SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: February 5, 1998
SBC COMMUNICATIONS INC.
A Delaware Corporation
Commission File No. 1-8610
IRS Employer No. 43-1301883
175 E. Houston, San Antonio, Texas 78205
Telephone Number (210) 821-4105
<PAGE>
Item 7. Financial Statements and Exhibits.
The following information was included in a press release issued by SBC
Communications Inc., a Delaware corporation ("SBC") on January 28, 1998:
<TABLE>
SBC Communications Inc.
- --------------------------------------------------------------------------------------
Consolidated Statements of Income
Dollars in millions except per share amounts
<CAPTION>
- --------------------------------------------------------------------------------------
Unaudited Twelve Months Ended
-------------------------------
12/31/97 12/31/96 % Chg
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Revenues
Local service:
Landline $ 9,568 $ 8,754 9.3%
Wireless 3,034 2,635 15.1%
Network access:
Interstate 3,946 4,008 -1.5%
Intrastate 1,869 1,823 2.5%
Long-distance service 2,115 2,240 -5.6%
Directory advertising 2,111 1,985 6.3%
Other 2,213 2,000 10.7%
- --------------------------------------------------------------------------------------
Total Operating Revenues 24,856 23,445 6.0%
- --------------------------------------------------------------------------------------
Operating Expenses
Cost of services and products 9,488 8,250 15.0%
Selling, general and administrative 7,276 5,250 38.6%
- --------------------------------------------------------------------------------------
Cash Operating Expenses 16,764 13,500 24.2%
- --------------------------------------------------------------------------------------
EBITDA * 8,092 9,945 -18.6%
- --------------------------------------------------------------------------------------
Depreciation and amortization 4,922 4,109 19.8%
- --------------------------------------------------------------------------------------
Total Operating Expenses 21,686 17,609 23.2%
- --------------------------------------------------------------------------------------
Operating Income 3,170 5,836 -45.7%
- --------------------------------------------------------------------------------------
Interest Expense 947 812 16.6%
- --------------------------------------------------------------------------------------
Equity in Net Income of Affiliates 201 207 -2.9%
- --------------------------------------------------------------------------------------
Other Income (Expense) - Net (87) (82) 6.1%
- --------------------------------------------------------------------------------------
Income Before Income Taxes 2,337 5,149 -54.6%
- --------------------------------------------------------------------------------------
Income Taxes 863 1,960 -56.0%
- --------------------------------------------------------------------------------------
Income Before Cumulative Effect of Accounting Change 1,474 3,189 -53.8%
- --------------------------------------------------------------------------------------
Cumulative Effect of Accounting Change, net of tax - 90 -
- --------------------------------------------------------------------------------------
Net Income $ 1,474 $ 3,279 -
======================================================================================
Basic Earnings Per Share:
Income Before Accounting Change $ 1.61 $ 3.46 -53.5%
Net Income $ 1.61 $ 3.56 -54.8%
Diluted Earnings Per Share:
Income Before Accounting Change $ 1.60 $ 3.45 -53.6%
Net Income $ 1.60 $ 3.54 -54.8%
Analytical and Operating Information
Return on Weighted Average Shareowners' Equity 14.75% 33.73% -1,898BP
Return on Weighted Average Total Capital 9.46% 17.15% -769 BP
Capital Expenditures $ 5,766 $ 5,481 5.2%
Dividends Declared Per Share $1.79 $1.72 4.1%
Weighted Average Common Shares Outstanding (000,000) 914 921 -0.8%
End of Period Common Shares Outstanding (000,000) 919 913 0.7%
Debt Ratio 56.19% 55.49% 70 BP
Total Employees 118,340 109,870 7.7%
Access Lines Served (000) 33,440 31,841 5.0%
Residence 20,887 20,082 4.0%
Business 12,092 11,309 6.9%
Other 461 450 2.4%
Wireless Customers (000) 5,493 4,433 23.9%
- --------------------------------------------------------------------------------------
<FN>
* EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization.
</FN>
</TABLE>
<PAGE>
SBC Communications Inc.
