As filed with the Securities and Exchange Commission on September 14, 1998
Registration No. 333-62069
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO.1
to
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
CONCORD EFS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 04-2462252
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2525 Horizon Lake Drive, Suite 120
Memphis, Tennessee 38133
(901) 371-8000
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
Thomas J. Dowling,
Vice President and Controller of
Concord EFS, Inc.
2525 Horizon Lake Drive, Suite 120
Memphis, Tennessee 38133
(901) 371-8022
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Approximate date of commencement of proposed sale to the public: As soon as
practicable following the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
CONCORD EFS, INC.
4,554,342 Shares
of
Common Stock
----------------------------------------
This Prospectus relates to up to 4,554,342 shares of common stock, $0.33
1/3 par value per share (the "Company Common Stock"), of Concord EFS, Inc. (the
"Company"), which may be offered and sold from time to time hereafter by or for
the account of the Selling Shareholders, as defined herein, in ordinary
brokerage or principal transactions in the over-the-counter market. The Company
Common Stock is quoted on the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") National Market System under the symbol
"CEFT". On September __, 1998, the closing sale price of the Company Common
Stock on the NASDAQ National Market System was $_______ per share.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
The date of this Prospectus is September __, 1998.
2
<PAGE>
TABLE OF CONTENTS
TITLE PAGE
AVAILABLE INFORMATION....................................................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................. 4
THE COMPANY................................................................. 5
SELLING SHAREHOLDERS........................................................ 5
LEGAL MATTERS............................................................... 8
EXPERTS..................................................................... 8
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, is required to file reports, proxy and information statements, and
other information with the Securities and Exchange Commission (the "SEC").
Copies of such reports, proxy and information statements, and other information
can be obtained, at prescribed rates, from the SEC by addressing written
requests for such copies to the Public Reference Section at the SEC at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, such
reports, proxy and information statements, and other information can be
inspected and copied at the public reference facilities referred to above and at
the regional offices of the SEC at 7 World Trade Center, 13th Floor, New York,
New York 10048 and Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. The SEC also maintains a site on the World Wide
Web at http://www.sec.gov that contains reports, proxy and information
statements, and other information regarding registrants that file electronically
with the SEC. The Company Common Stock is quoted on the Nasdaq National Market
System under the symbol "CEFT," and reports, proxy and information statements,
and other information concerning the Company may be inspected at the offices of
the National Association of Securities Dealers, Inc. (the "NASD"), 1735 K
Street, N.W., Washington, D.C. 20006.
* * * * * * * * * *
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, in connection
with the offer contained herein, and, if given or made, such information or
representations must not be relied upon. This Prospectus does not constitute an
offer to sell, or a solicitation of any offer to buy, nor shall there be a sale
of any securities offered hereby in any jurisdiction in which it is not lawful
or to any person to whom it is not lawful to make any such offer, solicitation
or sale. Neither delivery of this Prospectus nor any sale hereunder shall, under
any circumstances, create an implication that there has been no change in the
affairs of the Company since the date hereof. Statements made in this
Prospectus, unless the context indicates otherwise, are made as of the date of
this Prospectus.
3
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the Commission
are specifically incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998;
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering being made hereby shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents incorporated by
reference in this Prospectus, except for the exhibits to such documents.
Requests should be directed to Thomas J. Dowling, Vice President and
Comptroller, Concord EFS, Inc., 2525 Horizon Lake Drive, Suite 120, Memphis,
Tennessee 38133 (901) 371-8000.
4
<PAGE>
THE COMPANY
The Company, through its subsidiaries, primarily provides electronic
transaction authorization, processing, settlement and funds transfer services in
selected markets within the United States. The Company's primary activity is
Card Services, which involves the provision of integrated electronic transaction
services for credit card, debit card and electronic benefits transfer ("EBT")
card transactions to supermarket chains, grocery stores, convenience store
merchants and other retailers. The Company also provides electronic payment and
banking facilities to the trucking industry for use at major truck stop chains
throughout the United States. In addition to maintaining a network of over 350
automated teller machines ("ATMs") at truck stops nationwide, the Company
provides fuel purchase cards, ATM bank cards and general banking services to
truck drivers. The Company offers trucking companies payroll deposit and cash
forwarding services, as well as real-time data compilation with respect to fuel
volume usage, fuel expenditures, vehicle and driver tracking and truck routine
maintenance schedules. In addition, the Company provides check verification
services to grocery and other retail merchants.
The Company's principal executive offices are located at 2525 Horizon Lake
Drive, Suite 120, Memphis, Tennessee 38133. Its telephone number is (901)
371-8000.
SELLING SHAREHOLDERS
The shares of Company Common Stock covered by this Prospectus were issued
by the Company to the shareholders listed herein (the "Selling Shareholders") in
connection with two separate acquisition transactions recently consummated, and
to the Selling Shareholders of one of the transactions in the form of a stock
dividend. The first transaction was the Company's acquisition of Pay Systems of
America, Inc. ("Pay Systems") on December 15, 1997, in which the Company issued
86,229 shares of Company Common to the shareholders of Pay Systems (the "Pay
Systems Shareholders"). All of the Selling Shareholders, other than Sam
Buchbinder, are Pay Systems Shareholders. After consummation of the Pay Systems
transaction, the Company declared a stock dividend which resulted in an
additional 43,113 shares of Company Common Stock being issued to the Pay System
Shareholders with respect to the shares of Company Common Stock they received in
the Pay Systems transaction. This Prospectus also covers the 43,113 shares of
Company Common Stock issued to the Pay Systems Shareholders in the form of the
stock dividend.
The second transaction was the Company's acquisition of Digital Merchant
Systems of Illinois, Inc., and American Bankcard International, Inc., from Sam
Buchbinder (the "Digital Acquisition"), which was consummated on June 30, 1998.
In the Digital Acquisition the Company issued 4,425,000 shares of Company Common
Stock to or for the benefit of Sam Buchbinder, who was the sole shareholder,
Chairman of the Board and Chief Executive Officer of the entities acquired.
