<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ Quarterly report pursuant to Section 13 or 15(d)of the Securities
Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1999
/ / Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File No. 1-8726
RPC, INC.
(exact name of registrant as specified in its charter)
DELAWARE 58-1550825
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2170 PIEDMONT ROAD, NE, ATLANTA, GEORGIA 30324
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code -- (404) 321-2140
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
--- ---
As of March 31, 1999, RPC, Inc. had 28,546,050 shares of common stock
outstanding.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1999, AND DECEMBER 31, 1998
(In thousands)
<TABLE>
<CAPTION>
MARCH 31, December 31,
1999 1998
(UNAUDITED) (Audited)
- -----------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 10,345 $ 10,029
Marketable securities 5,032 3,414
Accounts receivable, net of allowance for doubtful
accounts of $7,742 and $7,004, respectively 23,809 25,266
Inventories, at lower of cost or market 17,249 17,446
Deferred income taxes 10,423 10,787
Federal income taxes receivable 1,200 3,673
Prepaid expenses and other current assets 2,005 1,909
- -----------------------------------------------------------------------------------
Current assets 70,063 72,524
- -----------------------------------------------------------------------------------
Equipment and property, net 68,315 70,206
Marketable securities 32,510 29,507
Intangible assets, net 7,198 7,401
Other assets 1,051 1,053
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
TOTAL ASSETS $179,137 $180,691
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $ 7,412 $ 5,859
Accrued payroll and related expenses 4,720 4,192
Accrued insurance expenses 5,255 6,329
Accrued state, local and other taxes 3,595 4,063
Accrued discounts 1,555 1,053
Current portion of long-term debt 604 659
Other accrued expenses 9,717 10,270
- -----------------------------------------------------------------------------------
Current liabilities 32,858 32,425
- -----------------------------------------------------------------------------------
Long-term accrued insurance expenses 3,545 3,308
Long-term debt 390 636
Deferred income taxes 1,556 1,256
- -----------------------------------------------------------------------------------
Total liabilities 38,349 37,625
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
Commitments and contingencies
- -----------------------------------------------------------------------------------
Common stock 2,855 2,888
Capital in excess of par value 24,145 26,538
Earnings retained 113,788 113,640
- -----------------------------------------------------------------------------------
Total stockholders' equity 140,788 143,066
- -----------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $179,137 $180,691
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
--------------------------------
1999 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
REVENUE $ 54,935 $ 66,940
- -----------------------------------------------------------------------------------
Cost of goods sold 25,911 23,121
Operating expenses 23,363 31,570
Depreciation and amortization 4,044 3,620
Interest income (366) (489)
- -----------------------------------------------------------------------------------
Income before income taxes 1,983 9,118
Income tax provision 754 3,464
- -----------------------------------------------------------------------------------
NET INCOME $ 1,229 $ 5,654
- -----------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------
EARNINGS PER SHARE
Basic $ 0.04 $ 0.19
- -----------------------------------------------------------------------------------
Diluted $ 0.04 $ 0.19
- -----------------------------------------------------------------------------------
AVERAGE SHARES OUTSTANDING
Basic 28,331 29,230
- -----------------------------------------------------------------------------------
Diluted 28,532 29,630
- -----------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended March 31,
-----------------------------
1999 1998
- ------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES $ 10,371 $ 9,671
- ------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (2,282) (5,775)
Proceeds from sale of equipment and property 728 594
Net (purchase) sale of marketable securities (4,621) (8,874)
- ------------------------------------------------------------------------------------
Net cash used for investing activities (6,175) (14,055)
- ------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend distributions (1,005) (1,037)
Repayments of long term debt (301) (571)
Purchase of treasury stock (2,625) (968)
Proceeds from exercise of stock options 51 41
- ------------------------------------------------------------------------------------
Net cash (used for) provided by financing activities (3,880) (2,535)
- ------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 316 (6,919)
Cash and cash equivalents at beginning of period 10,029 17,409
- ------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 10,345 $ 10,490
- ------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. These
consolidated financial statements should be read in conjunction with
the financial statements and related notes contained in the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 1998.
