<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended July 3, 1998 Commission file number 1-8827
------------ ------
ARAMARK CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 23-2319139
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
ARAMARK TOWER
1101 Market Street
Philadelphia, Pennsylvania 19107
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(Address of principal executive offices) (Zip Code)
(215) 238-3000
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(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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Class A common stock outstanding at July 31, 1998: 827,976 *
Class B common stock outstanding at July 31, 1998: 21,052,979 *
- -------------------------------------------------------------------------------
* Represents the number of shares outstanding on the date indicated and does
not reflect the three-for-one stock split effective September 1, 1998.
(See note 9 to the condensed consolidated financial statements).
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands)
ASSETS
------
<TABLE>
<CAPTION>
July 3, October 3,
1998 1997
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<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 30,174 $ 27,352
Receivables 543,511 517,035
Inventories, at lower of cost or market 369,015 366,515
Prepayments and other current assets 75,645 67,314
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Total current assets 1,018,345 978,216
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Property and Equipment, net 865,873 867,176
Goodwill 606,249 623,841
Other Assets 275,199 284,346
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$2,765,666 $2,753,579
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Current maturities of long-term borrowings $ 15,565 $ 18,517
Accounts payable 412,653 459,847
Accrued expenses and other liabilities 515,350 458,387
----------- -----------
Total current liabilities 943,568 936,751
----------- -----------
Long-Term Borrowings 1,730,487 1,213,944
Deferred Income Taxes and Other Noncurrent Liabilities 197,556 209,583
Common Stock Subject to Potential Repurchase Under
Provisions of Shareholders' Agreement 20,000 23,254
Shareholders' Equity Excluding Common Stock
Subject to Repurchase:
Class A common stock, par value $.01 25 20
Class B common stock, par value $.01 633 205
Earnings retained for use in the business (102,714) 394,090
Cumulative translation adjustment (3,889) (1,014)
Impact of potential repurchase feature of
common stock (20,000) (23,254)
---------- ----------
Total (125,945) 370,047
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$2,765,666 $2,753,579
========== ==========
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In Thousands, Except Per Share Amounts)
For the Three Months Ended For the Nine Months Ended
-------------------------------- ---------------------------------
July 3, June 27, July 3, June 27,
1998 1997 1998 1997
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Revenues $1,634,325 $1,531,614 $4,817,200 $4,676,382
---------- ---------- ---------- ----------
Costs and Expenses:
Cost of services provided 1,478,760 1,384,834 4,381,802 4,261,481
Depreciation and amortization 49,730 47,658 146,732 143,438
Selling and general corporate expenses 19,710 20,803 63,286 60,695
Other expense (income), net - - - (72,393)
---------- ----------- ----------- -----------
1,548,200 1,453,295 4,591,820 4,393,221
---------- ---------- ----------- -----------
Operating income 86,125 78,319 225,380 283,161
Interest Expense, net 28,534 28,596 82,380 88,598
----------- ----------- ----------- ----------
Income before income taxes 57,591 49,723 143,000 194,563
Provision for Income Taxes 20,422 19,589 57,096 48,822
----------- ------------ ------------ ----------
Income before Extraordinary Item 37,169 30,134 85,904 145,741
Extraordinary Item due to Early Extinguishment
of Debt (net of income taxes) 2,915 - 4,474 -
----------- ----------- ------------ -----------
Net income $ 34,254 $ 30,134 $ 81,430 $ 145,741
=========== =========== ============ ===========
Earnings Per Share:
Income before extraordinary item
Basic $.32 $.24 $.71 $1.15
Diluted $.30 $.23 $.66 $1.09
Net income
Basic $.29 $.24 $.67 $1.15
Diluted $.27 $.23 $.63 $1.09
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARAMARK CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
For the Nine Months Ended
---------------------------------
July 3, June 27,
1998 1997
---------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 81,430 $ 145,741
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 146,732 143,438
Income taxes deferred 9,846 (1,344)
Extraordinary item 4,474 -
Changes in noncash working capital (54,902) (87,544)
Other operating activities (12,280) (82,139)
----------- ----------
Net cash provided by operating activities 175,300 118,152
---------- ----------
Cash flows from investing activities:
Purchases of property and equipment (107,510) (136,497)
Disposals of property and equipment 16,260 14,439
Sale of Investments 5,779 -
Divestiture of certain businesses 31,116 111,613
Acquisition of certain businesses (19,769) (9,536)
Other investing activities (30,499) (4,698)
----------- ----------
Net cash used in investing activities (104,623) (24,679)
----------- ----------
Cash flows from financing activities:
Proceeds from additional long-term borrowings 675,065 128,869
Payment of long-term borrowings including premiums (172,440) (171,200)
Proceeds from issuance of common stock 22,330 13,728
Repurchase of stock (584,959) (59,874)
Other financing activities (7,851) (1,548)
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Net cash used in financing activities (67,855) (90,025)
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Increase in cash and cash equivalents 2,822 3,448
Cash and cash equivalents, beginning of period 27,352 25,283
----------- -----------
Cash and cash equivalents, end of period $ 30,174 $ 28,731
=========== ==========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
<PAGE>
ARAMARK CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
The condensed consolidated financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in consolidated financial statements
prepared in accordance with generally accepted accounting principles have
been condensed or omitted pursuant to such rules and regulations. In the
opinion of the Company, the statements include all adjustments (which
include only normal recurring adjustments) required for a fair statement
of financial position, results of operations and cash flows for such
periods. The results of operations for the interim periods are not
necessarily indicative of the results for a full year.
(2) OTHER INCOME:
In January 1997, the Company sold an approximate 83% interest in its
Spectrum Healthcare Services, Inc. subsidiary (Spectrum). Total
consideration was approximately $158 million and included cash ($125
million), notes and a warrant. The transaction resulted in a pre-tax gain
of $72.4 million, net of transaction costs and reserves established for
indemnification of certain matters related to insurance, legal and other
matters ($20 million), and is reflected as "other expense (income)" in
the accompanying condensed consolidated statements of income. No income
taxes were provided on the gain due to permanent differences in the
underlying book and tax basis of Spectrum. In fiscal 1996, the business
had approximately $500 million in annual revenues and a normalized
operating margin of approximately 4%. Cash proceeds from the divestiture
were used to repay borrowings under the Company's credit facility.
(3) LONG TERM BORROWINGS:
In January 1998, the Company replaced its existing $1 billion credit
facility with a $1.4 billion credit facility. The new facility matures on
March 31, 2005, with commitment reductions of $100 million in March 2000
and $150 million in March 2001 and March 2002.
In the third quarter of fiscal 1998, the Company exercised its option to
redeem its $100 million 8-1/2% subordinated notes at a price of 104.25%
of the principal amount, resulting in an extraordinary item for debt
extinguishment of $2.9 million (net of tax benefit of $1.9 million). In
the second quarter of fiscal 1998, the Company redeemed a $50 million 8%
note due April 2002 for a premium resulting in an extraordinary item for
debt extinguishment of $1.6 million (net of tax benefit of $1.0 million).
(4) CAPITAL STOCK:
On June 15, 1998, the Company completed a cash tender offer (the "Tender
Offer") for outstanding shares of its Class A common stock at a price of
$500 per share. Pursuant to the Tender Offer, the Company repurchased
1,062,485 shares for an aggregate purchase price of $531.2 million plus
transaction costs. The purchase price was financed through additional
borrowings under the $1.4 billion credit facility.
During the first nine months of fiscal 1998, pursuant to the ARAMARK
Ownership Program, employees purchased 2,357,260 shares or $30.8 million
of Class B Common Stock for $22.3 million cash plus $8.5 million of
deferred payment obligations.
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(5) SUPPLEMENTAL CASH FLOW INFORMATION:
The Company made interest payments of $83.0 million and $84.6 million and
income tax payments of $32.6 million and $43.7 million during the first
nine months of fiscal 1998 and 1997, respectively. During the first nine
months of fiscal 1998, the Company purchased $71.4 million of its Class B
Common Stock, issuing $17.7 million in subordinated installment notes as
partial consideration.
(6) PROSPECTIVE ACCOUNTING CHANGES:
In fiscal 1999, the Company is required to adopt the provisions of
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income" and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." The Company is currently assessing
the impact the adoption will have on the consolidated financial
statements. The Company will complete its analysis of the disclosure
requirements of these standards in fiscal 1998.
In fiscal 2000, the Company is required to adopt SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" and
Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." The Company is
currently assessing the impact the adoption of these standards will have
on the consolidated financial statements.
