SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
( X ) Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended December 31, 1994 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 1-7444
OAKWOOD HOMES CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0985879
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7025 Albert Pick Road, Greensboro, North Carolina 27109
(Address of principal executive offices)
Post Office Box 7386, Greensboro, North Carolina 27417-0386
(Mailing address of principal executive offices)
(910) 855-2400
(Registrant's telephone number, including area code)
Not Applicable
(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, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No _____
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock as of January 31, 1995.
Common Stock, Par Value $.50 Per Share . . . . . . . . . . 21,127,020
1
<PAGE>
QUARTERLY REPORT ON FORM 10-Q
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Quarter Ended December 31, 1994
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
Greensboro, North Carolina
The condensed consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to such rules and regulations, although the Company believes that the
disclosures contained herein are adequate to make the information presented not
misleading. These condensed consolidated financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company's latest annual report on Form 10-K.
2
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(in thousands except per share data)
<TABLE>
<CAPTION>
Three months ended
December 31,
1994 1993
<S> <C> <C>
Revenues
Net sales $ 127,443 $ 96,316
Financial services income 16,218 14,241
Other income 3,142 2,441
Total revenues 146,803 112,998
Cost and expenses
Cost of sales 93,240 69,417
Selling, general and administrative expenses
Non-financial services 30,631 23,172
Financial services 2,727 1,961
Provision for losses on credit sales 1,932 1,931
Interest expense
Non-financial services 386 247
Financial services 5,453 6,038
Total costs and expenses 134,369 102,766
Income before income taxes 12,434 10,232
Provision for income taxes 4,786 3,598
Net income $ 7,648 $ 6,634
Earnings per share
Primary $ .35 $ .30
Fully diluted $ .35 $ .30
Dividends paid per share $ .02 $ .02
Average shares outstanding
Primary 22,054 22,121
Fully diluted 22,165 22,140
</TABLE>
3
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
(dollar amounts in thousands except share and per share data)
<TABLE>
<CAPTION>
December 31, September 30,
ASSETS 1994 1994
<S> <C> <C>
Cash and cash equivalents $ 2,689 $ 12,573
Receivables, principally installment contracts 315,039 367,212
Inventories:
Manufactured homes 109,177 84,114
Work-in-process, materials and supplies 11,472 10,757
Land/homes under development 1,533 1,534
122,182 96,405
Manufactured housing communities, net 9,579 8,766
Property, plant and equipment, net 66,815 54,131
Deferred income taxes 7,783 7,403
Other assets 29,079 28,697
$ 553,166 $ 575,187
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings $ 19,000 $ 25,000
Notes and bonds payable 195,747 207,432
Accounts payable and accrued liabilities 46,155 59,051
Reserve for contingent liabilities 3,419 3,827
Other long-term obligations 10,550 8,966
Shareholders' equity
Common stock, $.50 par value; 100,000,000
shares authorized; 21,122,518 and 21,085,004
shares issued and outstanding 10,561 10,543
Additional paid-in capital 148,647 148,507
Retained earnings 119,087 111,861
278,295 270,911
$ 553,166 $ 575,187
</TABLE>
4
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
December 31,
1994 1993
<S> <C> <C>
Operating activities
Net income $ 7,648 $ 6,634
Items not requiring (providing) cash
Depreciation and amortization 1,799 1,388
Deferred income taxes (380) (1,141)
Provision for losses on credit sales, net of
actual losses 141 951
Other 300 335
(Increase) in other receivables (471) (3,991)
(Increase) in inventories (25,777) (14,170)
(Decrease) in accounts payable and accrued
liabilities (12,896) (8,335)
Increase in other long-term obligations 1,584 673
Cash used by operations (28,052) (17,656)
Installment receivables issued (80,005) (59,815)
Purchase of installment loan portfolio - (604)
Sale of installment loans 121,359 80,765
Receipts on installment receivables 10,665 13,744
Cash provided by operating activities 23,967 16,434
Investing activities
Additions to property, plant and equipment (14,032) (2,900)
Additions to manufactured housing communities (838) (37)
Other (1,032) 664
Cash used by investing activities (15,902) (2,273)
Financing activities
Net repayments on short-term credit facilities (6,000) (17,300)
Issuance of notes and bonds payable - 1,150
Payments on notes and bonds (11,685) (12,914)
Cash dividends (422) (407)
Proceeds from exercise of stock options 158 324
Redemption of preferred stock - (1,150)
Cash used by financing activities (17,949) (30,297)
Net decrease in cash and cash equivalents (9,884) (16,136)
Cash and cash equivalents
Beginning of period 12,573 25,402
End of period $ 2,689 $ 9,266
</TABLE>
5
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. The condensed consolidated financial statements reflect all adjustments,
which included only normal recurring adjustments, which are, in the opinion of
management, necessary to present fairly the results of operations for the
periods presented. Results of operations for any interim period are not
necessarily indicative of results to be expected for a full year.
2. The Company is contingently liable as guarantor on installment sale
contracts sold to unrelated financial institutions on a full or limited recourse
basis. The amount of this contingent liability was approximately $103 million
at December 31, 1994. The Company is also contingently liable under terms of
repurchase agreements with financial institutions providing inventory financing
for retailers of homes produced by Golden West Homes, a manufacturing subsidiary
of the Company doing business with independent dealers. The Company estimates
that its potential obligation under repurchase agreements approximated $22
million at December 31, 1994.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Three months ended December 31, 1994 compared to three months ended
December 31, 1993
The following table summarizes certain key sales statistics for the
quarters ended December 31, 1994 and 1993 :
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Retail sales dollar volume (in millions) $ 98.1 $ 69.7
Wholesale sales dollar volume (in millions) 26.6 25.3
Other sales - principally relating to
communities (in millions) 2.7 1.3
Total sales dollar volume (in millions) 127.4 96.3
Gross profit % - integrated operations 29.1% 31.0%
Gross profit % - wholesale operations 19.4% 19.9%
New units sold - retail 3,051 2,395
Used units sold - retail 461 326
New units sold - wholesale 721 705
Average new single-section sales price - retail $24,700 $23,200
Average new multi-section sales price - retail $45,900 $41,100
Average new home sales price - wholesale $36,900 $36,000
Weighted average sales centers 161 123
New unit sales per sales center 19.0 19.5
</TABLE>
Retail sales dollar volume increased 42%, reflecting a 27% increase in new
unit volume and increases of 6% and 12% in the average new unit sales prices of
single-section and multi-section homes, respectively. New unit volume rose
primarily due to a 31% increase in the weighted average number of sales centers
open during the period. Average new unit sales per sales center decreased
slightly as a result of the addition of 22 new sales centers during the three
months ended December 31, 1994, compared to five centers in the first quarter of
fiscal 1994. New sales centers typically require a period of several months to
reach unit sales levels similar to existing outlets. Dollar sales at sales
centers open more than one year rose 6% in the quarter, and same store unit
sales were essentially flat. The weakness in same store unit sales was confined
largely to the Southwest, where the focus for the quarter was on sales center
expansion; same store unit sales in the Southeast increased over the prior year.
