SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Mark one
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the Quarterly period
ended April 2, 1995 or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission File Number 1-302
ARVIN INDUSTRIES, INC.
- -----------------------------------------------------
(Exact name of registrant as specified in its charter)
Indiana 35-0550190
- --------------------------------- ----------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Noblitt Plaza, Box 3000
Columbus, IN 47202-3000
- --------------------------------- ----------------
(Address of principal (Zip Code)
executive offices)
812-379-3000
----------------
(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 [ ]
As of May 7, 1995, the Registrant had outstanding 22,310,412
Common Shares (excluding treasury shares), $2.50 par value.
<PAGE>
Table of Contents
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Operations for the Three
Months Ended April 2, 1995 and April 3, 1994
Consolidated Statement of Financial Condition at
April 2, 1995 and January 1, 1995
Consolidated Statement of Cash Flows for the Three
Months Ended April 2, 1995 and April 3, 1994
Condensed Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Part II. Other Information
Item 6. Exhibits and Reports on Form 8K
<PAGE>
Part I.
Item 1. Financial Statements
<TABLE>
Arvin Industries, Inc.
Consolidated Statement of Operations
(Dollars in millions, except per share amounts)
<CAPTION>
Unaudited
----------------------------
Three Months Ended
----------------------------
April 2, April 3,
1995 1994
----------- -----------
<S> <C> <C>
Net Sales $ 553.4 $ 479.2
Costs and Expenses:
Cost of goods sold 481.2 406.9
Selling, operating general and administrative 44.4 47.6
Corporate general and administrative 2.1 2.5
Restructuring charges 2.1 --
Interest expense 11.5 9.6
Interest income (.6) (.5)
Other expense, net 1.4 3.6
---------- ----------
542.1 469.7
---------- ----------
Earnings from Continuing
Operations Before Income Taxes 11.3 9.5
Income taxes (4.4) (3.9)
Minority share of income (2.3) (.3)
Equity losses of affiliates (.2) (.2)
---------- ----------
Earnings from Continuing Operations 4.4 5.1
---------- ----------
Income from discontinued operations, net of
income taxes of $.0 and $.1, respectively -- .2
Income from disposal of discontinued operations,
net of income taxes of $.2 and $.0, respectively .7 --
---------- ----------
Net Earnings $ 5.1 $ 5.3
========== ==========
Earnings Per Common Share
Primary:
Continuing operations $ .20 $ .23
Discontinued operations .03 .01
---------- ----------
Total - Primary $ .23 $ .24
Fully Diluted: ========== ==========
Continuing operations $ .20 $ .23
Discontinued operations .03 .01
---------- ----------
Total -Fully Diluted $ .23 $ .24
========== ==========
Average Common Shares Outstanding (000's)
Primary 22,348 22,513
Fully Diluted 25,371 25,934
Dividends Per Common Share $ .19 $ .19
========== ==========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Arvin Industries, Inc.
Consolidated Statement of Financial Condition
(Dollars in millions, except per share amounts)
Unaudited Audited
---------- ----------
As of As of
4/2/95 1/1/95
---------- ----------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 37.1 $ 17.6
Receivables, net of allowances of $7.3 as of
April 2, 1995 and $4.8 as of January 1, 1995 338.4 302.4
Inventories 117.2 105.9
Other current assets 101.9 76.4
---------- ----------
Total current assets 594.6 502.3
---------- ----------
Non-Current Assets:
Property, plant and equipment:
Land, buildings, machinery & equipment 950.9 890.1
Less: Allowance for depreciation 490.5 458.8
---------- ----------
460.4 431.3
Goodwill, net of amortization of $27.8 as of
April 2, 1995 and $26.6 as of January 1, 1995 149.4 150.4
Investment in affiliates 78.2 91.9
Net assets of discontinued operations -- 40.8
Other assets 59.8 58.6
---------- ----------
Total non-current assets 747.8 773.0
---------- ----------
$ 1,342.4 $ 1,275.3
========== ==========
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term debt $ 80.0 $ 25.1
Accounts payable 243.1 198.7
Accrued expenses 111.5 113.5
Income taxes payable 2.9 1.5
---------- ----------
Total current liabilities 437.5 338.8
---------- ----------
Long-term employee benefits 61.2 63.5
Deferred income taxes and other liabilities 15.4 15.3
Long-term debt 364.3 416.3
Minority interest 63.4 45.1
Shareholders' Equity:
Common shares ($2.50 par value) 60.4 60.4
Capital in excess of par value 206.5 206.6
Retained earnings 194.9 194.1
Minimum pension liability adjustment (.6) (.6)
Cumulative translation adjustment (18.3) (20.7)
Common shares held in treasury (at cost) (42.3) (43.5)
---------- ----------
Total shareholders' equity 400.6 396.3
---------- ----------
$ 1,342.4 $ 1,275.3
========== ==========
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Arvin Industries, Inc.