(7) ARAMARK SERVICES, INC. AND SUBSIDIARIES:
The following financial information has been summarized from the separate
consolidated financial statements of ARAMARK Services, Inc. (a wholly
owned subsidiary of ARAMARK Corporation) and the subsidiaries which it
currently owns. ARAMARK Services, Inc. is the borrower under the
revolving credit facility and certain other senior debt agreements and
incurs the interest expense thereunder. This interest expense is only
partially allocated to all of the other subsidiaries of ARAMARK
Corporation.
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
-------------------------- --------------------------
July 3, June 27, July 3, June 27,
1998 1997 1998 1997
----------- ----------- -------------- ---------
(in millions)
<S> <C> <C> <C> <C>
Revenues $896.4 $846.0 $2,777.7 $2,602.9
Cost of services provided 846.6 795.5 2,609.6 2,447.8
Net income 4.7 6.9 26.2 21.4
July 3, October 3,
1998 1997
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(in millions)
Current assets $ 411.9 $ 408.0
Noncurrent assets 2,189.8 1,558.0
Current liabilities 506.5 507.2
Noncurrent liabilities 1,946.6 1,333.8
</TABLE>
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(8) EARNINGS PER SHARE:
In fiscal 1998, the Company adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings per Share."
Earnings per share is reported on a Common Stock, Class B equivalent
basis (which reflects Common Stock, Class A shares converted to a Class B
basis, ten for one). Basic earnings per share is based on the weighted
average number of common shares outstanding during the respective
periods. Diluted earnings per share is based on the weighted average
number of common shares outstanding during the respective periods, plus
the common equivalent shares, if dilutive, that would result from the
exercise of stock options. Earnings per share for prior periods have been
restated to conform with the requirements of SFAS No. 128. Earnings
applicable to common stock and common shares utilized in the calculation
of basic and diluted earnings per share are as follows. Share and per
share amounts have been restated to reflect the three-for-one stock split
(see note 9).
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
------------------------- -------------------------
July 3, June 27, July 3, June 27,
1998 1997 1998 1997
-------- ---------- --------- -------
(in thousands, except per share data)
Earnings:
<S> <C> <C> <C> <C>
Income before extraordinary item $37,169 $30,134 $85,904 $145,741
======= ======= ======= ========
Shares:
Weighted average number of common
shares outstanding used in basic
earnings per share calculation 117,432 124,999 121,762 126,709
Impact of potential exercise opportunities
under the ARAMARK Ownership Plan 8,097 6,286 7,927 6,956
--------- --------- ---------- -----------
Total common shares used in diluted
earnings per share calculation 125,529 131,285 129,689 133,665
======== ======== ========= ========
Basic earnings per common share $.32 $.24 $.71 $1.15
==== ==== ==== =====
Diluted earnings per common share $.30 $.23 $.66 $1.09
==== ==== ==== =====
</TABLE>
(9) SUBSEQUENT EVENTS:
In July 1998, the Company issued $300 million of 7% senior notes due July
2006 and $300 million of 6.75% senior notes due August 2004. The net
proceeds of approximately $594 million were used to repay borrowings
under the $1.4 billion credit facility.
Effective in July 1998, the Company consummated an agreement to form a
joint venture for its distributive business with another leading magazine
and book wholesaler. The Company contributed substantially all of its
distribution segment's assets and liabilities to the venture in exchange
for a significant minority interest in the venture. The Company
expects that any costs recognized in connection with the transaction
would be immaterial. The Company will account for its interest in the
venture on the cost basis.
On August 11, 1998, the Company's Board of Directors declared, effective
September 1, 1998, a three-for-one split of the Class B and Class A
Common Stock effected in the form of a stock dividend to shareholders of
record on September 1, 1998. The stated par value of $.01 per share of
Class B and Class A common stock was not changed. In the financial
statements, all per share amounts have been restated to reflect the stock
split. In addition an amount equal to $.01 par value of the new shares to
be issued has been transferred from earnings retained for use in the
business to common stock.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Overview
Revenues and operating income for the third quarter were $1.6 billion and
$86.1 million, an increase of 7% and 10%, respectively, over the prior year
period. Revenues and operating income for the nine month period were $4.8
billion and $225.4 million versus $4.7 billion and $283.2 million,
respectively, in fiscal 1997. Operating income for the nine month period in
fiscal 1997 includes a gain of $72.4 million from the divestiture of Spectrum
Healthcare Services, Inc. (Spectrum), which is reflected as "other expense
(income)" in the condensed consolidated statements of income (See note 2 to
the condensed consolidated financial statements). Excluding "other expense
(income)" and the operating results of Spectrum, revenues and operating income
increased 6% and 9%, respectively, for the nine months compared to the prior
year period. The Company's operating margin, excluding "other expense
(income)", increased to 4.7% from 4.5% for the nine month period due to
improved cost controls and leveraging of fixed costs, primarily in the Food
and Support Services segment. Interest expense, net for the nine month period
decreased 7% from the prior year period due to lower debt levels and interest
income received from the settlement of a contract dispute. The effective
income tax rate for the three and nine month periods was 35.5% and 39.9%,
respectively, compared to 39.4% and 25.1%, in the comparable prior year
periods. The fiscal 1998 third quarter effective tax rate was favorably
impacted by the settlement of certain state tax matters, and the prior year
nine month effective income tax rate was favorably impacted by a permanent
difference in the book and tax basis of the divested Spectrum business (See
Note 2 to the condensed consolidated financial statements).
Segment Results
Revenues - Food and Support Services segment revenues for both the three and
nine month periods increased 7% over the prior year periods due to new
accounts (approximately 5% and 4%, respectively), and increased volume,
(approximately 3% and 4%, respectively), partially offset by the unfavorable
impact of foreign currency translation (approximately 1%). Uniform and Career
Apparel segment revenues for the three and nine month periods increased 6%
over the prior year periods due to increased volume in both the uniform rental
and direct marketing businesses. Health and Educational Resources segment
revenues, excluding the Spectrum operations, for the three and nine month
periods increased 9% and 10%, respectively, due to enrollment growth, pricing
and new locations at Educational Resources. Distributive segment revenues
increased 2% for the three months and decreased 1% for the nine months versus
the prior year periods. Effective in July 1998 the Company consummated an
agreement to form a joint venture for its distributive business (See note 9 to
the condensed consolidated financial statements).
Operating Income - Food and Support Services segment operating income
increased 14% and 18% for the three and nine month periods versus the prior
year periods due to the increased revenues noted above and effective cost
controls. Uniform and Career Apparel operating income decreased 9% for the
three month period and increased 1% for the nine month period. Included in
fiscal 1998 three and nine month results is a provision to write-down certain
inventory to net realizable value and also included in the nine month results
is a gain on the sale of certain assets. Excluding these items, operating income
increased 1% for the three months and equaled the prior year nine month
results with the impact of increased revenues being offset by increased
operating costs in the direct marketing businesses. Health and Educational
Resources segment operating income for the three and nine month periods,
excluding the operating results of Spectrum, increased 11% and 16%,
respectively, over the prior year periods due to the revenue increases at
Educational Resources. The Distributive segment incurred operating losses of
$4.7 million and $12.6 million, respectively, for the three and nine month
periods, compared to operating losses of $8.1 million and $13.8 million in the
comparable prior year periods.
<PAGE>
FINANCIAL CONDITION
The Company's indebtedness increased $514 million in the first nine months of
fiscal 1998 due primarily to the completion of a cash tender offer for
outstanding shares of Common Stock, Class A (the "Tender Offer"). See note 4
to the condensed consolidated financial statements. In January 1998, the
Company replaced its existing $1 billion credit facility with a $1.4 billion
credit facility. The new facility matures on March 31, 2005, with commitment
reductions of $100 million in March 2000 and $150 million in March 2001 and
March 2002.
In the third quarter of fiscal 1998, the Company exercised its option to
redeem its $100 million 8-1/2% subordinated notes at a price of 104.25% of the
principal amount, resulting in an extraordinary item for debt extinguishment of
$2.9 million (net of tax benefit of $1.9 million). In the second quarter of
fiscal 1998, the Company redeemed a $50 million 8% note due April 2002 for a
premium resulting in an extraordinary item for debt extinguishment of $1.6
million (net of tax benefit of $1.0 million).
In July 1998, the Company issued $300 million of 7% senior notes due July 2006
and $300 million of 6.75% senior notes due August 2004. The net proceeds of
approximately $594 million were used to repay borrowings under the $1.4
billion credit facility.
Currently, the Company has approximately $1.0 billion of unused committed
credit availability under its credit facilities, which management believes,
along with cash flows from operations, is sufficient to fund operating
requirements, including the increased interest expense resulting from the
additional indebtedness incurred in connection with the Tender Offer.
