UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-871
BUCYRUS INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 39-0188050
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
P. O. BOX 500
1100 MILWAUKEE AVENUE
SOUTH MILWAUKEE, WISCONSIN
53172
(Address of Principal Executive Offices)
(Zip Code)
(414) 768-4000
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding November 17, 1997
Common Stock, $.01 par value 1,000
<PAGE>
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. FINANCIAL INFORMATION:
Item 1 - Financial Statements (Unaudited)
Consolidated Condensed Statements of Operations -
Quarters and nine months ended September 30, 1997
and 1996 3
Consolidated Condensed Balance Sheets -
September 30, 1997 and December 31, 1996 4-5
Consolidated Condensed Statements of Cash Flows -
Nine months ended September 30, 1997 and 1996 6-8
Notes to Consolidated Condensed Financial
Statements 9-27
Item 2 - Management's Discussion and Analysis
of Financial Condition and Results
of Operations 28-32
Item 3 - Quantitative and Qualitative Disclosures
About Market Risk N/A
Not applicable.
Part II. OTHER INFORMATION:
Item 1 - Legal Proceedings 33-34
Item 2 - Changes in Securities and Use of Proceeds N/A
Not applicable.
Item 3 - Defaults Upon Senior Securities N/A
Not applicable.
Item 4 - Submission of Matters to a Vote of
Security Holders N/A
Not applicable.
Item 5 - Other Events 34
Item 6 - Exhibits and Reports on Form 8-K 34-37
Signature Page 38
<PAGE>
<TABLE>
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
Successor Predecessor
Quarter Nine Months
September 24- July 1- Ended January 1- Ended
September 30, September 23, September 30, September 23, September 30,
1997 1997 1996 1997 1996
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $ 10,429 $ 67,703 $ 68,077 $ 211,465 $ 198,897
Other income 23 674 236 1,289 700
__________ __________ __________ __________ __________
10,452 68,377 68,313 212,754 199,597
__________ __________ __________ __________ __________
Costs and Expenses:
Cost of products sold 7,437 55,254 55,292 171,515 162,315
Product development, selling,
administrative and
miscellaneous expenses 790 8,770 9,224 27,115 27,078
Interest expense 355 2,350 1,756 6,306 5,929
Nonrecurring items - 10,051 - 10,051 -
__________ __________ __________ __________ __________
8,582 76,425 66,272 214,987 195,322
__________ __________ __________ __________ __________
Earnings (loss) before
income taxes 1,870 (8,048) 2,041 (2,233) 4,275
Income taxes 601 249 546 2,641 1,870
__________ __________ __________ __________ __________
Net earnings (loss) $ 1,269 $ (8,297) $ 1,495 $ (4,874) $ 2,405
Weighted average number
of common and common
equivalent shares
outstanding - 10,543,466 10,234,574 10,530,610 10,234,574
Net earnings (loss) per share
of common stock $ - $ (.79) $ .14 $ (.46) $ .23
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
<TABLE>
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars In Thousands, Except Per Share Amounts)
<CAPTION>
September 30, December 31, September 30, December 31,
1997 1996 1997 1996
(Successor) (Predecessor) (Successor) (Predecessor)
<S> <C> <C> <C> <C> <C>
ASSETS LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT ASSETS: CURRENT LIABILITIES:
Cash and cash Accounts payable and
equivalents $ 10,389 $ 15,763 accrued expenses $ 59,356 $ 33,765
Receivables 65,748 32,085 Liabilities to customers
Inventories 129,727 70,889 on uncompleted contracts
Prepaid expenses and and warranties 6,624 3,579
other current assets 7,834 2,504 Income taxes 4,209 1,469
Receivable from Short-term obligations 9,525 3,186
Global Industrial Current maturities of
Technologies, Inc. 5,275 - long-term debt - 428
________ ________ ________ ________
Total Current Assets 218,973 121,241 Total Current Liabilities 79,714 42,427
OTHER ASSETS: LONG-TERM LIABILITIES:
Restricted funds Deferred income taxes 132 148
on deposit 1,056 1,079 Liabilities to customers
Goodwill 58,226 - on uncompleted contracts
Intangible assets - net 45,663 8,545 and warranties 4,169 3,277
Other assets 14,620 6,003 Postretirement benefits 14,838 11,064
________ ________ Deferred expenses
and other 14,831 11,891
119,565 15,627 ________ ________
PROPERTY, PLANT AND EQUIPMENT: 33,970 26,380
Cost 101,591 43,409 LONG-TERM DEBT, less
Less accumulated current maturities 181,849 66,627
depreciation (59) (7,382)
________ ________
101,532 36,027
COMMON SHAREHOLDERS' INVESTMENT:
Common stock - par value
$.01 per share, authorized,
issued and outstanding
1,000 shares at
September 30, 1997 - -
Common stock - par value
$.01 per share, authorized
20,000,000 shares, issued
and outstanding 10,534,574
shares at December 31, 1996 - 105
Additional paid-in capital 143,000 57,739
Unearned stock compensation - (2,815)
Accumulated earnings
(deficit) 1,269 (16,446)
Cumulative translation
adjustment 268 (1,122)
________ ________
144,537 37,461
________ ________ ________ ________
$440,070 $172,895 $440,070 $172,895
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars In Thousands)
Successor Predecessor
Nine Months
September 24- January 1- Ended
September 30, September 23, September 30,
1997 1997 1996
Cash Flows From
Operating Activities
Net earnings (loss) $ 1,269 $ (4,874) $ 2,405
Adjustments to reconcile
net earnings (loss) to
net cash (used in)
provided by operating
activities:
Depreciation 186 3,125 2,955
Amortization 101 770 863
Non-cash stock
compensation
expense - 677 393
Inventory fair value
adjustment charged
to cost of products
sold 300 283 -
Nonrecurring items - 10,051 -
In kind interest on
the Secured Notes
due December 14,
1999 - - 3,767
Loss (gain) on sale
of property, plant
and equipment 22 (275) 278
Non-cash income tax
expense 410 - -
Changes in assets
and liabilities,
net of effects of
acquisitions:
Receivables (4,440) (19,534) (752)
Inventories 919 (11,383) 3,875
Other current
assets 186 (1,434) (835)
Other assets (10) (408) (1,019)
Current liabilities
other than income
taxes, short-term
obligations and
current maturities
of long-term debt (4,892) 17,210 1,574
Income taxes 208 1,181 (2,098)
Long-term liabilities
other than deferred
income taxes (10) (2,012) (2,420)
________ ________ ________
Net cash (used in) provided by
operating activities (5,751) (6,623) 8,986
________ ________ ________
Cash Flows From Investing
Activities
Payment to cash out stock
options and stock
appreciation rights (6,944) - -
Decrease in restricted funds
on deposit 23 - 1,800
Purchases of property, plant
and equipment (38) (4,331) (3,715)
Proceeds from sale of property,
plant and equipment 99 1,227 806
Acquisition of Bucyrus
International, Inc. (189,613) - -
Purchase of Von's Welding, Inc.,
net of cash acquired - (818) -
Purchase of surface mining
equipment business
of Global Industrial
Technologies, Inc. - (36,720) -
Receivable from Global
Industrial Technologies, Inc. - (5,275) -
________ ________ ________
Net cash used in investing
activities (196,473) (45,917) (1,109)
________ ________ ________
Cash Flows From Financing
Activities
Proceeds from issuance of
project financing
obligations - 5,672 5,402
Reduction of project
financing obligations - - (8,104)
Net increase (decrease) in
other bank borrowings 28,472 690 (1,337)
Payment of acquisition
expenses (4,300) (820) -
Payment of refinancing fees (5,378) (656) -
Payment of bridge loan fees - (3,361) -
(Payment of) proceeds from
bridge loan (45,000) 45,000 -
Capital contribution from
American Industrial
Partners 143,000 - -
Proceeds from issuance of
long-term debt 150,000 1,706 849
Payment of long-term debt (65,785) (190) -
________ ________ ________
Net cash provided by (used
in) financing activities 201,009 48,041 (3,190)
________ ________ ________
Effect of exchange rate
changes on cash (77) 417 (257)
________ ________ ________
Net (decrease) increase in
cash and cash equivalents (1,292) (4,082) 4,430
Cash and cash equivalents at
beginning of period 11,681 15,763 11,150
________ ________ ________
Cash and cash equivalents at
end of period $ 10,389 $ 11,681 $ 15,580
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest $ 2,023 $ 3,881 $ 417
Income taxes - net of refunds - 1,218 3,162
Supplemental Schedule of Noncash Investing and Financing Activities
In 1997, the Company purchased all of the common stock of Von's Welding, Inc.
In conjunction with the acquisition, liabilities were assumed as follows:
1997
Fair value of assets acquired $ 1,956
Cash paid (885)
_______
Liabilities assumed $ 1,071
In 1997, the Company purchased certain assets and liabilities of the surface
mining and equipment business of Global Industrial Technologies, Inc.
("Global"). In conjunction with the acquisition, liabilities were assumed
as follows:
1997
Fair value of assets acquired $48,662
Cash paid - net of receivable from Global (36,720)
_______
Liabilities assumed $11,942
See notes to consolidated condensed financial statements.
<PAGE>
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. In the opinion of Bucyrus International, Inc. (the "Company"), the
consolidated condensed financial statements contain all adjustments
(consisting of normal recurring accruals and other adjustments as stated
below) necessary to present fairly the financial results for the interim
periods. Certain items are included in these statements based on
estimates for the entire year.
2. Certain notes and other information have been condensed or omitted from
these interim consolidated condensed financial statements. Therefore,
these statements should be read in conjunction with the Company's 1996
Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 20, 1997.
3. On September 24, 1997, American Industrial Partners Acquisition Company,
LLC ("AIP"), Bucyrus Acquisition Corp. ("Bucyrus Acquisition") and the
Company announced that AIP completed their tender offer for all of the
outstanding shares of common stock of the Company at a price of $18 per
share. The purchase of all of the Company's outstanding shares of common
stock by AIP resulted in a change in control of voting interest.
Subsequently, Bucyrus Acquisition was merged (the "Merger") with and into
the Company upon the filing of a Certificate of Merger. The Certificate
of Merger was filed pursuant to an Agreement and Plan of Merger (the
"Merger Agreement") dated as of August 21, 1997 between the Company,
Bucyrus Acquisition and AIP, which is the parent of Bucyrus Acquisition
and a wholly-owned subsidiary of American Industrial Partners Capital Fund
II, L.P. The separate corporate existence of Bucyrus Acquisition was
terminated and the Company, as the successor corporation in the Merger
(sometimes referred to herein as the "Successor"), became wholly-owned by
AIP.
Approximately $186,853,000 was required to purchase all of the shares of
the Company's common stock in the tender offer and $2,769,000 was needed
to cash out the remaining outstanding shares in the Merger. Bucyrus
Acquisition received $143,000,000 of the necessary funds to purchase the
shares of the Company's common stock as an equity contribution from AIP.