Consolidated Statement of Cash Flows
(Dollars in millions)
(Unaudited)
-----------------------
Three Months Ended
-----------------------
April 2, April 3,
1995 1994 <F1>
-------- --------
<S> <C> <C>
Operating Activities:
Net earnings $ 5.1 $ 5.3
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 20.2 17.7
Amortization 1.5 1.7
Long-term employee benefits (1.9) ---
Deferred income taxes, long-term (2.6) (1.6)
Minority interest 2.3 0.3
Other 1.7 (4.3)
Changes in operating assets and liabilities:
Receivables (30.0) (48.7)
Inventories and other current assets (24.8) (1.7)
Accounts payable and other accrued expenses 16.6 27.2
Income taxes payable and deferred taxes 2.6 7.4
-------- --------
Net Cash Provided By/(Used For) Operating Activities (9.3) 3.3
-------- --------
Investing Activities:
Purchase of property, plant and equipment (19.0) (20.8)
Proceeds from sale of property, plant and equipment 0.8 0.1
Proceeds from sale of business segment 36.2 ---
Cash balance of previously unconsolidated subsidiary 16.9 ---
-------- --------
Net Cash Provided By/(Used For) Investing Activities 34.9 (20.7)
-------- --------
Financing Activities:
Change in short-term debt, net 3.1 12.8
Proceeds from long-term borrowings --- 75.0
Principal payments on long-term debt (8.9) (75.0)
Dividends paid (4.2) (4.2)
Other --- 0.3
-------- --------
Net Cash Provided By/(Used For) Financing Activities (10.0) 8.9
-------- --------
Cash and Cash Equivalents:
Effect of exchange rate changes on cash (0.9) (0.6)
-------- --------
Net increase/(decrease) 14.7 (9.1)
Beginning of the period 22.4 39.1
-------- --------
End of the Period $ 37.1 $ 30.0
======== ========
<F1> Certain amounts have been reclassified to conform with current year presentation.
See notes to consolidated financial statements.
</TABLE>
ARVIN INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements and
should be read in conjunction with the financial statements and
notes thereto appearing in the Company's annual report on Form
10-K for the year ended January 1, 1995.
In the opinion of management, all adjustments considered necessary
for a fair presentation of the results of operations for the periods
reported have been included. Other than the adjustment described in
note 11, all such adjustments are of normal recurring nature.
The results of operations for the three months ended April 2,
1995 are not necessarily indicative of the results to be expected
for the full year ending December 31, 1995.
Note 2. Results of operations in the first quarter of 1995
include $2.0 million restructuring charges for early retirement
program costs and $.1 million of other restructuring costs.
These costs were anticipated and disclosed as a part of the 1994
restructuring, but they were not permissible for 1994 accrual
under current accounting guidelines. Cash flows for the quarter
include $.3 million for restructuring costs which were accrued in
1994 and $.1 million of other restructuring costs accrued and
paid during the quarter. The remaining workforce reductions and
consolidation of manufacturing facilities and product lines
announced as a part of the 1994 restructuring will be
substantially complete by December 31, 1995. Seventy-three
employees terminated under early retirement during the first
quarter of 1995. The total number of employees to be separated
under the 1994 restructuring plan is now estimated to be 276.