Management intends to refocus its attention to unit sales in the Southwest in
coming periods. The increase in the average new unit sales price reflects
increases in the cost of certain raw materials, a continuing trend toward
higher-end homes and price increases implemented to recover increased costs
associated with new wind and thermal standards adopted by the Department of
Housing and Urban Development. Sales in the Southwest, where the average home
size is somewhat larger than in the Southeast, comprised 30% of total new
manufactured housing sales dollars in the first quarter of 1995 compared to 22%
last year.
7
<PAGE>
Wholesale sales dollar volume (which represents sales by Golden West to
independent dealers) increased 5%, reflecting a 2% increase in unit volume and a
3% increase in the average selling price.
Gross profit margins - integrated operations reflect gross profit earned on
all sales at retail as well as the manufacturing gross profit on retail sales of
units manufactured by the Company. Gross profit margins - integrated operations
declined to 29.1% in the current period from 31.0% in the prior year. The
reduction in gross margins reflects the effects of starting up new manufacturing
facilities as well as the results of certain relatively new sales centers where
gross margins attained at retail did not meet expectations. Management intends
to provide additional training of retail personnel in the affected markets in
order to improve retail margins in those areas. Approximately 75% of the total
new unit retail sales volume was manufactured by the Company in the first
quarter of both fiscal 1995 and 1994. To the extent production levels at new
manufacturing facilities during the balance of the year increase at a faster
rate than new unit sales increases arising from sales center expansion, margins
should increase as retail unit sales are increasingly sourced from Company owned
manufacturing facilities. During the current period, the Company's five North
Carolina plants operated at or near capacity while production at the Company's
first Texas single-section plant, opened in the first quarter of fiscal 1994,
was at 75% capacity. Production levels at the Company's two new plants in Texas
were at 22% and 38% of capacity for the quarter. The Company's new plants in
Tennessee and Colorado opened late in the quarter and produced a total of only
approximately 100 floors during the period. Management does not expect a
significant improvement in gross margins to be realized from the additional
manufacturing plants until late in fiscal 1995 because of the start-up costs
associated with bringing new production capacity on line.
Wholesale gross profit margins decreased to 19.4% in the current quarter
from 19.9% last year, primarily due to a slight shift in product mix toward less
expensive homes which typically are ordered with fewer high margin option
packages. During the first quarters of fiscal 1995 and 1994, Golden West's
Albany, Oregon plant operated at approximately 104% and 108%, respectively, of
theoretical full capacity. Golden West's Sacramento, California facility
operated at approximately 92% capacity for the fiscal 1995 quarter compared to
64% for the fiscal 1994 quarter due to a strengthening market, as well as the
use of the Sacramento plant to reduce order backlog in Albany. Golden West's
Perris, California plant operated at approximately 60% and 45% for the fiscal
1995 and 1994 quarters, respectively. In January 1995, Golden West shipped to
Company-owned retail centers the first of several planned new models of lower
priced multi-section homes, designed to broaden Golden West's independent dealer
product line as well as provide multi-section product to Company-owned retail
centers opened or planned to be opened in the Southwest. To the extent these
new products are successful in the marketplace, their introduction may enable
the Company to increase utilization levels at the California plants as well as
displace less profitable business in those facilities.
Financial services income, which consists primarily of interest income on
installment sale contracts retained by the Company, loan servicing fees and
earnings on the Company's retained interests in REMIC securitizations accounted
for as sales of receivables, increased 14% to $16.2 million from $14.2 million
last year. Credit sales represented approximately 81% and 84% of the Company's
retail unit volume in fiscal 1995 and 1994, respectively. The Company's credit
subsidiary captured approximately 93% of loan originations in the first quarter
of fiscal 1995 compared to 92% in the prior year period.
8
<PAGE>
Other income increased 29%, principally due to increased insurance
commissions resulting from the overall increase in sales. This increase was
partially offset by the continuing decline in endorsement fee income resulting
from the Company's emphasis on internal financing of credit sales.
Total selling, general and administrative expenses increased 33% from $25.1
million (22.2% of revenues) in fiscal 1994 to $33.4 million (22.7% of revenues)
in fiscal 1995, primarily as a result of higher sales volumes. Non-financial
services selling, general and administrative expenses in fiscal 1995 reflect
additional costs, both ongoing and one-time, such as employee training,
associated with new manufacturing facilities currently in the start-up phase, as
well as expenses associated with new sales centers opened during the quarter,
many of which operated at a loss for the period.
The provision for losses on credit sales remained flat when compared with
the prior period. The Company provides for estimated future losses on current
period retail credit sales financed by the Company. The amounts provided are
based on the Company's historical loss experience, current repossession trends
and costs and management's assessment of the current credit quality of the
installment sale contract portfolio. Accordingly, the provision for losses on
credit sales is not necessarily directly related to current period sales.
Credit losses charged to loss reserves as a percentage of the average
outstanding balance of installment sale contracts on an annualized basis were
.63% for the first quarter of 1995 and .61% for the same period in the prior
year, while repossessions as a percentage of the average number of contracts
outstanding on an annualized basis declined to 3.00% in fiscal 1995 from 3.09%
in fiscal 1994.
Financial services interest expense decreased because the Company is now
structuring its REMIC securitizations as sales of receivables instead of as
collateralized borrowings. Financial services interest expense is expected to
continue to decline as the Company retires its outstanding debt secured by
installment sale contracts.
The Company's effective income tax rate was 38.5% in fiscal 1995 compared
to 37.2% in fiscal 1994 (excluding in 1994 a $214,000 reduction in income tax
expense arising from the adoption of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes). The increase in the effective tax rate
is primarily due to higher state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial position at December 31, 1994 reflects the normal
seasonal increase in inventories in preparation for the typically strong spring
and summer selling seasons. In addition, the Company's retail expansion has
resulted in an increased investment in inventories. Of the $25.7 million
increase in inventories since September 30, 1994, approximately $13.2 million
relates to the 22 new sales centers opened during the three months ended
December 31, 1994. Short-term borrowings principally reflect outstanding
advances on the Company's warehouse line of credit used to finance installment
sale contracts prior to securitization or other permanent financing. Borrowings
outstanding at September 30, 1994 were liquidated using a portion of the
proceeds of the Company's November 1994 REMIC securitization described below.
Receivables, which consist principally of installment sale contracts,
decreased primarily as a result of the Company's structuring of installment sale
contract securitizations as sales of
9
<PAGE>
receivables rather than as collateralized borrowings. During the three
months ended
December 31, 1994, the Company originated approximately $80 million of
installment sale contracts and sold approximately $129 million of installment
sale contracts via a REMIC securitization in November 1994. Investors purchased
94% of the interests in the REMIC trust for approximately $121.4 million cash
and the Company retained a 6% interest in the trust. This securitization was the
first public offering by the Company's new subsidiary, Oakwood Mortgage
Investors, Inc., which filed a shelf registration in late 1994 for $500 million
of asset-backed securities. Management believes that financing for installment
sale contracts remains readily available and anticipates securitizing
installment sale contracts using REMICs approximately every four months.
Management believes that the availability of permanent financing for
installment sale contracts, the Company's short-term credit facilities and cash
generated by operations are sufficient to provide for the Company's short-term
liquidity needs.