On August 11, 1998, the Company's Board of Directors declared, effective
September 1, 1998, a three-for-one split of the Class B and Class A Common
Stock effected in the form of a stock dividend to shareholders of record on
September 1, 1998. The stated par value of $.01 per share of Class B and Class
A common stock was not changed. In the financial statements, all per share
amounts have been restated to reflect the stock split. In addition an amount
equal to $.01 par value of the new shares to be issued has been transferred from
earnings retained for use in the business to common stock.
<PAGE>
PART II - OTHER INFORMATION
Item 1: Legal Proceedings
As previously disclosed, Metropolitan Life Insurance Company
("MetLife") filed a complaint against the Company and its Board of
Directors in the Court of Chancery of the State of Delaware in and
for New Castle County (the "Court") seeking to enjoin the
consummation of the Company's proposed recapitalization plan (the
"MetLife Action"). Two additional actions were commenced by certain
holders of the Company's shares of Common Stock, Class A, par value
$0.01 per share (the "Class A Shares"), one of which was brought
individually and as a purported class action on behalf of all
similarly situated stockholders (the "Class Action") and the other
of which was brought individually (the "Webb Action"). Both the
complaint filed in connection with the Class Action and the
complaint filed in connection with the Webb Action asserted claims
and sought remedies that were substantially similar to those set
forth in the complaint filed in connection with the Met Life Action.
The Court granted a preliminary injunction and subsequently ARAMARK
abandoned its recapitalization plan.
On May 15, 1998, the Company commenced a cash tender offer for all
of its outstanding Class A Shares at a price of $500.00 per share,
upon the terms and subject to the conditions set forth in the
Company's Offer to Purchase dated May 15, 1998 (the "Offer").
In connection with the Offer, the parties to the Class Action
executed and filed with the Court a Stipulation and Agreement of
Compromise and Settlement (the "Stipulation"), the terms of which
were set forth in a Notice of Pendency of Class Action, Class Action
Determination, Proposed Settlement of Class Action, Settlement
Hearing and Right to Appear (the "Notice"). At a hearing held on
June 15, 1998, the settlement of the Class Action was approved by
the Court. The plaintiffs in each of the MetLife and the Webb
Actions dismissed their respective actions, and the Company paid
their respective fees and expenses. The Court awarded fees and
expenses to the Plaintiffs in the Class Action. The Court dismissed
the MetLife, Class and Webb Actions.
Item 2: Not Applicable
Item 3: Not Applicable
Item 4: Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Stockholders was held on February 10,
1998 and adjourned until March 12, 1998 when directors were
elected. The meeting was re convened on April 10, 1998 at
which time it was adjourned.
(b) Not Applicable
(c) Not Applicable
(d) See Item 1, Legal Proceedings
Item 5: Not Applicable
Item 6: Exhibits and Reports on Form 8-K
(a) (1) Exhibit 3 (i) - Restated Certificate of Incorporation
dated August 12, 1998
(2) Exhibit 3 (ii) - Bylaws, as amended May 12, 1998
(3) Exhibit 27 - Financial Data Schedule for the nine months
ended July 3, 1998.
(b) None
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ARAMARK CORPORATION
s/Alan J. Griffith
--------------------------
Alan J. Griffith
August 17, 1998 Vice President, Controller
and Chief Accounting Officer
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
ARAMARK CORPORATION
(Originally Incorporated on September 7, 1984
under the name "ARA Acquiring Company")
FIRST: The name of the Corporation is ARAMARK CORPORATION.
SECOND: The address of the Corporation's registered office in the
State of Delaware is 1209 Orange Street, in the City of Wilmington, County of
New Castle. The name of the Corporation's registered agent at such address is
The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or
promoted by the Corporation is to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is 185,000,000 shares,
consisting of (i) 10,000,000 shares of Series Preferred Stock, $1.00 par value
per share (the "Series Preferred Stock"), and (ii) 25,000,000 shares of Common
Stock, Class A, $.01 par value per share (the "Class A Common Stock"), and
(iii) 150,000,000 shares of Common Stock, Class B, $.01 par value per share
(the "Class B Common Stock"). The Class A Common Stock and the Class B Common
Stock are referred to collectively as the "Common Stock".
The Board of Directors shall have the full authority permitted by law
to fix full or limited, or no voting power, and such other designations,
powers, preferences, and relative, participating, optional, special or other
rights (including, as examples and not as a limitation, multiple voting powers
and conversion rights), and qualifications, limitations or restrictions of any
series of the class of Series Preferred Stock that may be desired.
4A. Common Stock
A statement of the designations, powers, preferences, and rights of
the Common Stock, and the qualifications, limitations and restrictions in
respect thereof, is as follows:
1. Classes.
The Common Stock shall be divided into two classes, the
Class A Common Stock and the Class B Common Stock. The Common Stock shall be
issuable only in whole shares. The powers, preferences and rights of the Class
A Common Stock and the Class B Common Stock, and the qualifications,
limitations and restrictions thereon, shall be in all respects identical,
except as otherwise provided in this Part 4A.
<PAGE>
2. Dividends.
Subject to any provision in this Article FOURTH with respect
to any stock of the Corporation to the contrary, out of the assets of the
Corporation which are by law available for the payment of dividends, dividends
and other distributions may be, but shall not be required to be, declared and
paid upon shares of Common Stock, and the holders of shares of Class A Common
Stock and Class B Common Stock shall be entitled to receive the same dividends
and other distributions, ratably with the holder of one share of Class A
Common Stock entitled to receive ten times what the holder of one share of
Class B Common Stock is entitled to receive; provided, however, that in the
case of dividends or other distributions payable in Common Stock, only shares
of Class B Common Stock shall be distributed with respect to Class B Common
Stock and only shares of Class A Common Stock shall be distributed with
respect to Class A Common Stock, and any such distribution shall be made
ratably, with the holder of one share of Class A Common Stock entitled to
receive the same number of shares of Class A Common Stock as the number of
shares of Class B Common Stock the holder of one share of Class B Common Stock
shall be entitled to receive; and provided further, that the Board of
Directors, may declare and pay dividends and other distributions with respect
to the Class A Common Stock without declaring or paying any dividend or other
distribution with respect to the Class B Common Stock.
3. Voting Rights.
(a) Subject to the special voting rights of the
holders of any other stock of the Corporation, the Common Stock (and any other
stock of the Corporation which may be entitled to vote with the holders of
Common Stock), voting as a single class except where the Class A Common Stock
and the Class B Common Stock (and such other stock) are required by law to
vote as separate classes, shall possess all of the voting power of the
Corporation with respect to the election of directors and for all other
purposes.
(b) Each share of Common Stock, whether Class A
Common Stock or Class B Common Stock, shall be entitled to one vote on all
matters submitted to a vote of the Corporation's stockholders.
4. Liquidation.
Upon the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after provision for the payment
of creditors and after provision shall be made for holders of all shares of
stock of the Corporation having a preference upon liquidation, dissolution or
winding up, the remaining assets of the Corporation shall be distributed among
the holders of Common Stock, ratably, with the holder of one share of Class A
Common Stock entitled to receive ten times what the holder of one share of
Class B Common Stock is entitled to receive, and, to the extent provided in
this Article FOURTH, the holders of any other stock of the Corporation which
may be entitled to share in such distribution.
5. Conversion of Class B Common Stock.
(a) Each share of Class B Common Stock may at any
time, but only with the prior approval of the Board of Directors, be converted
at the election of the holder thereof into one-tenth of a fully paid and
nonassessable share of Class A Common Stock. Subject to the terms of any such
approval, the holder of shares of Class B Common Stock may elect to convert
any or all of such shares at one time or at various times in such holder's
discretion. Such right shall be exercised by the surrender of the certificate
representing each share of Class B Common Stock to be converted to the agent
for the registration of transfer of shares of Class B Common Stock at its
office, or to the Corporation at its principal executive offices, accompanied
by a written notice of the election by the holder thereof to convert and (if
so required by the transfer agent or by the Corporation) by instruments of
transfer, in form satisfactory to the transfer agent and to the Corporation,
duly executed by such holder or the holder's duly authorized attorney.
<PAGE>
(b) If a holder of Class B Common Stock ceases to
be either a director or full-time employee of the Corporation or any of its
Subsidiaries (a "Management Investor") or a Permitted Transferee of a person
who is then a Management Investor, then each share of Class B Common Stock
held by such holder shall thereupon be converted into one-tenth of a share of
Class A Common Stock effective immediately. No share of Class B Common Stock
may be issued other than to a Management Investor or a person who would be a
Permitted Transferee of a Management Investor, and any such share issued to
any other person shall ipso facto be converted into one-tenth of a share of
Class A Common Stock effective at the time of the purported issuance.