Note 3. Effective April 14, 1994, the Company adopted a plan to
sell its Schrader Automotive unit (Schrader). Accordingly,
Schrader is reported as a discontinued operation at January 1,
1995.
In February 1995, the Company entered into a contract for the
sale of Schrader. The transaction was completed on February 16,
1995. An initial payment for the estimated selling price
of $43.0 million was received and the estimated
gain recorded during the first quarter of 1995 was
$.7 million, net of tax.
Note 4. There were options for 2.1 and 1.9 million common shares
outstanding as of April 2, 1995 and April 3, 1994, respectively.
Earnings per share calculations include dilutive options in the
determination of the weighted average common and common
equivalent shares outstanding. Interest paid, net of tax, on the
7.5 percent convertible subordinated debentures is added to net
earnings in calculating fully diluted earnings per share.
Note 5. The Company uses the method of pooling, by individual
natural inventory components (e.g., steel, substrate, labor and
overhead), in computing an overall weighted average index. The
index is applied to the total dollar value of the ending
inventory. This method of pooling makes it impractical to
classify LIFO inventories into the finished goods, work in
process and raw material components.
Note 6. During the first quarter 1995, the Company repurchased,
at approximately book value, $7.8 million of its outstanding 7.5
percent convertible subordinated debentures. The remaining 7.5
percent convertible subordinated debentures, due in 2014, are
convertible into common shares at a rate of approximately 35.09
shares for each $1,000 debenture held.
Note 7. The Company is defending various environmental claims
and legal actions that arise in the normal course of its
business, including matters in which the Company has been
designated a potentially responsible party at certain waste
disposal sites or has been notified that it may be a potentially
responsible party at other sites as to which no proceedings have
been initiated. At a majority of these sites, the information
currently available leads the Company to believe it has very
limited or even de minimis responsibility. At other sites,
neither the remediation method, amount of remediation costs nor
the allocation among potentially responsible parties has been
determined. Where reasonable estimates are possible, the Company
has provided for the costs of study, cleanup, remediation, and
certain other costs, taking into account, as applicable,
available information regarding site conditions, potential
cleanup methods and the extent to which other parties can be
expected to bear those costs.
The Company is a participant with the EPA and the current owner
of a site previously owned by the Company's Maremont subsidiary
in a corrective action proceeding under the Resource Conservation
and Environmental Recovery Act. In the fourth quarter of 1994,
based on the results of an environmental study, the Company
accrued for its share of the reasonably estimable minimum
remediation costs at this site, which include costs incurred in
connection with further studies and design of a remediation plan,
remedial costs, including cleanup activities, and administrative,
legal and consulting fees. Given the inherent uncertainties in
evaluating legal and environmental exposures, actual costs to be
incurred in future periods may vary from the currently recorded
estimates. The Company expects that any sum it may be required
to pay in connection with legal and environmental matters in
excess of the amounts recorded will not have a material adverse
effect on its financial condition.
Note 8. Arvin's Board of Directors has approved a one million
share Common Share Repurchase Program. The objective of the
program is to meet benefit plan obligations, including employee
stock options. Repurchases under the program may take place from
time to time in the market.
Note 9. Changes in Shareholders' Equity
(Dollars in millions)
For the Three
Months Ended
------------------
4/2/95 4/3/94
------- -------
Beginning balance $ 396.3 $ 420.6
Exercise of stock options 0 1.0
Cash dividends (4.2) (4.2)
Net earnings 5.1 5.3
Translation adjustments during the period 2.4 (.8)
Shares contributed to employee benefit plan 1.0 .7
------- -------
Total shareholders' equity $ 400.6 $ 422.6
======= =======
Note 10. Effective January 1, 1995, significant changes were
made to the by-laws of a previously unconsolidated subsidiary,
which provide Arvin the ability to control this joint venture.