In the opinion of management, the consolidated financial statements
included herein contain all adjustments necessary to present fairly
the financial position of the Company as of March 31, 1999, and the
results of operations and the cash flows for the three months then
ended.
2. Basic and diluted earnings per share are computed by dividing net
income by the respective weighted average number of shares
outstanding during the respective periods.
3. The results of operations for the quarter ended March 31, 1999, are
not necessarily indicative of the results to be expected for the full
year.
4. In June, 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (SFAS No. 133), which
establishes standards for reporting and disclosing information about
derivative instruments. SFAS No. 133 is effective for fiscal years
beginning after June 15, 1999. The adoption of SFAS No. 133 is not
expected to have a material impact.
5. RPC has two reportable segments: oil and gas services and boat
manufacturing. The oil and gas services segment provides a variety
of services, equipment, and personnel to the oil and gas industry.
The boat manufacturing segment manufactures and sells powerboats to
a nationwide network of independent dealers.
RPC evaluates performance based on profit or loss from operations
before income taxes. RPC accounts for intersegment sales and
transfers as if the sales or
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<PAGE>
RPC, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONT'D
transfers were to third parties, that is, at current market prices.
RPC's reportable segments are strategic business units that offer
different products and services. They are managed separately because
each business requires different technology and marketing
strategies. All of these businesses were acquired as a unit, and the
management at the time of acquisition was retained.
Certain information with respect to RPC's business segments is set
forth in the following table:
-----------------------------------------------------
March 31, 1999 1998
-----------------------------------------------------
(IN THOUSANDS)
REVENUE:
Oil and gas services $ 20,512 $ 35,891
Boat manufacturing 31,233 26,487
Other 3,190 4,562
------------------------------------------------------
Total revenue $ 54,935 $ 66,940
------------------------------------------------------
------------------------------------------------------
OPERATING INCOME(LOSS):
Oil and gas services ($ 1,839) $ 6,254
Boat manufacturing 4,294 3,610
Other 129 (148)
------------------------------------------------------
Total operating income $ 2,584 $ 9,716
------------------------------------------------------
Corporate expenses (967) (1,087)
Interest income 366 489
------------------------------------------------------
Income before income taxes $ 1,983 $ 9,118
------------------------------------------------------
------------------------------------------------------
The identifiable assets for the powerboat manufacturing segment increased by
$2,442,000 from $28,085,000 at December 31, 1998 to $30,527,000 at March 31,
1999. The identifiable assets for the oil and gas segment decreased by
$5,348,000 from $89,891,000 at December 31, 1998 to $84,543,000 at March 31,
1999.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
Revenue for the first quarter ended March 31, 1999, was $54,935,000 compared
with $66,940,000 for the quarter ended March 31, 1998. Revenue for the
quarter ended March 31, 1999, decreased $12,005,000 or 18% from the same
period one year ago. The oil and gas services segment revenue of $20,512,000
decreased 43% from last year's first quarter. This decrease was due to a slow
down in drilling activity. Oil and natural gas prices have decreased 8% and
22%, respectively, as compared to the first quarter of 1998. The average US
rig count has also declined 43% versus last year's first quarter. The
powerboat manufacturing segment revenue for the quarter ended March 31, 1999,
of $31,233,000 increased 18% from last year's first quarter of $26,487,000
which is attributed to an increase in the volume of boats sold coupled with
an increase in the average sales price versus the prior year. The increase in
the average sales price is the result of a price increase and an increase in
the number of larger boats sold versus prior year.
Cost of goods sold for the first quarter ended March 31, 1999, was
$25,911,000 compared to $23,121,000 for the first quarter ended March 31,
1998, an increase of $2,790,000 or 12%. This increase is somewhat less than
the increase in sales due to a change in product mix with a greater
percentage of larger, higher margin boats being sold.