- ------------------------------------------------------------------------
Consolidated Balance Sheets
Dollars in millions
- ------------------------------------------------------------------------
Unaudited 12/31/97 12/31/96
- ------------------------------------------------------------------------
Assets
Current Assets
Cash and cash equivalents $398 $314
Short-term cash investments 320 432
Accounts receivable - net of allowances for
uncollectibles of $395 and $311 5,015 4,684
Prepaid expenses 349 287
Deferred income taxes 622 201
Deferred charges 82 102
Other current assets 276 251
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Total current assets 7,062 6,271
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Property, Plant and Equipment - at cost 65,286 61,786
Less: Accumulated depreciation and amortization 37,947 35,706
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Property, Plant and Equipment - Net 27,339 26,080
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Intangible Assets - Net of Accumulated
Amortization of $1,002 and $611 3,269 3,589
Investments in Equity Affiliates 2,740 1,964
Other Assets 1,722 1,581
- ------------------------------------------------------------------------
Total Assets $42,132 $39,485
========================================================================
Liabilities and Shareowners' Equity
Current Liabilities
Debt maturing within one year $1,953 $2,335
Accounts payable and accrued liabilities 7,888 6,584
Dividends payable 411 393
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Total current liabilities 10,252 9,312
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Long-Term Debt 12,019 10,930
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Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes 1,639 853
Postemployment benefit obligation 4,929 5,070
Unamortized investment tax credits 417 498
Other noncurrent liabilities 1,984 2,181
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Total deferred credits and other noncurrent
liabilities 8,969 8,602
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Corporation-obligated mandatorily redeemable
preferred securities of subsidiary trusts 1,000 1,000
- ------------------------------------------------------------------------
Shareowners' Equity
Common shares issued ($1 par value) 934 934
Capital in excess of par value 9,418 9,422
Retained earnings 1,146 1,297
Guaranteed obligations of employee stock
ownership plans (183) (229)
Deferred Compensation - LESOP (119) (161)
Foreign currency translation adjustment (574) (637)
Treasury shares (at cost) (730) (985)
- ------------------------------------------------------------------------
Total shareowners' equity 9,892 9,641
- ------------------------------------------------------------------------
Total Liabilities and Shareowners' Equity $42,132 $39,485
========================================================================
<PAGE>
SBC Communications Inc.
- -----------------------------------------------------------------------
Consolidated Statements of Cash Flows
Dollars in millions, increase (decrease) in cash and cash equivalents
- -----------------------------------------------------------------------
Unaudited Twelve months ended
12/31/97 12/31/96
- -----------------------------------------------------------------------
Operating Activities
Net income $1,474 $3,279
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 4,922 4,109
Undistributed earnings from investments
in equity affiliates (100) (138)
Provision for uncollectible accounts 523 395
Amortization of investment tax credits (81) (80)
Deferred income tax expense 215 626
Cumulative effect of accounting
change, net of tax - (90)
Other - net 17 (685)
- -----------------------------------------------------------------------
Total adjustments 5,496 4,137
- -----------------------------------------------------------------------
Net Cash Provided by Operating Activities 6,970 7,416
- -----------------------------------------------------------------------
Investing Activities
Construction and capital expenditures (5,766) (5,481)
Investments in affiliates (26) (74)
Purchase of short-term investments (916) (1,005)
Proceeds from short-term investments 1,029 816
Dispositions 578 96
Acquisitions (1,115) (442)
- -----------------------------------------------------------------------
Net Cash Used in Investing Activities (6,216) (6,090)
- -----------------------------------------------------------------------
Financing Activities
Net change in short-term borrowings with
original maturities of three months or less (505) (977)
Issuance of other short-term borrowings 1,079 209
Repayment of other short-term borrowings (805) (134)
Issuance of long-term debt 1,498 989
Repayment of long-term debt (506) (408)
Issuance of trust originated preferred - 1,000
securities
Purchase of fractional shares (15) -
Issuance of common shares - 111
Purchase of treasury shares (80) (650)
Issuance of treasury shares 293 52
Dividends paid (1,622) (1,664)
Other (7) (106)
- -----------------------------------------------------------------------
Net Cash Used in Financing Activities (670) (1,578)
- -----------------------------------------------------------------------
Net increase (decrease) in cash and cash
equivalents 84 (252)
- -----------------------------------------------------------------------
Cash and cash equivalents beginning of year 314 566
- -----------------------------------------------------------------------
Cash and Cash Equivalents End of Period $398 $314
=======================================================================
(b) Exhibits
Exhibit 3-b Bylaws dated January 30, 1998.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SBC Communications Inc.
_/s/ Randall Stephenson________
Randall Stephenson
Vice President and Controller
February 5, 1998
SBC COMMUNICATIONS INC.