442,500 of the shares of Company Common Stock issued in the Digital Acquisition
transaction were deposited in escrow with Union Planters Bank, National
Association as "Exchange Agent" pursuant to an Escrow Agreement dated as of June
30, 1998. This Prospectus also covers all shares of Company Common Stock issued
to or for the benefit of Sam Buchbinder in the Digital Acquisition, including,
but not limited to, the 442,500 shares issued to the Exchange Agent.
5
<PAGE>
It is anticipated that the Selling Shareholders, or any one or more of
them, may from time to time offer and sell all or part of their shares of
Company Common Stock covered by this Prospectus in ordinary brokerage or
principal transactions in the over-the-counter market to market makers, to
broker-dealers acting as agent for a Selling Shareholder, or to broker-dealers
acting as agent for a customer, at prices prevailing at the time of sale, and in
private transactions at negotiated prices. In connection with sales of shares of
Company Common Stock in the over-the-counter market, there will be paid such
brokerage commissions or discounts as may be negotiated between the particular
Selling Shareholder and his or her broker, except that Selling Shareholders who
are also "affiliates" of the Company, within the meaning of the Securities Act,
may be limited to payment of normal brokerage commissions in connection with
such sales. Upon any sale of the shares of Company Common Stock offered hereby,
Selling Shareholders, brokers executing sales orders on their behalf, and
dealers to whom such persons or entities may sell, may, under certain
circumstances, be deemed to be "underwriters" within the meaning of the
Securities Act. As of the date of this Prospectus, no agreements, arrangements,
or understandings have been entered into between any Selling Shareholder and any
broker or dealer in connection with the sale of the shares of Company Common
Stock covered by this Prospectus.
Set out below is (i) the name and address of each Selling Shareholder, (ii)
the nature of any position, office or other material relationship which each
Selling Shareholder has had within the past three years with the Company or any
of its affiliates, (iii) the number of shares of Company Common Stock owned
beneficially by each Selling Shareholder on the date of this Prospectus, and
(iv) the number of shares to be offered for each Selling Shareholder's account.
NUMBER NUMBER
NAME OF SHARES OF SHARES
ADDRESS POSITION OWNED* OFFERED
- --------------------------- ---------------- --------- ---------
Michael J. Dobbs President 36,309 36,309
1321 Murfreesboro R., #100 Pay Systems
Nashville, TN 37217
Anne A. Dobbs 19,039 19,039
321 Murfreesboro R., #100
Nashville, TN 37217
Andrew M. Dobbs 3,336 3,336
1321 Murfreesboro R., #100
Nashville, TN 37217
6
<PAGE>
NUMBER NUMBER
NAME OF SHARES OF SHARES
ADDRESS POSITION OWNED* OFFERED
- --------------------------- ---------------- --------- ---------
Chatham J. Dobbs 3,336 3,336
1321 Murfreesboro R., #100
Nashville, TN 37217
Douglas C. Altenbern, Jr. 19,039 19,039
1321 Murfreesboro R., #100
Nashville, TN 37217
Douglas C. Altenbern, III 2,235 2,235
1321 Murfreesboro R., #100
Nashville, TN 37217
William C. Altenbern 2,223 2,223
1321 Murfreesboro R., #100
Nashville, TN 37217
John C. Altenbern 2,223 2,223
1321 Murfreesboro R., #100
Nashville, TN 37217
Darrington P. Altenbern 19,039 19,039
1321 Murfreesboro R., #100
Nashville, TN 37217
Darrington P. Atlenbern, Jr. 2,235 2,235
1321 Murfreesboro R., #100
Nashville, TN 37217
Chandler E. Altenbern 2,223 2,223
1321 Murfreesboro R., #100
Nashville, TN 37217
Adam M. Alternbern 2,223 2,223
1321 Murfreesboro R., #100
Nashville, TN 37217
Jean Pierce Field Services 2,268 2,268
1321 Murfreesboro Rd., #100 Mgr., Pay Systems
Nashville, TN 37217
7
<PAGE>
NUMBER NUMBER
NAME OF SHARES OF SHARES
ADDRESS POSITION OWNED* OFFERED
- --------------------------- ---------------- --------- ---------
Rebecca Murphy Operations Mgr., 6,807 6,807
1321 Murfreesboro Rd., #100 Pay Systems
Nashville, TN 37217
Joe B. Ray Director of Tax 6,807 6,807
1321 Murfreesboro Rd., #10 Pay Systems
Nashville, TN 37217
Sam Buchbinder Consultant, 4,435,700 4,425,000
9801 N. Keeler Avenue Concord EFS, Inc.
Skokie, IL 60606
*All Selling Shareholders, other than Sam Buchbinder, own less than one percent
(1%) of the outstanding shares of Company Common Stock. As of the date of this
Prospectus, Sam Buchbinder owned approximately 4.5% of the outstanding shares of
Company Common Stock.
LEGAL MATTERS
The legality of the Company Common Stock offered hereby will be passed upon
for the Company by Wyatt, Tarrant & Combs, Memphis, Tennessee.
EXPERTS
The consolidated financial statements of the Company incorporated by
reference in the Company's Annual Report (Form 10-K) and for the year ended
December 31, 1997, have been audited by Ernst & Young LLP, independent auditors,
as set forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon such report given upon authority of such firm as
experts in accounting and auditing.
8
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the fees and expenses in connection with the
issuance and distribution of the securities being registered. All of the amounts
shown are estimates, except for the registration fees. The Company will bear the
cost of such expenses.
Securities and Exchange Commission Fee $31,573
Accountants' Fees and Expenses $4,000
Legal Fees and Expenses $3,000
-------
Total $38,573
=======
Item 15. Indemnification of Directors and Officers.
Article Seventh of the Registrant's Restated Certificate of Incorporation
limits the liability of directors of the Registrant pursuant to the Delaware
General Corporation Law ("DGCL"). Under this Article, directors generally will
be personally liable to the Registrant or its shareholders for monetary damages
only for transactions involving conflicts of interest or from which a director
derives an improper personal benefit, intentional misconduct or violations of
law, and unlawful distributions.