Net income for the quarter ended March 31, 1999, was $1,229,000 or $0.04
diluted earnings per share versus net income of $5,654,000 or $0.19 diluted
earnings per share for the quarter ended March 31, 1998. Basic earnings per
share was the same as diluted earnings per share at $0.04 cents per share
versus $0.19 cents per share last year. The decrease in earnings from the
same period one year ago was due to the decreased revenues coupled with
decreased profit margins for the oil and gas services segment offset to some
extent by the increase in revenues and profit margins for the powerboat
manufacturing segment.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
FINANCIAL CONDITION
- -------------------
The Company's current ratio remained strong as of March 31, 1999, with
current assets of $70,063,000 exceeding current liabilities of $32,858,000 by
a ratio of 2.1-to-1. This compares to a current ratio of 2.2-to-1 at December
31, 1998.
Capital expenditures during the first three months of 1999 totaling $2,282,000
were primarily for revenue-producing equipment in the oil and gas services
segment. The remainder was spent on various purchases for the other business
segments. Funding for future capital requirements is expected to be provided
from operations.
Year 2000 Issue
- ---------------
The Company began its assessment and remediation processes related to the
Year 2000 (Y2K) information technology programming issue in 1997. RPC's
assessment activities have included (1) identifying all software and
operating systems -both information technology (IT) and non-IT systems with
embedded technology, which are critical to operations and/or financial
reporting, (2) testing of such software and systems for Y2K compliance, and
(3) obtaining assurances from its vendors and its large commercial customers.
RPC's remediation activities have included replacing certain software and
operating systems, followed by testing to ensure the Y2K compliance of the
replacements.
Based on its assessment and remediation activities to date, RPC believes that
its critical internal software and operating systems are Y2K compliant with
the exception of a subsidiary billing system. The total cost of Y2K
expenditures to date have not been material. The remaining Y2K remediation
costs are anticipated to be less than $50,000.
Based on assurances from the majority of its vendors and large commercial
customers to date, RPC does not anticipate any material Y2K impact on its
operations or financial reporting at this time. RPC believes that the worst
case scenario will be temporary delays in billing and collection of customer
receivables. RPC expects to have contingency plans in place by the end of
1999 that address any potential Y2K issues.
Forward-Looking Statements
- --------------------------
Management's discussion and analysis of results of operations and financial
condition include "forward looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), Section
21E of the Securities Exchange
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<PAGE>
RPC, INC. AND SUBSIDIARIES
ITEM 2. CONT'D
Act of 1934, as amended (the "Exchange Act") and the Private Securities
Litigation Reform Act of 1995. All statements, other than statements of
historical facts, included or incorporated by reference which address
activities, events or developments which the Company expects or anticipates
will or may occur in the future, including statements regarding the impact of
the year 2000 programming issue, funding of future capital requirements,
potential exposure to market risk, and anticipated trends and similar
expressions concerning matters that are not historical facts, are
forward-looking statements. These statements are based on certain assumptions
and analyses made by the Company in light of its experience and its
perception of historical trends, current conditions and expected future
developments as well as other factors it believes are appropriate in the
circumstances. However, whether actual results and developments will conform
with the Company's expectations are influenced by a number of factors,
including economic conditions, conditions in the industries in which the
Company operates, competition, and other factors, many of which are beyond
the control of the Company. Consequently, all of the forward-looking
statements made are qualified by these cautionary statements and there can be
no assurance that the actual results or developments anticipated by the
Company will be realized or, even if substantially realized, that they will
have the expected consequences to or effects on the Company or its business
or operations. The Company assumes no obligation to update publicly any such
forward-looking statements, whether as a result of new information, future
events, or otherwise.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
RPC maintains an investment portfolio, comprised of U.S. Government and
corporate debt securities, which is subject to interest rate risk exposure.
This risk is managed through conservative policies to invest in high-quality
obligations. RPC has performed an interest rate sensitivity analysis using a
duration model over the near term with a 10 percent change in interest rates.
RPC's portfolio is not subject to material interest rate risk exposure based
on this analysis. RPC does not expect any material changes in market risk
exposures or how those risks are managed.