Incorporated under the Laws of the State of Delaware, October 5, 1983
Bylaws
Article I
Stockholders
Section 1. Annual Meeting
An annual meeting of the stockholders, for the election of Directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall fix each year.
Section 2. Special Meeting
Special meetings of the stockholders may be called at any time, either by
the Board of Directors or by the Chairman of the Board, and the Chairman of the
Board shall call a special meeting whenever requested in writing to do so by
stockholders representing two-thirds of the shares of the corporation, then
outstanding, and entitled to vote at such meeting. This request must specify the
time, place and object of the proposed meeting.
Section 3. Notice of Meetings
Written notice of all meetings of the stockholders shall be given to each
stockholder entitled to vote at such meeting not less than ten (10) nor more
than sixty (60) days before the date on which the meeting is to be held. The
notice shall state the place, date and hour of the meeting, and, in the case of
a special meeting, the purpose or purposes for which the meeting is called. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail with postage thereon prepaid, addressed to the stockholder at his
address as it appears on the stock transfer books of the corporation. Any
previously scheduled meeting of the stockholders may be postponed by resolution
of the Board of Directors upon public notice given prior to the time previously
scheduled for such meeting of stockholders.
When a meeting is adjourned to another place, date, or time, written
notice need not be given of the meeting when reconvened, if the place, date, and
time thereof are announced at the meeting at which the adjournment is taken. If
the date of the meeting to be reconvened is more than thirty (30) days after the
date for which notice of the meeting was originally given or if a new record
date is fixed for the meeting, written notice of the place, date and time of the
meeting to be reconvened shall be given in conformity herewith. At any
reconvened meeting, any business may be transacted that might have been
transacted at the original meeting.
Section 4. Quorum
At any meeting of the stockholders, the holders of forty percent (40%) of
all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for the transaction of business.
If a quorum shall fail to attend any meeting, the chairman of the meeting
or the holders of a majority of the shares of the stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date,
or time.
Section 5. Organization
The Chairman of the Board, or a Director or officer as the Chairman of the
Board may designate, shall act as chairman of the stockholders' meeting. The
chairman of the meeting shall designate an officer to act as a secretary for the
meeting in the absence of the corporation's Secretary.
Section 6. Proxies and Voting
At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy.
Each holder of common stock shall have one vote for every share of stock
that is registered in the stockholder's name on the record date for the meeting.
All voting may be by a voice vote, provided that upon demand of a
stockholder entitled to vote in person or by proxy, a recorded vote of all
shares of stock at the meeting shall be taken.
Directors shall be elected by a plurality of the votes cast. All other
matters shall be determined by a majority of the votes cast, unless a greater
number is required by law or the Certificate of Incorporation for the action
proposed.
Section 7. Nomination of Directors
Only persons who are nominated in accordance with the following procedures
shall be eligible for election as Directors. Nomination of persons for election
to the Board of Directors may be made at any annual meeting of stockholders (a)
by or at the direction of the Board of Directors or any duly authorized
committee thereof or (b) by any stockholder of the corporation entitled to vote
for the election of Directors at the annual meeting. In addition to any other
applicable requirements, a nomination made by a stockholder shall be pursuant to
timely notice in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be received at
the principal executive offices of the corporation not less than sixty (60) days
nor more than ninety (90) days prior to the date of the annual meeting;
provided, however, that in the event that less than seventy (70) days' notice or
prior public disclosure of the date of the meeting is given or made to
stockholders, notice by the stockholder must be received not later than ten (10)
days following the day on which notice or public disclosure of the date of the
annual meeting was mailed or made, whichever first occurs.
To be in proper written form, a stockholder's notice to the Secretary must
set forth (a) as to each person whom the stockholder proposes to nominate for
election as Director (i) the name, age, business address, and residence address
of the person, (ii) the principal occupation or employment of the person, (iii)
the class or series and number of shares of capital stock of the corporation
which are owned beneficially or of record by the person, and (iv) any other
information relating to the person that is required to be disclosed in
solicitations of proxies for election of Directors pursuant to Section 14 of the
Securities Exchange Act of 1934, as amended, and (b) as to the stockholder
giving the notice (i) the name and record address of such stockholder, (ii) the
class or series and number of shares of capital stock of the corporation which
are owned beneficially or of record by such stockholder, and (iii) any other
information relating to such stockholder that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitation of proxies for the election of Directors pursuant to Section 14 of
the Securities Exchange Act of 1934, as amended. Such notice must be accompanied
by a written consent of each proposed nominee to being named as a nominee and to
serve as a Director if elected.