The Company continues to monitor the credit and equity markets and evaluate
the sources and cost of the long-term capital required to finance the demands of
both planned expansion and higher operating levels within existing operations.
The Company will seek to raise additional equity or long-term debt based upon
anticipated business demands, management's assessment of existing and future
conditions in the capital markets, and management's assessment of the
appropriate components of the Company's capital structure.
REGULATORY DEVELOPMENTS
The Department of Housing and Urban Development had stated its intention to
issue new Zone 1 wind standards by January 1, 1995; however, such issuance has
been delayed, and the timing of issuance of any new regulations and the
effective date thereof is not known.
10
<PAGE>
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Annual Meeting of Shareholders of the Registrant held on February 1,
1995, the shareholders approved (i) the election of Clarence W. Walker, Dennis
I. Meyer and C. Michael Kilbourne as directors; (ii) Three-Year Incentive Awards
for the executive officers and certain key employees of the Registrant; (iii) an
amendment to the Registrant's Bylaws to increase the authorized number of
directors to be not less than seven nor more than fifteen; and (iv) the
selection of Price Waterhouse LLP as independent accountants. The following
table sets forth the votes on each such matter:
<TABLE>
<CAPTION>
BROKER
FOR AGAINST ABSTAIN NON-VOTES
<S> <C> <C> <C> <C>
ELECTION OF DIRECTORS
(BY NOMINEE)
Clarence W. Walker 16,400,997 81,250 0 N/A
Dennis I. Meyer 16,400,797 81,720 0 N/A
C. Michael Kilbourne 16,401,101 81,416 0 N/A
APPROVAL OF THREE-YEAR 13,899,474 243,844 308,575 2,030,624
INCENTIVE AWARDS FOR THE
EXECUTIVE OFFICERS AND
CERTAIN KEY EMPLOYEES OF
THE REGISTRANT
APPROVAL OF AMENDMENT 15,918,993 482,841 80,683 N/A
TO BYLAWS TO INCREASE THE
REGISTRANT'S AUTHORIZED
NUMBER OF DIRECTORS
APPROVAL OF SELECTION OF 16,407,678 36,620 38,219 N/A
PRICE WATERHOUSE LLP AS
INDEPENDENT AUDITORS
</TABLE>
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
<TABLE>
<CAPTION>
<C> <S>
(3.1) Amendment to the Bylaws of the Registrant adopted
February 1, 1995
(3.2) Amended and restated Bylaws of the Registrant
adopted February 1, 1995
(4) Agreement to Furnish Copies of Instruments
with Respect to Long-term Debt
(11) Statement re Computation of Earnings Per Share
(27) Financial Data Schedule (filed in electronic format only)
</TABLE>
b) Reports on Form 8-K
No reports on Form 8-K were filed for the quarter ended
December 31, 1994.
Items 1, 2, 3 and 5 are inapplicable and are omitted.
12
<PAGE>
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Date: February 14, 1995
OAKWOOD HOMES CORPORATION
BY: s/C. Michael Kilbourne
C. Michael Kilbourne
Executive Vice President
(Principal Financial Officer)
(Duly Authorized Officer)
13
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
ITEM 6(a)
FORM 10-Q
QUARTERLY REPORT
For the quarter ended Commission File Number
December 31, 1994 1-7444
OAKWOOD HOMES CORPORATION
EXHIBIT INDEX
<TABLE>
<CAPTION>
<C> <S>
Exhibit No. Exhibit Description
3.1 Amendment to the Bylaws of the Registrant adopted
February 1, 1995
3.2 Amended and restated Bylaws of the Registrant
adopted February 1, 1995
4 Agreement to Furnish Copies of Instruments with
respect to Long-Term Debt (page 28 of the
sequentially numbered pages)
11 Statement re Computation of Earnings Per Share
(page 29 of the sequentially numbered pages)
27 Financial Data Schedule (filed in electronic format only)
</TABLE>
14
Exhibit 3.1
Amendment to the Bylaws of Oakwood Homes Corporation
Adopted February 1, 1995
Section 3.2 Number, Term and Qualification. The
Number of Directors of the Corporation shall be a maximum
of fifteen (15) and a minimum of seven (7) and the exact
number of directors within these limits shall be fixed
from time to time by resolution of the Board of Direc-
tors. Any directorships not filled by the shareholders
shall be treated as vacancies to be filled by and in the
discretion of the Board of Directors. The directors
shall be divided into three classes, each class to be as
nearly equal in number as possible. Each class of direc-
tors shall be elected to serve for terms of three (3)
years and until their successors shall be elected and
qualified. In the event of any increase in the autho-
rized number of directors, the additional directors shall
be classified so that all classes of directors shall be
increased equally, as nearly as possible, and, in the
event of any decrease in the authorized number of direc-
tors, all classes of directors shall be decreased
equally, as nearly as possible. In the event of the
death, resignation, retirement, removal or
disqualification of a director during his elected term of
office, his successor shall be elected to serve only
until the expiration of the term of his predecessor.
Directors need not be residents of the State of North
Carolina or shareholders of the Corporation.
Exhibit 3.2
BYLAWS
OF
OAKWOOD HOMES CORPORATION
ARTICLE I - OFFICES
Section 1.1 Principal Office. The principal office of the Corporation
shall be located at such place, within or without the State of North Carolina,
as shall be determined from time to time by the Board of Directors and as
shall have been so designated most recently in the annual report of the
Corporation or amendment thereto, filed with the North Carolina Secretary of
State pursuant to the North Carolina Business Corporation Act (the Act).
Section 1.2 Registered Office. The Corporation shall maintain a regis-
tered office in the State of North Carolina as required by law, which may be,
but need not be, identical with the principal office.
Section 1.3 Other Offices. The Corporation may have offices at such
other places, either within or without the State of North Carolina, as the
Board of Directors may from time to time determine, or as the business of the
Corporation may require.
ARTICLE II - MEETINGS OF SHAREHOLDERS
Section 2.1 Place of Meetings. All meetings of shareholders shall be
held at the principal office of the Corporation, or at such other place,
either within or without the State of North Carolina, as shall be designated
by the Board of Directors or the Chief Executive Officer of the Corporation.
Section 2.2 Annual Meetings. The annual meeting of the shareholders
shall be held at 2:00 p.m. on the fifth Wednesday in each calendar year, if
not a legal holiday, and, if a legal holiday, then at the same time on the
next day following which is not a legal holiday, for the purpose of electing
directors of the Corporation and for the transaction of such other business as
may be properly brought before the meeting.
Section 2.3 Substitute Annual Meetings. If the annual meeting shall
not be held on the day provided for by these Bylaws, a substitute annual
meeting may be called in accordance with the provisions of Section 2.4. A
meeting so called shall be designated and treated for all purposes as the
annual meeting.
Section 2.4 Special Meetings. Special meetings of the shareholders may
be called at any time by or at the request of the Chief Executive Officer or
the Board of Directors.
Section 2.5 Notice of Meetings. Written or printed notice stating the
date, time and place of the meeting shall be given not less than 10 nor more
than 60 days before the date thereof, either personally or by mail, at the
direction of the person or persons calling the meeting, to each shareholder
entitled to vote at such meeting and each other shareholder entitled to notice
pursuant to the Articles of Incorporation or applicable law.
