<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
- --------------------------------------------------------------------------------
FORM 10-Q
Quarterly Report under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended March 31, 1995 Commission file number: 1-8859
IP TIMBERLANDS, Ltd.
(Exact name of registrant as specified in its charter)
Texas 13 3259241
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Two Manhattanville Road, Purchase, NY 10577
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 914-397-1500
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
--- ---
Class A Depositary Units outstanding on April 28, 1995: 46,445,729
<PAGE>
IP TIMBERLANDS, Ltd.
INDEX
Page No.
--------
PART I. Financial Information
Item 1. Financial Statements 3
Consolidated Statement of Earnings -
Three Months Ended March 31, 1995 and 1994 4
Consolidated Balance Sheet -
March 31, 1995 and December 31, 1994 5
Consolidated Statement of Cash Flows -
Three Months Ended March 31, 1995 and 1994 6
Notes to Consolidated Financial Statements 7 - 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 12
PART II. Other Information
Item 1. Legal Proceedings *
Item 2. Changes in Securities *
Item 3. Defaults upon Senior Securities *
Item 4. Submission of Matters to a Vote of
Security Holders *
Item 5. Other Information *
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
* Omitted since no answer is called for, answer is in the negative or
inapplicable.
2
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PART 1. Financial Information
ITEM 1. Financial Statements
The accompanying unaudited financial statements have been prepared in
conformity with current Securities and Exchange Commission regulations
governing interim financial reporting. In the opinion of the managing
general partner of IP Timberlands, Ltd. (the "Registrant"), a Texas
limited partnership, the accompanying unaudited financial statements
contain all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position of the Registrant as
of March 31, 1995, and the results of operations for the quarter ended
March 31, 1995. It is suggested that these interim financial statements
be read in conjunction with the audited financial statements and notes
thereto incorporated by reference in the Registrant's Form 10-K for the
year ended December 31, 1994, which has been previously filed with the
Commission.
The results for the interim period covered by this report are not
necessarily indicative of what the results will be for the remainder of
the year.
3
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IP TIMBERLANDS, Ltd.
CONSOLIDATED STATEMENT OF EARNINGS
(In thousands - except per unit data)
(Unaudited)
Three Months Ended
March 31,
------------------------
1995 1994
-------- ---------
Revenues
Stumpage sales
International Paper $ 52,569 $ 47,502
Unaffiliated parties 28,276 34,396
Forestland sales 59 26,583
Other income, net 1,363 1,098
-------- ---------
Total revenues 82,267 109,579
-------- ---------
Operating Costs and Expenses
Depletion
International Paper 3,230 2,766
Unaffiliated parties 2,765 3,030
Cost of forestlands sold 47 4,508
Amortization of roads 535 539
Forest operations 9,754 9,232
General and administrative 5,391 5,187
Property and severance taxes 3,793 4,412
-------- ---------
Total operating costs and expenses 25,515 29,674
-------- ---------
Operating Earnings 56,752 79,905
Interest Income 7,005 2,820
General Partners' Interest in IPTO (637) (827)
-------- ---------
Net Partnership Earnings $ 63,120 $ 81,898
======== =========
Earnings per Class A Unit (Note 5) $ 1.36 $ 1.49
======== =========
The accompanying notes are an integral part of these financial statements.
4
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IP TIMBERLANDS, Ltd.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
March 31, December 31,
1995 1994
----------- ------------
Assets
Current Assets
Cash and temporary investments $ 7,105 $ 7,922
Notes receivable - International Paper 256,996 430,146
Due from International Paper 10,806 3,328
Accounts and notes receivable 6,531 8,716
----------- ------------
Total current assets 281,438 450,112
Notes Receivable 998 1,174
Forestlands 739,737 739,136
Roads, net of accumulated amortization of
$48,039(1995) and $47,504(1994) 35,920 36,097
----------- ------------
Total Assets $1,058,093 $1,226,519
=========== ============
Liabilities and Partners' Capital
Current Liabilities
Accounts payable and accrued liabilities $ 410 $ 354
Accrued property and severance taxes 6,225 5,868
Customer advance payments 5,287 4,658
----------- ------------
Total current liabilities 11,922 10,880
Lease Obligations 1,311 1,443
General Partners' Interest in IPTO 32,913 34,607
Partners' Capital
General partners 31,974 33,651
Limited partners 979,973 1,145,938
----------- ------------
Total Liabilities and Partners' Capital $1,058,093 $1,226,519
=========== ============
The accompanying notes are an integral part of these financial statements.
5
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IP TIMBERLANDS, Ltd.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
------------------------
1995 1994
-------- --------
Operating Activities
Net Partnership earnings $ 63,120 $ 81,898
Noncash items
Depletion 5,995 5,796
Cost of forestlands sold 47 4,508
Amortization of roads 535 539
Other, net 337 519
Changes in current assets and liabilities
Accounts and notes receivable 2,361 11,083
Due from International Paper (7,478) (14,664)
Customer advance payments 629 1,239
Other, net 280 1,066
-------- --------
Cash provided by operations 65,826 91,984
-------- --------
Investment Activities
Investment in forestlands and roads (6,700) (9,008)
Loans to International Paper (41,570) (101,685)
Repayment of loans by International Paper 214,720 55,300
-------- --------
Cash provided by (used for) investment activities 166,450 (55,393)
-------- --------
Financing Activities
Distributions to partners of IPT and IPTO (233,093) (35,557)
-------- --------
Change in Cash and Temporary Investments (817) 1,034
Cash and Temporary Investments
Beginning of the period 7,922 6,782
-------- --------
End of the period $ 7,105 $ 7,816
======== ========
The accompanying notes are an integral part of these financial statements.
6
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IP TIMBERLANDS, Ltd.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Organization
IP Timberlands, Ltd. (the "Registrant" or "IPT"), is a Texas
limited partnership. IP Forest Resources Company ("IPFR"), a
wholly owned subsidiary of International Paper, is the
managing general partner of the Registrant and International
Paper is the special general partner.
The Registrant operates through IP Timberlands Operating
Company, Ltd. ("IPTO"), a Texas limited partnership, in which
the Registrant holds a 99% limited partner's interest, and
IPFR and International Paper together hold a 1% general
partners' interest. IPFR is also the managing general partner
of IPTO, and International Paper is the special general
partner.
2. Transactions with International Paper
The Registrant reimburses IPFR and International Paper for
both direct and indirect costs and expenses associated with
the management and operations of the Partnerships. Charges
from International Paper for indirect expenses for the
quarters ended March 31, 1995 and 1994 were $2.3 million for
each period. The interim period charges are based upon
estimates of the total charges for the year.
Interest income from notes receivable from International Paper
for the quarters ended March 31, 1995 and 1994 was $6.8 and
$2.5 million, respectively. The increase in interest income
in 1995 was due to higher interest rates and loan balances.
3. Temporary Investments
Temporary investments with a maturity of three months or less
are treated as cash equivalents and are stated at cost.
Temporary investments were $6.5 million at both March 31, 1995
and December 31, 1994.