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<PAGE>
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
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<PAGE>
RPC, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit Number Description
-------------- -----------
3(i)(a) RPC's Certificate of Incorporation
is incorporated herein by reference
to Exhibit (3)(1)(a) to the 1998
Third Quarter Form 10-Q.
3(i)(b) RPC's Certificate of Amendment of
the Certificate of Incorporation is
incorporated herein by reference to
Exhibit (3)(1)(b) to the 1998 Third
Quarter Form 10-Q.
3(ii) By-laws of RPC
4 RPC's Form of Stock Certificate is
incorporated herein by reference to
the 1998 Form 10-K.
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed or required to be filed
during the quarter ended March 31, 1999.
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RPC, INC.
/s/ RICHARD A. HUBBELL
---------------------------------------
Date: May 14, 1999 Richard A. Hubbell
President and Chief Operating Officer
/s/ BEN M. PALMER
---------------------------------------
Date: May 14, 1999 Ben M. Palmer
Treasurer and Chief Financial Officer
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<PAGE>
Exhibit 3(ii)
BYLAWS
OF
RPC ENERGY SERVICES, INC.
OFFICES
FIRST: The executive offices of RPC Energy Services, Inc. (the
"Corporation") shall be located at 2170 Piedmont Road, N.E., in the City of
Atlanta, GA. The registered office in the State of Delaware is located at 32
Lockerman Square, Suite L-100, in the city of Dover, County of Kent, and the
registered agent in charge of said office shall be the Prentice-Hall Corporation
System, Inc.
CORPORATE SEAL
SECOND: The corporate seal shall have inscribed thereon the name of the
Corporation and the year and state of its incorporation.
<PAGE>
MEETINGS OF STOCKHOLDERS
THIRD: The annual meeting of stockholders for the election of directors
shall be held on the fourth Tuesday of April at such office of the Corporation
as may be designated by the Board of Directors and included in the notice of
such meeting, in each year, or if that day be a legal holiday, on the next
succeeding day not a legal holiday, at which meeting they shall elect by ballot,
by plurality vote, a board of directors and may transact such other business as
may come before the meeting.
Special meetings of the stockholders may be called at any time by the
chairman and shall be called by the chairman or secretary on the request in
writing or by vote of a majority of the directors or at the request in writing
of stockholders of record owning a majority in the amount of the capital stock
outstanding and entitled to vote.
All such special meetings of the stockholders shall be held at such
place or places, within or without the State of Delaware, as may from time to
time be fixed by the board
<PAGE>
of Directors or as shall be specified and fixed in the respective notices or
waivers of notice thereof.
Each stockholder of each class entitled to vote shall, at every meeting
of the stockholders be entitled to one vote in person or by proxy, signed by
him, for each share of voting stock held by him, but no proxy shall be voted
after the meeting of stockholders for which such proxy was solicited and which
has been adjourned sine die. Such right to vote shall be subject to the right of
the board of directors to fix a record date for voting stockholders as
hereinafter provided and if the directors shall not have exercised such right,
no share of stock which shall have been transferred on the books of the
Corporation within twenty days next preceding such election shall be voted on at
any election for directors.
Notice of all meetings shall be mailed by the secretary to each
stockholder of record entitled to vote, at his or her last known post office
address, not less than ten nor more than sixty days before any annual or special
meeting.
The holders of a majority of each class of stock outstanding and
entitled to vote shall constitute a quorum, but the holders of a smaller amount
may adjourn from time to time without further notice until a quorum is secured.
<PAGE>
DIRECTORS
FOURTH: The property and business of this Corporation shall be managed
by a board of not less than six (6) nor more than eleven (11) directors; except
that where all the shares of Common Stock of the Corporation are owned
beneficially and of record by one stockholder, the property and business of the
Corporation may be managed by a sole director. The directors shall be divided
into three classes. The first class (Class I) shall consist of at least two (2)
directors and the initial term of office of such class shall expire at the first
annual meeting of stockholders. The second class (Class II) shall consist of at
least two (2) directors and the initial term of office of such class shall
expire at the second annual meeting of stockholders. The third class (Class III)
shall consist of at least two (2) directors and the initial term of office of
such third class shall expire at the third annual meeting of stockholders.