The Bylaws of the Registrant require the Registrant to indemnify each
person who was or is made a party or is threatened to be made a party to any
action, suit or proceeding, whether civil, criminal, administrative or
investigative ("Proceeding"), by reason of the fact that he or she is or was a
director or officer of the Registrant, or is or was serving in such capacity
with another entity at the request of the Registrant, for the costs of such
Proceeding to the fullest extent authorized by Delaware law. If the Proceeding
was initiated by the officer or director, however, indemnification is permitted
only if the Proceeding was authorized by the Board of Directors. The costs
indemnified include all expenses, liability and loss reasonably incurred or
suffered by the director or officer in connection with his or her action on
behalf of the Registrant.
The Bylaws of the Registrant further provide for the advancement of
expenses incurred by an officer or director, and reimbursable under the Bylaws,
only upon delivery to the Registrant of an agreement, by or on behalf of such
director or officer, to repay all amounts advanced if it is ultimately
determined that such director or officer is not entitled to indemnification. If
a claim is not paid in full by the Registrant within twenty (20) days after a
written claim has been received, the director or officer making the claim may
bring suit against the Registrant to recover any unpaid amount. If the director
or officer is successful, in whole or in part, he or she will be entitled to be
paid the expense of prosecuting such claim. Although it is a defense to an
action against the Registrant by a director or officer that he or she has not
met the standards of conduct which make it permissible under Delaware law for
the Registrant to indemnify, the Registrant has the burden of proving this
defense.
i
<PAGE>
The circumstances under which Delaware law requires or permits a
corporation to indemnify its directors, officers, employees and/or agents are
set forth at Section 145, et seq. of the DGCL. Generally, under Section 145 et
seq. of the DGCL, a corporation may indemnify an individual made a party to a
proceeding because he is or was a director against liability incurred in the
proceeding if: [1] he conducted himself in good faith; and [2] he reasonably
believed: [a] in the case of conduct in his official capacity with the
corporation that his conduct was in its best interests; and [b] in all other
cases, that his conduct was at least not opposed to its best interests; and [3]
in the case of any criminal proceeding, he had no reasonable cause to believe
his conduct was unlawful.
A corporation may not indemnify a director: [1] in connection with a
proceeding by or in the right of the corporation in which the director was
adjudged liable to the corporation; or [2] in connection with any other
proceeding charging improper personal benefit to him, whether or not involving
action in his official capacity, in which he was adjudged liable on the basis
that personal benefit was improperly received by him. Indemnification permitted
in connection with a proceeding by or in the right of the corporation is limited
to reasonable expenses incurred in connection with the proceeding.
In addition, the Registrant maintains directors' and officers' liability
insurance covering certain liabilities which may be incurred by the directors
and officers of the Registrant in connection with the performance of their
duties.
Item 16. Exhibits.
The following exhibits are filed as a part of this Registration Statement:
4(a) Restated Certificate of Incorporation of the Registrant.*
4(b) Certificate of Amendment to Certificate of Incorporation of
the Registrant dated May 30, 1997.*
4(c) Certificate of Amendment to Certificate of Incorporation of
the Registrant dated May 29, 1998.*
4(d) Bylaws of the Registrant as amended.
5 Opinion of Wyatt, Tarrant & Combs as to the legality of the
Common Stock.*
23(a) Consent of Ernst & Young LLP
23(b) Consent of Wyatt, Tarrant & Combs (included in Exhibit 5).*
24 Power of Attorney (included on signature page initial filing
of this Registration Statement).*
*Previously filed.
ii
<PAGE>
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
To include any prospectus required by Section 10(a)(3) of the Act;
To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement;
To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
Provided, however, that paragraphs 1(A)[1] and 1(A)[2] do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in the Registration Statement.
That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or controlling persons of the Company pursuant
to the Articles of Incorporation or Bylaws of the Company or the Delaware
General Corporation Law or otherwise, the Company has been informed that in the
opinion of the Commission such indemnification is against public policy as
iii
<PAGE>
expressed in the Act and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
iv
<PAGE>
SIGNATURES AND POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Memphis, State of
Tennessee on this the 14th day of September, 1998.
CONCORD EFS, INC.
/s/ Dan M. Palmer*
-----------------
Dan M. Palmer,
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signatures Title Date
---------- ----- ----
/s/ Dan M. Palmer* Chairman of the Board, September 14, 1998
- ----------------- Chief Executive Officer,
Dan M. Palmer Director (Principal Executive Officer)
/s/ Edward A. Labry, III* President, Director September 14, 1998
- ------------------------
Edward A. Labry, III
/s/ Thomas J. Dowling* Vice President & Controller September 14, 1998
- --------------------- (Principal Financial Officer)
Thomas J. Dowling
<PAGE>
Signatures Title Date
---------- ----- ----
/s/ Douglas C. Altenbern* Director September 14, 1998
- ------------------------
Douglas C. Altenbern
/s/ David C. Andersen* Director September 14, 1998
- ---------------------
David C. Andersen
/s/ J. Richard Buchignani* Director September 14, 1998
- -------------------------
J. Richard Buchignani
Director
- -----------------
Richard M. Harter
Director
- -----------
Joyce Kelso
/s/ Richard P. Kiphart* Director September 14, 1998
- ----------------------
Richard P. Kiphart
/s/ Jerry D. Mooney* Director September 14, 1998
- -------------------
Jerry D. Mooney
/s/ Paul L. Whittington* Director September 14, 1998
- -----------------------
Paul L. Whittington
* By /s/ Thomas J. Dowling
---------------------
Attorney In Fact
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number
Page Description of Exhibit
- ------- ----------------------
4(a) Restated Certificate of Incorporation of the Registrant.*
4(b) Certificate of Amendment to Certificate of Incorporated of the
Registrant dated May 30, 1997.*
4(c) Certificate of Amendment to Certificate of Incorporation of the
Registrant dated May 29, 1998.*
4(d) Bylaws of the Registrant as amended.
5 Opinion of Wyatt, Tarrant & Combs as to the legality of the Common
Stock.*
23(a) Consent of Ernst & Young LLP
23(b) Consent of Wyatt, Tarrant & Combs (included in Exhibit 5).*
24 Power of Attorney (included on signature page of this original filing
of this Registration Statement).*
* Previously filed.