In the case of a special meeting, the notice of meeting shall specifi-
cally state the purpose or purposes for which the meeting is called. In the
case of an annual meeting, the notice of meeting need not specifically state
the purpose or purposes thereof or the business to be transacted thereat
unless such statement is expressly required by the provisions of these Bylaws
or by applicable law.
If a meeting is adjourned for more than 120 days after the date fixed
for the original meeting, or if a new record date is fixed for the adjourned
meeting,
<PAGE>
or if the date, time and place for the adjourned meeting is not
announced prior to adjournment, then notice of the adjourned meeting shall be
given as in the case of an original meeting; otherwise, it is not necessary to
give any notice of the adjourned meeting other than by announcement at the
meeting at which the adjournment is taken.
A shareholder's attendance at a meeting constitutes a waiver by such
shareholder of (a) objection to lack of notice or defective notice of the
meeting, unless the shareholder at the beginning of the meeting objects to
holding the meeting or transacting business at the meeting and (b) objection
to consideration of a particular matter at the meeting that is not within the
purpose or purposes described in the notice of the meeting, unless the
shareholder objects to considering the matter before it is voted upon.
Section 2.6 Record Date. For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may fix in advance a date as
the record date for any such determination of shareholders, such record date
in any case to be not more than 70 days immediately preceding the date of the
meeting or the date on which the particular action requiring such determina-
tion of shareholders is to be taken, or such earlier date as may be required
by the rules of any exchange upon which the Corporation's securities may be
listed.
If no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, the close of
business on the day before the date on which notice of the meeting is first
mailed to shareholders shall be the record date for such determination of
shareholders.
A determination of shareholders entitled to notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless
the Board of Directors fixes a new record date for the adjourned meeting,
which it must do if the meeting is adjourned to a date more than 120 days
after the date fixed for the original meeting.
Section 2.7 Shareholders' List. Not later than two business days after
the date notice of a meeting of shareholders is first given, the Secretary or
other officer or person having charge of the stock transfer books of the
Corporation shall prepare an alphabetical list of the shareholders entitled to
notice of such meeting, with the address of and number of shares held by each
shareholder, which list shall be kept on file at the principal office of the
Corporation (or such other place in the city where the meeting is to be held
as may be identified in the notice of the meeting) for the period commencing
two business days after notice of the meeting is first given and continuing
through such meeting, and which list shall be available for inspection by any
shareholder, or his or her agent or attorney, upon his or her demand, at any
time during regular business hours. This list shall also be produced and kept
open at the time and place of the meeting and shall be subject to inspection
by any shareholder, or his or her agent or attorney, during the whole time of
the meeting and any adjournment thereof.
Section 2.8 Quorum. The holders of shares entitled to a majority of
votes entitled to be cast (as described in Section 2.10), present in person or
represented by proxy, shall constitute a quorum at all meetings of sharehold-
ers for purposes of acting on any matter for which action by the shareholders
is required. If there is no quorum at the opening of a meeting of sharehold-
ers, such meeting may be adjourned from time to time by the vote of a majority
of the shares voting on the motion to adjourn; and, at any adjourned meeting
at which a quorum is present, any business may be transacted which might have
been transacted at the original meeting.
Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjourn-
<PAGE>
ment thereof unless a new record date is or must be set for that ad-
journed meeting.
Section 2.9 Organization. Each meeting of shareholders shall be
presided over by the Chief Executive Officer, or, in the absence or at the
request of the Chief Executive Officer, by such other officer as the Chief
Executive Officer or the Board of Directors may designate, or in their absence
and in the absence of such designation, by any person selected to preside by
plurality vote of the shares represented and entitled to vote at the meeting,
with each share having the same number of votes to which it would be entitled
on any other matter on which all shares represented and entitled to vote at
the meeting would be entitled to vote. The Secretary, or in the absence or at
the request of the Secretary, any person designated by the person presiding at
the meeting, shall act as secretary of the meeting.
Section 2.10 Voting of Shares. Except as otherwise provided in the
Articles of Incorporation, each outstanding share having the right to vote on
a matter or matters submitted to a vote at a meeting of shareholders shall be
entitled to one vote on each such matter. A shareholder may vote in person or
by proxy.
Except in the election of directors (as provided in Section 3.4), if a
quorum exists, action on a matter by the shareholders entitled to vote on the
matter is approved by such shareholders if the votes cast favoring the action
exceed the votes cast opposing the action, unless a greater number of affirma-
tive votes is required by law or the Articles of Incorporation or a Bylaw
adopted by the shareholders.
Voting on all matters including the election of directors shall be by
voice vote or by a show of hands unless, as to any matter, the holders of
shares entitled to at least 25% of the votes of shares represented at the
meeting and entitled to vote on that matter shall demand, prior to the voting
on such matter, a ballot vote on such matter.
Section 2.11 Action Without Meeting. Any action required or permitted
to be taken at a meeting of the shareholders may be taken without a meeting if
one or more written consents, setting forth the action so taken, shall be
signed by all of the persons who would be entitled to vote upon such action at
a meeting, whether before or after the action so taken, and delivered to the
Corporation to be included in the corporate minute book or filed with the
corporate records. Such consent has the same effect as a meeting vote and may
be described as such in any document.
ARTICLE III - DIRECTORS
Section 3.1 General Powers. All corporate powers of the Corporation
shall be exercised by or under the authority of, and the business and affairs
of the Corporation shall be managed under the direction of, the Board of
Directors.
Section 3.2 Number, Term and Qualification. The number of directors of
the Corporation shall be a maximum of fifteen (15) and a minimum of seven (7)
and the exact number of directors within these limits shall be fixed from time
to time by resolution of the Board of Directors. Any directorships not filled
by the shareholders shall be treated as vacancies to be filled by and in the
discretion of the Board of Directors. The directors shall be divided into
three classes, each class to be as nearly equal in number as possible.
Each class of directors shall be elected to serve for terms of three (3)
years and until their successors shall be elected and qualified. In the
event of any increase in the authorized number of directors, the
additional directors shall be so classified so that all classes of directors
shall be increased equally, as nearly as possible, and, in the event of any
decrease in the authorized number of directors, all classes of directors
shall be decreased equally, as nearly as possible. In the
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event of the death, resignation, retirement, removal or
disqualification of a director during his elected term of office, his succes-
sor shall be elected to serve only until the expiration of the term of his
predecessor. Directors need not be residents of the State of North Carolina
or shareholders of the Corporation.
Section 3.3 Election of Directors. Except as provided in Section 3.6,
directors shall be elected at the annual meeting of shareholders.
Section 3.4 Voting for Directors. Directors shall be elected by a
plurality of the votes cast by the shares entitled to vote in the election of
directors at a meeting at which a quorum is present. Shareholders shall have
the right to cumulate their votes for directors except (a) if on the record
date for a meeting of shareholders, shares of any class or series are listed
on a national securities exchange or held of record by more than 2,000
shareholders or (b) as provided in the Articles of Incorporation or required
by applicable law. If the shareholders have the right to cumulate their
votes, then this right of cumulative voting shall not be exercised unless some
shareholder or proxy holder announces in open meeting, before the voting for
the directors starts, his intention so to vote cumulatively; and if such
announcement is made, the chair shall declare that all shares entitled to vote
have the right to vote cumulatively and shall thereupon grant a recess of not
less than one nor more than four hours, as he shall determine, or of such
other period of time as is unanimously then agreed upon.