(c) At any time when the Board of Directors
authorizes and directs the conversion of all the Class B Common Stock into
Class A Common Stock, then, at the time designated by the Board for the
occurrence of such event, each outstanding share of Class B Common Stock shall
be converted into one-tenth of a share of Class A Common Stock and no further
shares of Class B Common Stock may be issued thereafter.
(d) In the event of any such conversion pursuant to
paragraph (a), (b) or (c), the certificate or certificates representing shares
of Class B Common Stock held by such holder shall thereupon and thereafter be
deemed to represent the number of whole shares of Class A Common Stock
issuable upon such conversion and the right to receive cash in lieu of
fractional shares pursuant to paragraph (f) hereof. Upon the surrender of any
such certificate to the agent for the registration of transfer of shares of
Class B Common Stock at its office, or to the Corporation at its principal
executive offices, such certificate shall be cancelled and a certificate for
the number of whole shares of Class A Common Stock to which he shall be
entitled, together with a cash adjustment for any fraction of a share if not
evenly convertible pursuant to paragraph (f) hereof, shall be issued and
delivered to the holder thereof as hereinafter provided.
(e) The issuance of a certificate for shares of
Class A Common Stock upon conversion of shares of Class B Common Stock shall
be made without charge for any stamp or other similar tax in respect of such
issuance. However, if any such certificate is to be issued in a name other
than that of the holder of the share or shares of Class B Common Stock
converted, the person or persons requesting issuance thereof shall pay to the
transfer agent or to the Corporation the amount of any tax which may be
payable in respect of any such transfer, or shall establish to the
satisfaction of the transfer agent or of the Corporation that such tax has
been paid. As promptly as practicable after the surrender for conversion of a
certificate representing shares of Class B Common Stock and the payment of any
tax as herein before provided, the Corporation will deliver or cause to be
delivered at the office of the transfer agent to, or upon the written order
of, the holder of such certificate, a certificate or certificates representing
the number of whole shares of Class A Common Stock issuable upon such
conversion, issued in such name or names as such holder may direct together
with a cash adjustment for any fraction of a share as provided pursuant to
paragraph (f) hereof, if not evenly convertible. Such conversion shall be
deemed to have been made immediately prior to the close of business on the
date of the surrender of the certificate representing shares of Class B Common
Stock (if on such date the transfer books of the Corporation shall be closed,
then immediately prior to the close of business on the first date thereafter
that said books shall be open) or, in the case of a conversion under paragraph
(b) or (c) of this Section, immediately upon the event giving rise to the
conversion, and all rights of such holder arising from ownership of shares of
Class B Common Stock shall cease at such time, and the person or persons in
whose name or names the certificate representing shares of Class A Common
Stock are to be issued shall be treated for all purposes as having become the
record holder or holders of such shares of Class A Common Stock at such time
and shall have and may exercise all the rights and powers appertaining
thereto. No adjustments in respect of any past dividends and other
distributions shall be made upon the conversion of any share of Class B Common
Stock; provided, however, that if any share of Class B Common Stock shall be
converted subsequent to the record date for the payment of a dividend or other
distribution on shares of Class B Common Stock but prior to such payment, the
registered holder of such shares at the close of business on such record date
shall be entitled to receive the dividend or other distribution payable to
holders of Class B Common Stock. The Corporation shall at all times reserve
and keep available, solely for the purpose of issue upon conversion of
outstanding shares of Class B Common Stock, such number of shares of Class A
Common Stock as may be issuable upon the conversion of all such outstanding
shares of Class B Common Stock, provided that the Corporation may deliver
shares of Class A Common Stock held in the treasury of the Corporation.
<PAGE>
(f) No fractions of shares of Class A Common Stock
are to be issued upon conversion, but in lieu thereof the Corporation will pay
therefor in cash, a sum equal to the number of shares of Class B Common Stock
not evenly convertible multiplied by the per share fair market value of the
Class B Common Stock, as determined by an Appraiser according to the most
recent existing appraisal; provided, however, that such appraisal shall be as
of a date not more than six months prior to its use hereunder.
4B. Series D Stock
1. Designation. There shall be a series of Series Preferred
Stock which shall consist of 20,000 shares and shall be designated as
Adjustable Rate Callable Nontransferable Series D Preferred Stock (the "Series
D Stock"). The number of authorized shares of Series D Stock may be increased
by resolution of the Board of Directors.
2. Rank.
(a) Rank of Series D Stock. To the extent and in
the manner provided in this Part 4B, the Series D Stock shall, with respect to
dividend rights and rights on liquidation, rank (i) junior to or on parity
with, as the case may be, any other stock of the Corporation, the terms of
which shall specifically provide that such stock shall rank senior to, or on
parity with, as the case may be, the Series D Stock with respect to dividend
rights or rights on liquidation or both and (ii) senior to any other stock of
the Corporation.
(b) Certain Definitions. The following terms as
used in this Part 4B shall be deemed to have the meanings set forth in this
section.
(1) The term "Participating Stock" shall
mean the Common Stock and any other stock of the Corporation of any class
which has the right to participate in dividends and distributions of the
Corporation without limit as to the amount or percentage.
(2) The term "Parity Stock" with respect
to Series D Stock shall mean the Series D Stock and all other stock of the
Corporation ranking equally therewith as to the payment of dividends or the
distribution of assets upon liquidation. The term "Dividend Parity Stock" with
respect to Series D Stock shall mean the Series D Stock and all other stock of
the Corporation ranking equally therewith as to the payment of dividends. The
term "Liquidation Parity Stock" with respect to Series D Stock shall mean the
Series D Stock and all other stock of the Corporation ranking equally
therewith as to distribution of assets upon liquidation.
(3) The term "Junior Stock" with respect
to Series D Stock shall mean the Participating Stock and all other stock of
the Corporation ranking junior thereto as to the payment of dividends and the
distribution of assets upon liquidation. The term "Dividend Junior Stock" with
respect to Series D Stock shall mean the Participating Stock and all other
stock of the Corporation ranking junior thereto as to the payment of
dividends. The term "Liquidation Junior Stock" with respect to Series D Stock
shall mean the Participating Stock and all other stock of the Corporation
ranking junior thereto as to distribution of assets upon liquidation.
<PAGE>
(4) The term "Senior Stock" with respect
to Series D Stock shall mean all stock of the Corporation ranking senior
thereto as to the payment of dividends or distribution of assets upon
liquidation.
3. Dividends.
(a) Cumulative Dividends. The holders of record of
Series D Stock shall be entitled to receive, as and if declared by the Board
of Directors, cumulative cash dividends thereon at the per annum rate per
share equal to the Established Dividend Rate (as defined in paragraph (c)),
and no more, but only out of funds legally available for the payment of such
distributions under the General Corporation Law of the State of Delaware.
Dividends on the Series D Stock shall not be payable unless and until declared
by the Board of Directors. Dividends shall accrue from the date of original
issuance. Accumulations of dividends shall not bear interest.
(b) Limitations Upon Dividend Arrearage. Unless
dividends that have been declared and are payable upon the Series D Stock have
been paid, no dividend or other distribution (except in Junior Stock) shall be
declared or paid on Dividend Junior Stock and no amount shall be set aside for
or applied to the redemption, purchase or other acquisition of (i) any
Dividend Junior Stock or Liquidation Junior Stock other than by exchange
therefor of Junior Stock or out of the proceeds of a substantially concurrent
sale of shares of Junior Stock or (ii) any Parity Stock except in accordance
with a purchase or exchange offer made simultaneously by the Corporation to
all holders of record of Parity Stock which, considering the annual dividend
rates and the other relative rights and preferences of such shares, in the
opinion of the Board of Directors (whose determination shall be conclusive),
will result in fair and equitable treatment among all such shares.
(c) The "Established Dividend Rate" shall initially
be $25.00, and shall be reset as provided in this paragraph. On each December
16, beginning December 16, 1998 and continuing so long as any shares of Series
D Stock shall be outstanding, the Established Dividend Rate shall be reset at
a rate equal to $1,000 multiplied by 50% of the One Year Treasury Rate that
shall have been in effect at the close of business on the December 1 next
preceding (or if such December 1 shall not have been a business day, the
business day next preceding such December 1), rounded up to the nearest $1.00;
provided, however, that the Established Dividend Rate shall in no event be
greater than $50.00. For purposes of the preceding sentence, the "One Year
Treasury Rate" shall mean the rate for direct obligations of the United States
having a constant maturity of 1-year, as published in H.15(519) under the
heading "Treasury Constant Maturities", or, if not so published by such
December 16, such rate as determined in good faith by the Corporation, which
determination absent manifest error shall be conclusive. The Corporation shall
file with the duly appointed transfer agent for the Series D Stock a
certificate stating the new Established Dividend Rate determined as provided
in this paragraph and showing the computation thereof, and will cause a notice
stating the new Established Dividend Rate and the computation thereof to be
mailed to the holders of shares of Series D Stock.