No person shall be eligible for election as a Director of the corporation
unless nominated in accordance with the procedures set forth in this Section 7.
If the Chairman determines that a nomination was not made in accordance with the
foregoing procedure, the Chairman shall declare to the meeting that the
nomination was defective and such defective nomination shall be disregarded.
Section 8. Conduct of Annual Meeting
No business may be transacted at an annual meeting of stockholders, other
than business that is either (a) specified in the notice of meeting (or any
supplement thereto) given by or at the direction of the Board of Directors (or
any duly authorized committee thereof), (b) otherwise properly brought before
the meeting by or at the direction of the Board of Directors (or any duly
authorized committee thereof), or (c) otherwise properly brought before the
meeting by a stockholder as of the record date for the determination of
stockholders entitled to vote at such annual meeting. In addition to any other
applicable requirements for business to be properly brought before an annual
meeting by a stockholder, such stockholder must have given timely notice thereof
in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be received at
the principal executive offices of the corporation not less than sixty (60) days
nor more than ninety (90) days prior to the date of the annual meeting;
provided, however, that in the event that less than seventy (70) days' notice or
prior public disclosure of the date of the annual meeting is given or made to
the stockholder, notice by the stockholder must be received not later than the
close of business on the tenth day following the day in which such notice of the
date of the annual meeting was mailed or such public disclosure of the date of
the annual meeting was made, whichever first occurs.
To be in proper written form, stockholder's notice to the Secretary must
set forth, as to each matter such stockholder proposes to bring before the
annual meeting, (i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such business at the
annual meeting, (ii) the name and record address of such stockholder, (iii) the
class or series and number of shares of capital stock of the corporation which
are owned beneficially or of record of such stockholder, and (iv) any material
interest of the stockholder in such business.
No business shall be conducted at the annual meeting of stockholders
except in accordance with the procedures set forth in this Section 8; provided,
however, that nothing in this Section 8 shall be deemed to preclude discussion
by any stockholder of any business properly brought before the annual meeting.
If the Chairman determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the business was not brought properly before the
meeting and such business shall not be transacted.
Article II
Board of Directors
Section 1. Number and Terms of Office
The business and affairs of the corporation shall be under the direction
of a Board of Directors.
The number of Directors shall be not more than twenty-one (21), as
determined by a majority vote of the total number of Directors then serving in
office.
Directors shall be divided into three classes designated as Group A, Group
B, and Group C. The three classes of Directors shall each consist of an equal
number of Directors or a number of Directors as nearly equal as possible. When
the total number of Directors is divided by three and one remains, the Director
remaining shall be assigned to Group A. When the total number of Directors is
divided by three and two remain, they shall be assigned one to Group A and one
to Group B. The number of Directors in any one class may not exceed the number
of Directors in any other class by more than one, except as may result from the
phasing-in of a decrease in Directors under Section 2 of this Article II.
The Board of Directors appointed by the incorporators shall serve until
the first stockholders' meeting. At the first meeting of stockholders after
organization of the corporation, Directors to serve in Group A shall be elected
to a term of one year; Directors to serve in Group B shall be elected to a term
of two years; and Directors to serve in Group C shall be elected to a full term
of three years. Thereafter, at each annual meeting of the stockholders,
Directors shall be elected to a full term of three years to succeed those in the
Director group whose terms expire at that annual meeting.
Section 2. Increases and Decreases in Directors
The Board of Directors may increase or decrease the number of Directors,
subject to the maximum limits provided in Section 1 of this Article II, by a
vote of a majority of the total number of Directors. Any vacancies created by an
increase in the number of Directors shall be filled as provided in Section 3 of
this Article II and be distributed among the Director groups in accordance with
Section 1 of this Article II. Any decrease in the authorized number of Directors
shall be phased in by reducing the number of Directors in the first Director
group whose terms expire subsequent to the decrease to the number required to be
in that group by Section 1 of this Article II at the end of the phasing-in
period, and by similarly reducing the number of Directors in the other Director
groups upon expiration of their terms, so that when the terms of Directors in
all three Director groups have successively expired subsequent to the decrease,
each Director group shall have the distribution of Directors required by Section
1 of this Article II of these Bylaws.