Section 3.5 Removal. Directors may be removed from office with or
without cause by a vote of shareholders holding at least seventy-five percent
(75%) of the shares entitled to vote at an election of directors. However,
unless the entire Board is removed, an individual director may not be removed
if the number of shares voting against the removal would be sufficient to
elect a director if such shares were voted cumulatively at an annual election.
If any directors are so removed, new directors may be elected at the same
meeting.
Section 3.6 Vacancies. A vacancy occurring in the Board of Directors,
including positions not filled by the shareholders or those resulting from an
increase in the number of directors, may be filled by a majority of the
remaining directors, though less than a quorum, or by the sole remaining
director. The shareholders may elect a director at any time to fill any
vacancy not filled by the directors.
Section 3.7 Compensation. The Board of Directors, in its discretion,
may compensate directors for their services as such and may provide for the
payment of all expenses reasonably incurred by directors in attending meetings
of the Board or of any Committee or in the performance of their other duties
as directors. Nothing herein contained, however, shall be construed to
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor.
Section 3.8 Committees. The Board of Directors, by resolution adopted
by a majority of the number of directors then in office, may designate and
appoint from among its members one or more Committees, including an Executive
Committee, each consisting of two or more directors, who shall serve as
members of such Committee at the pleasure of the Board of Directors. Each
such Committee, to the extent provided in such resolution, shall have and may
exercise all of the authority of the Board of Directors in the management of
the Corporation, including such powers as may be given to the Board of
Directors by these Bylaws, except that no such Committee shall have authority
to: (a) authorize dividends or other distributions not permitted by applica-
ble law to be authorized by a Committee; (b) approve or propose to sharehold-
ers action that applicable law requires to be approved by shareholders; (c)
fill vacancies on the Board of Directors or on any Committee; (d) amend the
Articles of Incorporation; (e) adopt, amend or repeal bylaws; (f) approve a
plan of merger not requiring
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shareholder approval; (g) authorize or approve
reacquisition of shares, except according to a formula or method prescribed by
the Board of Directors; (h) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative rights,
preferences and limitations of a class or series of shares (except that the
Board of Directors may authorize a Committee or a senior executive officer to
do so within limits specifically prescribed by the Board of Directors); or (i)
amend or repeal any resolution of the Board of Directors that by its terms
provides that it is not so amendable or repealable. Nothing herein shall
preclude the Board of Directors from establishing and appointing any commit-
tee, whether of directors or otherwise, not having or exercising the authority
of the Board of Directors.
ARTICLE IV - MEETINGS OF DIRECTORS
Section 4.1 Regular Meetings. A regular annual meeting of the Board of
Directors shall be held immediately after, and at the same place as, the
annual meeting or substitute annual meeting of shareholders. In addition, the
Board of Directors may provide the time and place, either within or without
the State of North Carolina, for the holding of additional regular meetings.
Section 4.2 Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board (if
there shall be a person holding such office), the Chief Executive Officer or
any two directors. Such meetings may be held either within or without the
State of North Carolina.
Section 4.3 Notice of Meetings. Regular meetings of the Board of
Directors may be held without notice.
The person or persons calling a special meeting of the Board of Direc-
tors shall give notice of the meeting to the directors by any usual means of
communication. If such notice is given to a director in writing by mail, it
shall be mailed, correctly addressed to such director with postage prepaid, no
later than six days prior to the date of the meeting. If such notice is given
to a director in writing otherwise than by mail, it shall be given so that it
is received by such director no later than two days prior to the meeting. If
such notice is given orally to a director, it shall be communicated orally to
such director no later than two days prior to the meeting. Delivery or
completion of transmission of written notice to the address of a director
shall be deemed receipt by such director, and any such written notice given to
a director by mail that is not timely mailed shall nevertheless be valid and
effective if so received by such director no later than two days prior to the
date of the meeting. The person or persons giving such notice may conclu-
sively presume that the address of a director to which such notice is to be
directed is the business address of such director appearing in the Corpora-
tion's most current annual report to the North Carolina Secretary of State,
unless prior to the sending of such notice, the Corporation shall have
received from such director notice of a different address to which notices to
such director should be directed.
A director's attendance at or participation in a meeting shall consti-
tute a waiver by such director of notice of such meeting, unless the director
at the beginning of the meeting (or promptly upon his or her arrival) objects
to holding the meeting or to the transaction of business at the meeting and
does not thereafter vote for or assent to action taken at the meeting.
Section 4.4 Quorum. A majority of the number of directors fixed or
prescribed by these Bylaws shall be required for, and shall constitute, a
quorum for the transaction of business at any meeting of the Board of Direc-
tors.
Section 4.5 Manner of Acting. Except as otherwise provided in these
Bylaws or required by applicable law, the affirmative vote of a majority of
the
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directors present at a meeting of the Board of Directors shall be the act
of the Board of Directors, if a quorum is present when the vote is taken.
Section 4.6 Organization. Each meeting of the Board of Directors shall
be presided over by the Chief Executive Officer (if there shall be a person
holding such office), or, in the absence or at the request of the Chief
Executive Officer, by the Chairman of the Board, and in their absence or at
their request, by any person selected to preside by vote of a majority of the
directors present. The Secretary, or in the absence or at the request of the
Secretary, any person designated by the person presiding at the meeting, shall
act as secretary of the meeting.
Section 4.7 Action Without Meeting. Action required or permitted to be
taken by the Board of Directors or a Committee at a meeting may be taken
without a meeting if one or more written consents describing the action taken
are signed by each of the directors or members of the Committee, as the case
may be, whether before or after the action so taken, and filed with the
corporate records or the minutes of the proceedings of the Board or Committee.
Action so taken is effective when the last director or Committee member signs
such consent, unless the consent specifies a different effective date. Such
consent has the effect of a meeting vote and may be described as such in any
document.
Section 4.8 Participation by Conference Telephone. Any one or more
directors or members of a Committee may participate in a meeting of the Board
of Directors or Committee by means of a conference telephone or similar
communications device that allows all persons participating in the meeting to
simultaneously hear each other during the meeting, and such participation in a
meeting shall be deemed presence in person at such meeting.
ARTICLE V - OFFICERS
Section 5.1 General. The officers of the Corporation shall consist of
a Chief Executive Officer (who shall be either the Chairman of the Board or
the President, as provided in these Bylaws), a President, a Secretary and a
Treasurer, and may also include a Chairman of the Board, a Chief Operating
Officer, and such Vice Presidents, Assistant Secretaries, Assistant Treasurers
and other officers as may be appointed by the Board of Directors or otherwise
provided in these Bylaws. Any two or more offices may be simultaneously held
by the same person, but no person may act in more than one capacity where
action of two or more officers is required. The title of any officer may
include any additional designation descriptive of such officer's duties as the
Board of Directors may prescribe.