7
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4. Receivables
The major classifications of current receivables are shown
below. No allowance for doubtful accounts was considered
necessary.
March 31, December 31,
1995 1994
--------- ------------
(In thousands)
Notes receivable - trade $5,562 $7,487
Accounts receivable - trade 568 609
Accrued interest and other receivables 401 620
--------- ------------
$6,531 $8,716
========= ============
5. Computation of Earnings Per Class A Unit
The Partnership Agreement provides for the allocation of Partnership
earnings among the general and limited partners. The following table
presents the computation of earnings per Class A Unit (in thousands,
except per unit data):
Three Months Ended
March 31,
--------------------
1995 1994
-------- -------
Allocation to Primary Account $ 66,771 $ 72,471
Allocation to Secondary Account (3,651) 9,427
-------- -------
Net Partnership Earnings 63,120 81,898
-------- -------
95% of the Primary Account\1\ 63,432 68,848
4% of the Secondary Account\1\ (146) 377
-------- -------
Earnings Allocated to Class A Limited Partners $ 63,286 $ 69,225
======== =======
Weighted Average Class A Units Outstanding 46,446 46,446
======== =======
Earnings Per Class A Unit $ 1.36 $ 1.49
======== =======
\1\ Class B units are allocated 4% of Primary Account and 95% of
Secondary Account earnings. The general partners are allocated
1% of each account.
8
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6. Partners' Capital
The following tables present an analysis of the activity in Partners'
Capital (in thousands):
Partners' Capital
---------------------------------
General Limited
Partners Partners Total
-------- ----------- ----------
Three Months Ended March 31, 1995
Balance - January 1, 1995 $ 33,651 $ 1,145,938 $1,179,589
Net earnings for the period 631 62,489 63,120
Partner distributions (2,308) (228,454) (230,762)
-------- ----------- ----------
Balance - March 31, 1995 $ 31,974 $ 979,973 $1,011,947
======== =========== ==========
Three Months Ended March 31, 1994
Balance - January 1, 1994 $ 32,321 $ 1,014,323 $1,046,644
Net earnings for the period 819 81,079 81,898
Partner distributions (352) (34,849) (35,201)
-------- ----------- ----------
Balance - March 31, 1994 $ 32,788 $1,060,553 $1,093,341
======== =========== ==========
The authorized and outstanding Class A and B Depositary Units at
March 31, 1995 and 1994, which represent the limited partnership
interests of IPT, are presented below. The Class B Units are 100%
owned by International Paper and affiliates.
Class A Depositary Units Outstanding
------------------------------------ Class B
International Unaffiliated Depositary
Paper and Third Units
Affiliates Parties Total Outstanding
------------- ------------ ---------- -----------
Number of Units 39,146,229 7,299,500 46,445,729 50,976,480
Percentage of total 84% 16% 100% 100%
Under the terms of the Partnership Agreement, International Paper has
the right to purchase, at any time, all outstanding Class A Units at a
price equal to 133% of the market price at that time.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Total Partnership revenues for the first quarter of 1995 were $82.3 million,
down 25% from 1994 first quarter revenues of $109.6 million. Revenues from
stumpage sales were $80.8 million in the first quarter of 1995, as compared with
$81.9 million in the first quarter of 1994. Net Partnership earnings were $63.1
million, compared with $81.9 million in 1994. Both harvest volumes and overall
average prices were comparable in both periods. The decline in total revenues
and earnings was due to lower forestland sales.
In the South, 11% higher average prices and an 8% increase in harvest volumes
led to stumpage sales revenues 20% above 1994 levels. Low customer inventories
combined with poor weather conditions to keep demand and pricing for Partnership
stumpage strong in this region. In the West, revenues from stumpage sales were
34% lower than in 1994. Harvest volumes were 32% below prior year totals due to
exceptionally wet weather conditions and high customer inventories. Export
sales were weak as customers resisted higher prices. In the Northeast,
although total harvest volumes were flat, an increased mix of higher value
sawlogs resulted in a 24% increase in stumpage sales revenues.
Forestland sales are made when current market values for selected nonstrategic
tracts exceed the values expected from future operations, and thus vary from
period to period. The Partnership recorded no significant forestland sales in
the first quarter of 1995. Forestland sales totaled $26.6 million in the 1994
quarter.
Amounts attributable to the Primary and Secondary Accounts for major categories
in the statement of earnings were (in thousands):
Three Months Ended March 31,
----------------------------
1995 1994
Stumpage Sales ------- -------
Primary Account $80,819 $81,898
Secondary Account 26 -
------- -------
$80,845 $81,898
======= =======
Forestland Sales
Primary Account $ 5 $12,096
Secondary Account 54 14,487
------- -------
$ 59 $26,583
======= =======
Operating Costs and Expenses
Primary Account $19,270 $22,921
Secondary Account 6,245 6,753
------- -------
$25,515 $29,674
======= =======
Operating costs and expenses by category are shown in the consolidated statement
of earnings on page 4.
10
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Sales volumes attributable to timber sales were (in thousand cunits):
Three Months Ended March 31,
----------------------------
1995 1994
---- ----
Used by International Paper facilities 314 223
Resold by International Paper 156 190
Sold to unaffiliated parties 398 441
---- ----
868 854
==== ====
Liquidity and Capital Resources
IPT had cash and temporary investments of $7.1 million, an intercompany account
receivable from International Paper of $10.8 million and notes receivable from
International Paper of $257.0 million at March 31, 1995, giving the Partnership
$274.9 million in liquid assets. Cash is either invested in temporary
investments or loaned to International Paper at market rates. The breakdown of
liquid assets between the Primary and Secondary Accounts was (in thousands):
March 31, December 31,
1995 1994
--------- ------------
Cash, temporary investments
and current receivables from
International Paper
Primary Account $ 164,635 $ 313,742
Secondary Account 110,272 124,326
--------- ------------
$ 274,907 $ 438,068
========= ============
Total per Class A Unit $ 3.46 $ 6.52
========= ============
The decrease in Primary Account liquid assets reflects the payment of a $4.00
per Class A Unit special distribution on March 31, 1995.
In addition, current assets at March 31, 1995 and December 31, 1994, included
$1.0 million and $1.2 million of accounts receivable, respectively, and $5.5
million and $7.5 million of notes receivable, respectively, from parties other
than International Paper, due within the next 12 months.
11
<PAGE>
The following table reflects cash flow from operations, after capital
expenditures, attributable to the Class A Units (in thousands).