<PAGE>
EXHIBIT 4(d)
CONCORD EFS, INC.
BY-LAWS
Article I -General
Section 1.1. Offices. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware. The Corporation may also
have offices at such other places both within and without the State of Delaware
as the Board of Directors may from time to time determine or the business of the
Corporation may require.
Section 1.2. Seal. The seal of the Corporation shall be in the form of a
circle and shall have inscribed thereon the name of the Corporation, the year of
its organization and the words "Corporate Seal, Delaware".
Section 1.3. Fiscal Year. The fiscal year of the Corporation shall be the
twelve months ending at midnight on December 31 of each year.
Article II -Stockholders
Section 2.1. Place of Meetings. All meetings of the stockholders shall be
held at the principal office of the Corporation or at such other place or places
within or without the State of Delaware as the Board of Directors may from time
to time designate.
Section 2.2. Annual Meeting. The annual meeting of the stockholders shall
be held in the month of May of each year on such date and at such time as the
Board of Directors may determine. At each annual meeting the stockholders
entitled to vote shall elect a Board of Directors by plurality vote by ballot,
and they may transact such other corporate business as may properly be brought
before the meeting. At the annual meeting any business may be transacted,
irrespective of whether the notice calling such meeting shall have contained a
reference thereto, except where notice is required by law, the Certificate of
Incorporation, or these by-laws.
Section 2.3. Quorum. At all meetings of the stockholders the holders of a
majority of the stock issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall constitute a quorum requisite
for the transaction of business except as otherwise provided by law, by the
Certificate of Incorporation or by these by-laws. If, however, such majority
shall not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or by proxy, by a
majority vote, shall have power to adjourn the meeting from time to time without
notice other than announcement at the meeting until the requisite amount of
voting stock shall be present. if the adjournment is for more than thirty (30)
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting. At such adjourned meeting, at which the
requisite amount of voting stock shall be represented, any business may be
transacted which might have been transacted if the meeting had been held as
originally called.
-1-
<PAGE>
Section 2.4. Right to Vote; Proxies. Each stockholder having the right to
vote at any meeting shall be entitled to one vote for each share of stock held
by him. Any stockholder entitled to vote at any meeting of stockholders may vote
either in person or by proxy, but no proxy which is dated more than three years
prior to the meeting at which it is offered shall confer the right to vote
thereat unless the proxy provides that it shall be effective for a longer
period. Every proxy shall be in writing, subscribed by a stockholder or his duly
authorized attorney in fact, and dated, but need not be sealed, witnessed, or
acknowledged.
Section 2.5. Voting. At all meetings of stockholders all questions, except
as otherwise expressly provided for by statute, the Certificate of Incorporation
or these by-laws, shall be determined by a majority vote of the stockholders
present in person or represented by proxy. Except as otherwise expressly
provided by law, the Certificate of Incorporation or these by-laws, at all
meetings of stockholders the voting shall be by voice vote, but any stockholder
qualified to vote on the matter in question may demand a stock vote, by shares
of stock, upon such question, whereupon such stock vote shall be taken by
ballot, each of which shall state the name of the stockholder voting and the
number of shares voted by him, and, if such ballot be cast by a proxy, it shall
also state the name of the proxy. All elections shall be decided by plurality
vote.
Section 2.6. Notice of Annual Meetings. Written notice of the annual
meeting of the stockholders shall be mailed to each stockholder entitled to vote
thereat at such address as appears on the stock books of the Corporation at
least ten (10) days (and not more than sixty (60) days) prior to the meeting. It
shall be the duty of every stockholder to furnish to the Secretary of the
Corporation or to the transfer agent, if any, of the class of stock owned by
him, his post-office address and to notify said Secretary or transfer agent of
any change therein.
Section 2.7. Stockholders' List. A complete list of the stockholders
entitled to vote at any meeting of stockholders, arranged in alphabetical order
and showing the address of each stockholder, and the number of shares registered
in the name of each stockholder, shall be prepared by the Secretary and filed
either at a place within the city where the meeting is to be held, which place
shall be specified in the notice of the meeting, or, if not so specified, at the
place where the meeting is to be held, at least ten days before such meeting,
and shall at all times during the usual hours for business, and during the whole
time of said election, be open to the examination of any stockholder for a
purpose germane to the meeting.
Section 2.8. Special Meetings. Special meetings of the stockholders for any
purpose or purposes, unless otherwise provided by statute may be called by the
Board of Directors, the Chairman of the Board, if any, the President or any Vice
President.
Section 2.9. Notice of Special Meetings. Written notice of a special
meeting of stockholders, stating the time and place and object thereof shall be
mailed, postage prepaid, not less than ten (10) nor more than sixty (60) days
before such meeting, to each stockholder entitled to vote thereat, at such
address as appears on the books of the corporation. No business may be
transacted at such meeting except that referred to in said notice, or in a
supplemental notice given also in compliance with the provisions hereof, or such
other business as may be germane or supplementary to that stated in said notice
or notices.
-2-
<PAGE>
Section 2.10. Inspectors. One or more inspectors may be appointed by the
Board of Directors before or at any meeting of stockholders, or, if no such
appointment shall have been made, the presiding officer may make such
appointment at the meeting. At the meeting for which the inspector or inspectors
are appointed, he or they shall open and close the polls, receive and take
charge of the proxies and ballots, and decide all questions touching on the
qualifications of voters, the validity of proxies and the acceptance and
rejection of votes. If any inspector previously appointed shall fail to attend
or refuse or be unable to serve, the presiding officer shall appoint an
inspector in his place.