Section 5.2 Appointment and Term. The officers of the Corporation
shall be appointed from time to time by the Board of Directors; provided, that
the Board of Directors may authorize a duly appointed officer to appoint one
or more other officers or assistant officers, other than appointment of the
Chief Executive Officer, the Chairman of the Board, the President or the Chief
Operating Officer. Each officer shall serve as such at the pleasure of the
Board of Directors.
Section 5.3 Removal. Any officer may be removed by the Board of
Directors at any time with or without cause; but such removal shall not itself
affect the contract rights, if any, of the person so removed.
Section 5.4 Compensation. The compensation of all officers of the
Corporation shall be fixed by, or in the manner prescribed by, the Board of
Directors.
Section 5.5 Chief Executive Officer. If there is a Chairman of the
Board and the Board of Directors designates the Chairman of the Board as the
Chief Executive Officer, then the Chairman of the Board shall be the Chief
Executive Officer of the Corporation. Otherwise, the President shall be the
Chief Execu-
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tive Officer of the Corporation. Subject to the direction and
control of the Board of Directors, the Chief Executive Officer shall supervise
and control the management of the Corporation and shall have such duties and
authority as are normally incident to the position of chief executive officer
of a corporation and such other duties and authority as may be prescribed from
time to time by the Board of Directors or as are provided for elsewhere in
these Bylaws. The title of the Chairman of the Board or President, as the
case may be, serving as the Chief Executive Officer may, but need not, also
refer to his or her position as Chief Executive Officer.
Section 5.6 Chairman of the Board. The Board of Directors may, but
need not, appoint from among its members an officer designated as the Chairman
of the Board. If there is appointed a Chairman of the Board and such Chairman
of the Board is also designated by the Board of Directors to be the Chief
Executive Officer, then the Chairman of the Board shall have all of the duties
and authority of the Chief Executive Officer and shall also, when present,
preside over meetings of the Board of Directors. If there is a Chairman of
the Board but such Chairman of the Board is not also designated as the Chief
Executive Officer, then the Chairman of the Board shall, in the absence of the
Chief Executive Officer, preside over meetings of the Board of Directors and
shall have such other duties and authority as may be prescribed from time to
time by the Board of Directors or as are provided for elsewhere in these
Bylaws.
Section 5.7 Chief Operating Officer. If there is appointed a Chairman
of the Board who is also the Chief Executive Officer, then the President shall
be the Chief Operating Officer. If the President is the Chief Executive
Officer, then the President shall also serve as the Chief Operating Officer
unless the Board of Directors shall designate some other officer of the
Corporation as the Chief Operating Officer. Subject to the direction and
control of the Chief Executive Officer and the Board of Directors, the Chief
Operating Officer shall supervise and control the operations of the Corpora-
tion, shall have such duties and authority as are normally incident to the
position of chief operating officer of a corporation and such other duties as
may be prescribed from time to time by the Chief Executive Officer or the
Board of Directors, and, in the absence or disability of the Chief Executive
Officer, shall have the authority and perform the duties of the Chief Execu-
tive Officer. The title of the President or other officer serving as the
Chief Operating Officer may, but need not, also refer to his or her position
as Chief Operating Officer.
Section 5.8 President. Unless there is appointed a Chairman of the
Board who is also designated the Chief Executive Officer, the President shall
be the Chief Executive Officer of the Corporation and shall have all of the
duties and authority of that office. If the President is not the Chief
Executive Officer, then the President shall be the Chief Operating Officer and
shall have all of the duties and authority of that office. If the President
shall be the Chief Executive Officer and no other officer shall have been
designated by the Board of Directors as the Chief Operating Officer, then the
President shall also have all of the duties and authority of the Chief
Operating Officer. The President shall also have such other duties and
authority as may be prescribed from time to time by the Board of Directors.
Section 5.9 Vice President. The Vice President, and if there be more
than one, the Executive Vice President or other Vice President designated by
the Board of Directors, shall, in the absence or disability of the President,
have the authority and perform the duties of said office (including the duties
and authority of the President as either Chief Executive Officer or Chief
Operating Officer or both, if the President serves as such). In addition,
each Vice President shall perform such other duties and have such other powers
as are normally incident to the office of Vice President or as shall be
prescribed by the Chief Executive Officer, the Chief Operating Officer or the
Board of Directors.
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Section 5.10 Secretary. The Secretary shall have the responsibility
and authority to maintain and authenticate the records of the Corporation;
shall keep, or cause to be kept, accurate records of the acts and proceedings
of all meetings of shareholders, directors and Committees; shall give, or
cause to be given, all notices required by law and by these Bylaws; shall have
general charge of the corporate books and records and of the corporate seal,
and shall affix the corporate seal to any lawfully executed instrument
requiring it; shall have general charge of the stock transfer books of the
Corporation and shall keep, or cause to be kept, all records of shareholders
as are required by applicable law or these Bylaws; shall sign such instruments
as may require the signature of the Secretary; and, in general, shall perform
all duties incident to the office of Secretary and such other duties as may be
assigned to him or her from time to time by the Chief Executive Officer, the
Chief Operating Officer or the Board of Directors.
Section 5.11 Treasurer. The Treasurer shall have custody of all funds
and securities belonging to the Corporation and shall receive, deposit or dis-
burse the same under the direction of the Board of Directors; shall keep, or
cause to be kept, full and accurate accounts of the finances of the Corpora-
tion in books especially provided for that purpose, and shall generally have
charge over the Corporation's accounting and financial records; shall cause a
true statement of its assets and liabilities as of the close of each fiscal
year, and of the results of its operations and of cash flows for such fiscal
year, all in reasonable detail, including particulars as to convertible
securities then outstanding, to be made as soon as practicable after the end
of such fiscal year. The Treasurer shall also prepare and file, or cause to be
prepared and filed, all reports and returns required by Federal, State or
local law and shall generally perform all other duties incident to the office
of Treasurer and such other duties as may be assigned to him or her from time
to time by the Chief Executive Officer, the Chief Operating Officer or the
Board of Directors.
Section 5.12 Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries and Assistant Treasurers, if any, shall, in the absence
or disability of the Secretary or the Treasurer, respectively, have all the
powers and perform all of the duties of those offices, and they shall in
general perform such other duties as shall be assigned to them by the Secre-
tary or the Treasurer, respectively, or by the Chief Executive Officer, the
Chief Operating Officer or the Board of Directors.
Section 5.13 Bonds. The Board of Directors may by resolution
require any or all officers, agents and employees of the Corporation to give
bond to the Corporation, with sufficient sureties, conditioned on the faithful
performance of the duties of their respective offices or positions, and to
comply with such other conditions as may from time to time be required by the
Board of Directors.
ARTICLE VI - CONTRACTS, LOANS AND DEPOSITS
Section 6.1 Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any document or instrument on behalf of the Corporation, and such
authority may be general or confined to specific instances. Any resolution of
the Board of Directors authorizing the execution of documents by the proper
officers of the Corporation or by the officers generally and not specifying
particular officers shall be deemed to authorize such execution by the Chief
Executive Officer, the Chief Operating Officer, the Chairman of the Board, the
President, or any Vice President, or by any other officer if such execution is
within the scope of the duties and of such other office. The Board of
Directors may by resolution authorize such execution by means of one or more
facsimile signatures.