Primary Secondary IPT
Account Account Total
-------- --------- --------
Three Months Ended March 31, 1995
Cash provided by operations $ 73,511 $ (7,685) $ 65,826
Investment in forestlands and roads (2,855) (3,845) (6,700)
IPTO general partners' interest in above (707) 115 (592)
-------- --------- --------
Cash flow after capital expenditures 69,949 (11,415) $ 58,534
Class A Unit allocation factor 95% 4% ========
-------- ---------
Class A Unit cash flow
after capital expenditures $ 66,452 $ (457) $ 65,995
======== ========= ========
Distributions declared for Class A Units $219,224 $219,224
======== ========
Three Months Ended March 31, 1994
Cash provided by operations $ 84,271 $ 7,713 $ 91,984
Investment in forestlands and roads (6,044) (2,964) (9,008)
IPTO general partners' interest in above (782) (48) (830)
-------- --------- --------
Cash flow after capital expenditures 77,445 4,701 $ 82,146
Class A Unit allocation factor 95% 4% ========
-------- ---------
Class A Unit cash flow
after capital expenditures $ 73,573 $ 188 $ 73,761
======== ========= ========
Distributions declared for Class A Units $ 33,441 $ 33,441
======== ========
On March 31, 1995, IPT paid a $4.00 per Class A Depositary Unit special
distribution. The payment of this distribution was the result of management's
evaluation that remaining cash balances and projected future cash flows would be
adequate for future asset acquisition and operating requirements.
In April, IPT declared a cash distribution of $.72 per Class A Unit for the
first calendar quarter of 1995. This distribution is payable on May 15, 1995 to
holders of record as of April 28, 1995.
Capital expenditures, including expenditures for reforestation of harvested
forestland, acquisition of capitalized leases and road construction, are
expected to be approximately $44 million for 1995.
12
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Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(3) Bylaws, as amended April 11, 1995.
(27) Financial Data Schedule
(b) A Current Report on Form 8-K was filed January 13, 1995
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
IP Timberlands, Ltd.
By: IP Forest Resources Company
Managing General Partner
(Registrant)
Date: May 5, 1995 By: /s/ James W. Guedry
----------------------------
James W. Guedry
Vice President and Secretary
Date: May 5, 1995 By: /s/Frederick L. Bleier
------------------------
Frederick L. Bleier
Treasurer and Controller
and Chief Financial and
Accounting Officer
14
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EXHIBIT 3
B Y L A W S
IP FOREST RESOURCES COMPANY
AS AMENDED APRIL 11, 1995
<PAGE>
I N D E X
INDEX PAGE
ARTICLE I. OFFICES
Section 1. Principal Office............................. 1
Section 2. Registered Office............................ 1
Section 3. Other Offices................................ 1
ARTICLE II. STOCKHOLDERS' MEETINGS
Section 1. Annual Meeting............................... 1
Section 2. Special Meetings............................. 1
Section 3. Notice of Meetings and Adjourned Meetings.... 1
Section 4. Quorum....................................... 1
Section 5. Organization................................. 2
Section 6. Voting....................................... 2
Section 7. Stockholders Entitled to Vote................ 2
Section 8. Order of Business............................ 2
Section 9. Action by Written Consent.................... 2
ARTICLE III. DIRECTORS
Section 1. Management................................... 3
Section 2. Number and Term.............................. 3
Section 3. Quorum and Manner of Action.................. 3
Section 4. Vacancies.................................... 3
Section 5. Resignations................................. 3
Section 6. Removals..................................... 3
Section 7. Annual Meetings.............................. 3
Section 8. Regular Meetings............................. 4
Section 9. Special Meetings............................. 4
Section 10. Organization of Meetings..................... 4
Section 11. Place of Meetings............................ 4
Section 12. Compensation of Directors.................... 4
Section 13. Action by Unanimous Written Consent.......... 4
Section 14. Participation in Meetings by Telephone....... 4
ARTICLE IV. COMMITTEES OF THE BOARD
Section 1. Membership and Authorities................... 4
Section 2. Minutes...................................... 4
Section 3. Vacancies.................................... 5
Section 4. Telephone Meetings........................... 5
Section 5. Action Without Meeting....................... 5
ARTICLE V. OFFICERS
Section 1. Number and Title............................. 5
Section 2. Term of Office; Vacancies.................... 5
Section 3. Removal of Elected Officers.................. 5
Section 4. Resignations................................. 5
Section 5. The Chairman of the Board.................... 5
Section 6. Chief Executive Officer...................... 5
Section 7. President.................................... 6
Section 8. Vice Presidents.............................. 6
<PAGE>
ARTICLE V. OFFICERS (cont'd.)
Section 9. Secretary.................................... 6
Section 10. Treasurer.................................... 6
Section 11. Controller................................... 6
Section 12. Chief Tax Officer............................ 6
Section 13. Auditor...................................... 6
Section 14. Assistant Secretaries........................ 6
Section 15. Assistant Treasurers......................... 7
Section 16. Subordinate Officers......................... 7
Section 17. Salaries and Compensation.................... 7
ARTICLE VI. INDEMNIFICATION
Section 1. Indemnification of Directors and Officers.... 7
ARTICLE VII. CAPITAL STOCK
Section 1. Certificates of Stock........................ 8
Section 2. Lost Certificates............................ 9
Section 3. Fixing Date for Determination of Stockholders 9
of Record for Certain Purposes............. 9
Section 4. Dividends.................................... 9
Section 5. Registered Stockholders...................... 9
Section 6. Transfer of Stock............................ 9
Section 7. Transfer to Voting Trust..................... 9
Section 8. Stockholders' Agreement...................... 10
Section 9. Restriction on Transfer...................... 10
Section 10. Repurchase of Shares......................... 10
Section 11. Additional Stockholders...................... 11
ARTICLE VIII. MISCELLANEOUS PROVISIONS
Section 1. Corporate Seal............................... 11
Section 2. Fiscal Year.................................. 11
Section 3. Checks, Drafts, Notes........................ 11
Section 4. Notice and Waiver of Notice.................. 11
ARTICLE IX. AMENDMENTS
Section 1. Amendment.................................... 11
<PAGE>
IP FOREST RESOURCES COMPANY
B Y L A W S
ARTICLE I
OFFICES
SECTION 1. PRINCIPAL OFFICE. The principal office of the Corporation
shall be in the County of Westchester, State of New York.
SECTION 2. REGISTERED OFFICE. The registered office of the Corporation
required by the Delaware General Corporation Law to be maintained in the State
of Delaware, may be, but need not be, identical with the principal office, and
the address of the registered office may be changed from time to time by the
Board of Directors.
SECTION 3. OTHER OFFICES. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
STOCKHOLDERS' MEETINGS
SECTION 1. ANNUAL MEETING. The annual meeting of the holders of shares of
each class or series of stock as are entitled to notice thereof and to vote
thereat pursuant to applicable law and the Certificate of Incorporation for the
purpose of electing directors and transacting such other proper business as may
come before it shall be held in each year, commencing with the year 1985, on the
second Tuesday in April, if not a legal holiday, or if a legal holiday, then on
the next succeeding business day. Such meeting may be held within or without the
State of Delaware.
SECTION 2. SPECIAL MEETINGS. In addition to such special meetings as are
provided by law or the Certificate of Incorporation, special meetings of the
holders of any class or series or of all classes or series of the Corporation's
stock, for any purpose or purposes, may be called at any time by the Board of
Directors and may be held on such day, at such time and at such place, within or
without the State of Delaware, as shall be designated by the Board of Directors.