The remainder of the consideration required to consummate the tender offer
and related expenses was funded by a bridge loan from AIP to Bucyrus
Acquisition, which was repaid in full on September 26, 1997.
The Merger Agreement also provided that each outstanding option to
purchase shares of the Company's common stock and each outstanding stock
appreciation right granted under the Company's Non-Employee Directors'
Stock Option Plan, the 1996 Employees' Stock Incentive Plan and any other
stock-based incentive plan or arrangement of the Company, whether or not
then exercisable or vested, would be cancelled. In consideration of such
cancellation, the holders of such options and stock appreciation rights
received for each share subject to such option or stock appreciation right
an amount in cash equal to the excess of the offer price of $18 per share
over the per share exercise price of such option or the per share base
price of such stock appreciation right, as applicable, multiplied by the
number of shares subject to such option or stock appreciation right.
Included in the Nonrecurring Items in the Consolidated Condensed Statement
of Operations is $6,690,000 of expense incurred to cash out the
outstanding options and stock appreciation rights. The total cash paid
was $6,944,000.
The acquisition of the Company by AIP was accounted for as a purchase and
accordingly, the assets acquired and liabilities assumed have been
restated to their estimated fair values. The preliminary allocation of
the purchase price was as follows:
(Dollars in Thousands)
Working capital $ 132,841
Property, plant and equipment 101,773
Intangible assets (including
goodwill of $58,673) 104,384
Other long-term assets
and liabilities (195,998)
Total purchase price $ 143,000
4. On September 24, 1997, the Company completed the private placement (the
"Private Offering") of $150,000,000 aggregate principal amount of its
9.75% Senior Notes due 2007 (the "Senior Notes"). Also on September 24,
1997, the Company purchased and cancelled $63,963,000 of its 10.5% Secured
Notes due December 14, 1999 (the "Secured Notes"), and issued a notice of
redemption for the remaining $1,822,000 of Secured Notes.
The Company also entered into a new credit agreement with Bank One,
Wisconsin on September 24, 1997 which provides the Company with a
$75,000,000 senior secured revolving credit facility (the "Revolving
Credit Facility") with a $25,000,000 sublimit for standby letters of
credit. Borrowings under the Revolving Credit Facility bear interest at
variable rates and are subject to a borrowing base formula based on
receivables, inventory and machinery and equipment. Direct borrowings
under the Revolving Credit Facility at September 30, 1997 were $29,300,000
at a weighted average interest rate of 8.6%. The issuance of standby
letters of credit reduce the amount available for direct borrowings under
the Revolving Credit Facility. At September 30, 1997, there were
$3,467,000 of standby letters of credit outstanding under the Revolving
Credit Facility. The Revolving Credit Facility contains covenants which,
among other things, require the Company to maintain certain financial
ratios.
5. On August 26, 1997, the Company consummated the acquisition (the "Marion
Acquisition") of certain assets and liabilities of The Marion Power Shovel
Company, a subsidiary of Global Industrial Technologies, Inc. ("Global"),
and of certain subsidiaries and divisions of Global that represent
Global's surface mining equipment business in Australia, Canada and South
Africa (collectively referred to herein as "Marion"). The purchase price
for Marion was initially $40,300,000, subject to post-closing adjustments
which reduced the purchase price by $5,275,000 to $35,025,000. This post-
closing purchase price adjustment is classified as Receivable from Global
Industrial Technologies, Inc. in the Consolidated Condensed Balance Sheet
at September 30, 1997.
The Company financed the Marion Acquisition and related expenses by
utilizing on August 26, 1997 an unsecured bridge loan (the "Bridge Loan")
provided by a former affiliate of the Company, in the amount of
$45,000,000. The Bridge Loan was repaid in full on September 24, 1997
with a portion of the proceeds from the Private Offering. The Bridge Loan
had an interest rate of 10.625% and the total interest expense incurred by
the Company was $385,000. The Company incurred $3,361,000 of loan fees in
connection with the Bridge Loan. These fees are included in Nonrecurring
Items in the Consolidated Condensed Statement of Operations.
The acquisition of Marion by the Company was accounted for as a purchase
and accordingly, the assets acquired and liabilities assumed by the
Company have been restated to their estimated fair values. The
preliminary allocation of the purchase price was as follows:
(Dollars in Thousands)
Working capital $ 41,321
Negative goodwill (4,601)
_________
Total purchase price $ 36,720
6. The following pro forma results of operations assumes that the Company had
been acquired by AIP and the Company acquired Marion as of January 1, 1997
and 1996. Such information reflects adjustments to reflect additional
interest expense and depreciation expense, amortization of goodwill and
the effects of adjustments made to the carrying value of certain assets
and liabilities.
The pro forma results for the nine months ended September 30, 1997 include
Marion's historical results for the nine months ended September 30, 1997
and the pro forma results for the nine months ended September 30, 1996
include Marion's historical results for the nine months ended July 31,
1996.
Nine Months Ended
September 30,
1997 1996
(Dollars in Thousands)
Net sales $262,130 $278,206
Net loss (17,019) (16,694)
Net loss per share
of common stock (1) N/A N/A
(1) Net loss per share of common stock is not meaningful since only
1,000 shares would be outstanding and all of these shares are
owned by AIP.
The pro forma financial information presented above is not necessarily
indicative of either the results of operations that would have occurred
had the acquisition been effective at the beginning of the periods
presented or of future operations of the Company.
7. The Company's payment obligations under the Senior Notes are guaranteed by
certain of the Company's wholly-owned subsidiaries (the "Guarantor
Subsidiaries"). Such guarantees are full, unconditional and joint and
several. Separate financial statements of the Guarantor Subsidiaries are
not presented because the Company's management has determined that they
would not be material to investors. The following supplemental financial
information sets forth, on an unconsolidated basis, statement of
operations, balance sheet, and statement of cash flow information for the
Company (the "Parent Company"), for the Guarantor Subsidiaries and for the
Company's non-guarantor subsidiaries (the "Other Subsidiaries"). The
supplemental financial information reflects the investments of the Company
in the Guarantor and Other Subsidiaries using the equity method of
accounting. Parent Company amounts for net earnings and common
shareholders' investment differ from consolidated amounts as intercompany
profit in subsidiary inventory has not been eliminated in the Parent
Company statement but has been eliminated in the Consolidated Totals.
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
For the Period September 24, 1997 to September 30, 1997
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $ 6,615 $ 782 $ 4,286 $ (1,254) $ 10,429
Other income 62 - 14 (53) 23
________ ________ ________ ________ ________
6,677 782 4,300 (1,307) 10,452
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 4,774 632 3,226 (1,195) 7,437
Product development,
selling, administrative
and miscellaneous
expenses 496 34 260 - 790
Interest expense 340 8 60 (53) 355
________ ________ ________ ________ ________
5,610 674 3,546 (1,248) 8,582
________ ________ ________ ________ ________
Earnings before income
taxes and equity
in net earnings of
consolidated
subsidiaries 1,067 108 754 (59) 1,870
Income taxes 373 42 186 - 601
________ ________ ________ ________ ________
Earnings before equity
in net earnings of
consolidated subsidiaries 694 66 568 (59) 1,269
Equity in net earnings of
consolidated subsidiaries 634 - - (634) -
________ ________ ________ ________ ________
Net earnings $ 1,328 $ 66 $ 568 $ (693) $ 1,269
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
For the Period July 1, 1997 to September 23, 1997
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $ 39,372 $ 7,245 $ 28,846 $ (7,760) $ 67,703
Other income 774 - 106 (206) 674
________ ________ ________ ________ ________
40,146 7,245 28,952 (7,966) 68,377
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 33,591 6,236 23,009 (7,582) 55,254
Product development,
selling, administrative
and miscellaneous
expenses 4,865 559 2,315 1,031 8,770
Interest expense 2,043 89 424 (206) 2,350
Nonrecurring items 10,051 - - - 10,051
________ ________ ________ ________ ________
50,550 6,884 25,748 (6,757) 76,425
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and equity
in net earnings of
consolidated
subsidiaries (10,404) 361 3,204 (1,209) (8,048)
Income taxes (775) 141 883 - 249
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated
subsidiaries (9,629) 220 2,321 (1,209) (8,297)
Equity in net earnings of
consolidated
subsidiaries 2,541 - - (2,541) -
________ ________ ________ ________ ________
Net earnings (loss) $ (7,088) $ 220 $ 2,321 $ (3,750) $ (8,297)
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
For the Quarter Ended September 30, 1996
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $ 44,640 $ 7,255 $ 21,981 $ (5,799) $ 68,077
Other income 457 - 241 (462) 236
________ ________ ________ ________ ________
45,097 7,255 22,222 (6,261) 68,313
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 37,991 6,136 17,193 (6,028) 55,292
Product development,
selling, administrative
and miscellaneous
expenses 3,819 380 3,571 1,454 9,224
Interest expense 1,817 122 279 (462) 1,756
________ ________ ________ ________ ________
43,627 6,638 21,043 (5,036) 66,272
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and equity
in net earnings of
consolidated
subsidiaries 1,470 617 1,179 (1,225) 2,041
Income taxes (79) 241 384 - 546
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated
subsidiaries 1,549 376 795 (1,225) 1,495
Equity in net earnings of
consolidated
subsidiaries 1,171 - - (1,171) -
________ ________ ________ ________ ________
Net earnings (loss) $ 2,720 $ 376 $ 795 $ (2,396) $ 1,495
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
For the Period January 1, 1997 to September 23, 1997
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $126,962 $ 23,836 $ 84,658 $(23,991) $211,465
Other income 1,696 1 274 (682) 1,289
________ ________ ________ ________ ________
128,658 23,837 84,932 (24,673) 212,754
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 107,735 20,240 67,278 (23,738) 171,515
Product development,
selling, administrative
and miscellaneous
expenses 15,167 1,871 9,024 1,053 27,115
Interest expense 5,818 248 922 (682) 6,306
Nonrecurring items 10,051 - - - 10,051
________ ________ ________ ________ ________
138,771 22,359 77,224 (23,367) 214,987
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and equity
in net earnings of
consolidated