Section 3. Vacancies
If the position of any Director is or becomes vacant, a majority of the
Directors remaining in office may appoint a successor to serve the full or
remaining term, as the case may be, of the other Directors in the group in which
the vacancy occurred or was created.
<PAGE>
Section 4. Regular Meetings
Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall be established
by the Board of Directors. A notice of each regular meeting shall not be
required.
Section 5. Special Meetings
Special meetings of the Board of Directors may be called by one-third of
the Directors or by the Chairman of the Board and shall be held at such place,
on such date, and at such time as the Directors calling the meeting or the
Chairman of the Board shall fix. Notice of a special meeting shall be given to
each Director in any of the following ways: in person, by telephone or by
delivery of a written notice or facsimile communication to the Director's
business or residence. Notice given in writing or by facsimile communication to
the Director's business or residence must be delivered at least twenty-four (24)
hours before such meeting. Notice given by telephone or in person shall be given
at least twelve (12) hours prior to the time set for the meeting. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice of such meeting. A
written waiver of any notice, signed by a Director, whether before or after the
time of the event for which notice is to be given, shall be equivalent to the
notice required to be given to such person.
Section 6. Quorum
At any meeting of the Board of Directors, a majority of the total number
of the Directors shall constitute a quorum.
Section 7. Committees of the Board of Directors
The corporation elects to be governed by the provisions of Section
141(c)(2) of the General Corporation of the State of Delaware, as amended
effective July 1, 1996. The Board of Directors may from time to time designate
committees of the Board of Directors, with such lawfully delegable powers and
duties as it thereby confers, to serve at the pleasure of the Board of Directors
and shall elect a Director or Directors to serve as the member or members,
designating, if it desires, other Directors as alternate members who may replace
any absent or disqualified members at any meeting of the committee. Any
committee so designated may exercise the power and authority of the Board of
Directors as permitted by law. In the absence or disqualification of any member
of any committee and any alternate member designated to replace such member, the
members of the committee present at the meeting and not disqualified from voting
may by unanimous vote appoint another member of the Board of Directors to act at
the meeting in the place of the absent or disqualified member.
Each committee may determine procedural rules for the conduct of its
meetings and business, and shall act in accordance therewith, unless otherwise
provided by the Board of Directors in the resolution establishing the committee.
<PAGE>
Article III
Officers of the Company
Section 1. Generally
The officers of the corporation shall consist of a Chairman of the Board,
a President, one or more Vice Presidents, a Secretary, a Treasurer, and a Vice
President-Chief Financial Officer appointed by the Board of Directors. The Board
of Directors may also appoint one or more Assistant Secretaries, Assistant
Treasurers, and such other officers and agents as the Board of Directors may
desire. Officers shall be appointed by the Board of Directors at its first
meeting after every annual meeting of stockholders. Each officer or agent
appointed by the Board of Directors shall hold office until a successor is
elected and qualified or until such person's earlier resignation or removal. Any
number of offices may be held by the same person.
Section 2. Duties of the Chairman of the Board
The Chairman of the Board shall preside at all meetings of the
stockholders and of the Board of Directors.
Unless otherwise directed by the Board of Directors, the Chairman of the
Board, or such other officer or agent as the Chairman of the Board may
designate, shall have authority to vote and otherwise act on behalf of the
corporation, in person or by proxy, at any meeting of stockholders, or with
respect to any action of stockholders of any other corporation in which this
corporation may hold securities, and otherwise to exercise any and all rights
and powers that this corporation may possess by reason of its ownership of
securities in any other corporation.
Section 3. Duties of the President
The President shall perform the duties as usually pertain to the office
and such other duties as may from time to time be assigned.
Section 4. Duties of Vice Presidents
Each Vice President shall perform the duties as usually pertain to the
office to which appointed and such other duties as may from time to time be
assigned.
Section 5. Duties of Secretary and Assistant Secretaries
The Secretary shall make a record of the proceedings of all meetings of
the stockholders, Board of Directors and any committee of Directors, in books to
be kept for that purpose. The Secretary shall also give and publish all
necessary notices of all meetings, have custody of the corporate seal and affix
it when authorized, and preserve and keep all general contracts, papers and
documents. In general, the Secretary shall perform all duties incident to the
office of Secretary and such other duties as from time to time may be assigned.
Each Assistant Secretary shall perform such duties of the Secretary as may
from time to time be assigned.