Should the number of directors be increased or decreased in the future, no class
of directors shall have more than one director more than any other class
<PAGE>
of directors. At each annual election commencing at the first annual meeting of
stockholders, the successors to the class of directors whose term expires at
that time shall be elected to hold office for a term of three years to succeed
those whose term expires, so that the term of office of one class of directors
shall expire in each year. Each director shall hold office for the term for
which he is elected or appointed or until his successor shall be elected and
qualified, or until his death or until he shall resign.
POWERS OF DIRECTORS
FIFTH: The board of directors shall have, in addition to such powers as
are hereinafter expressly conferred on it, all such powers as may be exercised
by the Corporation, subject to the provisions of the General Corporation Law of
Delaware, the certificate of incorporation and the bylaws.
The board of directors shall have power:
To purchase or otherwise acquire property, rights or privileges for the
Corporation, which the Corporation has power to take, at such prices and on such
terms
<PAGE>
as the board of directors may deem proper.
To pay for such property, rights or privileges in whole or in part with
money, stock, bonds, debentures or other securities of the Corporation, or by
the delivery of other property of the Corporation.
To create, make and issue mortgages, bonds, deeds of trust, trust
agreements and negotiable or transferable instruments and securities, secured by
mortgages or otherwise, and to do every other act and thing necessary to
effectuate the same.
To appoint agents, clerks, assistants, factors, employees and trustees,
and to dismiss them at its discretion, to fix their duties and emoluments and to
change them from time to time and to require security as it may deem proper. Any
employee appointed by the board may be given such designation of title as the
board shall determine; however, any such designation or title given any such
employee shall not be deemed to constitute such employee a corporate officer
under Article EIGHTH of these bylaws.
<PAGE>
To confer on any officer of the Corporation the power of selecting,
discharging or suspending such employee.
To determine by whom and in what manner the Corporation's bills, notes,
receipts, acceptances, endorsement, checks, releases, contracts or other
documents shall be signed.
MEETINGS OF DIRECTORS
SIXTH: After each annual election of directors, the newly elected
directors may meet for the purpose of organization, the election of officers and
the transaction of other business, immediately after such meeting of
stockholders or at such place and time as the directors may determine, and, if
the majority of the directors be present at such place and time, no prior notice
of such meeting shall be required to be given to the directors. The place and
time of such meeting may also be fixed by written consent of the directors.
Regular meetings of the directors shall be held annually following the
stockholders meeting on the fourth Tuesday of April and quarterly on the fourth
Tuesday of January, July and October of each year at the executive offices of
the corporation in
<PAGE>
Atlanta, Georgia, or elsewhere. Meetings may be held at other times as may be
fixed by resolution of the board.
Special meetings of the directors may be called by the chairman on two
days' notice in writing or on one day's notice orally, by telegraph, telephone
or otherwise to each director and shall be called by the chairman in like manner
on the written request of two directors.
Special meetings of the directors may be held within or without the
State of Delaware at such places as is indicated in the notice or waiver of
notice thereof.
A majority of the directors shall constitute a quorum, but a smaller
number may adjourn from time to time, without further notice, until a quorum is
secured.
The board may, by resolution passed by a majority of the whole board,
designate one or more committees, including without limitation an Executive
Committee, and Audit Committee and an Executive Compensation Committee, each
committee to consist of one or more directors of the Corporation. Any such
committee, to the extent provided in the directors' resolution or in these
bylaws, shall have and may exercise all the powers
<PAGE>
and authority of the board in managing the affairs and business of the
Corporation, including without limitation the power and authority to declare a
dividend or to authorize the issuance of stock, and may authorize affixation of
the corporate seal to all papers that require it, but no such committee shall
have the power or authority of the board in reference to amending the
certificate of incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all, or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the bylaws of the Corporation.