Section 2.11. Stockholders' Consent in Lieu of Meeting. Unless otherwise
provided in the Certificate of Incorporation, any action required by law to be
taken at any annual or special meeting of stockholders of the Corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
Article III -Directors
Section 3.1. Number of Directors. Except as otherwise provided by law, the
Certificate of Incorporation or these by-laws, the property and business of the
Corporation shall be managed by or under the direction of a board of not less
than three nor more than fifteen directors. Within the limits specified, the
number of directors shall be determined by resolution of the Board of Directors
or by the stockholders at the annual meeting. Directors need not be
stockholders, residents of Delaware or citizens of the United States. The
directors shall be elected by ballot at the annual meeting of the stockholders
and each director shall be elected to serve until his successor shall be elected
and shall qualify or until his earlier resignation or removal; provided that in
the event of failure to hold such meeting or to hold such election at such
meeting, such election may be held at any special meeting of the stockholders
called for that purpose. If the office of any director becomes vacant by reason
of death, resignation, disqualification, removal, failure to elect, or
otherwise, or if the number of directors shall be increased by resolution of the
Board of Directors or by the stockholders as provided above, thereby creating
one or more new directorships, the remaining directors, although more or less
than a quorum, by a majority vote of such remaining directors may elect a
successor or successors, or an individual or individuals to fill any such newly
created directorships, who shall hold office for the unexpired term.
Section 3.2 Change in Number of Directors; Vacancies. The maximum number of
directors may be increased by an amendment to these by-laws adopted by a
majority vote of the Board of Directors or by a majority vote of the capital
stock having voting power, and if the number of directors is so increased by
action of the Board of Directors or of the stockholders or otherwise, then the
additional directors maybe elected in the manner provided above for the filling
of vacancies in the Board of Directors or at the annual meeting of stockholders
or at a special meeting called for that purpose.
-3-
<PAGE>
Section 3.3. Resignation. Any director of this Corporation may resign at
any time by giving written notice to the Chairman of the Board, if any, the
President or the Secretary of the Corporation. Such resignation shall take
effect at the time specified therein, at the time of receipt if no time is
specified therein and at the time of acceptance if the effectiveness of such
resignation is conditioned upon its acceptance. Unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
Section 3.4. Removal. Any director or the entire Board of Directors may be
removed, with or without cause, by the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 3.5. Place of Meetings and Books. The Board of Directors may hold
their meetings and keep the books of the Corporation within or without the State
of Delaware, at such places as they may from time to time determine.
Section 3.6 General Powers. In addition to the powers and authority
expressly conferred upon them by the Certificate of Incorporation or these
by-laws, the board may exercise all such powers of the Corporation and do all
such lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these by-laws directed or required to be exercised or done
by the stockholders.
Section 3.7. Executive Committee. There may be an executive committee of
one or more directors designated by resolution passed by a majority of the whole
board. The act of a majority of the members of such committee shall be the act
of the committee. Said committee may meet at stated times or on notice to all by
any of their own number, and shall have and may exercise those powers of the
Board of Directors in the management of the business affairs of the Company as
are provided by law and may authorize the seal of the Corporation to be affixed
to all papers which may require it. Vacancies in the membership of the committee
shall be filled by the Board of Directors at a regular meeting or at a special
meeting called for that purpose.
Section 3.8. Other Committees. The Board of Directors may also designate
one or more committees in addition to the executive committee, by resolution or
resolutions passed by a majority of the whole board; such committee or
committees shall consist of one or more directors of the Corporation, and to the
extent provided in the resolution or resolutions designating them, shall have
and may exercise specific powers of the Board of Directors in the management of
the business and affairs of the Corporation to the extent permitted by statute
and shall have power to authorize the seal of the Corporation to be affixed to
all papers which may require it. Such committee or committees shall have such
name or names as may be determined from time to time by resolution adopted by
the Board of Directors.
Section 3.9. Powers Denied to Committees. Committees of the Board of
Directors shall not, in any event, have any power or authority to mend the
Certificate of Incorporation, adopt an agreement of merger or consolidation,
recommend to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommend to the
stockholders a dissolution of the Corporation or a revocation or a dissolution
or to amend the by-laws of the Corporation. Further, committees of the Board of
Directors shall not have any power or authority to declare a dividend or to
authorize the issuance of stock.
-4-
<PAGE>
Section 3.10. Substitute Committee Member. In the absence or on the
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of such absent or disqualified
member. Any committee shall keep regular minutes of its proceedings and report
the same to the board as may be required by the board.
Section 3.11 Compensation of Directors. The Board of Directors shall have
the power to fix the compensation of directors and members of committees of the
Board. The directors may be paid their expenses, if any, of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for attendance at
each meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
Section 3.12. Annual Meeting. The newly elected board may meet at such
place and time as shall be fixed and announced by the presiding officer at the
annual meeting of stockholders, for the purpose of organization or otherwise,
and no further notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting, provided a quorum shall be
present, or they may meet at such place and time as shall be stated in a notice
given to such directors two (2) days prior to such meeting, or as shall be fixed
by the consent in writing of all the directors.
Section 3.13. Regular Meetings. Regular meetings of the board may be held
without notice at such time and place as shall from time to time be determined
by the board.
Section 3.14. Special Meetings. Special meetings of the board may be called
by the Chairman of the Board, if any, or the President, on two (2) days' notice
to each director, or such shorter period of time before the meeting as will
nonetheless be sufficient for the convenient assembly of the directors so
notified; special meetings shall be called by the Secretary in like manner and
on like notice, on the written request of two or more directors.
Section 3.15. Quorum. At all meetings of the Board of Directors, a majority
of the total number of directors shall be necessary and sufficient to constitute
a quorum for the transaction of business, and the act of a majority of the
directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors, except as may be otherwise specifically permitted or
provided by statute, or by the Certificate of Incorporation, or by these
by-laws. If at any meeting of the board there shall be less than a quorum
present, a majority of those present may adjourn the meeting from time to time
until a quorum is obtained, and no further notice thereof need be given other
than by announcement at said meeting which shall be so adjourned.
Section 3.16. Telephonic Participation in Meetings. Members of the Board of
Directors or any committee designated by such board may participate in a meeting
of the board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
section shall constitute presence in person at such meeting.
-5-
<PAGE>
Section 3.17. Action by Consent. Unless otherwise restricted by the
Certificate of Incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if written consent thereto is signed by all
members of the board or of such committee as the case may be and such written
consent is filed with the minutes of proceedings of the board or committee.