Section 6. Duties of Treasurer and Assistant Treasurers
The Treasurer shall have charge of all monies, funds and securities which
may come into the Treasurer's possession, maintain deposits of the corporation's
monies and funds in such depositories as the Board of Directors, the Chairman of
the Board or the President shall approve, make disbursements of such monies and
funds under direction of the Board of Directors, the Chairman of the Board, or
the President, keep an account of all receipts and disbursements, and make such
reports as may be required. The Treasurer shall also maintain a record of the
outstanding shares of stock in the corporation, a stock transfer record and a
list of the stockholders of the corporation. In general, the Treasurer shall
perform all duties incident to the office of Treasurer and such other duties as
from time to time may be assigned.
Each Assistant Treasurer shall perform such duties of the Treasurer as may
from time to time be assigned.
Section 7. Duties of the Vice President-Chief Financial Officer
The Vice President-Chief Financial Officer shall be the principal officer
in charge of the accounts of the corporation and shall perform all duties
incident to the office of Vice President-Chief Financial Officer and such other
duties as from time to time may be assigned.
Section 8. Delegation of Authority
The Board of Directors may from time to time assign or delegate the
powers, authorities or duties of the Chairman of the Board, the President or any
officer or agent to any other officers or agents, notwithstanding any provision
hereof.
Article IV
Indemnification
The corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (including any action or suit by or in
the right of the corporation) by reason of the fact that such person is or was a
Director, officer or employee of the corporation, or, while such person is or
was a Director, officer or employee of the corporation, such person is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust, or other
enterprise, against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit, or proceeding, but in each case only if and
to the extent permitted under applicable state or federal law.
The indemnification provided herein shall not be deemed exclusive of any
other rights to which those indemnified may be entitled, and shall continue as
to a person who has ceased to be a Director, officer, employee, or agent, and
shall inure to the benefit of the heirs and personal representatives of such a
person.
<PAGE>
Article V
Stock
Section 1. Stock Certificates; Uncertificated Shares
The shares of the corporation shall be represented by certificates,
provided that the Board of Directors of the corporation may provide by
resolution or resolutions that some or all of any or all classes or series of
its stock shall be uncertificated shares. Any such resolution shall not apply to
shares represented by a certificate until such certificate is surrendered to the
corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock represented by certificates and upon request
every holder of uncertificated shares shall be entitled to have a certificate
signed by, or in the name of the corporation by the Chairman or Vice-Chairman of
the Board of Directors, or the President or Vice-President, and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary of such
corporation representing the number of shares registered in certificate form.
Any or all of the signatures on the certificate may be a facsimile. In case any
officer, transfer agent or registrar who has signed or whose facsimile signature
has been placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he or she were such officer,
transfer agent or registrar at the date of issue.
Section 2. Transfers of Stock
Transfers of stock shall be made only on the stock transfer record of the
corporation and upon surrender of the certificate previously issued therefor
which is outstanding and not canceled, except in the case of uncertificated
shares.
Section 3. Transfer on Death Directions
At the request of a stockholder residing in a state that permits transfer
on death directions by law, the Treasurer shall record on the stockholder's
certificate, or, in the case of uncertificated shares, upon the account
statements evidencing the shares, a direction to transfer the stockholder's
interest in the corporation to a person designated by the stockholder on death
of the stockholder. The Treasurer shall execute such direction upon proof of
death of the stockholder, surrender of the outstanding certificate with the
direction written thereon, and under such regulations as may be prescribed by
the Treasurer.
Article VI
Business Combinations
Section 1. Vote Required for Certain Business Combinations
A. In addition to any vote of stockholders required by law or these Bylaws,
and except as otherwise expressly provided in Section 2 of this Article
VI, any Business Combination (as hereinafter defined) shall require the
affirmative vote of the holders of at least 66_ percent of the then
outstanding shares of capital stock of the corporation entitled to vote
generally in the election of Directors (the "Voting Stock"), voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any
national securities exchange or otherwise.