Section 6.2 Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless
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authorized by the Board of Directors. Such authority may be general or
confined to specific instances.
Section 6.3 Checks and Drafts. All checks, drafts or other orders for
the payment of money 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 determined by resolution of the Board of
Directors.
Section 6.4 Deposits. All funds of the Corporation not otherwise
employed or invested shall be deposited from time to time to the credit of the
Corporation in such depositories as the Board of Directors direct.
ARTICLE VII - SHARE CERTIFICATES
Section 7.1 Certificates for Shares. Unless the Board of Directors
authorizes the issue of some or all of the shares of any or all classes or
series without certificates, certificates representing shares of the Corpora-
tion shall be issued, in such form as the Board of Directors shall determine,
to every shareholder for the fully paid shares owned by him. These certifi-
cates shall be signed by the Chief Executive Officer, the Chief Operating
Officer, the Chairman of the Board, the President or a Vice President and by
the Secretary, an Assistant Secretary, the Treasurer or an Assistant Trea-
surer, either manually or in facsimile (provided that certificates bearing
facsimile signatures of both officers shall be manually countersigned by a
registrar, transfer agent or other authenticating agent) and shall be sealed
with the seal of the Corporation or a facsimile thereof. Such certificates
shall be consecutively numbered or otherwise identified and the name and
address of the persons to whom they are issued, with the number of shares and
the date of issue, shall be entered on the stock transfer books of the
Corporation.
Section 7.2 Transfer of Shares. Transfer of shares represented by cer-
tificates shall be made on the stock transfer books of the Corporation only
upon the surrender of the certificates for the shares sought to be transferred
by the record holder thereof or by his or her duly authorized agent, trans-
feree or legal representative, or as otherwise provided by applicable law.
All certificates surrendered for transfer shall be cancelled before new
certificates for the transferred shares shall be issued.
Section 7.3 Lost Certificates. The Board of Directors may authorize
the issuance of a new share certificate in place of a certificate claimed to
have been lost, destroyed or wrongfully taken, upon receipt of an affidavit of
such fact from the person claiming the loss or destruction. When authorizing
such issuance of a new certificate, the Board may require the claimant to give
the Corporation a bond in such sum and with such sureties as it may direct to
indemnify the Corporation against loss from any claim with respect to the
certificate claimed to have been lost, destroyed or wrongfully taken; or the
Board may, by resolution reciting that the circumstances justify such action,
authorize the issuance of the new certificate without requiring such a bond
with respect to a certificate claimed to have been lost or destroyed. Any
such authorization by the Board of Directors may be general or confined to
specific instances. Nothing herein shall require the Board of Directors to
authorize the issuance of any such replacement certificate under any circum-
stances in which the Corporation is not required to issue such certificate,
this provision being permissive and not mandatory.
ARTICLE VIII - RECORDS AND REPORTS
Section 8.1 General. The Corporation shall keep all records and submit
and file all reports and filings as are required by applicable law. Unless
the Board of Directors otherwise directs, the Treasurer shall be responsible
for keeping, or causing to be kept, all financial and accounting records of
the Corporation and for submitting or filing, or causing to be submitted or
filed, all
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reports and filings of a financial or accounting nature, and the
Secretary shall be responsible for keeping, or causing to be kept, all other
records and for submitting or filing, or causing to be submitted or filed, all
other reports and filings.
The Corporation shall keep as permanent records minutes of all meetings
of its incorporators, shareholders and Board of Directors, a record of all
actions taken by the shareholders or Board of Directors without a meeting, and
a record of all actions taken by Committees of the Board of Directors. The
Corporation shall maintain appropriate accounting records. The Corporation or
its agent shall maintain a record of its shareholders, in a form that permits
preparation of a list of the names and addresses of all shareholders, in
alphabetical order by class of shares showing the number and class of shares
held by each. The Corporation shall maintain its records in written form or
in another form capable of conversion into written form within a reasonable
time.
Section 8.2 Records at Principal Office. The Corporation shall keep a
copy of the following records at the Corporation's principal office: (a) its
Articles or restated Articles of Incorporation and all amendments to them cur-
rently in effect; (b) its Bylaws or restated Bylaws and all amendments to them
currently in effect; (c) resolutions adopted by the Board of Directors
creating one or more classes or series of shares, and fixing their relative
rights, preferences, and limitations, if shares issued pursuant to those
resolutions are outstanding; (d) the minutes of all shareholders' meetings,
and records of all action taken by shareholders without a meeting, for the
past three years; (e) all written communications to shareholders generally
within the past three years and the financial statements required by law to be
made available to the shareholders for the past three years; (f) a list of the
names and business addresses of its current directors and officers; and
(g) its most recent annual report delivered to the North Carolina Secretary of
State pursuant to the Act.
Section 8.3 Financial Statements. The Corporation shall make available
to its shareholders annual financial statements, which may be consolidated or
combined statements of the Corporation and one or more of its subsidiaries, as
appropriate, that include a balance sheet as of the end of the fiscal year, an
income statement for that year, and a statement of cash flows for the year
unless that information appears elsewhere in the financial statements. If
financial statements are prepared for the Corporation on the basis of gener-
ally accepted accounting principles, the annual financial statements shall
also be prepared on that basis.
If the annual financial statements are reported upon by a public
accountant, such accountant's report shall accompany them. If not, the
statements shall be accompanied by a statement of the President or the
Treasurer or other person responsible for the Corporation's accounting records
(a) stating his or her reasonable belief whether the statements were prepared
on the basis of generally accepted accounting principles and, if not, describ-
ing the basis of preparation and (b) describing any respects in which the
statements were not prepared on a basis of accounting consistent with the
statements prepared for the preceding year.
The Corporation shall mail the annual financial statements, or a written
notice of their availability, to each shareholder within 120 days after the
close of each fiscal year; provided that the failure of the Corporation to
comply with this requirement shall not constitute the basis for any claim of
damages by any shareholder unless such failure was in bad faith. Thereafter,
on written request from a shareholder who was not mailed the statements, the
Corporation shall mail such shareholder the latest financial statements.
Section 8.4 Annual Report. The Corporation shall prepare and deliver
to the North Carolina Secretary of State for filing each year the annual
report required by the Act. Such annual report shall be filed each year
within 60 days
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after the end of the month of March, or at such other time as
is then required by applicable law. The Corporation may, and when required by
law shall, file all necessary or appropriate corrections and amendments to
such annual report, and shall promptly file an amendment to its annual report
to reflect any change in the location of the principal office of the Corpora-
tion.
ARTICLE IX - GENERAL PROVISIONS
Section 9.1 Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
the manner and upon the terms and conditions provided by law and the Articles
of Incorporation of the Corporation. The Board of Directors may fix in
advance a record date for determining the shareholders entitled to a dividend.
If such record date is not fixed by the Board of Directors, the date the Board
of Directors authorizes such dividend shall be the record date.