SECTION 3. NOTICE OF MEETINGS AND ADJOURNED MEETINGS. Except as otherwise
provided by law, written notice of any meeting of Stockholders shall be given
either by personal delivery or by mail to each Stockholder of record entitled to
vote thereat. Notice of each meeting shall be in such form as is approved by the
Board of Directors and shall state the date, place and hour of the meeting, and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Unless otherwise provided by law, such written notice shall be given
not less than ten (10) nor more than sixty (60) days before the date of the
meeting. Except when a Stockholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
on the ground that the meeting is not lawfully called or convened, presence in
person or by proxy of a Stockholder shall constitute a waiver of notice of such
meeting. Except as otherwise provided by law, the business that may be
transacted at any such meeting shall be limited to and consist of the purpose or
purposes stated in such notice. If a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the adjournment is for more than 30 days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each Stockholder of record entitled
to vote at the meeting.
SECTION 4. QUORUM. Except as otherwise provided by law or by the
Certificate of Incorporation, the holders of a majority of the Corporation's
stock issued and outstanding and entitled to vote at a meeting, present in
person or represented by proxy, without regard to class or series, shall
constitute a quorum at all meetings of the Stockholders for the transaction of
business. If, however, such quorum shall not be present or represented at
<PAGE>
any meeting of the Stockholders, the holders of a majority of such shares of
stock, present in person or represented by proxy, may adjourn any meeting from
time to time without notice other than announcement at the meeting, except as
otherwise required by these Bylaws, until a quorum shall be present or
represented. At any such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally called.
SECTION 5. ORGANIZATION. Meetings of the Stockholders shall be presided
over by the Chairman of the Board of Directors, if one shall be elected, or in
his absence, by the President or by any Vice President, or, in the absence of
any of such officers, by a chairman to be chosen by a majority of the
Stockholders entitled to vote at the meeting who are present in person or by
proxy. The Secretary, or, in his absence, any Assistant Secretary or any person
appointed by the Chairman, shall act as secretary of all meetings of the
Stockholders.
SECTION 6. VOTING. Each Stockholder of record, as determined pursuant to
Section 7 of this Article II, and who is entitled to vote in accordance with the
terms of the Certificate of Incorporation and in accordance with the provisions
of these Bylaws, shall be entitled to one vote, in person or by proxy, for each
share of stock registered in his name on the books of the Corporation. Every
Stockholder entitled to vote at any Stockholders' meeting may authorize another
person or persons to act for him by proxy duly appointed by instrument in
writing subscribed by such Stockholder and executed not more than three (3)
years prior to the meeting, unless the proxy provides for a longer period. A
duly executed proxy shall be irrevocable if it states that it is irrevocable and
if, and only so long as, it is coupled with an interest sufficient in law to
support an irrevocable power. The attendance at any meeting of a Stockholder who
may have theretofore given a proxy shall not have the effect of revoking such
proxy unless such Stockholder shall in writing so notify the Secretary of the
meeting prior to the voting of the proxy. Election of directors shall be by
written ballot but, unless otherwise provided by law, no vote on any question
before the meeting need be by ballot unless the Chairman of the meeting shall
determine that it shall be by ballot or the holders of a majority of the shares
of stock present in person or by proxy and entitled to participate in such vote
shall so demand. In a vote by ballot, each ballot shall state the number of
shares voted and the name of the Stockholder or proxy voting. Except as
otherwise provided by law, by the Certificate of Incorporation or these Bylaws,
all elections of directors and all other matters before the Stockholders shall
be decided by the vote of the holders of a majority of the shares of stock
present in person or by proxy at the meeting and entitled to vote in the
election or on the question. In the election of directors, votes may be
cumulated as provided in the Certificate of Incorporation.
SECTION 7. STOCKHOLDERS ENTITLED TO VOTE. The Board of Directors may fix
a date not more than sixty (60) days nor less than ten (10) days prior to the
date of any meeting of Stockholders, or, in the case of corporate action by
written consent in accordance with the terms of Section 9 of this Article II,
not more than sixty (60) days prior to such action, as a record date for the
determination of the Stockholders entitled to notice of and to vote at such
meeting and any adjournment thereof, or to act by written consent, and in such
case such Stockholders and only such Stockholders as shall be Stockholders of
record on the date so fixed shall be entitled to notice of and to vote at, such
meeting and any adjournment thereof, or to act by written consent, as the case
may be, notwithstanding any transfer of any stock on the books of the
Corporation after such record date fixed as aforesaid.
SECTION 8. ORDER OF BUSINESS. The order of business at all meetings of
Stockholders shall be as determined by the Chairman of the meeting or as is
otherwise determined by the vote of the holders of a majority of the shares of
stock present in person or by proxy and entitled to vote without regard to class
or series at the meeting.
SECTION 9. ACTION BY WRITTEN CONSENT. Unless otherwise provided by law or
the Certificate of Incorporation, any action required or permitted to be taken
by the Stockholders of the Corporation may be taken without notice and an actual
meeting 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.
Except as provided above, no action shall be taken by the Stockholders by
written consent.
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ARTICLE III
DIRECTORS
SECTION 1. MANAGEMENT. The property, affairs and business of the
Corporation shall be managed by or under the direction of its Board of Directors
which may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by law, by the Certificate of Incorporation or by
these Bylaws directed or required to be exercised or done by the Stockholders.
SECTION 2. NUMBER AND TERM. The Board of Directors shall consist of five
(5) members who shall be elected annually by the Stockholders except as provided
in Section 4 of this Article III. From and after five (5) days following the
occurrence of a Triggering Event (as such term is defined in the Certificate of
Incorporation), each Director must be a holder of Class B Common Stock to
qualify as a Director.
SECTION 3. QUORUM AND MANNER OF ACTION. At all meetings of the Board of
Directors a majority of the total number of directors holding office shall
constitute a quorum for the transaction of business and the act of a majority of
the directors present at any meeting at which there is a quorum shall be the act
of the Board of Directors, except as may be otherwise specifically provided by
law, by the Certificate of Incorporation or these Bylaws. 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 such adjourned meeting. Attendance by a director at a meeting shall
constitute a waiver of notice of such meeting except where a director attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
SECTION 4. VACANCIES. Except as otherwise provided by law and the
Certificate of Incorporation, in the case of any vacancy in the Board of
Directors, however created, the vacancy or vacancies may be filled by majority
vote of the directors remaining on the whole Board although less than a quorum,
or by a sole remaining director. In the event one or more directors shall
resign, effective at a future date, such vacancy or vacancies shall be filled as
provided herein. Directors so chosen or elected shall hold office for the
remaining term of the directorship to which appointed. Any director elected or
chosen as provided herein shall serve for the unexpired term of office or until
his successor is elected and qualified or until his earlier resignation or
removal.
SECTION 5. RESIGNATIONS. A director may resign at any time upon written
notice of resignation to the Corporation. Any resignation shall be effective
immediately unless a certain effective date is specified therein, in which event
it will be effective upon such date. Acceptance of any resignation shall not be
necessary to make it effective.