4. Liquidation Rights.
(a) Liquidation Value. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of Series D Stock shall be entitled to receive from
the assets of the Corporation, payment in cash, of $1,000 per share, plus a
further amount equal to unpaid cumulative dividends on Series D Stock accrued
to the date when such payments shall be made available to the holders thereof,
and no more, before any amount shall be paid or set aside for, or any
distribution of assets shall be made to the holders of Liquidation Junior
Stock. If, upon such liquidation, dissolution or winding up, the amounts
available for distribution to the holders of all Liquidation Parity Stock
shall be insufficient to permit the payment in full to such holders of the
preferential amounts to which they are entitled, then such amounts shall be
paid ratably among the shares of Liquidation Parity Stock in accordance with
the respective preferential amounts (including unpaid cumulative dividends, if
any) payable with respect thereto if paid in full.
<PAGE>
(b) Actions Not Considered Liquidation. None of the
following shall be considered a liquidation, dissolution or winding up of the
Corporation within the meaning of this section: (1) a consolidation or merger
of the Corporation with or into any other corporation; (2) a merger of any
other corporation into the Corporation; (3) a reorganization of the
Corporation; (4) the purchase or redemption of all or part of the outstanding
shares of any class or classes of the Corporation; (5) a sale or transfer of
all or any part of the assets of the Corporation; or (6) a share exchange to
which the Corporation is a party.
5. Redemption.
(a) Optional Redemption. The Series D Stock may be
called for redemption and redeemed out of funds legally available therefor at
the option of the Corporation by resolution of the Board of Directors, in
whole at any time or in part at any time or from time to time upon the notice
hereinafter provided for in paragraph (c), by the payment therefor of the
redemption price per share of $1,000 plus an amount equal to the accrued and
unpaid cumulative dividends thereon to the date fixed by the Board of
Directors as the redemption date. In addition, the Corporation may so call for
redemption at any time all, but not less than all, of the shares of Series D
Stock held by any person or entity.
(b) No Mandatory Redemption. There is no mandatory
sinking fund for, or other required redemption of, the Series D Stock.
(c) Manner of Redemption.
(1) If less than all of the outstanding
shares of Series D Stock shall be called for redemption (and such redemption
is not pursuant to the second sentence of paragraph (a)), the particular
shares to be redeemed shall be selected by lot or by such other equitable
manner as may be prescribed by resolution of the Board of Directors.
(2) Notice of redemption of any shares of
Series D Stock shall be given by the Corporation by first-class mail, not less
than 10 nor more than 60 days prior to the date fixed by the Board of
Directors of the Corporation for redemption (the "redemption date"), to the
holders of record of the shares to be redeemed at their respective addresses
then appearing on the records of the Corporation. The notice of the redemption
shall state: (1) the redemption date; (2) the redemption price; (3) if less
than all outstanding shares of Series D Stock of the holder are to be
redeemed, the identification of the shares of Series D Stock to be redeemed;
(4) that dividends on the shares to be redeemed shall cease to accrue on the
redemption date; and (5) the place or places where such shares of Series D
Stock to be redeemed are to be surrendered for payment of the redemption
price.
(3) Notice having been mailed as
aforesaid, from and after the redemption date (unless default shall be made by
the Corporation in providing money for the payment of the redemption price of
the shares called for redemption), dividends on the shares of Series D Stock
so called for redemption shall cease to accrue, and from and after the
redemption date or such earlier date as funds shall be set aside for payment
of the redemption price (unless default shall be made by the Corporation in
providing money for the payment of the redemption price of the shares called
for redemption) said shares shall no longer be deemed to be outstanding, and
all rights of the holders thereof as stockholders of the Corporation (except
the right to receive from the Corporation the redemption price) shall cease.
Upon surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Board
of Directors of the Corporation shall so require and the notice shall so
state), such shares shall be redeemed by the Corporation at the redemption
price aforesaid.
<PAGE>
(4) Shares of Series D Stock redeemed by
the Corporation shall be restored to the status of authorized and unissued
shares of Series Preferred Stock, undesignated as to series, and, except as
otherwise provided by the express terms of any outstanding series, may be
reissued by the Corporation as shares of one or more series of Series
Preferred Stock.
6. Voting Rights.
(a) No Voting Rights Generally. Except as expressly
provided to the contrary in this Part 4B or as otherwise required by law, the
holders of Series D Stock shall have no right to vote at, or to participate
in, any meeting of stockholders of the Corporation, or to receive any notice
of such meeting.
(b) Rights Upon Dividend Arrearage.
(1) In the event dividends that have been
declared and are payable upon the Series D Stock shall be in arrears, the
number of directors constituting the full board shall be increased by two, and
the holders of the Series D Stock voting noncumulatively and separately as a
single series together with the holders of any other shares of Series
Preferred Stock having the right to elect directors as a series under
circumstances when dividends are in arrears, shall be entitled to elect two
members of the Board of Directors of the Corporation at the next annual
meeting of stockholders of the Corporation or at a special meeting called as
hereinafter provided in this section. Such voting rights of the holders of
Series D Stock shall continue until all declared and unpaid dividends thereon
shall have been paid in full, whereupon such special voting rights of the
holders of Series D Stock shall cease (and the respective terms of the two
additional directors shall thereupon expire and the number of directors
constituting the full board shall be decreased by two) subject to being again
revived from time to time upon the recurrence of the conditions described in
this section as giving rise thereto.
(2) At any time when such right of holders
of Series D Stock to elect two additional directors shall have so vested, the
Corporation may, and upon the written request of the holders of record of not
less than 10% of the Series D Stock then outstanding (or 10% of all Series
Preferred Stock having the right to vote for such directors in case holders of
shares of other series of Series Preferred Stock shall also have the right to
elect directors as a series in circumstances when dividends are in arrears)
shall, call a special meeting of holders of such Series D Stock (and other
series of Series Preferred Stock, if applicable) for the election of
directors. In the case of such a written request, such special meeting shall
be held within 60 days after the delivery of such request, and, in either
case, at the place and upon the notice provided by law and in the bylaws of
the Corporation; except that the Corporation shall not be required to call
such a special meeting if such request is received less than 120 days before
the date fixed for the next ensuing annual meeting of stockholders of the
Corporation; provided, that the holders of Series D Stock receive notice of
such meeting and their right to vote thereat.
(3) Whenever the number of directors of
the Corporation shall have been increased by two as provided in this section,
the number as so increased may thereafter be further increased or decreased in
such manner as may be permitted by the bylaws of the Corporation and without
the vote of the holders of Series D Stock. No such action shall impair the
right of the holders of Series D Stock to elect and to be represented by two
directors as provided in this section.
<PAGE>
(4) The two directors elected as provided
in this section shall serve until the next annual meeting of stockholders of
the Corporation and until their respective successors shall be elected and
qualified or the earlier expiration of their terms as provided in this
section. No such director may be removed without the vote or consent of
holders of a majority of the shares of Series D Stock (or holders of a
majority of shares of Series Preferred Stock having the right to vote in the
election of such director in case holders of shares of other series of Series
Preferred Stock shall also have the right to elect such director as a class).
If, prior to the expiration of the term of any such director, a vacancy in the
office of such director shall occur, such vacancy shall, until the expiration
of such term, in each case be filled by appointment made by the remaining
director elected as provided in this section.
7. Restrictions on Transfer. The shares of Series D Stock
shall not be transferable (other than by will or the laws of descent), except
that such shares may be transferred with the consent of the Board of Directors
of the Corporation.
8. No Conversion Rights. The holders of shares of Series D
Stock shall not have the right to convert such shares into other securities of
the Corporation.
FIFTH: Subject to the rights of holders of Series Preferred Stock to
elect additional directors under certain circumstances, the Corporation shall
be governed in accordance with the following provisions:
5A. Number of Directors
The Board of Directors of the Corporation shall consist of
not less than nine and not more than 19 members and the Chief Executive
Officer of the Corporation shall always be one of the members. The exact
number of directors within such minimum and maximum shall be fixed by the
Board of Directors.
5B. Election
Directors need not be elected by written ballot.
SIXTH: The following terms shall have the accompanying defined
meanings:
1. "Appraiser" shall mean a firm headquartered in the United
States of nationally recognized standing in the business of appraisal or
valuation of securities which does not own any stock of the Corporation and
which has been selected by the Board of Directors to act as an independent
appraiser.