Article IV - Officers
Section 4.1. Selection; Statutory Officers. The officers of the Corporation
shall be chosen by the Board of Directors. There shall be a President, a
Secretary and a Treasurer, and there may be a Chairman of the Board of
Directors, one or more Vice Presidents, one or more Assistant Secretaries, and
one or more Assistant Treasurers, as the Board of Directors may elect. Any
number of offices may be held by the same person, except that the offices of
President and Secretary shall not be held by the same person simultaneously.
Section 4.2. Time of Election. The officers above named shall be chosen by
the Board of Directors at its first meeting after each annual meeting of
stockholders. None of said officers need be a director.
Section 4.3. Additional Officers. The board may appoint such other officers
and agents as it shall deem necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4.4. Terms of Office. Each officer of the Corporation shall hold
office until his successor is chosen and qualified, or until his earlier
resignation or removal. Any officer elected or appointed by the Board of
Directors may be removed at anytime by the Board of Directors.
Section 4.5. Compensation of Officers. Directors shall have power to fix
the compensation of all officers of the Corporation. It may authorize any
officer, upon whom the power of appointing subordinate officers may have been
conferred, to fix the compensation of such subordinate officers.
Section 4.6. Chairman of the Board. The Chairman of the Board of Directors
shall preside at all meetings of the stockholders and directors, and shall have
such other duties as may be assigned to him from time to time by the Board of
Directors.
Section 4.7. President. Unless the Board of Directors otherwise determines,
the President shall be the chief executive officer and head of the Corporation.
Unless there is a Chairman of the Board, the President shall preside at all
meetings of directors and stockholders. Under the supervision of the Board of
Directors and of the executive committee, the President shall have the general
control and management of its business and affairs, subject, however, to the
right of the Board of Directors and of the executive committee to confer any
specific power, except such as may be by statute exclusively conferred on the
President, upon any other officer or officers of the Corporation. The President
shall perform and do all acts and things incident to the position of President
and such other duties as may be assigned to him from time to time by the Board
of Directors or the executive committee.
-8-
<PAGE>
Section 4.8 Vice-Presidents. The Vice-Presidents shall perform such of the
duties of the President on behalf of the Corporation as may be respectively
assigned to them from time to time by the Board of Directors or by the executive
committee or by the President. The Board of Directors or the executive committee
may designate one of the Vice-Presidents as the Executive Vice-President, and in
the absence or inability of the President to act, such Executive Vice-President
shall have and possess all of the powers and discharge all of the duties of the
President subject to the control of the board and of the executive committee.
Section 4.9. Treasurer. The Treasurer shall have the care and custody of
all the funds and securities of the Corporation which may come into his hands as
Treasurer, and the power and authority to endorse checks, drafts and other
instruments for the payment of money for deposit or collection when necessary or
proper and to deposit the same to the credit of the Corporation in such bank or
banks or depository as the Board of Directors or the executive committee, or the
officers or agents to whom the Board of Directors or the executive committee may
delegate such authority, may designate, and he may endorse all commercia
documents requiring endorsements for or on behalf of the Corporation. He may
sign all receipts and vouchers for the payments made to the Corporation. He
shall render an account of his transactions to the Board of Directors or to the
executive committee as often as the board or the committee shall require the
same. He shall enter regularly in the books to be kept by him for that purpose
full and adequate account of all moneys received and paid by him on account of
the Corporation. He shall perform all acts incident to the position of
Treasurer, subject to the control of the Board of Directors and of the executive
committee. He shall when requested, pursuant to vote of the Board of Directors
or the executive committee, give a bond to the Corporation conditioned for the
faithful performance of his duties, the expense of which bond shall be borne by
the Corporation.
Section 4.10. Secretary. The Secretary shall keep the minutes of all
meetings of the Board of Directors and of the stockholders; he shall attend to
the giving and serving of all notices of the Corporation. Except as otherwise
ordered by the Board of Directors or the executive committee, he shall attest
the seal of the Corporation upon all contracts and instruments executed under
such seal and shall affix the seal of the Corporation thereto and to all
certificates of shares of the Capital Stock. He shall have charge of the stock
certificate book, transfer book and stock ledger, and such other books and
papers as the Board of Directors or the executive committee may direct. He
shall, in general, perform all the duties of Secretary, subject to the control
of the Board of Directors and of the executive committee.
Section 4.11. Assistant Secretary. The Board of Directors or any two of the
officers of the Corporation acting jointly may appoint or remove one or more
Assistant Secretaries of the Corporation. Any Assistant Secretary upon his
appointment shall perform such duties of the Secretary, and also any and all
such other duties as the executive committee or the Board of Directors or the
President or the Executive Vice-President or the Treasurer or the Secretary may
designate.
Section 4.12. Assistant Treasurer. The Board of Directors or any two of the
officers of the Corporation acting jointly may appoint or remove one or more
Assistant Treasurers of the Corporation. Any Assistant Treasurer upon his
appointment shall perform such of the duties of the Treasurer, and also any and
all such other duties as the executive committee or the Board of Directors or
the President or the Executive Vice-President or the Treasurer or the Secretary
may designate.
-9-
<PAGE>
Section 4.13. Subordinate Officers. The Board of Directors may select such
subordinate officers as it may deem desirable. Each such officer shall hold
office for such period, have such authority, and perform such duties as the
Board of Directors may prescribe. The Board of Directors may, from time to time,
authorize any officer to appoint and remove subordinate officers and to
prescribe the powers and duties thereof.