SECTION 6. REMOVALS. The entire Board of Directors may be removed with or
without cause, and other persons may be elected to serve for the remainder of
their term, by the holders of a majority of the shares of the Corporation
entitled to vote in the election of directors. If less than the entire Board of
Directors is to be removed, no director may be removed without cause if the
votes cast against his removal would be sufficient to elect him if then
cumulatively voted at an election of the entire Board of Directors. In case any
vacancy so created shall not be filled by the Stockholders at the meeting at
which the vacancy is created, such vacancy may be filled by the directors as
provided in Section 4 of this Article III.
SECTION 7. ANNUAL MEETINGS. The annual meeting of the Board of Directors
shall be held, if a quorum be present, immediately following each annual meeting
of the Stockholders at the place such meeting of Stockholders took place, for
the purpose of organization and transaction of any other business that might be
transacted at a regular meeting thereof, and no notice of such meeting shall be
necessary. If a quorum is not present, such annual meeting may be held at any
other time or place that may be specified in a notice given in the manner
provided in Section 9 of this Article III for special meetings of the Board of
Directors or in a waiver of notice thereof.
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SECTION 8. REGULAR MEETINGS. 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. Except as otherwise
provided by law, any business may be transacted at any regular meeting of the
Board of Directors.
SECTION 9. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the President at any time, or by the Secretary on the written
request of one-third ( 1/3) of the members of the whole Board stating the
purpose or purposes of such meeting. Notices of special meetings, if mailed,
shall be mailed to each director not later than (2) days before the day the
meeting is to be held or if otherwise given in the manner permitted by the
Bylaws, not later than the day before such meeting. Neither the business to be
transacted at, nor the purpose of, any special meeting need be specified in any
notice or written waiver of notice unless so required by the Certificate of
Incorporation or by the Bylaws and, unless limited by law, the Certificate of
Incorporation or by these Bylaws, any and all business may be transacted at a
special meeting.
SECTION 10. ORGANIZATION OF MEETINGS. At any meeting of the Board of
Directors, business shall be transacted in such order and manner as such Board
may from time to time determine, and all matters shall be determined by the vote
of a majority of the directors present, except as otherwise provided by these
Bylaws or required by law.
SECTION 11. PLACE OF MEETINGS. The Board of Directors may hold their
meetings and have one or more offices, and keep the books of the Corporation,
outside the State of Delaware, at any office or offices of the Corporation, or
at any other place as they may from time to time by resolution determine.
SECTION 12. COMPENSATION OF DIRECTORS. Directors shall be entitled to
reasonable compensation for their services. They may be paid a fixed salary and
may also receive a fee for attendance at any meeting of the Board of Directors
or of any Committee of the Board. The amount of compensation shall be determined
by resolution of the Board. Nothing herein contained shall preclude any director
from serving in any other capacity and receiving compensation therefor.
SECTION 13. ACTION BY UNANIMOUS WRITTEN CONSENT. Unless otherwise
restricted by law, the Certificate of Incorporation or these Bylaws, any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if prior to such action all
members of the Board of Directors or of such committee, as the case may be,
consent thereto in writing and the writing or writings are filed with the
minutes of proceedings of the Board of Directors or the committee.
SECTION 14. PARTICIPATION IN MEETINGS BY TELEPHONE. Unless otherwise
restricted by the Certificate of Incorporation or these Bylaws, members of the
Board of Directors or of any committee thereof may participate in a meeting of
such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in a meeting in such manner shall
constitute presence in person at such meeting.
ARTICLE IV
COMMITTEES OF THE BOARD
SECTION 1. MEMBERSHIP AND AUTHORITIES. The Board of Directors may, by
resolution or resolutions passed by a majority of the whole Board, designate two
(2) or more Directors to constitute an Executive Committee and such other
committees as the Board may determine, each of which committees, to the extent
provided in said resolution or resolutions or in these Bylaws, shall have and
may exercise all the powers of the Board of Directors in the management of the
business and affairs of the Corporation, except in those cases where the
authority of the Board of Directors is specifically denied to the Executive
Committee or such other committee or committees by law, the Certificate of
Incorporation or these Bylaws, and may authorize the seal of the Corporation to
be affixed to all papers that may require it. The designation of an Executive
Committee or other committee and the delegation thereto of authority shall not
operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed upon it or him by law.
SECTION 2. MINUTES. Each committee designated by the Board shall keep
regular minutes of its proceedings and report the same to the Board when
required.
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SECTION 3. VACANCIES. The Board of Directors may designate one (1) or
more of its members as alternate members of any committee who may replace any
absent or disqualified member at any meeting of such committee. The Board of
Directors shall have the power at any time to fill vacancies in, to change the
membership of and to dissolve any committee.
SECTION 4. TELEPHONE MEETINGS. Members of any committee designated by the
Board may participate in or hold a meeting by use of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other. Participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting, except where a
person participates in the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting is not lawfully called or convened.
SECTION 5. ACTION WITHOUT MEETING. Any action required or permitted to be
taken at a meeting of any committee designated by the Board may be taken without
a meeting if a consent in writing, setting forth the action so taken, is signed
by all the members of the committee, and such consent shall have the same force
and effect as a unanimous vote at a meeting.
ARTICLE V
OFFICERS
SECTION 1. NUMBER AND TITLE. The Chief Executive Officer, the President,
the Secretary and the Treasurer shall be chosen by the Board of Directors. The
Chief Executive Officer, in addition to the powers and duties set forth below,
shall have the authority, subject to quarterly review of the Board of Directors,
to designate one or more Vice Presidents, a Controller, a Chief Tax Officer, an
Auditor, Assistant Secretaries and/or Assistant Treasurers of the Corporation.
One person may hold any two or more of these offices, except that no one person
may hold both the offices of President and Secretary or of President and
Treasurer.
SECTION 2. TERM OF OFFICE; VACANCIES. So far as is practicable, the
election of officers by the Board of Directors shall take place at the annual
meeting of the Board of Directors following the annual meeting of shareholders
in each year, except as otherwise provided in this Article V, Section 1, and
shall hold office until the next such meeting of the Board of Directors in the
subsequent year and until their respective successors are elected and qualify or
until their earlier resignation or removal. All officers holding office pursuant
to Section 1 of Article V shall hold office at the pleasure of the Board of
Directors or the Chief Executive Officer. If any vacancy shall occur in any
office, as set forth in Article V, Section 1, the Board of Directors may elect
or the Chief Executive Officer may appoint, a successor to fill such vacancy for
the remainder of the term of said office.
SECTION 3. REMOVAL OF OFFICERS. Any officer elected or appointed in
accordance with Article V, Section 1, may be removed at any time, either for or
without cause, by affirmative vote of a majority of the whole Board of
Directors, at any regular meeting or at any special meeting called for such
purpose or at the discretion of the Chief Executive Officer of the Corporation.
SECTION 4. RESIGNATIONS. Any officer may resign at any time upon written
notice of resignation to the Chief Executive Officer, President or Secretary of
the Corporation. Any resignation shall be effective immediately unless a certain
date is specified for it to take effect, in which event it shall be effective
upon such date, and acceptance of any resignation shall not be necessary to make
it effective, irrespective of whether the resignation is tendered subject to
such acceptance.