2. "Permitted Transferee" shall have the meaning as defined
in the Stockholders' Agreement.
3. "Stockholders' Agreement" shall mean the Amended and
Restated Stockholders' Agreement dated as of December 14, 1994, by and among
the Corporation and the persons named therein as the same may be amended and a
copy of which is on file with the Secretary of the Corporation.
4. "Subsidiary" shall mean any corporation or other entity
of which the Corporation shall, directly or indirectly, own 50% or more of the
equity, as determined by the Board of Directors and any other corporation or
other entity in which the Corporation shall directly or indirectly have an
equity investment and which the Board of Directors shall in its sole
discretion designate.
SEVENTH: The By-Laws of the Corporation may be made, altered,
amended, changed, added to or repealed by the Board of Directors of the
Corporation without the assent or vote of the stockholders.
<PAGE>
EIGHTH: Each person who was or is made a party or is threatened to be
made a party to or is involuntarily involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
("proceeding"), by reason of the fact that he or a person of whom he is the
legal representative is or was a director or officer of the Corporation or is
or was serving at the request of the Corporation as a director or officer of
another corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer or representative or in any other capacity
while serving as a director, officer or representative shall be indemnified
and held harmless by the Corporation to the fullest extent authorized by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended, against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be
paid in settlement) reasonably incurred or suffered by him in connection
therewith; provided, however, that the Corporation shall indemnify any such
person seeking indemnity in connection with an action, suit or proceeding (or
part thereof) initiated by such person only if action, suit or proceeding (or
part thereof) was authorized by the Board of Directors. Such right shall be a
contract right and shall include the right to be paid by the Corporation
expenses incurred in defending any such proceeding in advance of its final
disposition upon delivery to the Corporation of an undertaking, by or on
behalf of such person, to repay all amounts so advanced if it should be
determined ultimately that such person is not entitled to be indemnified under
this section or otherwise.
If a claim under this Article is not paid in full by the Corporation
within ninety days after a written claim has been received by the Corporation,
the claimant unpaid may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and if successful in
whole or in part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the claimant has not
met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claim, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant had not met
such applicable standard of conduct, shall be a defense to the action or
create a presumption that claimant had not met the applicable standard of
conduct.
The rights conferred by this Article shall not be exclusive of any
other right which such person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, By-Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
The Corporation may maintain insurance, at its expense, to protect
itself and any such director, officer or representative against any such
expense, liability or loss, whether or not the Corporation would have the
power to indemnify him against such expense, liability or loss under the
Delaware General Corporation Law.
NINTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation
in the manner now or hereafter prescribed by law, and all rights and powers
conferred herein on stockholders, directors and officers are subject to this
reserved power.
<PAGE>
TENTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed by the Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for the Corporation under the provisions of Section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said Court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the Court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all
stockholders or class of stockholders of the Corporation, as the case may be,
and also on the Corporation.
ELEVENTH: To the fullest extent permitted by the Delaware General
Corporation Law as the same exists or may hereafter be amended, a director of
this Corporation shall not be liable to the Corporation or its stockholders
for monetary damages for breach of fiduciary duty as director.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation, which
restates and integrates but does not further amend the Corporation's
Certificate of Incorporation, as heretofore amended and restated, having been
duly adopted pursuant to the provisions of Section 245 of the General
Corporation Law of the State of Delaware, has been duly executed this 12th day
of August, 1998.
ARAMARK CORPORATION
By: /s/ Martin W. Spector
-------------------------------
Martin W. Spector
Executive Vice President
<PAGE>
BY-LAWS
OF
ARAMARK CORPORATION
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE -- The registered office of the corporation
shall be established and maintained at the office of The Corporation Trust
Company at 1209 Orange Street in the City of Wilmington,in the County of New
Castle, in the State of Delaware, and said corporation shall be the registered
agent of this corporation in charge thereof, unless otherwise established by
the Board of Directors and a certificate certifying the change is filed in the
manner provided by statute.
SECTION 2. OTHER OFFICES -- The corporation may also have offices in the
City of Philadelphia, Commonwealth of Pennsylvania, and also offices at such
other place or places as the Board of Directors may from time to time appoint
or as the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS -- All meetings of the stockholders shall
be held in the offices of the corporation in Philadelphia, Pennsylvania, or at
such other place as shall be determined 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 MEETING -- An annual meeting of the stockholders, for
the election of directors to succeed those whose terms expire and for the
transaction of such other business as may properly come before the meeting,
shall be held at such place, on such date, and at such time as the Board of
Directors shall each year fix. [ A meeting shall be held within thirteen
months subsequent to the date of the last annual meeting of stockholders.]
SECTION 3. SPECIAL MEETINGS -- Special meetings of the stockholders, for
any purpose or purposes prescribed in the notice of the meeting, may be called
by the Board of Directors or the Chief Executive Officer. Such meetings shall
be held at the place, on the date and at the time as they or he shall fix.
Business transacted at all special meetings shall be confined to the purpose
or purposes stated in the notice.
SECTION 4. NOTICE OF MEETINGS -- Written notice of the place, date, and
time of the meeting, and the general nature of business to be considered,
shall be given, not less than ten nor more than sixty days before the date on
which the meeting is to be held, to each stockholder entitled to vote there
at, except as otherwise provided herein or required by law (meaning, here and
hereinafter, as required from time to time by the Delaware General Corporation
Law or the Certificate of Incorporation of the corporation).
<PAGE>
When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting at which the adjournment is
taken; provided, however, that if the date of any adjourned meeting is more
than thirty days after the date for which the meeting was originally noticed,
or if a new record date is fixed for the adjourned meeting, written notice of
the place, date, and time of the adjourned meeting shall be given in
conformity herewith. At any adjourned meeting, any business may be transacted
which might have been transacted at the original meeting; but only those
stockholders entitled to vote at the meeting as originally noticed shall be
entitled to vote at any adjournment or adjournments thereof, unless the Board
of Directors shall fix a new record date for the adjourned meeting pursuant to
these By-Laws.
SECTION 5. QUORUM -- At any meeting of the stockholders, the holders of
a majority of the voting rights of all of the shares of capital stock issued
and outstanding and entitled to vote thereat, represented in person by proxy,
shall constitute a quorum for all purposes, unless or except, and to the
extent that, the presence of a larger number may be required by law or these
By-Laws. Shares of stock represented by a limited proxy (i.e., a proxy that by
its terms, withholds authority or does not empower its holder to vote on any
or all of the proposals to be considered at a meeting) contribute to the
establishment of a quorum at that meeting for all purposes.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the voting rights of the shares of
stock entitled to vote who are present, in person or by proxy, may adjourn the
meeting to another place, date, or time.
If a notice of any adjourned meeting of stockholders is sent to all
stockholders entitled to vote thereat, stating that it will be held with those
present constituting a quorum, then except as otherwise required by law, those
present at such adjourned meeting, provided that they represent at least one
third of the voting rights of the shares entitled to vote at such meeting
shall constitute a quorum, and all matters shall be determined by a majority
of the votes cast at such meeting (unless a larger majority is required by the
Certificate of Incorporation).
SECTION 6. ORGANIZATION -- Such person as the Board of Directors may
have designated or, in the absence of, or upon the failure so to delegate,
such a person, the Chief Executive Officer of the corporation or, in his
absence, such person as maybe chosen by the holders of a majority of the
voting rights of the shares entitled to vote who are present, in person or by
proxy, at any meeting, shall call to order any meeting of the stockholders and
act as chairman of the meeting. In the absence of the Secretary of the
corporation, the secretary of the meeting shall be such person as the chairman
appoints.
SECTION 7. CONDUCT OF BUSINESS -- The chairman of any meeting of
stockholders shall determine the order of business and the procedure at the
meeting, including such regulation of the manner of voting and the conduct of
discussion as seem to him in order.
SECTION 8. PROXIES AND VOTING -- At any meeting of the stockholders
every stockholder entitled to vote may vote in person or by proxy authorized
by an instrument in writing filed in accordance with the procedure established
for the meeting and bearing a date not more than three years prior to said
meeting, unless said instrument provides for a longer period.
Each stockholder shall be entitled to vote, in accordance with the
provisions of the Certificate of Incorporation relating to shares of stock,
the shares of stock registered in his name on the record date for the meeting,
except as otherwise provided herein or required by law.
2
BY-LAWS
<PAGE>
All voting, including on the election of directors but excepting where
otherwise required herein or by law, may be by a stock vote. Every stock vote
shall be taken by ballots, each of which shall state the name of the
stockholder or proxy voting and such other information as may be required
under the procedure established for the meeting. Every vote taken by ballots
shall be counted by an inspector or inspectors appointed by the Board of
Directors in advance of the meeting or in the absence of, or upon the failure
so to appoint, such person or persons, then by an inspector or inspectors
appointed by the chairman of the meeting.