subsidiaries (10,113) 1,478 7,708 (1,306) (2,233)
Income taxes (412) 576 2,477 - 2,641
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated
subsidiaries (9,701) 902 5,231 (1,306) (4,874)
Equity in net earnings of
consolidated
subsidiaries 6,133 - - (6,133) -
________ ________ ________ ________ ________
Net earnings (loss) $ (3,568) $ 902 $ 5,231 $ (7,439) $ (4,874)
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Operations
For the Nine Months Ended September 30, 1996
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $128,736 $ 24,194 $ 66,731 $(20,764) $198,897
Other income 1,137 1 494 (932) 700
________ ________ ________ ________ ________
129,873 24,195 67,225 (21,696) 199,597
________ ________ ________ ________ ________
Costs and Expenses:
Cost of products sold 110,901 20,346 52,486 (21,418) 162,315
Product development,
selling, administrative
and miscellaneous
expenses 14,650 1,345 9,622 1,461 27,078
Interest expense 5,834 330 697 (932) 5,929
________ ________ ________ ________ ________
131,385 22,021 62,805 (20,889) 195,322
________ ________ ________ ________ ________
Earnings (loss) before
income taxes and equity
in net earnings of
consolidated
subsidiaries (1,512) 2,174 4,420 (807) 4,275
Income taxes (389) 848 1,411 - 1,870
________ ________ ________ ________ ________
Earnings (loss) before
equity in net earnings of
consolidated
subsidiaries (1,123) 1,326 3,009 (807) 2,405
Equity in net earnings of
consolidated
subsidiaries 4,335 - - (4,335) -
________ ________ ________ ________ ________
Net earnings (loss) $ 3,212 $ 1,326 $ 3,009 $ (5,142) $ 2,405
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Balance Sheets
September 30, 1997
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ - $ 621 $ 9,768 $ - $ 10,389
Receivables 38,818 3,588 23,342 - 65,748
Intercompany
receivables 46,141 1,451 977 (48,569) -
Inventories 73,318 2,028 56,062 (1,681) 129,727
Prepaid expenses and
other current assets 4,894 317 2,623 - 7,834
Receivable from Global 6,346 - (1,071) - 5,275
________ ________ ________ ________ ________
Total Current Assets 169,517 8,005 91,701 (50,250) 218,973
OTHER ASSETS:
Restricted funds on
deposit - - 1,056 - 1,056
Goodwill 58,138 - 88 - 58,226
Intangible assets - net 45,419 244 - - 45,663
Other assets 12,136 34 2,450 - 14,620
Investment in
subsidiaries 43,266 - - (43,266) -
________ ________ ________ ________ ________
158,959 278 3,594 (43,266) 119,565
PROPERTY, PLANT AND
EQUIPMENT - net 88,024 2,755 10,753 - 101,532
________ ________ ________ ________ ________
$416,500 $ 11,038 $106,048 $(93,516) $440,070
LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable and
accrued expenses 42,872 2,444 14,349 (309) 59,356
Intercompany payables 279 5,785 40,136 (46,200) -
Liabilities to customers
on uncompleted contracts
and warranties 5,864 12 748 - 6,624
Income taxes 280 56 3,873 - 4,209
Short-term obligations 8,498 32 995 - 9,525
________ ________ ________ ________ ________
Total Current
Liabilities 57,793 8,329 60,101 (46,509) 79,714
LONG-TERM LIABILITIES:
Deferred income taxes - - 132 - 132
Liabilities to customers
on uncompleted contracts
and warranties 3,589 - 580 - 4,169
Postretirement benefits 14,401 - 437 - 14,838
Deferred expenses and
other 13,139 479 1,213 - 14,831
________ ________ ________ ________ ________
31,129 479 2,362 - 33,970
LONG-TERM DEBT, less
current maturities 179,300 - 2,549 - 181,849
COMMON SHAREHOLDERS'
INVESTMENT 148,278 2,230 41,036 (47,007) 144,537
________ ________ ________ ________ ________
$416,500 $ 11,038 $106,048 $(93,516) $440,070
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Balance Sheets
December 31, 1996
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash
equivalents $ 9,072 $ 149 $ 6,542 $ - $ 15,763
Receivables 15,028 4,941 12,116 - 32,085
Intercompany receivables 20,886 623 1,969 (23,478) -
Inventories 43,343 1,438 28,554 (2,446) 70,889
Prepaid expenses and
other current assets 366 144 1,994 - 2,504
________ ________ ________ ________ ________
Total Current Assets 88,695 7,295 51,175 (25,924) 121,241
OTHER ASSETS:
Restricted funds on deposit - - 1,079 - 1,079
Intangible assets - net 8,545 - - - 8,545
Other assets 3,845 - 2,158 - 6,003
Investment in
subsidiaries 30,769 - - (30,769) -
________ ________ ________ ________ ________
43,159 - 3,237 (30,769) 15,627
PROPERTY, PLANT AND
EQUIPMENT - net 27,226 954 7,847 - 36,027
________ ________ ________ ________ ________
$159,080 $ 8,249 $ 62,259 $(56,693) $172,895
LIABILITIES AND COMMON
SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable and
accrued expenses 22,219 2,205 9,361 (20) 33,765
Intercompany payables 785 5,579 16,141 (22,505) -
Liabilities to customers
on uncompleted contracts
and warranties 2,101 197 1,281 - 3,579
Income taxes 357 63 1,049 - 1,469
Short-term obligations 2,788 - 398 - 3,186
Current maturities of
long-term debt - - 428 - 428
________ ________ ________ ________ ________
Total Current
Liabilities 28,250 8,044 28,658 (22,525) 42,427
LONG-TERM LIABILITIES:
Deferred income taxes - - 148 - 148
Liabilities to customers
on uncompleted contracts
and warranties 2,638 - 639 - 3,277
Postretirement benefits 10,610 - 454 - 11,064
Deferred expenses
and other 10,937 233 721 - 11,891
________ ________ ________ ________ ________
24,185 233 1,962 - 26,380
LONG-TERM DEBT, less
current maturities 65,785 - 842 - 66,627
COMMON SHAREHOLDERS'
INVESTMENT 40,860 (28) 30,797 (34,168) 37,461
________ ________ ________ ________ ________
$159,080 $ 8,249 $ 62,259 $(56,693) $172,895
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
For the Period September 24, 1997 to September 30, 1997
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Net Cash Provided by (used
in) Operating Activities $ (7,584) $ 446 $ 1,387 $ - $ (5,751)
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
Payment to cash out stock
options and stock
appreciation rights (6,944) - - - (6,944)
Decrease in restricted
funds on deposit - - 23 - 23
Purchases of property,
plant and equipment (6) (17) (15) - (38)
Proceeds from sale of
property, plant and
equipment 115 - (16) - 99
Acquisition of Bucyrus
International, Inc. (189,613) - - - (189,613)
________ ________ ________ ________ ________
Net cash used in investing
activities (196,448) (17) (8) - (196,473)
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Net increase (decrease)
in other bank
borrowings 29,303 (427) (404) - 28,472
Payment of acquisition
expenses (4,300) - - - (4,300)
Payment of refinancing
fees (5,378) - - - (5,378)
Payment of bridge loan (27,024) - (17,976) - (45,000)
Capital contribution from
American Industrial
Partners 143,000 - - - 143,000
Proceeds from issuance of
long-term debt 150,000 - - - 150,000
Payment of long-term debt (65,785) - - - (65,785)
Change in intercompany
accounts (17,976) - 17,976 - -
________ ________ ________ ________ ________
Net cash provided by (used in)
financing activities 201,840 (427) (404) - 201,009
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - (77) - (77)
________ ________ ________ ________ ________
Net (decrease) increase
in cash and cash
equivalents (2,192) 2 898 - (1,292)
Cash and cash equivalents
at beginning of period 2,192 619 8,870 - 11,681
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ - $ 621 $ 9,768 $ - $ 10,389
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
For the Period January 1, 1997 to September 23, 1997
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Net Cash Provided by (used
in) Operating Activities $ (9,108) $ 804 $ 1,681 $ - $ (6,623)
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
Purchases of property,
plant and equipment (985) (144) (3,202) - (4,331)
Proceeds from sale of
property, plant and
equipment 5 - 1,222 - 1,227
Purchase of Von's Welding,
Inc., net of cash
acquired (818) - - - (818)
Purchase of surface mining
and equipment business
of Global Industrial
Technologies, Inc. (15,827) - (20,893) - (36,720)
Receivable from Global (6,346) - 1,071 - (5,275)
Change in intercompany
accounts (1,846) - 1,846 - -
Dividends paid to parent 150 - (150) - -
________ ________ ________ ________ ________
Net cash used in investing
activities (25,667) (144) (20,106) - (45,917)
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Net increase in other
bank borrowings 36 - 654 - 690
Payment of acquisition
expenses (820) - - - (820)
Payment of refinancing fees (656) - - - (656)
Payment of bridge loan fees (3,361) - - - (3,361)
Proceeds from bridge loan 27,024 - 17,976 - 45,000
Proceeds from issuance
of project financing
obligations 5,672 - - - 5,672
Proceeds from issuance
of long-term debt - - 1,706 - 1,706
Payment of long-term debt - (190) - - (190)
________ ________ ________ ________ ________
Net cash provided by (used in)
financing activities 27,895 (190) 20,336 - 48,041
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - 417 - 417
________ ________ ________ ________ ________
Net (decrease) increase
in cash and cash
equivalents (6,880) 470 2,328 - (4,082)
Cash and cash equivalents
at beginning of period 9,072 149 6,542 - 15,763
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ 2,192 $ 619 $ 8,870 $ - $ 11,681
</TABLE>
<PAGE>
<TABLE>
Bucyrus International, Inc. and Subsidiaries
Consolidating Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 1996
(Dollars in Thousands)
<CAPTION>
Parent Guarantor Other Consolidated
Company Subsidiaries Subsidiaries Eliminations Total
<S> <C> <C> <C> <C> <C>
Net Cash Provided by (used
in) Operating Activities $ 4,727 $ 1,457 $ 2,802 $ - $ 8,986
________ ________ ________ ________ ________
Cash Flows From Investing
Activities
Decrease in restricted
funds on deposit - - 1,800 - 1,800
Purchases of property,
plant and equipment (1,433) (71) (2,211) - (3,715)
Proceeds from sale of
property, plant and
equipment 745 - 61 - 806
Dividends paid to parent 1,450 (1,250) (200) - -
________ ________ ________ ________ ________
Net cash provided by
(used in) investing
activities 762 (1,321) (550) - (1,109)
________ ________ ________ ________ ________
Cash Flows From Financing
Activities
Proceeds from issuance
of project financing
obligations 5,402 - - - 5,402
Reduction of project
financing obligations (8,104) - - - (8,104)
Net decrease in other
bank borrowings (21) - (1,316) - (1,337)
Proceeds from issuance
of long-term debt - - 849 - 849
________ ________ ________ ________ ________
Net cash used in
financing activities (2,723) - (467) - (3,190)
________ ________ ________ ________ ________
Effect of exchange rate
changes on cash - - (257) - (257)
________ ________ ________ ________ ________
Net increase (decrease)
in cash and cash
equivalents 2,766 136 1,528 - 4,430
Cash and cash equivalents
at beginning of period 5,462 355 5,333 - 11,150
________ ________ ________ ________ ________
Cash and cash equivalents
at end of period $ 8,228 $ 491 $ 6,861 $ - $ 15,580
</TABLE>
<PAGE>
8. Inventories consist of the following:
September 30, December 31,
1997 1996
(Dollars in Thousands)
Raw materials and parts $ 14,971 $ 10,628
Costs relating to
uncompleted contracts 6,151 4,183
Customers' advances offset
against costs incurred on
uncompleted contracts (2,582) (1,816)
Work in process 28,769 13,746
Finished products (primarily
replacement parts) 82,418 44,148
$129,727 $ 70,889
At September 30, 1997, the remaining estimated purchase accounting fair
value adjustment included in inventory was $14,975,000.