SECTION 5. THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if one
shall be elected, shall preside at all meetings of the Stockholders and Board of
Directors. In addition, the Chairman of the Board shall perform whatever duties
and shall exercise all powers that are given to him by the Board of Directors.
SECTION 6. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
have general charge of the business of the Corporation and the power to
formulate all plans and policies in connection therewith, subject to the control
of the Board of Directors. He shall keep the Board of Directors fully informed
and shall freely consult with the Board concerning the business of the
Corporation. He shall have such other powers and perform such other duties as
may, from time to time, be specified by the Board of Directors.
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SECTION 7. PRESIDENT. The President shall have such powers and perform
such duties as may, from time to time, be specified by the Board of Directors or
by the Chief Executive Officer of the Corporation. He shall be subject to the
control of the Board of Directors and to the powers of the Chief Executive
Officer of the Corporation.
SECTION 8. VICE PRESIDENTS. The several Vice Presidents shall have such
powers and duties as may be assigned to them by these By-laws and as may from
time to time be assigned to them by the Board of Directors or the Chief
Executive Officer of the Corporation and may sign, with any other proper
officer, certificates for shares of the Corporation.
SECTION 9. SECRETARY. The Secretary, if available, shall attend all
meetings of the Board of Directors and all meetings of the Stockholders and
record the proceedings of the meetings in a book to be kept for that purpose and
shall perform the duties for any committee of the Board of Directors as shall
designate him to serve. He shall give, or cause to be given, notice of all
meetings of the Stockholders and meetings of the Board of Directors and
committees thereof and shall perform such other duties incident to the office of
Secretary or as may be prescribed by the Board of Directors or the Chief
Executive Officer under whose supervision he shall be. He shall have custody of
the corporate seal of the Corporation and he, or any Assistant Secretary, or any
other person whom the Board of Directors or the Chief Executive Officer may
designate, shall have authority to affix the same to any instrument requiring
it, and when so affixed it may be attested by his signature or by the signature
of any Assistant Secretary or by the signature of such other person so affixing
such seal.
SECTION 10. TREASURER. The Treasurer shall have the custody of and be
responsible for the corporate funds and securities, shall keep full and accurate
accounts of receipts and disbursements in the books belonging to the Corporation
and shall deposit all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors. He shall disburse the funds of the Corporation as may be ordered
by the Board of Directors, taking proper vouchers for such disbursements, and
shall render to the Chief Executive Officer and the Board of Directors, at its
regular meetings, or when the Board of Directors so requires, an account of all
his transactions as Treasurer and of the financial condition of the Corporation
and he shall perform all other duties incident to the position of the Treasurer,
or as may be prescribed by the Board of Directors or the Chief Executive
Officer. If required by the Board of Directors, he shall give the Corporation a
bond in such sum and with such surety or sureties as shall be satisfactory to
the Board of Directors for the faithful performance of his duties of his office
and for the restoration to the Corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the Corporation.
SECTION 11. CONTROLLER. The Controller shall be the accounting officer of
the Corporation. He shall keep adequate and correct accounts of the
Corporation's business transactions (except those kept by the Treasurer as
herein provided), including accounts of its assets, liabilities, gains, losses,
stated capital and shares. He shall prepare and lay before the stockholders'
meetings the data referred to herein, and shall mail copies of such data as
required to any stockholder requesting same. He shall have such other powers and
perform such other duties as are assigned to or vested in him by the Board of
Directors or the Chief Executive Officer.
SECTION 12. CHIEF TAX OFFICER. The Chief Tax Officer shall have
responsibility for all tax matters of the Corporation, subject to control of the
Board of Directors or the Chief Executive Officer, and shall have such powers
and perform such other duties as the Board of Directors or the Chief Executive
Officer may from time to time direct.
SECTION 13. AUDITOR. If an Auditor shall have been elected, he shall have
full charge of the auditing of all accounts of every kind, subject to the
control of the Board of Directors or the Chief Executive Officer, and shall also
perform such other duties as the Board of Directors or the Chief Executive
Officer of the Corporation may from time to time direct.
SECTION 14. ASSISTANT SECRETARIES. Each Assistant Secretary shall have
the usual powers and duties pertaining to his office, together with such other
powers and duties as may be assigned to him by the Board of Directors, the Chief
Executive Officer, the President or the Secretary. The Assistant Secretary or
such other person as may be designated by the Chief Executive Officer shall
exercise the powers of the Secretary during that officer's absence or inability
to act.
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SECTION 15. ASSISTANT TREASURERS. Each Assistant Treasurer shall have the
usual powers and duties pertaining to his office, together with such other
powers and duties as may be assigned to him by the Board of Directors, the Chief
Executive Officer, the President or the Treasurer. The Assistant Treasurer or
such other person designated by the Chief Executive Officer shall exercise the
power of the Treasurer during that officer's absence or inability to act.
SECTION 16. SUBORDINATE OFFICERS. Each of the Board of Directors and the
Chief Executive Officer shall have the authority to (a) appoint such other
subordinate officers and agents as it shall deem necessary who shall hold their
offices for such terms, have such authority and perform such duties as the Board
of Directors or the Chief Executive Officer may, from time to time, determine in
accordance with this Article V, or (b) delegate to any committee or other
authorized officer pursuant to Article V, Section 1, the power to appoint any
such subordinate officers or agents.
SECTION 17. SALARIES AND COMPENSATION. The salary or other compensation
of officers shall be fixed from time to time by the Board of Directors or the
Chief Executive Officer. The Board of Directors or the Chief Executive Officer
may delegate to any committee or officer the power to fix from time to time the
salary or other compensation of subordinate officers and agents appointed in
accordance with the provisions of Section 16 of this Article V.
ARTICLE VI
INDEMNIFICATION
SECTION 1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (a) The Corporation
shall indemnify any person who was or is a witness or a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Corporation) by reason of the fact that such
person is or was, at any time prior to or during which this Article VI is in
effect, a director, officer, employee or agent of the Corporation, or is or was,
at any time prior to or during which this Article VI is in effect, serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan against reasonable expenses (including attorneys' fees),
judgments, fines, penalties, amounts paid in settlement and other liabilities
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that such person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that he had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a witness, a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was, at any
time prior to or during which this Article VI is in effect, a director, officer,
employee or agent of the Corporation, or is or was, at any time prior to or
during which this Article VI is in effect, serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against reasonable
expenses (including attorneys' fees) and amounts paid in settlement, actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Corporation, and if, with respect to the amounts paid in settlement, the
settlement is determined to be in the best interests of the Corporation;
provided, however, that no indemnification shall be made under this subsection
(b) in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable for gross negligence, recklessness or willful
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Delaware Court of Chancery, or other court of appropriate
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to the indemnity of such expenses which the
Delaware Court of Chancery, or other court of appropriate jurisdiction, shall
deem proper.