When a quorum is present at any meeting, the vote of the holders of a
majority of the votes of the shares having voting power represented in person
or by proxy at the meeting and entitled to vote on any question brought before
such meeting shall decide such question, unless the question is one upon
which, by express provision of law, or these By-Laws, a different vote is
required, in which case such express provision shall govern and control the
decision of such question. Shares represented by a limited proxy (i.e., a
proxy that by its terms, withholds authority or does not empower the holder to
vote on a particular proposal) will not be considered as part of the voting
power present and entitled to vote with respect to that proposal for
determining whether the proposal has a majority (or other required percentage)
approval of the voting power present and entitled to vote. Abstentions
(whether in person or by proxy) are counted as voting power present and
entitled to vote on any proposal to which they relate.
SECTION 9. STOCK LIST -- A complete list of stockholders entitled to
vote at any meeting of stockholders, arranged in alphabetical order for each
class of stock and showing the address of each such stockholder and the number
of shares registered in his name, shall be open to the examination of any such
stockholder, for any purpose germane to the meeting, during ordinary business
hours for a period of at least ten 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 stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such
stockholder who is present. This list shall presumptively determine the
identity of the stockholders entitled to vote at the meeting and the number of
shares held by each of them.
SECTION 10. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING -- Any action
required to be taken at any annual or special meeting of stockholders of the
corporation, or any action which may be taken at any annual or special meeting
of the stockholders, may be taken without a meeting, without prior notice and
without a vote, if a consent in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
3
BY-LAWS
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. NUMBER -- Except as otherwise provided in the Certificate of
Incorporation, the number of directors who shall constitute the whole board
shall be not less than nine or more than nineteen.
SECTION 2. ELECTION AND TERM -- Except as provided in Section 3 of this
Article III or as otherwise provided in the Certificate of Incorporation,
directors shall be elected at the annual meeting of the stockholders, and each
director shall be elected to serve until the next annual meeting and until his
successor shall be elected and shall qualify.
SECTION 3. RESIGNATION AND VACANCIES -- Any director or member of a
committee may resign at any time. Such resignation shall be made in writing,
and shall take effect at the time specified therein and if no time is
specified, at the time of its receipt by the Chief Executive Officer or
Secretary. The acceptance of a resignation shall not be necessary to make it
effective. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by vote of the
directors then in office though less than a quorum.
SECTION 4. INCREASE OF NUMBER -- The number of directors may be fixed or
increased by resolution of the Board of Directors, subject to the provisions
of the Certificate of Incorporation.
SECTION 5. COMMITTEES -- The Board of Directors may designate one or
more committees, each committee to consist of one or more directors of the
corporation. The Board may designate one or more directors as alternate
members of any committee, who may replace any absent or disqualified member at
any meeting of the committee.
SECTION 6. MEETINGS -- The newly elected directors may hold their first
meeting for the purpose of organization and the transaction of business, if a
quorum be present, immediately after the annual meeting of the stockholders;
or the time and place of such meeting may be fixed by consent of all the
directors.
Regular meetings of the Board of Directors may be held without notice at
such places and times as shall be determined from time to time by resolution
of the Board of Directors. Special meetings of the Board of Directors may be
called by the Chief Executive Officer or by the Secretary and shall be called
by them on the written request of any two directors. Notice of the place,
date, and time of each such special meeting shall be given each director by
whom it is not waived by mailing written notice not less than five days before
the meeting or by telephoning, telecopying or telegraphing the same not less
than twenty-four hours before the meeting. Unless otherwise indicated in the
notice thereof, any and all business may be transacted at a special meeting.
Members of the Board of Directors, or any committee designated by the
Board of Directors, may participate in a meeting of the Board of Directors
(whether regular or special), or any committee, by means of conference
telephone calls or by means of similar communications equipment by which all
persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at the meeting.
4
BY-LAWS
<PAGE>
SECTION 7. QUORUM -- A majority of the directors in office shall
constitute a quorum for the transaction of business. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting from time to time until a quorum is
obtained, and no further notice thereof need be given other than by
announcement at the meeting which shall be so adjourned. The vote of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors unless the Certificate of
Incorporation or these By-Laws shall require the vote of a greater number.
SECTION 8. COMPENSATION -- Directors shall be entitled to such
compensation and fees (including reimbursement of reasonable expenses) for
their services as directors or as members of committees as shall be authorized
by resolution of the Board. Nothing herein contained shall be construed to
preclude any director from serving the corporation in any other capacity as an
officer, agent or otherwise, and receiving compensation therefor.
SECTION 9. ACTION WITHOUT MEETING -- Any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee
designated by the Board of Directors, may be taken without a meeting, if a
written consent thereto is signed by all members of the Board or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or committee.
SECTION 10. POWERS -- The Board of Directors shall have full power to
manage the business and affairs of the Corporation; and all powers of the
corporation, except those specifically reserved or granted to the stockholders
by statute, the Certificate of Incorporation or these By-Laws, are hereby
granted to and vested in the Board of Directors.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS -- The officers of the corporation shall be a Chief
Executive Officer, a President, one or more Vice Presidents, a Treasurer and a
Secretary, all of whom shall be elected by the Board of Directors and shall
hold office until their successors are elected and qualified. In addition, the
Board of Directors may elect a Chairman and a Vice-Chairman of the Board of
Directors and such Assistant Secretaries and Assistant Treasurers as it may
deem proper. Except for the Chief Executive Officer, none of the officers of
the corporation need be directors. The officers shall be elected at the first
meeting of the Board of Directors after each annual meeting. Two or more
offices may be held by the same person.
SECTION 2. OTHER OFFICERS AND AGENTS -- The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall
hold office 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.
SECTION 3. CHAIRMAN -- The Chairman of the Board of Directors, if one is
elected, shall preside at all meetings of the Board of Directors, and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
5
BY-LAWS
<PAGE>
SECTION 4. CHIEF EXECUTIVE OFFICER -- The Chief Executive Officer must
at all times be a stockholder of the corporation and a member of the Board of
Directors. He shall be, as Chief Executive Officer of the corporation,
responsible for the general supervision of the business and affairs of the
corporation and, except as set forth in these By-Laws or a resolution of the
Board of Directors, of the corporation's other officers, and he shall have and
perform such other duties as from time to time may be assigned to him by the
Board of Directors. He may sign, execute and acknowledge, in the name of the
corporation, deeds, mortgages, bonds, contracts or other instruments
authorized by the Board of Directors, except in cases where the signing and
execution thereof shall be expressly and exclusively delegated by the Board of
Directors, or by these By-Laws, to some other officer or agent of the
corporation; and, in general, shall perform all duties incident to the office
of Chief Executive Officer, and such other duties as from time to time may be
assigned to him by the Board of Directors.
SECTION 5. PRESIDENT -- The President shall have such powers and shall
perform such duties as from time to time shall be assigned to him by the Chief
Executive Officer or the Board of Directors.
SECTION 6. VICE-PRESIDENTS -- Each Vice-President shall have such powers
and shall perform such duties as from time to time shall be assigned to him by
the Chief Executive Officer or the Board of Directors.
SECTION 7. TREASURER -- The Treasurer shall provide for the custody of
the corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
collect and deposit all moneys and other valuables in the name and to the
credit of the corporation in such depositaries 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, or the Chief Executive Officer, taking
proper vouchers for such disbursements. He shall render to the Chief Executive
Officer, and the Board of Directors at meetings of the Board of Directors, or
whenever the directors may request it, an account of all his transactions as
Treasurer and of the financial condition of the corporation. If required by
the Board of Directors, he shall give the corporation a bond for the faithful
discharge of his duties in such amount and with such surety as the Board of
Directors shall prescribe.
SECTION 8. SECRETARY -- The Secretary shall be present at and give, or
cause to be given, notice of all meetings of stockholders and directors, and
all other notices required by law or by these By-Laws, and in case of his
absence or refusal or neglect so to do, any such notice may be given by any
Assistant Secretary or by any person thereunto directed by the Chief Executive
Officer, or by the Board of Directors. He shall record all the proceedings of
the meetings of the corporation and of the Board of Directors in books to be
kept for such purpose, and shall perform such other duties as may be assigned
to him by the Chief Executive Officer or the Board of Directors. He shall have
the custody of the seal of the corporation and shall affix the same to all
instruments requiring it, when authorized by the Board of Directors or the
Chief Executive Officer, and attest the same.