9. Net earnings per share of common stock for the period September 24, 1997
to September 30, 1997 is not meaningful since only 1,000 shares are
outstanding and all of these shares are owned by AIP. There were no
dilutive potential common shares for the period.
Net loss per share of common stock for the period July 1, 1997 to
September 23, 1997 and for the period January 1, 1997 to September 23,
1997 are based on the weighted average number of common and common
equivalent shares outstanding during the period. Restricted common stock
was considered to be issued and outstanding and is included in the net
earnings per share calculation using the treasury stock method. Net
earnings per share of common stock for the quarter and nine months ended
September 30, 1996 are based on the weighted average number of common
shares outstanding since common stock equivalents were not significant.
The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share". At December 31, 1997,
the Company will adopt this statement for the periods ending September 23,
1997 and will restate prior period earnings per share as required.
Adoption of this statement will not have a material impact on the
Company's reported earnings (loss) per share for the periods ending
September 23, 1997 and for the quarter and nine months ended September 30,
1996.
<PAGE>
BUCYRUS INTERNATIONAL, INC. AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information is provided to assist in the understanding of
Bucyrus International, Inc.'s (the "Company") operations for the quarters and
nine months ended September 30, 1997 and 1996.
On September 24, 1997, American Industrial Partners Acquisition Company,
LLC ("AIP") completed their tender offer for all of the outstanding shares of
common stock of the Company at a price of $18 per share. The Company is now
wholly-owned by AIP. Also on September 24, 1997, the Company completed the
private placement (the "Private Offering") of $150,000,000 aggregate principal
amount of its 9.75% Senior Notes due 2007 (the "Senior Notes"). Following the
Private Offering, the Company purchased and cancelled $63,963,000 of its 10.5%
Secured Notes due December 14, 1999 (the "Secured Notes"), and issued a notice
of redemption for the remaining $1,822,000 of Secured Notes.
On August 26, 1997, the Company consummated the acquisition (the "Marion
Acquisition") of certain assets and liabilities of The Marion Power Shovel
Company, a subsidiary of Global Industrial Technologies, Inc.("Global"), and of
certain subsidiaries and divisions of Global that represent Global's surface
mining equipment business in Australia, Canada and South Africa (collectively
referred to herein as "Marion"). The Company financed the Marion Acquisition
and related expenses by utilizing an unsecured bridge loan (the "Bridge Loan")
provided by a former affiliate of the Company, in the amount of $45,000,000.
The Bridge Loan was repaid in full on September 24, 1997 with a portion of the
proceeds from the Private Offering.
In connection with these acquisitions, the assets and liabilities of the
acquired companies have been restated to their estimated fair values. The
consolidated condensed financial statements include the related amortization
charges associated with the fair value adjustments.
LIQUIDITY AND CAPITAL RESOURCES
Working capital and current ratio are two financial measurements which
provide an indication of the Company's ability to meet its short-term
obligations. These measurements at September 30, 1997 and December 31, 1996
were as follows:
September 30, December 31,
1997 1996
(Dollars in Thousands)
Working capital $139,259 $ 78,814
Current ratio 2.7 to 1 2.9 to 1
The changes in working capital and current ratio are due to the acquisition
of Marion and to the adjustment of assets and liabilities to fair value as a
result of the acquisition of the Company by AIP.
Equipment Assurance Limited has pledged $1,056,000 of its cash to secure
its reimbursement obligations for outstanding letters of credit at September 30,
1997. This collateral amount is classified as Restricted Funds on Deposit in
the Consolidated Condensed Balance Sheets.
The Company is presenting below a calculation of earnings (loss) before
interest expense, income taxes, depreciation, amortization, non-cash stock
compensation, (gain) loss on sale of fixed assets, inventory fair value
adjustment charged to cost of products sold and nonrecurring items ("Adjusted
EBITDA"). Since cash flow from operations is very important to the Company's
future, the Adjusted EBITDA calculation provides a summary review of cash flow
performance. In addition, the Company is required to maintain certain minimum
Adjusted EBITDA levels under its bank credit agreement (see below). The
Adjusted EBITDA calculation is not an alternative to operating income under
generally accepted accounting principles as an indicator of operating
performance or to cash flows as a measure of liquidity. The following table
reconciles Earnings (Loss) Before Income Taxes to Adjusted EBITDA:
<PAGE>
<TABLE>
<CAPTION>
Successor Predecessor
Quarter Nine Months
September 24- July 1- Ended January 1- Ended
September 30, September 23, September 30, September 23, September 30,
1997 1997 1996 1997 1996
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Earnings (loss)
before income taxes $ 1,870 $ (8,048) $ 2,041 $ (2,233) $ 4,275
Non-cash expenses:
Depreciation 186 946 975 3,125 2,955
Amortization 101 236 279 770 863
Non-cash stock
compensation - 257 277 677 393
Loss (gain) on sale
of fixed assets 22 (271) 32 (275) 278
Inventory fair value
adjustment charged
to cost of products
sold 300 283 - 283 -
In kind interest on
the Secured Notes - - - - 3,767
Cash interest expense 355 2,350 1,756 6,306 2,162
Nonrecurring items (1) - 10,051 - 10,051 -
________ ________ ________ ________ ________
Adjusted EBITDA $ 2,834 $ 5,804 $ 5,360 $ 18,704 $ 14,693
<FN>
(1) Nonrecurring items consist of $6,690,000 of expense to cash out the outstanding stock options and stock
appreciation rights in connection with the acquisition of the Company by AIP and $3,361,000 of loan fees incurred
in connection with the Bridge Loan that was utilized to purchase Marion.
</TABLE>
<PAGE>
On September 24, 1997, the Company entered into a new credit agreement with
Bank One, Wisconsin ("Bank One"), which provides the Company with a $75,000,000
senior secured revolving credit facility (the "Revolving Credit Facility"), with
a $25,000,000 sublimit for standby letters of credit. The issuance of standby
letters of credit will reduce the amount available for direct borrowings under
the Revolving Credit Facility. Availability under the Revolving Credit Facility
is limited to a borrowing base formula based on receivables, inventory and
machinery and equipment. The obligations of the Company under the Revolving
Credit Facility are guaranteed by certain of its domestic subsidiaries and
secured by substantially all of the assets of the Company, other than real
property and assets of the foreign subsidiaries. Pricing on the Revolving
Credit Facility is, at the option of the Company, (i) Bank One's base rate or
Federal Funds Rate plus 0.5% per annum plus an applicable margin ranging
from 0% to 0.5% dependent on the ratio of adjusted funded debt to EBITDA
(as defined), or (ii) LIBOR plus an applicable margin ranging from 1.5% to
2.75% dependent on the ratio of adjusted funded debt to EBITDA (as defined).
Letters of credit will be priced at 50% of the applicable LIBOR interest rate
margin for non-financial letters of credit and 100% of the applicable LIBOR
interest rate margin in the case of financial letters of credit.
The Revolving Credit Facility also contains covenants requiring the Company
to maintain certain financial ratios and to maintain a minimum net worth.
The agreements relating to the Senior Notes and the Revolving Credit
Facility permit the existing outstanding project financing from lenders to
manufacture mining machinery or other products pursuant to binding purchase
contracts. Project financing borrowings are secured by the inventory being
financed and any accounts receivable relating to such project. Project
financing borrowings mature not later than the date of the final payment
by the customer under the applicable purchase contract. At September 30,
1997, the Company had $8,102,000 of outstanding project financing
borrowings. These borrowings are classified as Short-Term Obligations in
the Consolidated Condensed Balance Sheets.
The Company believes that current levels of cash and liquidity, together
with funds generated by operations, funds available from the Revolving Credit
Facility and other project financing arrangements will be sufficient to permit
the Company to satisfy its debt service requirements and fund operating
activities for the forseeable future. The Company is subject to significant
business, economic and competitive uncertainties that are beyond its control.
Accordingly, there can be no assurance that the Company's financial resources
will be sufficient for the Company to satisfy its debt service obligations and
fund operating activities under all circumstances.
At September 30, 1997, the Company had approximately $4,442,000 of open
capital appropriations. Included in this amount is the remaining $611,000 to be
spent for a new service shop facility in Chile which is being financed primarily
with a local bank in Chile. In addition, the Company has committed
approximately $5,700,000 of a potential $20,000,000 machine shop tool
modernization project. The initial machine tools have been leased and the
remaining machine tools are expected to be financed or leased.
CAPITALIZATION
The long-term debt to equity ratio at September 30, 1997 and December 31,
1996 was 1.3 to 1 and 1.8 to 1, respectively. The long-term debt to total
capitalization ratio at September 30, 1997 and December 31, 1996 was .5 to 1 and
.6 to 1, respectively. Total capitalization is defined as total common
shareholders' investment plus long-term debt plus current maturities of
long-term debt and short-term obligations.
RESULTS OF OPERATIONS
The amounts presented below for the quarter and nine months ended
September 30, 1997 include amounts for the period September 24 to September 30,
1997 (Successor) and for the periods ended September 23, 1997 (Predecessor).
Net Sales
Net sales for the quarter and nine months ended September 30, 1997 were
$78,132,000 and $221,894,000, respectively, compared with $68,077,000 and
$198,897,000 for the quarter and nine months ended September 30, 1996,
respectively. Net sales of repair parts and services for the quarter and nine
months ended September 30, 1997 were $54,619,000 and $143,233,000, respectively,
which is an increase of 39.5% and 18.4% from the quarter and nine months ended
September 30, 1996, respectively. The increase in repair parts and service net
sales for the quarter and nine months ended September 30, 1997 was primarily due
to increased sales at foreign locations. Machine sales for the quarter and nine
months ended September 30, 1997 were $23,513,000 and $78,661,000, respectively,
which is a decrease of 18.7% and an increase of .9% from the quarter and nine
months ended September 30, 1996, respectively. The decrease in machine sales
for the quarter ended September 30, 1997 was primarily in blast hole drills.
There has been an overall decline in worldwide blast hole drill sales
activity in 1997.
Cost of Products Sold
Cost of products sold for the quarter ended September 30, 1997 was
$62,691,000 or 80.2% of net sales compared with $55,292,000 or 81.2% of net
sales for the quarter ended September 30, 1996. For the nine months ended
September 30, 1997, cost of products sold was $178,952,000 or 80.6% of net
sales compared with $162,315,000 or 81.6% of net sales for the nine months ended
September 30, 1996. The increases in gross margin percentages for the quarter
and nine months ended September 30, 1997 were primarily due to improved margins
on machine sales.
Product Development, Selling, Administrative and Miscellaneous Expenses
Product development, selling, administrative and miscellaneous expenses for
the quarter ended September 30, 1997 were $9,560,000 or 12.2% of net sales
compared with $9,224,000 or 13.5% of net sales for the quarter ended
September 30, 1996. The amounts for the nine months ended September 30, 1997
and 1996 were $27,905,000 or 12.6% of net sales and $27,078,000 or 13.6% of net
sales, respectively.