B. The term "Business Combination" shall mean:
i. Any merger or consolidation of the corporation or any subsidiary (as
hereinafter defined) with (a) any Interested Stockholder (as
hereinafter defined) or (b) any other corporation which is, or after
such merger or consolidation would be, an Affiliate (as hereinafter
defined) of an Interested Stockholder; or
ii. Any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in either one or in a series of transactions) to or
with any Interested Stockholder or any Affiliate of any Interested
Stockholder of any assets of the corporation or any subsidiary
having an aggregate Fair Market Value (as hereinafter defined) of
$10,000,000 or more; or
iii. The issuance or transfer by the corporation or any subsidiary (in
either one or in a series of transactions) of any securities of the
corporation or any subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder for cash, securities or
other property (or a combination thereof) having an aggregate Fair
Market Value of $10,000,000 or more; or
iv. The adoption of any plan or proposal for the liquidation or
dissolution of the corporation proposed by or on behalf of an
Interested Stockholder or any Affiliate of any Interested
Stockholder; or
v. Any reclassification of securities (including any reverse stock
split), or recapitalization of the corporation, or any merger or
consolidation of the corporation with any of its subsidiaries or any
other transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly
or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of the corporation or any subsidiary which is directly or indirectly
owned by any Interested Stockholder or any Affiliate of any
Interested Stockholder.
Section 2. Exceptions to Vote Required by Section 1
The provisions of Section 1 of this Article VI shall not be applicable to
any particular Business Combination, and such Business Combination shall require
only such affirmative vote as is required by law and any other provision of
these Bylaws, if:
A. The Business Combination is approved by a majority of the Continuing
Directors (as hereinafter defined); or
B. All of the following conditions are met:
i. The aggregate amount of the cash and the Fair Market Value of any
consideration other than cash as of the date of the consummation of
the Business Combination to be received per share by holders of
common stock in such Business Combination or by holders of shares of
any other class of outstanding Voting Stock shall be at least equal
to the highest amount determined under sub-clauses (a), (b), and (c)
below:
a. The highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid
by the Interested Stockholder for any shares of common stock
acquired by it (1) within the two-year period immediately
prior to the first public announcement of the proposal of the
Business Combination (the "Announcement Date") or (2) in the
transaction in which it became an Interested Stockholder,
whichever is higher; and
b. The Fair Market Value per share of common stock on the day
after the Announcement Date or on the date on which the
Interested Stockholder became an Interested Stockholder,
whichever is higher; and
c. The price per share equal to the Fair Market Value per share
of common stock determined pursuant to paragraph B(i)(b)
above, multiplied by the ratio of (1) the highest per share
price (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by the Interested Stockholder
for any shares of common stock it acquired within the two-year
period immediately prior to the Announcement Date to (2) the
Fair Market Value per share of common stock on the first day
in such two-year period upon which the Interested Stockholder
acquired any shares of common stock; and
ii. The consideration to be received by holders of a particular class of
outstanding Voting Stock shall be in cash or in the same form as the
Interested Stockholder has previously paid for shares of such class
of Voting Stock. If the Interested Stockholder has paid for shares
of any class of Voting Stock with varying forms of consideration,
the form of consideration for such class of Voting Stock shall be
either cash or the form of consideration used by the Interested
Stockholder to acquire the largest number of shares of such class of
Voting Stock previously acquired by it; and
iii. After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination:
a. Except as approved by a majority of the Continuing Directors,
there shall have been no failure to declare and pay at the
regular date therefor any full quarterly dividends (whether or
not cumulative) on any outstanding preferred stock; and
b. There shall have been (1) no reduction in the annual rate of
dividends paid on the common stock (except as necessary to
reflect any subdivision of the common stock), except as
approved by a majority of the Continuing Directors, and (2) an
increase in such annual rate of dividends as necessary to
reflect any reclassification (including any reverse stock
split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of
outstanding shares of the common stock, unless the failure so
to increase such annual rate is approved by a majority of the
Continuing Directors; and
c. Such Interested Stockholder shall have not become the
beneficial owner of any additional shares of Voting Stock
except as part of the transaction which resulted in such
Interested Stockholder becoming an Interested Stockholder; and
iv. A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities
Exchange Act of 1934 and the rules and regulations thereunder (or
any subsequent provisions replacing such Act, rules or regulations)
shall be mailed to the stockholders of the corporation at least
thirty (30) days prior to the consummation of such Business
Combination, whether or not such proxy or information statement is
required pursuant thereto.