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(c) Any indemnification under subsections (a) or (b) (unless ordered by the
Delaware Court of Chancery or other court of appropriate jurisdiction) shall be
made by the Corporation only as authorized in the specific case upon a
determination that indemnification of such person is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(a) and (b). Such determination shall be made (1) by the Board of Directors by a
majority vote of a quorum consisting of directors not parties to such action,
suit or proceeding; or (2) if such a quorum is not obtainable, or, even if
obtainable if a quorum of disinterested directors so directs, by independent
legal counsel, selected by the Board of Directors; or (3) by the Stockholders.
In the event a determination is made under this subsection (c) that the director
or officer has met the applicable standard of conduct as to some matters but not
as to others, amounts to be indemnified may be reasonably prorated.
(d) Expenses incurred in appearing at, participating in or defending any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, shall be paid by the Corporation at
reasonable intervals in advance of the final disposition of such action, suit or
proceeding as authorized by the Board of Directors in the specific case upon
receipt of an undertaking by or on behalf of the director, officer, employee or
agent to repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized by this Article VI.
(e) It is the intention of the Corporation to indemnify the persons
referred to in this Article VI to the fullest extent permitted by law and with
respect to any action, suit or proceeding arising from events which occur at any
time prior to or during which this Article VI is in effect. The indemnification
provided by this Article VI shall not be deemed exclusive of any other rights to
which those seeking indemnification may be or become entitled under any law, the
Certificate of Incorporation, agreement, vote of Stockholders or disinterested
directors or otherwise, or under any policy or policies of insurance purchased
and maintained by the Corporation on behalf of any such person, both as to
action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director or officer and shall inure to the benefit of the heirs, executors and
administrators of such person.
(f) The indemnification provided by this Article VI shall be subject to all
valid and applicable laws, and, in the event this Article VI or any of the
provisions hereof or the indemnification contemplated hereby are found to be
inconsistent with or contrary to any such valid laws, the latter shall be deemed
to control and this Article VI shall be regarded as modified accordingly, and,
as so modified, to continue in full force and effect.
ARTICLE VII
CAPITAL STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates of stock shall be issued to
each Stockholder certifying the number of shares owned by him in the Corporation
and shall be in a form not inconsistent with the Certificate of Incorporation
and as approved by the Board of Directaors. The certificates shall be signed by
the President or a Vice President and by the Secretary or an Assistant
Secretary, or the Treasurer or an Assistant Treasurer and may be sealed with the
seal of the Corporation or a facsimile thereof. Any or all of the signatures on
the certficate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
If the Corporation shall be authorized to issue more than one (1) class of
stock or more than one (1) series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided by statute, in lieu of the foregoing requirements, there may
be set forth on the face or back of the certificate which the Corporation shall
issue to represent such class or series of stock, a statement that the
Corporation will furnish without charge to each Stockholder who so requests the
powers, designations, preferences and relative, participating, optional or
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other special rights of each class of stock or series thereof and the
qualifications, limitations or restrictions of such preferences and/or rights.
SECTION 2. LOST CERTIFICATES. The Board of Directors may direct a new
certificate to be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost, stolen or destroyed, upon the making of
an affidavit of that fact by the owner of such certificate, or his legal
representative. When authorizing such issue of a new certificate, the Board of
Directors may in its discretion as a condition precedent to the issue thereof
require the owner, or his legal representative, to give a bond in such form and
substance with such surety as it may direct, to indemnify the Corporation
against any claim that may be made on account of the alleged loss, theft or
destruction of such certificate or the issuance of such new certificate.
SECTION 3. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD FOR
CERTAIN PURPOSES. (a) In order that the Corporation may determine the
Stockholders entitled to notice of or to vote at any meeting of Stockholders or
any adjournment thereof, or entitled to express consent to corporate action in
writing without a meeting, or entitled to receive payment of any dividend or
other distribution or allotment of any rights, or entitled to exercise any
rights in respect of any change, conversion or exchange of capital stock or for
the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall be not more than sixty (60) days prior to
the date of payment of such dividend or other distribution or allotment of such
rights or the date when any such rights in respect of any change, conversion or
exchange of stock may be exercised or the date of such other action. In such
case, only such Stockholders of record on the date so fixed shall be entitled to
receive any such dividend or other distribution or allotment of rights or to
exercise such rights or for any other purpose, as the case may be,
notwithstanding any transfer of any stock on the books of the Corporation after
any such record date fixed as aforesaid.
(b) If no record date is fixed, the record date for determining
Stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
SECTION 4. DIVIDENDS. Subject to the provisions of the Certificate of
Incorporation, if any, and except as otherwise provided by law, the directors
may declare dividends upon the capital stock of the Corporation as and when they
deem it to be expedient. Such dividends may be paid in cash, in property or in
shares of the Corporation's capital stock. Before declaring any dividend there
may be set apart out of the funds of the Corporation available for dividends,
such sum or sums as the directors from time to time in their discretion think
proper for working capital or as a reserve fund to meet contingencies or for
equalizing dividends, or for such other purposes as the directors shall think
conducive to the interests of the Corporation, and the directors may modify or
abolish any such reserve in the manner in which it was created.
SECTION 5. REGISTERED STOCKHOLDERS. Except as expressly provided by law,
the Certificate of Incorporation and these Bylaws, the Corporation shall be
entitled to treat registered Stockholders as the only holders and owners in fact
of the shares standing in their respective names, and the Corporation shall not
be bound to recognize any equitable or other claim to or interest in such shares
on the part of any other person, whether or not it shall have express or other
notice thereof.
SECTION 6. TRANSFER OF STOCK. Transfers of shares of the capital stock of
the Corporation shall be made only on the books of the Corporation by the
registered owners thereof, or by their legal representatives or their duly
authorized attorneys, and upon such transfers the old certificates shall be
surrendered to the Corporation by the delivery thereof to the person in charge
of the stock transfer books and ledgers, by whom they shall be cancelled and new
certificates shall thereupon be issued.
SECTION 7. TRANSFER TO VOTING TRUST. Each person who purchases shares of
Class B Common Stock of the Corporation at any time after the occurrence of a
Triggering Event shall execute and become a party to a voting trust agreement
among the Corporation, all of the holders of Class B Common Stock and the
trustee of the voting trust substantially in the form appended hereto from time
to time as Exhibit 'A' ('Voting Trust Agreement'). Each of the persons who
purchases any such shares shall deposit the certificates for the shares with the
trustee of the voting trust pursuant to the Voting Trust Agreement and shall be
issued a voting trust certificate ('Voting Trust Certificate') representing the
issuee's beneficial interest in the shares deposited.
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SECTION 8. STOCKHOLDERS' AGREEMENT. Each person who purchases shares of
Class B Common Stock of the Corporation at any time after the occurrence of a
Triggering Event shall execute and become a party to a stockholders' agreement
among the Corporation, all of the holders of Class B Common Stock and the voting
trust substantially in the form appended hereto from time to time as Exhibit 'B'
('Stockholders' Agreement'), pursuant to which the transfer of shares of the
Corporation will be restricted.