Interest Expense
Interest expense for the quarter and nine months ended September 30, 1997
was $2,705,000 and $6,661,000, respectively, compared with $1,756,000 and
$5,929,000 for the quarter and nine months ended September 30, 1996,
respectively. The Company had the option of paying interest on the Secured
Notes in cash at 10.5% or in kind (issuance of additional Secured Notes) at
13%. For the periods ended September 23, 1997, and for the quarter ended
September 30, 1996, interest was accrued at 10.5% since the Company intended
to pay this interest in cash. For the six months ended June 30, 1996, interest
was accrued at 13% since the Company paid this interest in kind. Interest
expense for the quarter and nine months ended September 30, 1997 also
includes $385,000 for the Bridge Loan used to purchase Marion and $284,000
for the Senior Notes.
Nonrecurring Items
Nonrecurring items consist of $6,690,000 of expense incurred to cash out the
outstanding options to purchase shares of the Company's common stock and
outstanding stock appreciation rights in connection with the acquisition of the
Company by AIP, and $3,361,000 of loan fees incurred in connection with the
Bridge Loan that was utilized to purchase Marion. The Bridge Loan was
subsequently refinanced on September 24, 1997.
Income Taxes
For the period September 24, 1997 to September 30, 1997, income tax expense
consists primarily of a non-cash income tax provision of $410,000 on United
States taxable income at applicable statutory rates and foreign taxes at
applicable statutory rates. The United States tax provision relates to tax
benefits realized from reductions in the valuation allowance established as of
September 24, 1997 (the date the Company was acquired by AIP). As a result, a
corresponding $410,000 reduction of goodwill was recorded.
For the periods ended September 23, 1997 and the quarter and nine months
ended September 30, 1996, income tax expense consists primarily of foreign taxes
at applicable statutory rates. For United States tax purposes, there was a loss
for which no income tax benefit was recorded.
Net Earnings (Loss)
Net loss for the quarter and nine months ended September 30, 1997 was
$(7,028,000) and $(3,605,000), respectively, compared with net earnings of
$1,495,000 and $2,405,000 for the quarter and nine months ended September 30,
1996, respectively. Included in the net loss for the quarter and nine months
ended September 30, 1997 was $6,690,000 of expense to cash out the outstanding
stock options and stock appreciation rights in connection with the acquisition
of the Company by AIP and $3,361,000 of Bridge Loan fees.
Backlog and New Orders
The Company's consolidated backlog at September 30, 1997 was $222,023,000
compared with $158,727,000 at December 31, 1996 and $173,243,000 at
September 30, 1996. Machine backlog at September 30, 1997 was $96,964,000,
which is an increase of 97.8% from December 31, 1996 and an increase of
23.4% from September 30, 1996. The Company has executed a contract with an
Australian mining company for the sale of a 2570WS walking dragline which is
scheduled for completion by December 31, 1999. Included in backlog at
September 30, 1997 was $55,398,000 related to this machine. Repair parts
and service backlog at September 30, 1997 was $125,059,000, which is an
increase of 14.0% from December 31, 1996 and an increase of 32.1% from
September 30, 1996.
New orders for the quarter and nine months ended September 30, 1997 were
$84,389,000 and $285,191,000, respectively, which is an increase of 58.5% and a
decrease of 3.0% from the quarter and nine months ended September 30, 1996,
respectively. New machine orders for the quarter and nine months ended
September 30, 1997 were $16,721,000 and $126,605,000, respectively, which is an
increase of 15.3% and 39.6% from the quarter and nine months ended September 30,
1996, respectively. Included in new machine orders for the quarter and nine
months ended September 30, 1997 was approximately $57,000,000 for the
aforementioned 2570WS walking dragline. New machine orders for electric mining
shovels for the nine months ended September 30, 1997 were even with last year
while new machine orders for blast hole drills have decreased. There has been
an overall decline in worldwide blast hole drill orders in 1997 which was
anticipated as a result of lower demand from copper mines. New repair parts and
service orders for the quarter and nine months ended September 30, 1997 were
$67,668,000 and $158,586,000, respectively, which is an increase of 58.5% and a
decrease of 3.0% from the quarter and nine months ended September 30, 1996,
respectively. The increases in both new orders and backlog for repair parts and
service orders were primarily due to the acquisition of Marion.
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
Joint Prosecution. The Company and its former affiliate Jackson
National Life Insurance Company ("JNL") entered into a joint
prosecution agreement (the "Joint Prosecution Agreement") dated as of
August 21, 1997 relating to various claims the Company and JNL have
or may have resulting from the Company's reorganization in 1994 under
Chapter 11 of the United States Bankruptcy Code (the "Chapter 11
Reorganization") against the law firm of Milbank, Tweed, Hadley &
McCloy ("Milbank") for disgorgement of fees (the "Disgorgement Claim")
and other claims (collectively, the "Milbank Claims"). All proceeds
of the Milbank Claims will be allocated as follows: (i) first, to
pay, or to reimburse the prior payment of, all bona fide third-party
costs, expenses and liabilities incurred on or after September 1, 1997
in connection with prosecuting the Milbank Claims (the "Joint
Prosecution") including, without limitation, the reasonable fees and
disbursements of counsel and other professional advisors, which are
to be advanced by JNL; (ii) the next $8.675 million of proceeds from
the Milbank Claims, if any, will be paid to JNL, provided that the
Company will retain 10% of the proceeds of the Disgorgement Claim, if
any, and will direct payment to JNL of the balance of such proceeds;
and (iii) all additional proceeds of the Milbank Claims will be
divided equally between JNL and the Company. Notwithstanding the
foregoing, the Company shall also receive the benefit of any reduction
of any obligation it may have to pay Milbank's outstanding fees if
any. JNL will indemnify the Company in respect of any liability
resulting from the Joint Prosecution other than in respect of legal
fees and expenses incurred prior to September 1, 1997. The Joint
Prosecution may involve lengthy and complex litigation and there can
be no assurance whether or when any recovery may be obtained or, if
obtained, whether it will be in an amount sufficient to result in the
Company receiving any portion thereof under the formula described
above.
Consistent with the Joint Prosection Agreement, on September 25, 1997,
the Company and JNL commenced an action against Milbank (the
"Milwaukee Action") in the Milwaukee County Circuit Court. The
Company seeks damages against Milbank arising out of Milbank's alleged
malpractice, breach of fiduciary duty, common law fraud, breach of
contract, unjust enrichment and breach of the obligation of good faith
and fair dealing. JNL seeks damages against Milbank arising out of
Milbank's alleged tortious interference with contractual relations,
abuse of process and common law fraud. The Company and JNL seek to
recover actual and punitive damages from Milbank. The Milwaukee
Action may involve lengthy and complex litigation and there can be no
assurance whether or when any recovery may be obtained or, if
obtained, whether it will be in an amount sufficient to result in the
Company receiving any portion thereof under the formula described
above.
On September 23, 1997, Minserco, Inc., one of the Guarantors, was
found liable to BR West Enterprises, Inc. d/b/a West Machine and Tool
Works ("West") in litigation pending in the United States District
Court for the Eastern District of Texas (the "Texas Court"), for
damages claimed with regard to an alleged joint venture agreement (the
"Minserco Litigation"). On October 29, 1997, a final judgment was
entered in the amount of $4.3 million, including attorney's fees and
costs. Minserco strongly disputes the Findings of Fact and
Conclusions of Law entered by the Texas Court and intends to seek a
new trial and, if not successful to vigorously appeal the case to the
United States Court of Appeals for the Fifth Circuit. On November 5,
1997, Bucyrus was sued by West in the Texas Court on substantially
similar grounds asserted in the Minserco Litigation in an apparent
attempt to hold Bucyrus liable for the damages awarded to West in the
Minserco Litigation. The new complaint also seeks punitive damages
in an unspecified amount. It is the view of management that the
Company's ultimate liability, if any, in these actions is not expected
to have a material effect on the Company's financial position or
results of operations, although no assurance to that effect can be
given.
The Company is normally subject to numerous product liability claims,
many of which relate to products no longer manufactured by Bucyrus or
its subsidiaries, and other claims arising in the ordinary course of
business. The Company has insurance covering most of said claims,
subject to varying deductibles ranging from $0.3 million to $3.0
million, and has various limits of liability depending on the
insurance policy year in question. It is the view of management that
the final resolution of said claims and other similar claims which are
likely to arise in the future will not individually or in the
aggregate have a material effect on the Company's financial position
or results of operations, although no assurance to that effect can be
given.
The Company is involved in various other litigation arising in the
normal course of business. It is the view of management that the
Company's recovery or liability, if any, under pending litigation is
not expected to have a material effect on the Company's financial
position or results of operations, although no assurance to that
effect can be given.
Item 5. Other Events
On October 27, 1997, the remaining $1,822,000 of the Company's 10.5%
Secured Notes due December 14, 1999, were purchased and cancelled.
No Secured Notes remain outstanding.
On November 5, 1997, the Company's Board of Directors (the "Board")
amended the Company's Bylaws to increase the number of directors to
six and elected the following new directors to fill the vacancies
created by such amendment: W. Richard Bingham, Robert L. Purdum and
Theodore C. Rogers. Also on November 5, 1997, Willard R. Hildebrand,
the Company's President and Chief Executive Officer, was elected to
fill a vacancy on the Board created by the resignation of Kenneth A.
Pereira, and Mr. Purdum was elected as the Chairman of the Board.
The Company has commenced an offer (the "Exchange Offer") to holders
of its Senior Notes to exchange Senior Notes for notes that have been
registered with the Securities and Exchange Commission ("Exchange
Notes") on a Form S-4 Registration Statement which became effective
on November 12, 1997. The Exchange Offer expires on December 18,
1997.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See Exhibit Index on last page of this report, which is
incorporated herein by reference.
(b) Reports on Form 8-K:
1. Form 8-K dated August 1, 1997, filed August 4, 1997:
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Ex. 99.1 Press release announcing financial operating
results for the quarter and six months ended
June 30, 1997.
Ex. 99.2 Press release announcing the execution of a
definitive agreement for the acquisition by
Registrant of certain assets and liabilities of
The Marion Power Shovel Company and related
businesses from Global Industrial Technologies,
Inc.
Ex. 99.3 Press release announcing the execution of a
Letter of Intent with American Industrial
Partners Capital Fund II, L.P. ("American
Industrial Partners"), providing for the
acquisition of Registrant by American Industrial
Partners or one of its affiliates.
Ex. 99.4 Letter of Intent dated July 30, 1997 between
Registrant and American Industrial Partners
providing for the acquisition of Registrant by
American Industrial Partners or one of its
affiliates.
2. Form 8-K dated September 2, 1997, filed September 2, 1997:
Item 2. Acquisition of Assets
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Ex. 2.1 Asset Purchase Agreement dated July 21, 1997, by
and among The Marion Power Shovel Company, Marion
Power Shovel Pty. Ltd., Intool International
B.V., Global-CIX Canada Inc., and Global
Industrial Technologies, Inc. (Sellers) and
Bucyrus International, Inc., Bucyrus (Australia)
Proprietary Ltd., Bucyrus (Africa) (Proprietary)
Limited, and Bucyrus Canada Limited (Buyers).
