16. Severability. Should any provision of this agreement be
held by a court or arbitration panel of competent jurisdiction to
be enforceable only if modified, such holding shall not affect the
validity of the remainder of this Agreement, the balance of which
shall continue to be binding upon the parties hereto with any such
modification to become a part hereof and treated as though
originally set forth in this Agreement. The parties further agree
that any such court or arbitration panel is expressly authorized to
modify any such unenforceable provision of this Agreement in lieu
of severing such unenforceable provision from this Agreement in its
entirety, whether by rewriting the offending provision, deleting
any or all of the offending provision, adding additional language
to this Agreement, or by making such other modifications as it
deems warranted to carry out the intent and agreement of the
parties as embodied herein to the maximum extent permitted by law.
The parties expressly agree that this Agreement as so modified by
the court or arbitration panel shall be binding upon and
enforceable against each of them. In any event, should one or more
of the provisions of this Agreement be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, and
if such provision or provisions are not modified as provided above,
this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been set forth herein.
17. Withholding. Anything to the contrary notwithstanding,
all payments required to be made by the Company hereunder to the
Executive or his beneficiaries, including his estate, shall be
subject to withholding of such amounts relating to taxes as the
Company may reasonably determine it should withhold pursuant to any
applicable law or regulation. In lieu of withholding such amounts,
in whole or in part, the Company, may, in its sole discretion,
accept other provision for payment of taxes as permitted by law,
provided it is satisfied in its sole discretion that all
requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.
18. Authority. The Company hereby represents and warrants
that all corporate actions necessary to authorize the execution,
delivery and performance of this Agreement by the Company have been
duly taken and are in full force and effect as of the date hereof.
The Company has delivered to the Executive a certified copy of the
corporate resolutions with respect to such approval.
19. Survivorship. The respective rights and obligations of
the Executive and the Company hereunder shall survive any
termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
20. Titles. Titles of the sections of this Agreement are
intended solely for convenience and no provision of this Agreement
is to be construed by reference to the title of any section.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
RODMAN & RENSHAW, INC.
By:/s/ James D. Van De Graaff
Title: EVP & General Counsel
/s/ Edwin J. McGuinn
EDWIN J. MCGUINN, JR.
<PAGE>
SCHEDULE A
A. Pre-Tax Profit for the Investment Banking Department. For
each fiscal year, the company shall arrive at the Pre-Tax Profit,
which shall be "Revenues", as hereinafter defined, minus all
"direct expenses", as hereinafter defined, and "certain allocated
expenses", as hereinafter defined.
(1) Revenues. "Revenues" shall mean:
(a) 100% of all fees received for mergers and
acquisition work;
(b) 100% of all financial advisory fees received;
(c) 100% of the management fees received in
connection with any public underwriting of
securities;
(d) 35% of all sales credits received by
December 31, 1995 in connection with any
public offerings;
(e) 30% of all sales credits received from
January 1, 1996 through December 31, 1996 in
connection with any public offerings;
(f) 25% of all sales credits received from
January 1, 1997 through December 31, 1997 in
connection with any public offerings;
(g) 25% of all sales credits received during the
term remaining in connection with any public
offerings; and
(h) 100% of all private placement revenues
(subject to any reasonable adjustment by the
Chief Executive Officer as it relates to the
apportionment of private placement fees
between department).
(2) Direct Expenses. "Direct expenses" shall mean:
(a) Salary, benefits and bonuses of all Investment
Banking personnel;
(b) All Direct expenses as set forth in the Rodman
& Renshaw Profit and Loss Statement, which is
annexed hereto as Exhibit A.
(3) Certain Allocated Expenses. From March 15, 1995
until December 31, 1995, an amount equal to 25% of the
fixed compensation of the research department's
personnel, i.e. salaries, benefits and guaranteed
bonuses, if any, shall be considered a "certain allocated
expense." From January 1, 1996 through December 31, 1996,
an amount equal to 30% of the fixed compensation of the
research department's personnel, as hereinabove defined,
shall be considered a "certain allocable expense." From
January 1, 1997 through December 31, 1997, an amount
equal to 35% of the fixed compensation, as hereinabove
defined, of the research department's personnel shall be
considered a "certain allocated expense." For the
remaining term of the agreement, 35% of the fixed
compensation of the research department shall be
considered a "certain allocated expense."
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000726977
<NAME> RODMAN & RENSHAW
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DED-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 48,598,000
<SECURITIES> 104,485,000
<RECEIVABLES> 146,375,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 315,687,000
<PP&E> 8,148,000
<DEPRECIATION> 578,000
<TOTAL-ASSETS> 323,835,000
<CURRENT-LIABILITIES> 301,121,000
<BONDS> 0
<COMMON> 598,000
0
0
<OTHER-SE> 22,116,000
<TOTAL-LIABILITY-AND-EQUITY> 323,835,000
<SALES> 14,574,000
<TOTAL-REVENUES> 38,004,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 45,208,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,680,000
<INCOME-PRETAX> (7,230,000)
<INCOME-TAX> (1,019,000)
<INCOME-CONTINUING> (6,211,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,211,000)
<EPS-PRIMARY> (0.99)
<EPS-DILUTED> (0.99)
</TABLE>