Section 3. Definitions
For the purposes of this Article VI:
A. A "person" shall mean any individual, firm, corporation or other entity.
B. "Interested Stockholder" shall mean any person (other than the corporation
or any subsidiary (as hereinafter defined) and other than any profit
sharing, thrift, employee stock ownership, retirement or other employee
benefit plan of the corporation or any subsidiary of any trustee of or
fiduciary with respect to any such plan when acting in such capacity) who
or which:
i. Is the beneficial owner (as hereinafter defined), directly or
indirectly, of more than 10 percent (10%) of any shares of the
Voting Stock of the corporation; or
ii. Is an Affiliate (as hereinafter defined) of the corporation and at
any time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 10
percent (10%) or more of any shares of the Voting Stock of the
corporation; or
iii. Is an assignee of or has otherwise succeeded to any shares of Voting
Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in
the course of a transaction or series of transactions not involving
a public offering within the meaning of the Securities Act of 1933.
C. A person shall be deemed a "beneficial owner" of any shares of Voting Stock:
i. Which such person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly; or
ii. Which such person or any of its Affiliates or Associates has (a) the
right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants, or options or otherwise, or (b)
the right to vote pursuant to any agreement, arrangement or
understanding; or
iii. Which are beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of Voting
Stock.
D. "Affiliate" or "Associate" shall have the same meanings set forth for such
terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on March 1, 1983.
E. "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the corporation;
provided, however, that for the purposes of the definition of Interested
Stockholder set forth in paragraph B of this Section 3, the term
"subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
corporation.
F. "Continuing Director" means any member of the Board of Directors of the
corporation who is unaffiliated with the Interested Stockholder and was a
member of the Board prior to the time that the Interested Stockholder
became an Interested Stockholder and any successor of a Continuing
Director who is unaffiliated with the Interested Stockholder and is
recommended or elected to succeed a Continuing Director by a majority of
Continuing Directors then on the Board.
G. "Fair Market Value" means: (1) in the case of stock, the highest closing
sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite
Tape, on the New York Stock Exchange, or, if such stock is not listed on
such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which such stock
is listed, or, if such stock is not listed on any such exchange, the
highest closing bid quotation with respect to a share of such stock during
the 30-day period preceding the date in question on the National
Association of Securities Dealers, Inc., Automated Quotations System or
any system then in use, or if no such quotations are available, the fair
market value on the date in question of a share of such stock as
determined by the majority of the Continuing Directors in good faith; and
(2) in the case of property other than cash or stock, the fair market
value of such property on the date in question as determined by a majority
of the Continuing Directors in good faith.
H. In the event of any Business Combination in which the corporation
survives, the phrase "any consideration other than cash" as used in
paragraph B(i) of Section 2 of this Article VI shall include the shares of
common stock and/or the shares of any other class of outstanding Voting
Stock retained by the holders of such shares.
Section 4. Certain Determinations
The Continuing Directors of the corporation shall have the power and duty
to determine for the purposes of this Article VI, on the basis of information
known to them after reasonable inquiry: (a) whether a person is an Interested
Stockholder; (b) the number of shares of Voting Stock beneficially owned by any
person; (c) whether a person is an Affiliate or Associate of another person; and
(d) whether the assets which are the subject of any Business Combination have,
or the consideration to be received for the issuance or transfer of securities
by the corporation or any subsidiary in any Business Combination has, an
aggregate Fair Market Value of $10,000,000 or more.
Section 5. No Effect on Fiduciary Obligations of Interested Stockholders
Nothing contained in this Article VI shall be construed to relieve any
Interested Stockholder from any fiduciary obligation otherwise imposed by law.
Article VII
Miscellaneous
Section 1. Facsimile Signatures
In addition to the provision for the use of facsimile signatures on stock
certificates as provided in Section 1 of Article V, facsimile signatures of any
officer or officers of the corporation may be used whenever and as authorized by
the Board of Directors.
Section 2. Corporate Seal
The Board of Directors shall provide a suitable seal for the corporation
that contains the name of the corporation and the state of incorporation, which
seal shall be kept by the Secretary.
Section 3. Fiscal Year
The fiscal year of the corporation shall be identical with the calendar
year unless otherwise established by the Board of Directors.
Section 4. Time Periods
In applying any provision of these Bylaws which requires that an act be
done or not be done in a specified number of days prior to an event, or that an
act be done during a period of a specified number of days prior to an event,
calendar days shall be used. The day of the doing of the act shall be excluded
and the day of the event shall be included.
Article VIII
Amendments
These Bylaws may be amended or repealed in accordance with the Certificate of
Incorporation by the Board of Directors at any meeting or by the stockholders at
any meeting.