Ex. 2.2 Agreement and Plan of Merger dated August 21,
1997, between Registrant, American Industrial
Partners Acquisition Company, LLC and Bucyrus
Acquisition Corp.
Ex. 10.15 Letter Agreement dated July 30, 1997 between
Jefferies & Company, Inc. and Registrant.
Ex. 10.22 Bridge Loan Agreement dated as of August 26, 1997
by and among PPM America Special Investments
Fund, L.P. as Agent and Lender and the other
lenders party thereto, the Company, Bucyrus
(Australia) Proprietary Ltd., and Bucyrus Canada
Limited.
Ex. 10.23 Letter of Intent dated July 30, 1997 between
Registrant and American Industrial Partners,
providing for the acquisition of Registrant by
American Industrial Partners or one of its
affiliates.
Ex. 10.24 Bridge Loan Commitment issued by PPM America
Special Investments Fund, L.P. as of April 14,
1997.
Ex. 10.25 Extension Agreement dated June 30, 1997 by and
between PPM America Special Investments Fund,
L.P. and Bucyrus International, Inc.
Ex. 10.26 Amendment to Bridge Loan Commitment dated as of
August 20, 1997 by and between PPM America
Special Investments Fund, L.P. and Bucyrus
International, Inc.
Ex. 10.27 Bridge Loan Agreement dated as of August 26, 1997
by and between PPM America Special Investments
Fund, L.P., Bank of Montreal, Bucyrus (Australia)
Proprietary Ltd., Bucyrus Canada Limited and
Bucyrus International, Inc.
Ex. 10.28 Joint Prosecution Agreement dated as of
August 21, 1997 by and between Jackson National
Life Insurance Company and Bucyrus International,
Inc.
Ex. 10.29 Settlement Agreement dated as of August 21, 1997
by and between Jackson National Life Insurance
Company and Bucyrus International, Inc.
Ex. 99.1 Audited and unaudited combined financial
statements of the Surface Mining and Equipment
Business of Global Industrial Technologies, Inc.
Ex. 99.2 Unaudited Pro Forma Combined Condensed Financial
Statements of the Company for the year ended
December 31, 1996, and the six months ended
June 30, 1997.
Ex. 99.3 Excerpts from Registrant's Preliminary
Confidential Offering Memorandum dated August 27,
1997 for use in connection with the Senior Notes
offering under the captions "Summary of Offering
Memorandum -- Sources and Uses of Funds," "Risk
Factors" (except for certain Sections pertinent
only to potential purchasers of Senior Notes),
"Management's Discussion and Analysis of
Financial Condition and Results of Operations",
and "Business".
3. Form 8-K dated September 24, 1997, filed September 25, 1997:
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Ex. 99.1 Press Release, dated September 24, 1997, issued
by Bucyrus International, Inc. announcing the
private placement of $150,000,000 of 9-3/4%
Senior Notes due 2007.
4. Form 8-K dated September 24, 1997, filed October 10, 1997:
Item 1. Change in Control of Registrant
Item 5. Other Events
Item 7. Financial Statements and Exhibits
Ex. 2.1 Agreement and Plan of Merger dated August 21,
1997 between Registrant, American Industrial
Partners and Bucyrus Acquisition Corp.
Ex. 2.2 Certificate of Merger dated September 26, 1997,
issued by the Secretary of State of the State of
Delaware.
Ex. 3.1 Restated Certificate of Incorporation of
Registrant.
Ex. 3.2 Bylaws of Registrant
Ex. 10.1 Credit Agreement dated September 24, 1997 between
Bank One, Wisconsin and Registrant
Ex. 99.1 Press Release dated September 24, 1997, issued by
Bucyrus International, Inc. announcing the
private placement of $150,000,000 of 9-3/4%
Senior Notes due 2007.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BUCYRUS INTERNATIONAL, INC.
(Registrant)
Date November 19, 1997 /s/Craig R. Mackus
Craig R. Mackus
Secretary and Controller
Principal Accounting Officer
Date November 19, 1997 /s/Willard R. Hildebrand
Willard R. Hildebrand
President and CEO
<PAGE>
BUCYRUS INTERNATIONAL, INC.
EXHIBIT INDEX
TO
QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1997
Incorporated
Exhibit Herein By Filed
Number Description Reference Herewith
2.1 Agreement and Plan of Exhibit 1 to
Merger dated August 21, Registrant's
1997, between Bucyrus Tender Offer
International, Inc., Solicitation/
American Industrial Recommendation
Partners Acquisition Statement on
Company, LLC and Schedule 14D-9
Bucyrus Acquisition filed with the
Corp. Commission on
August 26, 1997.
2.2 Certificate of Merger Exhibit 2.2 to
dated September 26, Registrant's
1997, issued by the Current Report
Secretary of State on Form 8-K
of the State of filed with the
Delaware. Commission on
October 10, 1997.
2.3 Asset Purchase Agreement Exhibit 2.3 to
dated July 21, 1997, by Registrant's
and among The Marion Amendment No. 1
Power Shovel Company, to Form S-4
Marion Power Shovel Pty. Registration
Ltd., Intool Inter- Statement, filed
national B.V., Global- with the Commission
GIX Canada Inc., and on November 12,
Global Industrial 1997.
Technologies, Inc.
(Sellers) and Bucyrus
International, Inc.,
Bucyrus (Australia)
Proprietary Ltd., Bucyrus
(Africa) (Proprietary)
Limited, and Bucyrus
Canada Limited (Buyers).
[OMITTED PROVISIONS
SUBJECT TO CONFIDENTIAL
TREATMENT BY ORDER OF
THE SECURITIES AND
EXCHANGE COMMISSION]
2.4 Second Amended Joint Exhibit 2.1 to
Plan of Reorganization Registrant's
of B-E Holdings, Inc. Current Report
and Bucyrus-Erie on Form 8-K
Company under Chapter filed with the
11 of the Bankruptcy Commission and
Code as modified on dated December 1,
December 1, 1994, 1994.
including exhibits.
2.5 Order dated December 1, Exhibit 2.2 to
1994 of the U.S. Registrant's
Bankruptcy Court, Current Report
Eastern District of on Form 8-K
Wisconsin confirming filed with the
the Second Amended Joint Commission and
Plan of Reorganization dated December 1,
of B-E Holdings, Inc. 1994.
and Bucyrus-Erie Company
under Chapter 11 of the
Bankruptcy Code, as
modified on December 1,
1994, including exhibits.
3.1 Restated Certificate of Exhibit 3.1 to
Incorporation of Registrant's
Bucyrus International, Current Report
Inc. on Form 8-K
filed with the
Commission on
October 10, 1997.
3.2 Bylaws of Bucyrus
International, Inc., as
amended on November 5,
1997. X
4.1 Indenture of Trust dated Exhibit 4.1 to
as of September 24, 1997 Registrant's
among Bucyrus Form S-4
International, Inc. Registration
Boonville Mining Statement,
Services, Inc., filed with the
Minserco, Inc., and Commission on
Von's Welding, Inc. and November 3, 1997.
Harris Trust and Savings
Bank, Trustee.
4.2 Form of Guarantee of Exhibit 4.2 to
Boonville Mining Registrant's
Services, Inc., Form S-4
Minserco, Inc. and Registration
Von's Welding, Inc. Statement,
dated as of September 24, filed with the
1997 in favor of Harris Commission on
Trust and Savings Bank November 3, 1997.
as Trustee under the
Indenture.
[INCLUDED AS EXHIBIT E
TO EXHIBIT 4.1 ABOVE]
4.3 Form of Bucyrus Exhibit 4.3 to
International, Inc.'s Registrant's
9.75% Senior Note due Form S-4
2007 to be issued in Registration
the Exchange Offer Statement,
subject to the filed with the
Registration Statement Commission on
of Form S-4 filed with November 3, 1997.
the Commission on
November 3, 1997 and
declared effective on
November 12, 1997.
[INCLUDED AS EXHIBIT B
TO EXHIBIT 4.1 ABOVE]
4.4 Form of Bucyrus Exhibit 4.4 to
International, Inc.'s Registrant's
9.75% Senior Note due Form S-4
2007 issued as of Registration
September 24, 1997. Statement,
filed with the
[INCLUDED AS EXHIBIT A Commission on
TO EXHIBIT 4.1 ABOVE] November 3, 1997.
10.1 Credit Agreement dated Exhibit 3.2 to
September 24, 1997 Registrant's
between Bank One, Current Report
Wisconsin and on Form 8-K
Bucyrus International, filed with the
Inc. Commission on
October 10, 1997.
10.2 Management Services Exhibit 10.2 to
Agreement by and among Registrant's
Bucyrus International, Form S-4
Inc., Boonville Mining Registration
Services, Inc., Statement,
Minserco, Inc. and filed with the
Von's Welding, Inc. Commission on
and American Industrial November 3, 1997.
Partners.
10.3 Registration Agreement Exhibit 10.3 to
dated September 24, Registrant's
1997 by and among Form S-4
Bucyrus International, Registration
Inc., Boonville Mining Statement,
Services, Inc., filed with the
Minserco, Inc. and Commission on
Von's Welding, Inc. November 3, 1997.
and Salomon Brothers,
Inc., Jefferies &
Company, Inc. and
Donaldson, Lufkin &
Jenrette Securities
Corporation.
10.4 Joint Prosecution Exhibit 9 to
Agreement dated as Registrant's
of August 21, 1997 Tender Offer
by and among Bucyrus Solicitation/
International, Inc. Recommendation
and Jackson National Statement on
Life Insurance Company. Schedule 14D-9
filed with the
Commission on
August 26, 1997.
10.5 Settlement Agreement Exhibit 10 to
dated as of August 21, Registrant's
1997, by and between Tender Offer
Jackson National Life Solicitation/
Insurance Company and Recommendation
Bucyrus International, Statement on
Inc. Schedule 14D-9
filed with the
Commission on
August 26, 1997.
10.6 Bridge Loan Agreement Exhibit 5.4 to
dated as of August 26, Registrant's
1997 by and among PPM Tender Offer
America Special Solicitation/
Investments Fund, L.P., Recommendation
Bank of Montreal, Statement on
Bucyrus (Australia) Schedule 14D-9
Proprietary Ltd., filed with the
Bucyrus Canada Limited Commission on
and Bucyrus August 26, 1997.
International, Inc.
27 Financial Data Schedule X
(EDGAR filing only.)
EXHIBIT 3.2
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1997
BY-LAWS
OF
BUCYRUS INTERNATIONAL, INC.
(hereinafter called the "Corporation")
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
Corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware.
Section 2. Other Offices. 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.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. Meetings of the stockholders for
the election of directors or for any other purpose shall be held at such time
and place, either within or without the State of Delaware as shall be
designated from time to time by the Board of Directors and stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. Annual Meetings. The annual meetings of stockholders
shall be held on such date and at such time as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting, at
which meetings the stockholders shall elect by a plurality vote a Board of
Directors, and transact such other business as may properly be brought before
the meeting. Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than 10 nor more than 60 days before the date of the
meeting.