SECTION 9. ASSISTANT TREASURERS AND ASSISTANT SECRETARIES -- Assistant
Treasurers and Assistant Secretaries, if any, shall have such powers and shall
perform such duties as shall be assigned to them, respectively, by the Chief
Executive Officer or by the Board of Directors.
6
BY-LAWS
<PAGE>
ARTICLE V
GENERAL PROVISIONS
SECTION 1. CERTIFICATES OF STOCK -- The stock of the corporation shall
be represented by certificates unless the Board of Directors shall by
resolution provide that some or all of any class or series of stock shall be
uncertificated shares.
SECTION 2. LOST CERTIFICATES -- Unless otherwise provided by the
Certificate of Incorporation, a new certificate of stock may be issued in the
place of any certificate theretofore issued by the corporation alleged to have
been lost, stolen, destroyed or mutilated, and (in the case of any certificate
alleged to be lost, stolen or destroyed) the Board of Directors may, in its
discretion, require the owner thereof or his legal representatives, to give
the corporation a bond, in such sum as the Board of Directors may direct, not
exceeding double the value of the stock, or to indemnify the corporation
against any claim that may be made against it with respect to any such
certificate, prior to the issuance of any new certificate.
SECTION 3. TRANSFER OF SHARES -- Transfers of stock shall be upon the
stock transfer books of the corporation kept at an office of the corporation
or by transfer agents designated to transfer shares of the corporation.
SECTION 4. STOCKHOLDER 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 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
a record date, which shall not be more than sixty nor less than ten days
before the date of such meeting, nor more than sixty days prior to any such
other action. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to an adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
SECTION 5. DIVIDENDS -- Subject to the provisions of law and the
provisions of the Certificate of Incorporation or any resolution or
resolutions adopted by the Board of Directors pursuant to authority expressly
vested in it by the Certificate of Incorporation and Section 151 of the
Delaware General Corporation Law, the Board of Directors may, out of funds
legally available therefor at any regular or special meeting, declare
dividends upon the capital stock of the corporation as and when it deems
expedient. Before declaring any dividend there may be set apart out of any
funds of the corporation legally available for dividends, such sum or sums as
the Board of Directors from time to time in its discretion deem proper for
working capital, future capital needs or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
Board of Directors shall deem appropriate or in the interests of the
corporation.
SECTION 6. SEAL -- The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "CORPORATE SEAL DELAWARE". Such seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 7. FACSIMILE SIGNATURES -- In addition to the provisions for use
of facsimile signatures elsewhere specifically authorized in these By-Laws,
facsimile signatures of any officer or officers of the Corporation may be used
whenever and as authorized by the Board of Directors or a committee thereof.
7
BY-LAWS
<PAGE>
SECTION 8. RELIANCE UPON BOOKS, REPORTS AND RECORDS -- Each director,
each member of any committee designated by the Board of Directors, and each
officer of the corporation shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of account or other records
of the corporation, including reports made to the corporation by any of its
officers, by an independent certified public accountant, or by an appraiser
selected with reasonable care.
SECTION 9. FISCAL YEAR -- The fiscal year of the corporation shall end
on the Friday nearest September 30 in each year, and shall be subject to
change, by resolution of the Board of Directors.
SECTION 10. CHECKS -- All checks, drafts or other orders for the payment
of money, notes or other evidences of indebtedness issued in the name of the
corporation shall be signed by such officer or officers, agent or agents of
the corporation, and in such manner, as shall be determined from time to time
by resolution of the Board of Directors.
SECTION 11. NOTICE AND WAIVER OF NOTICE -- Except as otherwise provided
in this Section 11, whenever any notice is required by these By-Laws to be
given, personal notice is not meant unless expressly so stated, and any notice
so required shall be deemed to be sufficient if given by depositing the same
in the United States mail, postage prepaid, addressed to the person entitled
thereto at his address as it appears on the records of the corporation, and
such notice shall be deemed to have been given on the day of such mailing.
Stockholders not entitled to vote shall not be entitled to receive notice of
any meetings except as otherwise provided by law. Whenever any notice is
required with respect to a special meeting of the Board of Directors, any
notice so required shall be deemed received when given, if given by telegram,
telex, telecopy or similar form of telecommunication, and sent to the last
known address (business or residence) of each director entitled to such
notice.
Whenever any notice is required to be given under the provisions of any
law, or under the provisions of the Certificate of Incorporation or these
By-Laws, a waiver thereof in writing, or by telegraph, telex, telecopy, cable
or other means, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE VI
AMENDMENTS
These By-Laws may be made, altered, amended, changed, added to or
repealed by the Board of Directors to the extent provided in the Certificate
of Incorporation.
8
BY-LAWS
<PAGE>
ARTICLE VII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Each person who was or is made a party or is threatened to be made a
party to or is involuntarily involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative ("proceeding"), by
reason of the fact that he or a person of whom he is the legal representative
is or was a director or officer of the corporation or is or was serving at the
request of the corporation as a director or officer of another corporation, or
as its representative in a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans, whether
the basis of such proceeding is alleged action in an official capacity as a
director, officer or representative or in any other capacity while serving as
a director, officer or representative, shall be indemnified and held harmless
by the corporation to the fullest extent permitted by the Delaware General
Corporation Law, as the same exists or may hereafter be amended, against all
expenses, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by him in connection therewith; provided,
however, that the corporation shall indemnify any such person seeking
indemnity in connection with an action, suit or proceeding (or part thereof)
initiated by such person only if such action, suit or proceeding (or part
thereof) was authorized by the Board of Directors. Such right shall be a
contract right and shall include the right to be paid by the corporation
expenses incurred in defending any such proceeding in advance of its final
disposition upon delivery to the corporation of an undertaking, by or on
behalf of such person, to repay all amounts so advanced if it should be
determined ultimately that such person is not entitled to be indemnified under
this section or otherwise.
If a claim under this section is not paid in full by the corporation
within ninety days after a written claim has been received by the corporation,
the claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the claim and if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought
to enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition where the required undertaking has been
tendered to the corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law
for the corporation to indemnify the claimant for the amount claimed, but the
burden of proving such defense shall be on the corporation. Neither the
failure of the corporation (including its Board of Directors, independent
legal counsel, or its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he has met the applicable standard of conduct set
forth in the Delaware General Corporation Law, nor an actual determination by
the corporation (including its Board of Directors, independent legal counsel,
or its stockholders) that the claimant had not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that
claimant had not met the applicable standard of conduct.
The rights conferred by this section shall not be exclusive of any other
right which such persons may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, By-Laws, agreement, vote of
stockholders or disinterested directors or otherwise.
The corporation may maintain insurance, at its expense, to protect
itself and any director, officer or representative against any such expense,
liability or loss, whether or not the corporation would have the power to
indemnify him against such expense, liability or loss under the Delaware
General Corporation Law.
As amended May 12, 1998
9
BY-LAWS
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information from the Condensed
Consolidated Balance Sheet and Condensed Consolidated Statement of Income
filed as part of Form 10-Q and is qualified in its entirety by reference to
such Form 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-02-1998
<PERIOD-START> OCT-04-1997
<PERIOD-END> JUL-03-1998
<CASH> 30,174
<SECURITIES> 0
<RECEIVABLES> 543,511
<ALLOWANCES> 24,071
<INVENTORY> 369,015
<CURRENT-ASSETS> 1,018,345
<PP&E> 1,740,141
<DEPRECIATION> 874,268
<TOTAL-ASSETS> 2,765,666
<CURRENT-LIABILITIES> 943,568
<BONDS> 1,730,487
0
0
<COMMON> 658
<OTHER-SE> (126,603)
<TOTAL-LIABILITY-AND-EQUITY> 2,765,666
<SALES> 0
<TOTAL-REVENUES> 4,817,200
<CGS> 0
<TOTAL-COSTS> 4,381,802
<OTHER-EXPENSES> 146,732
<LOSS-PROVISION> 4,538
<INTEREST-EXPENSE> 82,380
<INCOME-PRETAX> 143,000
<INCOME-TAX> 57,096
<INCOME-CONTINUING> 85,904
<DISCONTINUED> 0
<EXTRAORDINARY> (4,474)
<CHANGES> 0
<NET-INCOME> 81,430
<EPS-PRIMARY> .67 <F1><F2>
<EPS-DILUTED> .63 <F1><F2>
<FN>
<F1>
Earnings per share have been prepared in accordance with SFAS No. 128,
"Earnings Per Share" and therefore basic and diluted earnings per share have
been entered in place of primary and fully diluted EPS, respectively.
<F2>
Earnings Per Share amounts reflect a three-for-one stock split declared on
August 11, 1998 and effective September 1, 1998. Prior financial data schedules
have not been restated
</FN>
</TABLE>