Section 9.2 Seal. The corporate seal of the Corporation shall consist
of two concentric circles between or within which are the name of the Corpora-
tion, the state of incorporation, the year of incorporation and the word
"SEAL." The seal may be used by causing it or a facsimile thereof to be
impressed, affixed, stamped or reproduced by any means. Any officer of the
Corporation authorized to execute or attest a document on behalf of the
Corporation may affix or reproduce on such document, as and for the corporate
seal of the Corporation, a seal in any other form sufficient to evidence that
it is intended by such officer to represent the corporate seal of the Corpora-
tion, in which case such seal shall be as effective as the corporate seal in
the form herein prescribed.
Section 9.3 Notice and Waiver of Notice. Except as otherwise provided
in the Articles of Incorporation or these Bylaws, any notice permitted or
required to be given pursuant to these Bylaws may be given in any manner per-
mitted by applicable law and with the effect therein provided. Without
limiting the generality of the forgoing, written notice by the Corporation to
a shareholder is effective when deposited in the United States mail with
postage thereon prepaid and correctly addressed to the shareholder's address
shown in the Corporation's current record of shareholders.
Whenever any notice is required to be given to any shareholder or
director under the provisions of the Act or under the provisions of the
Articles of Incorporation or Bylaws, a waiver thereof in writing signed by the
person or persons entitled to such notice and included in the minutes or filed
with the corporate records, whether done before or after the time stated in
the notice, shall be equivalent to the giving of such notice.
Section 9.4 Fiscal Year. The fiscal year of the Corporation shall be
from October 1 through September 30.
Section 9.5 Indemnification. Any person who at any time serves or has
served as a director of the Corporation shall have a right to be indemnified
by the Corporation to the fullest extent permitted by law against (a) ex-
penses, including reasonable attorneys' fees, actually and necessarily
incurred by him or her in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or inves-
tigative, whether formal or informal, and whether or not brought by or on
behalf of the Corporation, arising out of his or her status as such director,
or his or her status as an officer, employee or agent of the Corporation, or
his or her service, at the request of the Corporation, as a director, officer,
partner, trustee, employee or agent of any other corporation, partnership,
joint venture, trust or other enterprise or as a trustee or administrator
under an employee benefit plan, or his or her activities in any of the forego-
ing capacities, and (b) any liability incurred by him or her, including
without limitation, satisfaction of any judgment, money decree, fine (includ-
ing any excise tax assessed with respect to
11
<PAGE>
an employee benefit plan), penalty or settlement, for which he or she may
have become liable in connection with any such action, suit or proceeding.
The Board of Directors of the Corporation shall take all such action as
may be necessary and appropriate to authorize the Corporation to pay the
indemnification required by this Bylaw, including without limitation, to the
extent necessary, (a) making a good faith evaluation of the manner in which
the claimant for indemnity acted and of the reasonable amount of indemnity due
him or her and (b) giving notice to and obtaining approval by the shareholders
of the Corporation.
Expenses incurred by a director in defending an action, suit or proceed-
ing may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
the director to pay such amount unless it shall ultimately be determined that
he or she is entitled to be indemnified by the Corporation against such ex-
penses.
Any person who at any time after the adoption of this Bylaw serves or
has served as a director of the Corporation shall be deemed to be doing or to
have done so in reliance upon, and as consideration for, the right of indemni-
fication provided herein, and any modification or repeal of these provisions
for indemnification shall be prospective only and shall not affect any rights
or obligations existing at the time of such modification or repeal. Such
right shall inure to the benefit of the legal representatives of any such
person, shall not be exclusive of any other rights to which such person may be
entitled apart from the provisions of this Bylaw, and shall not be limited by
the provisions for indemnification in Sections 55-8-51 through 55-8-56 of the
Act or any successor statutory provisions.
Any person who is entitled to indemnification by the Corporation
hereunder shall also be entitled to reimbursement of reasonable costs,
expenses and attorneys' fees incurred in obtaining such indemnification.
Section 9.6 Construction. All references in these Bylaws to "share-
holder" or "shareholders" refer to the person or persons in whose names shares
are registered in the records of the Corporation, except to the extent that a
beneficial owner of shares that are registered in the name of a nominee is
recognized by the Corporation as a "shareholder" in accordance with a proce-
dure therefor that the Corporation may, but need not, establish pursuant to
applicable law. All personal pronouns used in these Bylaws shall include
persons of any gender. All terms used herein and not specifically defined
herein but defined in the Act shall have the same meanings herein as given
under the Act, unless the context otherwise requires.
Section 9.7 Amendments. Except as otherwise provided herein or in the
Articles of Incorporation or by applicable law, these Bylaws may be amended or
repealed and new bylaws may be adopted by action of the Board of Directors or
the shareholders.
Sections 3.2 and 3.5 of these Bylaws have been adopted by the share-
holders of this Corporation and may not be amended, repealed or annulled
except by a vote of the shareholders holding at least seventy-five percent
(75%) of the shares of the Corporation entitled to vote.
12
<PAGE>
<PAGE>
EXHIBIT 4
AGREEMENT TO FURNISH COPIES OF INSTRUMENTS
WITH RESPECT TO LONG-TERM DEBT
The Registrant has entered into certain agreements with respect to long-term
indebtedness which do not exceed ten percent of the total assets of the
Registrant and its subsidiaries on a consolidated basis. The Registrant hereby
agrees to furnish a copy of such agreements to the Commission upon request of
the Commission.
OAKWOOD HOMES CORPORATION
By: s/C. Michael Kilbourne
C. Michael Kilbourne
Executive Vice President
28
<PAGE>
EXHIBIT 11
OAKWOOD HOMES CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended December 31,
1994 1993
<S> <C> <C>
Weighted average number of common
shares outstanding 21,100 21,073
Add: Dilutive effect of stock
options, computed using the
treasury stock method 954 1,048
Weighted average number of common
and common equivalent shares
outstanding 22,054 22,121
Net income $ 7,648 $ 6,634
Earnings per common share - primary $ .35 $ .30
Weighted average number of common 21,100 21,073
shares outstanding
Add: Dilutive effect of stock
options, computed using
the treasury stock method 1,065 1,067
Weighted average number of common
shares outstanding assuming
full dilution 22,165 22,140
Net income $ 7,648 $ 6,634
Earnings per common share - fully $ .35 $ .30
diluted
</TABLE>
29
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
registrant's consolidated financial statements for the quarter ended December
31, 1994 filed as part of the registrant's Form 10-Q for the quarter ended
December 31, 1994 and is qualified in its entirety by reference to such Form
10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> DEC-31-1994
<CASH> 2,689
<SECURITIES> 0
<RECEIVABLES> 315,039
<ALLOWANCES> 0
<INVENTORY> 122,182
<CURRENT-ASSETS> 0
<PP&E> 90,064
<DEPRECIATION> 23,249
<TOTAL-ASSETS> 553,166
<CURRENT-LIABILITIES> 65,155
<BONDS> 195,747
<COMMON> 10,561
0
0
<OTHER-SE> 267,734
<TOTAL-LIABILITY-AND-EQUITY> 553,166
<SALES> 127,443
<TOTAL-REVENUES> 146,803
<CGS> 93,240
<TOTAL-COSTS> 126,598
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,932
<INTEREST-EXPENSE> 5,839
<INCOME-PRETAX> 12,434
<INCOME-TAX> 4,786
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,648
<EPS-PRIMARY> .35
<EPS-DILUTED> .35
</TABLE>