Section 3. Special Meetings. Unless otherwise prescribed by law
or by the Certificate of Incorporation, special meetings of stockholders, for
any purpose or purposes, may be called by either (i) the Chairman, if there be
one, (ii) the President or (iii) the Secretary, and shall be called by any
such officer at the request in writing of a majority of the Board of
Directors. Such request shall state the purpose or purposes of the proposed
meeting. Written notice of a special meeting stating the place, date and hour
of the meeting and the purpose or purposes for which the meeting is called
shall be given not less than 10 nor more than 60 days before the date of the
meeting to each stockholder entitled to vote at such meeting.
Section 4. Quorum. Except as otherwise prescribed by law or by
the Certificate of Incorporation, the holders of a majority of the capital
stock issued and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
stockholders for the transaction of business. If, however, such quorum shall
not be present or represented at any meeting of the stockholders, the
stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present
or represented. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. If the adjournment is for
more than thirty 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 entitled to vote at the meeting in accordance with Section 2
or 3 above.
Section 5. Voting. Unless otherwise prescribed by law, the
Certificate of Incorporation or these By-laws, any question brought before any
meeting of stockholders shall be decided by the vote of the holders of a
majority of the stock represented and entitled to vote thereat. Unless
otherwise prescribed by law or the Certificate of Incorporation, each
stockholder represented at a meeting of stockholders shall be entitled to cast
one vote for each share of the capital stock entitled to vote thereat held by
such stockholder. Such votes may be cast in person or by proxy but no proxy
shall be voted on or after three years from its date, unless such proxy
provides for a longer period. The Board of Directors, in its discretion, or
the officer of the Corporation presiding at a meeting of stockholders, in his
or her discretion, may require that any votes cast at such meeting shall be
cast by written ballot.
Section 6. List of Stockholders Entitled to Vote. The officer of
the Corporation who has charge of the stock ledger of the Corporation shall
prepare and make, at least 10 days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 10 days prior to the
meeting, 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. The list shall also
be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any stockholder of the Corporation who
is present.
Section 7. Stock Ledger. The stock ledger of the Corporation
shall be the only evidence as to who are the stockholders entitled to examine
the stock ledger, the list required by Section 6 of this Article II or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
Section 8. Nomination of Directors. Only persons who are
nominated in accordance with the following procedures shall be eligible for
election as directors of the Corporation. Nominations of persons for election
to the Board of Directors may be made at any annual meeting of stockholders
(a) by or at the direction of the Board of Directors (or any duly authorized
committee thereof) or (b) by any stockholder of the Corporation (i) who is a
stockholder of record on the date of the giving of the notice provided for in
this Section 8 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (ii) who complies with the notice
procedures set forth in this Section 8.
In addition to any other applicable requirements, for a nomination
to be made by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the date of
the annual meeting of stockholders; provided, however, that in the event that
less than 70 days' notice or prior public disclosure of the date of the
meeting is given or made, notice by the stockholder to be timely must be so
received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date of the annual meeting was made,
whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth (a) as to each person whom the stockholder proposes
to nominate for election as a director (i) the name, age, business address and
residence address of the person, (ii) the principal occupation or employment
of the person, (iii) the class or series and number of shares of capital stock
of the Corporation that are owned beneficially or of record by the person and
(iv) any other information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder; and (b) as to the
stockholder giving the notice (i) the name and record address of such
stockholder, (ii) the class or series and number of shares of capital stock of
the Corporation that are owned beneficially or of record by such stockholder,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made by
such stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named in
its notice and (v) any other information relating to such stockholder that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for election
of directors pursuant to Section 14 of the Exchange Act and the rules and
regulations promulgated thereunder. Such notice must be accompanied by a
written consent of each proposed nominee to being named as a nominee and to
serve as a director if elected.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 8. If the Chairman of the meeting determines that a nomination
was not made in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the nomination was defective and such defective
nomination shall be disregarded.
Section 9. Business at Annual Meetings. No business may be
transacted at an annual meeting of stockholders, other than business that is
either (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors (or any duly authorized
committee thereof), (b) otherwise properly brought before the annual meeting
by or at the direction of the Board of Directors (or any duly authorized
committee thereof) or (c) otherwise properly brought before the annual meeting
by any stockholder of the Corporation (i) who is a stockholder of record on
the date of the giving of the notice provided for in this Section 9 and on the
record date for the determination of stockholders entitled to vote at such
annual meeting and (ii) who complies with the notice procedures set forth in
this Section 9.
In addition to any other applicable requirements, for business to
be properly brought before an annual meeting by a stockholder, such
stockholder must have given timely notice thereof in proper written form to
the Secretary of the Corporation.
To be timely, a stockholder's notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the date of
the annual meeting of stockholders; provided, however, that in the event that
less than 70 days' notice or prior public disclosure of the date of the
meeting be given or made, notice by the stockholder to be timely must be so
received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure of the date of the annual meeting was made,
whichever first occurs.
To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to bring
before the annual meeting (i) a brief description of the business desired to
be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and record address of such
stockholder, (iii) the class or series and number of shares of capital stock
of the Corporation that are owned beneficially or of record by such
stockholder, (iv) a description of all arrangements or understandings between
such stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a
representation that such stockholder intends to appear in person or by proxy
at the annual meeting to bring such business before the meeting.
No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in accordance
with the procedures set forth in this Section 9, provided, however, that, once
business has been properly brought before the annual meeting in accordance
with such procedures, nothing in this Section 9 shall be deemed to preclude
discussion by any stockholder of any such business. If the Chairman of an
annual meeting determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the Chairman shall
declare to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
ARTICLE III
DIRECTORS
Section 1. Number and Election of Directors. The Board of
Directors shall consist of six (6) directors or such other greater or lesser
number as shall be fixed from time to time by further resolution of this Board
of Directors. Except as provided in Section 2 of this Article III, directors
shall be elected by a plurality of the votes cast at annual meetings of
stockholders, and each director so elected shall hold office until the next
annual meeting and until his or her successor is duly elected and qualified,
or until his or her earlier death, resignation or removal. Any director may
resign at any time upon notice to the Corporation. Directors need not be
stockholders.
Section 2. Vacancies. Any vacancy on the Board of Directors that
results from an increase in the number of directors may be filled by a
majority of the Board of Directors then in office, provided that a quorum is
present, and any other vacancy occurring in the Board of Directors may be
filled by a majority of the directors then in office, even if less than a
quorum, or by a sole remaining director. Any director of any class elected to
fill a vacancy resulting from an increase in such class shall hold office for
a term that shall coincide with the remaining term of that class. Any
director elected to fill a vacancy not resulting from an increase in the
number of directors shall have the same remaining term as his or her
predecessor. Directors of the Corporation may be removed by the stockholders
of the Corporation only for cause.
Section 3. Duties and Powers. The business of the Corporation
shall be managed by or under the direction of the Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by
these By-laws directed or required to be exercised or done by the
stockholders.
Section 4. Meetings. The Board of Directors of the Corporation
may hold meetings, both regular and special, either within or without the
State of Delaware. Regular meetings of the Board of Directors may be held
without notice at such time and at such place as may from time to time be
determined by the Board of Directors. Special meetings of the Board of
Directors may be called by the Chairman, if there be one, the President, or by
a majority of the directors then in office. Notice thereof stating the place,
date and hour of the meeting shall be given to each director either by mail
not less than forty-eight (48) hours before the date of the meeting, by
telephone or telegram on twenty-four (24) hours' notice, or on such shorter
notice as the person or persons calling such meeting may deem necessary or
appropriate in the circumstances.
Section 5. Quorum. Except as otherwise prescribed by law, the
Certificate of Incorporation or these By-laws, at all meetings of the Board of
Directors, a majority of the entire Board of Directors shall 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. If a quorum shall not be present at any meeting of
the Board of Directors, the directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the meeting,
until a quorum shall be present.
Section 6. Actions of Board. Unless otherwise prescribed 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 all the members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or committee.
Section 7. Meetings by Means of Conference Telephone. Unless
otherwise prescribed by the Certificate of Incorporation or these By-laws,
members of the Board of Directors of the Corporation, or any committee
designated by the Board of Directors, may participate in a meeting of the
Board of Directors or such committee by means of a 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 7 shall constitute presence in person at such meeting.
Section 8. Compensation. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid, in cash or stock of the Corporation, a fixed sum for attendance
at each meeting of the Board of Directors or a stated salary as a 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 9. Interested Directors. 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 Directors or committee
thereof which authorizes the contract or transaction, or solely because his or
their votes are counted for such purpose if (i) the material facts as to his
or their 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 of Directors or committee in good faith authorizes the contract or
transaction by the affirmative votes of a majority of the disinterested
directors, even though the disinterested directors be less than a quorum; or
(ii) the material facts as to his or their relationship or interest and as to
the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) 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 thereof 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 contract or transaction.
ARTICLE IV
OFFICERS
Section 1. General. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, a Secretary and a
Treasurer. The Board of Directors, in its discretion, may also choose a
Chairman of the Board of Directors (who must be a director) and one or more
Vice Presidents, Assistant Secretaries, Assistant Treasurers and other
officers. Any number of offices may be held by the same person, unless
otherwise prohibited by law, the Certificate of Incorporation or these By-
laws. The officers of the Corporation need not be stockholders of the
Corporation nor, except in the case of the Chairman of the Board of Directors,
need such officers be directors of the Corporation.
Section 2. Election. The Board of Directors at its first meeting
held after each annual meeting of stockholders shall elect the officers of the
Corporation 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 of Directors; and all officers of the Corporation shall hold
office until their successors are chosen and qualified, or until their earlier
death, resignation or removal. Any officer elected by the Board of Directors
may be removed at any time by the affirmative vote of a majority of the Board
of Directors. Any vacancy occurring in any office of the Corporation shall be
filled by the Board of Directors. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors.
Section 3. Voting Securities Owned by the Corporation. Powers of
attorney, proxies, waivers of notice of meeting, consents and other
instruments relating to securities owned by the Corporation may be executed in
the name of and on behalf of the Corporation by the President or any Vice
President and any such officer may, in the name of and on behalf of the
Corporation, take all such action as any such officer may deem advisable to
vote in person or by proxy at any meeting of security holders of any
corporation in which the Corporation may own securities and at any such
meeting shall possess and may exercise any and all rights and power incident
to the ownership of such securities and which, as the owner thereof, the
Corporation might have exercised and possessed if present. The Board of
Directors may, by resolution, from time to time confer like powers upon any
other person or persons.