Article V - Stock
Section 5.1. Stock. Each stockholder shall be entitled to a certificate or
certificates of stock of the Corporation in such form as the Board of Directors
may from time to time prescribe. The certificates of stock of the Corporation
shall be numbered and shall be entered in the books of the Corporation as they
are issued. They shall certify the holder's name and number and class of shares
and shall be signed by both of (a) either the President or a Vice-President, and
(b) any one of the Treasurer or an Assistant Treasurer or the Secretary or an
Assistant Secretary, and shall be sealed with the corporate seal of the
Corporation. If such certificate is countersigned (1) by a transfer agent other
than the Corporation or its employee, or, (2) by a registrar other than the
Corporation or its employee, the signature of the officers of the Corporation
and the corporate seal may be facsimiles. In case any officer or officers who
shall have signed, or whose facsimile signature or signatures shall have been
used on, any such certificate or certificates shall cease to be such officer or
officers of the Corporation, whether because of death, resignation or otherwise,
before such certificate or certificates shall have been delivered by the
Corporation, such certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature shall have
been used thereon had not ceased to be such officer or officers of the
Corporation.
Section 5.2. Fractional Share Interests. The corporation may, but shall not
be required to, issue fraction of a share. If the corporation does riot issue
fractions of a share, it shall (a) arrange for the disposition of fractional
interests by those entitled thereto, (b) pay in cash the fair value of fractions
of a share as of the time when those entitled to receive such factions are
determined, or (c) issue scrip or warrants in registered or bearer form which
shall entitle the holder to receive a certificate for a full share upon the
surrender of such scrip or warrants aggregating a full share. A certificate for
a fractional share shall, but scrip or warrants shall not unless otherwise
provided therein, entitle the holder to exercise voting rights, to receive
dividends thereon, and to participate in any of the assets of the corporation in
the event of liquidation. The Board of Directors may cause scrip or warrants to
be issued subject to the conditions that they shall become void if not exchanged
for certificates representing full shares before a specified date, or subject to
the conditions that the shares for which scrip or warrants are exchangeable may
be sold by the corporation and the proceeds thereof distributed to the holders
of scrip or warrants, or subject to any other conditions which the Board of
Directors may impose.
Section 5.3. Transfers of Stock. Subject to any transfer restrictions then
in force, the shares of stock of the Corporation shall be transferable only upon
its books by the holders thereof in person or by their duly authorized attorneys
or legal representatives and upon such transfer the old certificates shall be
surrendered to the Corporation by the delivery thereof to the person in charge
of the stock and transfer books and ledgers or to such other person as the
directors may designate by whom they shall be cancelled and new certificates
shall thereupon be issued. The Corporation shall be entitled to treat the holder
-10-
<PAGE>
of record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person whether or not it shall
have express or other notice thereof save as expressly provided by the laws of
Delaware.
Section 5.4. Record Date. For the purpose of determining the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or the allotment of any rights, or entitled to exercise any rights
in respect of any change, conversion, or exchange of stock or for the purpose of
any other lawful action, the Board of Directors may fix, in advance, a record
date, which shall not be more than sixty (60) days nor less than ten (10) days
before the date of such meeting, nor more than sixty (60) days prior to any
other action. If no such record date is fixed by the Board of Directors, the
record date for determining stockholders entitled to notice of or to vote at a
meeting of stockholders shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is waived, at the
close of business on the day next preceding the day on which the meeting is
held; the record date for determining stockholders entitled to express consent
to corporate action in writing without a meeting, when no prior action by the
Board of Directors is necessary, shall be the day on which the first written
consent is expressed; and the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at any meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
Section 5.5 Transfer Agent and Registrar. The Board of Directors may
appoint one or more transfer agents or transfer clerks and one or more
registrars and may require all certificates of stock to bear the signature or
signatures of any of them.
Section 5.6. Dividends.
1. Power to Declare. Dividends upon the capital stock of the Corporation,
subject to the provisions of the Certificate of Incorporation, if any, may
be declared by the Board of Directors at any regular or special meeting,
pursuant to law. Dividends may be paid in cash, in property, or in shares
of the capital stock, subject to the provisions of the Certificate of
Incorporation and the laws of Delaware.
2. Reserves. Before payment of any dividend, there may be set aside out of
any funds of the Corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper
as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the Corporation,
or for such other purpose as the directors shall think conducive to the
interest of the Corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
Section 5.7. Lost, Stolen or Destroyed Certificates. No certificates for
shares of stock of the Corporation shall be issued in place of any certificate
alleged to have been lost, stolen or destroyed, except upon production of such
evidence of the loss, theft or destruction and upon indemnification of the
Corporation and its agents to such extent and in such manner as the Board of
Directors may from time to time prescribe.
-11-
<PAGE>
Section 5.8. Inspection of Books. The stockholders of the Corporation, by a
majority vote at any meeting of stockholders duly called, or in case the
stockholders shall fail to act, the Board of Directors shall have power from
time to time to determine whether and to what extent and at what times and
places and under what conditions and regulations the accounts and books of the
Corporation (other than the stock ledger) or any of them, shall be open to
inspection of stockholders; and no stockholder shall have any right to inspect
any account or book or document of the Corporation except as conferred by
statute or authorized by the Board of Directors or by a resolution of the
stockholders.
Article VI - Miscellaneous Management Provisions
Section 6.1. Checks, Drafts and Notes. All checks, drafts or orders for the
payment of money, and all notes and acceptances of the Corporation shall be
signed by such officer or officers, agent or agents as the Board of Directors
may designate.
Section 6.2. Notices.
1. Notices to directors may, and notices to stockholders shall, be in
writing and delivered personally or mailed to the directors or stockholders
at their addresses appearing on the books of the Corporation. Notice by
mail shall be deemed to be given at the time when the same shall be mailed.
Notice to directors may also be given by telegram or orally, by telephone
or in person.
2. Whenever any notice is required to be given tinder the provisions of the
statutes or of the Certificate of Incorporation of the Corporation or of
these by-laws, a written waiver of notice, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting except when the person
attends a meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business because the meeting is not
lawfully called or convened.
Section 6.3. Conflict of Interest. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers, or have a financial interest, shall be void or voidable solely for
this reason, or solely because the director or officer is present at or
participates in the meeting of the board of or committee thereof which
authorized the contract or transaction, or solely because his or their votes are
counted for such purpose, if: (a) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee and the board or committee in good faith
authorizes the contract or transaction by the affirmative vote of a majority of
the disinterested directors, even though the disinterested directors be less
than a quorum; or (b) the material facts as to his relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
of the Corporation entitled to vote thereon, and the contract or transaction as
specifically approved in good faith by vote of such stockholders; or (c) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified, by the Board of Directors, a Committee or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contractor transaction.