COMPENSATION OF DIRECTORS
AND MEMBERS OF COMMITTEES
SEVENTH: Directors and members of standing committees shall receive
such compensation for attendance at each regular or special meeting of the board
or such committees as the board shall from time to time prescribe.
<PAGE>
OFFICERS OF THE CORPORATION
EIGHTH: The officers of the Corporation shall be a chairman, a
president, a secretary, a treasurer and such other officers as may from time to
time be chosen by the board of directors. The chairman and the president shall
be chosen from among the directors.
One person may hold more than one office.
The officers of the Corporation shall hold office until their
successors are chosen and qualify in their stead. Any officer chosen or
appointed by the board of directors may be removed either with or without cause
at any time by the affirmative vote of a majority of the whole board of
directors. If the office of any officer or officers becomes vacant for any
reason, the vacancy shall be filled by the affirmative vote of a majority of the
whole board of directors.
DUTIES OF THE CHAIRMAN
NINTH: The chairman shall be the chief executive officer of the
Corporation. It shall be his duty to preside at all meetings of the stockholders
and
<PAGE>
directors; to have general and active management of the business of the
Corporation; and to see that all orders and resolutions of the board of
directors are carried into effect. The chairman shall be vested with all the
powers and be required to perform all the duties of the president in his absence
or disability. The chairman shall perform such other duties as shall be assigned
to him by the board of directors.
DUTIES OF THE PRESIDENT
TENTH: The president shall be the chief operating officer of the
Corporation. It shall be his duty to execute all contracts, agreements, deeds,
bonds, mortgages and other obligations and instruments, in the name of the
Corporation, and to affix the corporate seal thereto when authorized by the
board.
The president shall supervise and direct the other officers of the
Corporation and shall see that their duties are properly performed.
<PAGE>
The president shall be vested with all the powers and be required to
perform all the duties of the chairman in his absence or disability. The
president shall perform such other duties as shall be assigned to him by the
chairman of the board of directors or the board of directors.
CHAIRMAN PRO TEM
ELEVENTH: In the absence or disability of the chairman and the
president, the board may appoint from their own number a chairman pro tem.
SECRETARY
TWELFTH: The secretary shall attend all meetings of the board of
directors. He shall act as clerk thereof and shall record all of the proceedings
of such meetings in a book kept for that purpose. He shall give proper notice of
meetings of stockholders and shall perform such other duties as shall be
assigned to him by the president or the chairman of the board of directors.
<PAGE>
TREASURER
THIRTEENTH: The treasurer shall have custody of the funds and
securities of the Corporation 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.
He shall keep an account of stock registered and transferred in such
manner and subject to such regulations as the board of directors may prescribe.
He shall give the Corporation a bond, if required by the board of
directors, in such sum and in form and with security satisfactory to the board
of directors for the faithful performance of the duties of his office and the
restoration to the Corporation, in case of his death, resignation or removal
from office, of all books, papers, vouchers, money and other property of
whatever kind in his possession, belonging to the Corporation. He shall perform
such other duties as the board of directors may from time to time prescribe or
require.
<PAGE>
DUTIES OF THE OFFICERS MAY BE DELEGATED
FOURTEENTH: In the case of the absence or disability of any officer of
the Corporation or for any other reason deemed sufficient by a majority of the
board, the board of directors may delegate his powers or duties, to any other
officer or to any director for the duration of such absence or disability.
CERTIFICATES OF STOCK
FIFTEENTH: Certificates of stock shall be signed by either the chairman
or vice-chairman of the board of directors, or the president or vice-president,
and either the treasurer, assistant treasurer, secretary or assistant secretary.
If a certificate of stock be lost or destroyed, another may be issued in its
stead upon proof of such loss or destruction and the giving of a satisfactory
bond of indemnity, in an amount sufficient to indemnify the Corporation against
any claim. A new certificate may be issued without requiring bond when, in the
judgment of the directors, it is proper to do so. Certificates may be signed by
facsimile signature if so ordered by the board of directors.