Section 4. Chairman of the Board of Directors. The Chairman of
the Board of Directors, if there be one, shall preside at all meetings of the
stockholders and of the Board of Directors. The Chairman of the Board of
Directors shall be the Chief Executive Officer of the Corporation, and except
where by law the signature of the President is required, the Chairman of the
Board of Directors shall possess the same power as the President to sign all
contracts, certificates and other instruments of the Corporation which may be
authorized by the Board of Directors. During the absence or disability of the
President, the Chairman of the Board of Directors shall exercise all the
powers and discharge all the duties of the President. The Chairman of the
Board of Directors shall also perform such other duties and may exercise such
other powers as from time to time may be assigned to him or her by these By-
laws or by the Board of Directors.
Section 5. President. The President shall, subject to the
control of the Board of Directors and, if there be one, the Chairman of the
Board of Directors, have general supervision of the business of the
Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect. The President shall execute all bonds,
mortgages, contracts and other instruments of the Corporation requiring a
seal, under the seal of the Corporation, except where required or permitted by
law to be otherwise signed and executed and except that the other officers of
the Corporation may sign and execute documents when so authorized by these By-
laws, the Board of Directors or the President. In the absence or disability
of the Chairman of the Board of Directors, or if there be none, the President
shall preside at all meetings of the stockholders and the Board of Directors.
If there be no Chairman of the Board of Directors, the President shall be the
Chief Executive Officer of the Corporation. The President shall also perform
such other duties and may exercise such other powers as from time to time may
be assigned to him or her by these By-laws or by the Board of Directors.
Section 6. Vice Presidents. At the request of the President or
in the President's absence or in the event of the President's inability or
refusal to act (and if there be no Chairman of the Board of Directors), the
Vice President or the Vice Presidents if there is more than one (in the order
designated by the Board of Directors) shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President. Each Vice President shall perform
such other duties and have such other powers as the Board of Directors from
time to time may prescribe. If there be no Chairman of the Board of Directors
and no Vice President, the Board of Directors shall designate the officer of
the Corporation who, in the absence of the President or in the event of the
inability or refusal of the President to act, shall perform the duties of the
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the President.
Section 7. Secretary. The Secretary shall attend all meetings of
the Board of Directors and all meetings of stockholders and record all the
proceedings thereat in a book or books to be kept for that purpose; the
Secretary shall also perform like duties for the standing committees when
required. The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and special meetings of the Board of Directors,
and shall perform such other duties as may be prescribed by the Board of
Directors or the President, under whose supervision the Secretary shall be.
If the Secretary shall be unable or shall refuse to cause to be given notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and if there be no Assistant Secretary, then either the Board of
Directors or the President may choose another officer to cause such notice to
be given. The Secretary shall have custody of the seal of the Corporation and
the Secretary or any Assistant Secretary, if there be one, shall have
authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by the signature of the Secretary or by the
signature of any such Assistant Secretary. The Board of Directors may give
general authority to any other officer to affix the seal of the Corporation
and to attest the affixing by his signature. The Secretary shall see that all
books, reports, statements, certificates and other documents and records
required by law to be kept or filed are properly kept or filed, as the case
may be.
Section 8. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may
be ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the President and the Board of Directors,
at its regular meetings, or when the Board of Directors so requires, an
account of all transactions as Treasurer and of the financial condition of the
Corporation. If required by the Board of Directors, the Treasurer shall give
the Corporation a bond in such sum and with such surety or sureties as shall
be satisfactory to the Board of Directors for the faithful performance of the
duties of the office of the Treasurer and for the restoration to the
Corporation, in case of his or her death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession or under his or her control belonging to the
Corporation.
Section 9. Assistant Secretaries. Except as may be otherwise
provided in these By-laws, Assistant Secretaries, if there be any, shall
perform such duties and have such powers as from time to time may be assigned
to them by the Board of Directors, the President, any Vice President, if there
be one, or the Secretary, and in the absence of the Secretary or in the event
of his or her disability or refusal to act, shall perform the duties of the
Secretary, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Secretary.
Section 10. Assistant Treasurers. Assistant Treasurers, if there
be any, shall perform such duties and have such powers as from time to time
may be assigned to them by the Board of Directors, the President, any Vice
President, if there be one, or the Treasurer, and in the absence of the
Treasurer or in the event of his or her disability or refusal to act, shall
perform the duties of the Treasurer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the Treasurer. If
required by the Board of Directors, an Assistant Treasurer shall give the
Corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of the office of Assistant Secretary and for the restoration to the
Corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his or her possession or under his or her control belonging to the
Corporation.
Section 11. Other Officers. Such other officers as the Board of
Directors may choose shall perform such duties and have such powers as from
time to time may be assigned to them by the Board of Directors. The Board of
Directors may delegate to any other officer of the Corporation the power to
choose such other officers and to prescribe their respective duties and
powers.
ARTICLE V
COMMITTEES
Section 1. Executive. The Board of Directors may, by resolution
passed by a majority of the entire Board of Directors, designate an Executive
Committee of the Board of Directors. The Executive Committee shall consist of
not less than three members of the Board, one of whom shall be the Chairman of
the Board. One member shall be designated as chairman by the Board. During
the intervals between meetings of the Board of Directors and subject to such
limitations as provided by law or by resolution of the Board, the Committee
shall possess and may exercise all powers and authority of the Board of
Directors in the management and direction of the affairs of the Corporation as
shall be permitted by applicable law. The Committee shall keep minutes of its
proceedings, and all action by the Committee shall be reported at the next
meeting of the Board of Directors.
Section 2. Audit Committee. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, designate an
Audit Committee of the Board of Directors. The Audit Committee shall consist
of one or more members of the Board, none of whom shall be an officer of the
Corporation or any of its subsidiaries. One member shall be designated as
chairman by the Board. The Committee shall recommend to the Board the
conditions, compensation and term of appointment of independent certified
public accountants for the auditing of the books and accounts of the
Corporation and its subsidiaries. From time to time, as considered necessary
and desirable, the Committee shall confer with such accountants for the
exchanging of views relating to the scope and results of the auditing books
and accounts of the Corporation and its subsidiaries and shall provide to the
Board such assistance as may be required with respect to the corporate and
reporting practices of the Corporation. The Committee shall perform such
other duties as the Board may prescribe.
Section 3. Compensation Committee. The Board of Directors may,
by resolution passed by a majority of the entire Board of Directors, designate
a Compensation Committee of the Board of Directors. The Compensation
Committee shall consist of one or more members of the Board, none of whom
shall be an officer of the Corporation or any of its subsidiaries. No person
may be a member of this Committee who is, or within one year prior to his
appointment to the Committee was, eligible for selection as a person to whom
stock (or other "equity securities," as defined for purposes of Section 16(b)
of Exchange Act) may be allocated or to whom stock options or stock
appreciation rights may be granted pursuant to any such plan of the Company or
its "affiliates" (as defined for purposes of Section 16(b) of the Exchange
Act) entitling the participants therein to acquire stock, stock options or
stock appreciation rights (or other equity securities) of the issuer or any of
its affiliates (other than any plan which is treated as a "formula plan" under
Section 16(b) of the Exchange Act). Further, no person may be a member of
this Committee except individuals who are "outside directors" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended.
One member shall be designated as chairman by the Board. The Committee shall
determine the nature and amount of compensation of all senior officers of the
Corporation. As may be prescribed by the Board of Directors, the Committee
shall administer any stock option or other long term incentive plan of the
Corporation and perform other prescribed duties.
Section 4. Nominating Committee. The Board of Directors may, by
resolution passed by a majority of the entire Board of Directors, designate a
Nominating Committee of the Board of Directors. The Nominating Committee
shall consist of one or more members of the Board. One member shall be
designated as chairman by the Board. The Committee shall recommend to the
Board nominees for election as directors, and shall perform such other duties
as the Board may prescribe.
ARTICLE VI
STOCK
Section 1. Form of Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed, in the name of the
Corporation (i) by the Chairman of the Board of Directors, the President or a
Vice President and (ii) by the Treasurer or an Assistant Treasurer, or the
Secretary or an Assistant Secretary of the Corporation, certifying the number
of shares owned by such stockholder in the Corporation.
Section 2. Signatures. When a certificate is countersigned by
(i) a transfer agent other than the Corporation or its employees, or (ii) a
registrar other than the Corporation or its employees, any other signature on
a certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with
the same effect as if he were such officer, transfer agent or registrar at the
date of issue.
Section 3. Lost Certificates. The Board of Directors may direct
a new certificate to be issued in place of any certificate theretofore issued
by the Corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such issue of a new
certificate, the Board of Directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to advertise the same in
such manner as the Board of Directors shall require and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation with respect to the certificate
alleged to have been lost, stolen or destroyed.
Section 4. Transfers. Stock of the Corporation shall be
transferable in the manner prescribed by law and in these By-laws. Transfers
of stock shall be made on the books of the Corporation only by the person
named in the certificate or by his attorney lawfully constituted in writing
and upon the surrender of the certificate therefor, which shall be cancelled
before a new certificate shall be issued.
Section 5. Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to express consent to
corporate action in writing without a meeting, or entitled to receive payment
of any dividend or other distribution or 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 60 days nor
less than 10 days before the date of such meeting, nor more than 60 days prior
to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
Section 6. Beneficial Owners. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends, and to vote as such owner, and shall not
be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise required by law.
ARTICLE VII
NOTICES
Section 1. Notices. Whenever written notice is required by law,
the Certificate of Incorporation or these By-laws, to be given to any
director, member of a committee or stockholder, such notice may be given by
mail, addressed to such director, member of a committee or stockholder, at
such person's address as it appears on the records of the Corporation, with
postage thereon prepaid, and such notice shall be deemed to be given at the
time when the same shall be deposited in the United States mail. Written
notice may also be given personally or by telegram, telex, cable or confirmed
facsimile.
Section 2. Waivers of Notice. Whenever any notice is required by
law, the Certificate of Incorporation or these By-laws, to be given to any
director, member of a committee or stockholder, a waiver thereof in writing,
signed, by the person or persons entitled to said notice, whether before or
after the time stated therein, shall be deemed equivalent thereto.
ARTICLE VIII
GENERAL PROVISIONS
Section 1. Dividends. 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, and may be paid in cash, in property, or in shares of capital stock.
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 Board of Directors
from time to time, in its absolute discretion, deems 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 any proper purpose, and
the Board of Directors may modify or abolish any such reserve.
Section 2. Disbursements. All checks or demands for money and
notes of the Corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may from time to time
designate.
Section 3. Fiscal Year. The fiscal year of the Corporation shall
be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization
and the words "Corporate Seal, Delaware". The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE IX
AMENDMENTS
Section 1. These By-laws may be altered, amended or repealed, in
whole or in part, or new By-laws may be adopted by the stockholders or by the
Board of Directors, provided, however, that notice of such alteration,
amendment, repeal or adoption of new By-laws be contained in the notice of
such meeting of stockholders or Board of Directors as the case may be. All
such amendments must be approved by either the holders of a majority of the
outstanding capital stock entitled to vote thereon or by a majority of the
entire Board of Directors then in office.
Section 2. Entire Board of Directors. As used in this Article IX
and in these By-laws generally, the term "entire Board of Directors" means the
total number of directors which the Corporation would have if there were no
vacancies.
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