SECTION 9. RESTRICTION ON TRANSFER. Except as set forth in these Bylaws,
the Certificate of Incorporation, the Voting Trust Agreement or the
Stockholders' Agreement, no holder of Class B Common Stock or holder of a Voting
Trust Certificate shall sell, directly or indirectly, assign, transfer, convey,
pledge, hypothecate, give a security interest in, encumber, give, or otherwise
dispose or attempt to dispose of any of the shares of Class B Common Stock of
the Corporation or any interest therein, including any interest represented by a
Voting Trust Certificate. Any purported sale or other transfer of any shares of
Class B Common Stock, any Voting Trust Certificate or any interest therein
contrary to these Bylaws, the Certificate of Incorporation, the Voting Trust
Agreement or the Stockholders' Agreement shall be null and void and the
purported purchaser or other transferee shall acquire no interest whatsoever in
the shares or Voting Trust Certificate.
SECTION 10. REPURCHASE OF SHARES. (a) At any time after the occurrence of a
Triggering Event, any of the following events will constitute a 'Transfer Event'
as to any stockholder (other than the trustee of the voting trust in its
capacity as trustee) or holder of a Voting Trust Certificate:
(i) that person ceases to be a director of the Corporation for any
reason;
(ii) that person fails to re-execute the Voting Trust Agreement, as
provided in the Voting Trust Agreement, as it may be amended from time to
time;
(iii) any shares of that person are levied upon under a writ of
execution, become subject to sale under any legal process, are transferred
or ordered to be transferred to or for the benefit of any person or entity
as a result of or in connection with any final property settlement or
judgment incident to a divorce, dissolution of marriage or separation or
are transferred or ordered to be transferred to any person by decree of
distribution or other court order in proceedings arising from the death of
the spouse of that person (on and as of the date of such levy, legal
process, settlement, judgment, decree or order);
(iv) a transfer or attempted or purported transfer in violation of
Section 9 of this Article VII occurs;
(v) that person's spouse fails to sign any consent which may be
required; or
(vi) that person materially breaches the Stockholders' Agreement or
the Voting Trust Agreement.
(b) Upon the occurrence of any Transfer Event:
(i) the stockholder or holder of the Voting Trust Certificate shall
promptly notify the Corporation of the Transfer Event;
(ii) the beneficial owner of the shares subject to the Transfer Event
shall resign immediately as a director of the Corporation; and
(iii) the Corporation shall purchase (or otherwise direct the sale of)
all shares owned by the stockholder or holder of a Voting Trust Certificate
in accordance with Sections 10(c) and 10(d) of this Article VII within one
calendar month from the Transfer Event and the Corporation shall use its
best efforts to repurchase (or otherwise direct the sale of) such shares as
soon as possible after the Transfer Event.
(c) The Corporation shall repurchase the shares of a stockholder as
follows:
(i) The purchase price per share repurchased by the Corporation shall
be $100.00 per share, as adjusted to reflect splits, recapitalizations or
like events.
(ii) Subject to Section 10(b)(iii) of this Article VII the shares
shall be repurchased at such time or times as the Corporation shall
determine. In connection with any such repurchase the stockholder or holder
of a Voting Trust Certificate shall immediately cause his or her shares
which are being repurchased to be withdrawn from the voting trust and
surrendered to the Corporation for cancellation.
10
<PAGE>
(d) Notwithstanding anything to the contrary herein, the Corporation may
approve or require the sale of the shares by the beneficial owner of the shares
directly to his or her successor as director at a price equal to that set forth
in Section 4.3(a)(i) of the Stockholders' Agreement.
SECTION 11. ADDITIONAL STOCKHOLDERS. Any person who becomes a director and
thereupon acquires shares of Class B Common Stock of the Corporation shall
contribute all of such shares to the voting trust described in Section 7 of this
Article VII, and shall execute and become a party to the Voting Trust Agreement,
the Stockholders' Agreement and any other agreement among all of the holders of
Class B Common Stock or Voting Trust Certificates.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 1. CORPORATE SEAL. If one be adopted, the corporate seal shall have
inscribed thereon the name of the Corporation and shall be in such form as may
be approved by the Board of Directors. Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner reproduced.
SECTION 2. FISCAL YEAR. The fiscal year of the Corporation shall begin on
January 1 and end on the next following December 31.
SECTION 3. CHECKS, DRAFTS, NOTES. 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 from time to time be
determined by resolution (whether general or special) of the Board of Directors
or may be prescribed by any officer or officers, or any officer and agent
jointly, thereunto duly authorized by the Board of Directors.
SECTION 4. NOTICE AND WAIVER OF NOTICE. Whenever notice is required to be
given to any director or Stockholder under the provisions of applicable law, the
Certificate of Incorporation or these Bylaws it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or Stockholder at his address as it appears on the records of the
Corporation, with postage thereon prepaid (unless prior to the mailing of such
notice he shall have filed with the Secretary a written request that notices
intended for him be mailed to some other address, in which case such notice
shall be mailed to the address designated in the request), and such notice shall
be deemed to be given at the time when the same shall be deposited in the United
States mail. Notice to directors may also be given by telegram, cable or other
form of recorded communication or by personal delivery or by telephone. Whenever
notice is required to be given under any provision of law, the Certificate of
Incorporation or these Bylaws, a waiver thereof in writing or by telegraph,
cable or other form of recorded communication, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting at the beginning of the meeting, to
the transaction of any business on the ground that the meeting is not lawfully
called or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Stockholders, directors, or members of
a committee of directors need be specified in any written waiver of notice
unless so required by the Certificate of Incorporation or these Bylaws.
ARTICLE IX
AMENDMENTS
SECTION 1. AMENDMENT. Except as otherwise expressly provided in a bylaw
adopted by the Stockholders as hereinafter provided, the directors, by the
affirmative vote of a majority of the entire Board and without the assent or
vote of the Stockholders, may at any meeting, provided the substance of the
proposed amendment shall have been stated in the notice of the meeting, make,
repeal, alter, amend or rescind any of these Bylaws. The Stockholders shall not
make, repeal, alter, amend or rescind any of the provisions of these Bylaws
except by affirmative vote of the holders of not less than a majority of the
shares of stock of the Corporation entitled to vote for the election of
directors, considered for purposes of this Article IX as one class.
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Exhibit 27
This schedule contains summary financial information extracted from the
Consolidated Statement of Earnings and the Consolidated Balance Sheet of IP
Timberlands, Ltd. and is qualified in its entirety by reference to such
financial Statements.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 7,105
<SECURITIES> 0
<RECEIVABLES> 274,333
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 281,438
<PP&E> 775,657
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,058,093
<CURRENT-LIABILITIES> 11,922
<BONDS> 0
<COMMON> 1,011,947
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,058,093
<SALES> 80,904
<TOTAL-REVENUES> 82,267
<CGS> 0
<TOTAL-COSTS> 25,515
<OTHER-EXPENSES> 637
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (7,005)
<INCOME-PRETAX> 63,120
<INCOME-TAX> 0
<INCOME-CONTINUING> 63,120
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 63,120
<EPS-PRIMARY> 1.36
<EPS-DILUTED> 1.36
</TABLE>