<PAGE>
TRANSFER OF STOCK
SIXTEENTH: All transfers of stock of the Corporation shall be made upon
its books by the holders of the shares in person or by his lawfully constituted
representative, upon surrender of certificates of stock for cancellations.
The Corporation shall have authority to appoint transfer agents and
registrars by resolution of the board of directors.
STOCKHOLDERS OF RECORD
SEVENTEENTH: The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of
Delaware.
<PAGE>
FISCAL YEAR
EIGHTEENTH: The fiscal year of the Corporation shall end on the last
day of December in each year.
DIVIDENDS
NINETEENTH: Dividends upon the capital stock of any class may be
declared by the board of directors at any regular or special meeting and may be
paid in cash or in property or in shares of the capital stock. Before paying any
dividend or making any distribution of profits, the directors may set apart out
of any of the funds of the Corporation available for dividends a reserve or
reserves for any proper purpose and may alter or abolish any such reserve or
reserves.
CHECKS FOR MONEY
TWENTIETH: All checks, drafts or orders for the payment of money shall
be signed by the treasurer or by such other officer or officers as the board of
directors may from time to time designate. No check shall be signed in blank.
The board of
<PAGE>
Directors also from time to time may authorize specified employees to sign
checks on the Corporation's accounts.
BOOKS AND RECORDS
TWENTY-FIRST: The books, accounts and records of the Corporation except
as otherwise required by the laws of the State of Delaware, may be kept within
or without the State of Delaware, at such place or places as may from time to
time be designated by the bylaws or by resolution of the directors.
NOTICES
TWENTY-SECOND: Notice required or permitted to be given under the
provisions of these bylaws to any director, officer or stockholder shall not be
construed to mean personal notice, but may be given in writing by depositing the
same in a post office or letter-box, in a postpaid sealed wrapper, addressed to
such stockholder, officer or director at such address as appears on the books of
the Corporation, and such notice shall be deemed to be given at the time when
the same shall be thus mailed. Any stockholder, officer or director may waive,
in writing, any notice, required to be given under these
<PAGE>
bylaws whether before or after the time stated therein.
AMENDMENTS OF BYLAWS
TWENTY-THIRD: These bylaws may be amended, altered, repealed, or added
to at any meeting of the stockholders or board of directors, by affirmative vote
of a majority of each class of stock issued and outstanding and entitled to vote
thereon or of a majority of the directors in office, as the case may be.
INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES
TWENTY-FOURTH: INDEMNIFICATION. The Corporation shall indemnify, in the
manner and to the fullest extent now or hereafter permitted by the General
Corporation Law of the State of Delaware, any person (or the estate of any
person) who was or is a party to, or is threatened to be made a party to, any
threatened, pending or completed action, suit or proceeding, whether or not by
or in the right of the Corporation, and whether civil, criminal, administrative,
investigative or otherwise, by reason of the fact that such person is or was a
director, officer or General Counsel of the Corporation, or is or was serving at
the request of the Corporation as a director, officer or General
<PAGE>
Counsel of another corporation, partnership, joint venture, trust or other
enterprise. The indemnification provided herein shall be made if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interest of the Corporation, and, with respect to any criminal action or
proceeding, has no reasonable cause to believe his conduct was unlawful; except
that no indemnification shall be made in respect of any claim, issue or matter
as to which such person shall have been determined to be liable for gross
negligence or willful misconduct in the performance of his duty to the
Corporation. Such determination may be made by a majority of a committee
composed of the directors not involved in the matter in controversy (whether or
not a quorum). To the full extent permitted by law, the indemnification provided
herein shall include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement, and, in the manner provided by law, any such
expenses may be paid by the Corporation in advance of the final disposition of
such action, suit or proceeding. The indemnification provided herein shall not
be deemed to limit the right of the Corporation to indemnify any other employee
for such expenses to the full extent provided by law, nor shall it be deemed
exclusive of any other rights to which any person seeking indemnification from
the Corporation may be entitled under any agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. The Corporation
may, to the full extent permitted by law, purchase and maintain insurance on
behalf of any such person against any liability which may be asserted against
him.
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<PAGE>
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