-12-
<PAGE>
Section 6.4. Voting of Securities owned by this Corporation. Subject always
to the specific directions of the Board of Directors, (a ) any shares or other
securities issued by any other Corporation and owned or controlled by this
Corporation may be voted in person at any meeting of security holders of such
other corporation by the President of this Corporation if he is present at such
meeting, or in his absence by the Treasurer of this Corporation if he is present
at such meeting, and (b) whenever, in the judgment of the President, it is
desirable for this corporation to execute a proxy or written consent in respect
to any shares or other securities issued by any other Corporation and owned by
this Corporation, such proxy or consent shall be executed in the name of this
Corporation by the President, without the necessity of any authorization by the
Board of Directors, affixation of corporate seal or counter signature or
attestation by another officer, provided that if the President is unable to
execute such proxy or consent by reason of sickness, absence from the United
States or other similar cause, the Treasurer may execute such proxy or consent.
Any person or persons designated in the manner above stated as the proxy or
proxies of this Corporation shall have full right, power and authority to vote
the shares or other securities issued by such other corporation and owned by
this Corporation the same as such shares or other securities might be voted by
this Corporation.
Article VII - Indemnification
Section 7. 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of being or having been a director or
officer of the Corporation or serving or having served at the request of the
Corporation as a director, trustee, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to a employee benefit plan (an "Indemnitee"),
whether the basis of such proceeding is alleged action or failure to act in an
official capacity as a director, trustee, officer, employee or agent or in any
other capacity while serving as a director, trustee, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Delaware General Corporation Law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than permitted prior thereto) (as used in this Article VII, the "Delaware
Law"), against all expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such Indemnitee in connection
therewith and such indemnification shall continue as to an Indemnitee who has
ceased to be a director, trustee, officer, employee or agent and shall inure to
the benefit of the Indemnitee's heirs, executors and administrators; provided,
however, that, except as provided in Section 7.2 hereof with respect to
Proceedings to enforce rights to indemnification, the Corporation shall
indemnify any such Indemnitee in connection with a Proceeding (or part thereof)
initiated by such Indemnitee only if such Proceeding (or part thereof) was
authorized by the board of directors of the Corporation. The right to
indemnification conferred in this Article VII shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such Proceeding in advance of its final disposition (an
"Advancement of Expenses"); provided, however, that, if the Delaware Law so
requires, and Advancement of Expenses incurred by an Indemnitee shall be made
only upon delivery to the Corporation of an undertaking (an "Undertaking"), by
or on behalf of such Indemnitee, to repay all amounts so advanced if it shall
-13-
<PAGE>
ultimately be determined by final judicial decision from which there is no
further right to appeal (a "Final Adjudication") that such Indemnitee is not
entitled to be indemnified for such expenses under this Article VII or
otherwise.
Section 7.2. Right of Indemnitee to Bring Suit. If a claim under Section
7.1 hereof is not paid in full by the Corporation within sixty days after a
written claim has been received by the Corporation, except in the case of a
claim for an Advancement of Expenses, in which case the applicable period shall
be twenty days, the Indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in while or
in part in any such suit, or in a suit brought by the Corporation to recover an
Advancement of Expenses pursuant to the terms of an Undertaking, the Indemnitee
shall be entitled to be paid also the expense of prosecuting or defending such
suit. In (i) any suit brought by the Indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the Indemnitee to
enforce a right to an Advancement for Expenses) it shall be a defense that, and
(ii) in any suit by the Corporation to recover an Advancement of Expenses
pursuant to the terms of an Undertaking the Corporation shall be entitled to
recover such expenses upon a Final Adjudication that, the Indemnitee has not met
the applicable standard of conduct set forth in the Delaware Law. Neither the
failure of the Corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the Indemnitee is proper in
the circumstances because the Indemnitee has met the applicable standard of
conduct set forth in the Delaware Law, nor an actual determination by the
Corporation (including its board of directors, independent legal counsel, or its
stockholders) that the Indemnitee has not met such applicable standard of
conduct, shall create a presumption that the Indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
Indemnitee, be a defense to such suit. In any suit brought by the Indemnitee to
enforce a tight to indemnification or to an Advancement of Expenses hereunder,
or by the Corporation to recover an Advancement of Expenses pursuant to the
terms of an Undertaking, the burden of proving that the Indemnitee is not
entitled to be indemnified, or to such Advancement of Expenses, under this
Article VII or otherwise shall be on the Corporation.
Section 7.3. Non-Exclusivity of Rights. The rights to indemnification and
to the Advancement of Expenses conferred in this Article VII shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, the Corporation's Certificate or Incorporation, by-law,
agreement, vote of stockholders or disinterested directors or otherwise.
Section 7.4. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under this Article VII or under the Delaware Law.
Section 7. 5. Indemnification of Employees and Agents of the Corporation.
The Corporation may, to the extent authorized from time to time by the board of
directors, grant rights to indemnification, and to the Advancement of Expenses,
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article VII with respect to the indemnification and
Advancement of Expenses of directors and officers of the Corporation.
-14-
<PAGE>
Article VIII - Amendments
Section 8.1. Amendments. The by-laws of the Corporation may be altered,
amended or repealed at any meeting of the Board of Directors upon notice thereof
in accordance with these by-laws, or at any meeting of the stockholders by the
vote of the holders of the majority of the stock issued and outstanding and
entitled to vote at such meeting, in accordance with the provisions of the
Certificate of Incorporation of the corporation and of the laws of Delaware.
-15-
<PAGE>
EXHIBIT 23(a)
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 333-62069) and related Prospectus of
Concord EFS, Inc. for the registration of 4,554,342 shares of its common stock
and to the incorporation by reference therein of our report dated February 5,
1998, with respect to the consolidated financial statements of Concord EFS, Inc.
incorporated by reference in its Annual Report (Form 10-K) for the year ended
December 31, 1997, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Memphis, Tennessee
September 10, 1998
<PAGE>