Accordingly, the Company has consolidated the 1995 financial
results of the subsidiary, which were accounted for under the
equity method in prior periods. Since Arvin's 50 percent
ownership interest in the joint venture remains the same, there
is no effect on the Company's earnings from continuing
operations. However, the consolidation of the previously
unconsolidated subsidiary increased first quarter 1995 net sales
and earnings from continuing operations before income taxes by
$26.3 million and $2.2 million, respectively.
Note 11. During the first quarter of 1995, a one time adjustment
of $3.9 million was recorded to reduce prior years' accruals of
employee benefits in the Technology segment.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Review
(Dollar amounts in tables in millions)
Overview
Arvin recorded sales of $553.4 million for the first quarter of
1995, which represents a 15 percent increase over the first
quarter of 1994 sales of $479.2 million. The increase in sales
was primarily attributable to strong North American vehicle
production, the easing of recessionary pressures in the European
automotive markets and the consolidation of a previously
unconsolidated Arvin joint venture.
Earnings from continuing operations decreased from $5.1 million
in the first quarter of 1994 to $4.4 million in the first quarter
of 1995. Earnings from continuing operations includes both 1995
restructuring charges of $2.1 million and a one-time positive
adjustment of $3.9 million to employee benefit accruals in the
Technology segment.
Except for the exchange losses of approximately $.9 million
related to the devaluation of the Mexican peso, currency
fluctuations had a minor positive impact on the comparative
balances of both sales and operating income.
Results of Operations
Net Sales by Segment First Quarter First Quarter
1995 1994
------------ ------------
Automotive Original Equipment $370.7 67% $283.9 59%
Automotive Replacement 148.5 27 142.4 30
Technology 34.2 6 52.9 11
------ ---- ------ ----
Total $553.4 100% $479.2 100%
------ ---- ------ ----
Operating Income by Segment<F1> First Quarter First Quarter
1995 1994
------------ ------------
Automotive Original Equipment $ 20.4 77% $ 15.3 66%
Automotive Replacement 1.7 7 7.7 33
Technology 4.3 16 .1 1
------ ---- ------ ----
Total $ 26.4 100% $ 23.1 100%
<F1> Reflects income from continuing operations prior to
Corporate allocated expenses.
Automotive Original Equipment ("OE"): First quarter 1995 OE
sales were 31 percent higher than the first quarter 1994. The
increase was primarily a result of an increase in the North
American automotive build rate, continued strengthening of the
European market, significant new business and improved
revenues and margins from coil coating operations. In addition,
approximately 30 percent of the increase was a result of the
consolidation of sales from an Arvin joint venture which was
previously unconsolidated. Offsetting these positive movements
in sales were pricing pressures in both the U.S. and Europe,
continued start up costs on new strut production and the
deteriorating economic conditions surrounding the Company's
Mexican operations.
Operating income in this segment increased 33 percent during the
first quarter of 1995 when compared to the first quarter of 1994.
The increase can be attributed to the higher sales revenues and
productivity improvements. These gains were somewhat offset by
price concessions, inflation and early retirement expenses.
Automotive Replacement ("Replacement"): Replacement sales
increased 4 percent over the prior year. A slight sales decrease
in the U.S. was offset by a strong increase in the European Union
sales of both exhaust and ride control product lines. European
Union sales increased 22 percent at reported exchange rates and
12 percent at a constant rate of exchange. The increase was
primarily a result of improving economic conditions throughout
the European Union.
Operating profit for the replacement market was down
significantly in the U.S. market as a result of increased costs
associated with obtaining new business. The European market,
however, experienced strong increases in operating profit on
increased sales.
Technology: Technology sales decreased 35 percent. The
Company's reorganization of its service contract business unit
contributed $16.5 million of the decline. As part of this
reorganization, the Company entered into an agreement to transfer
a principal contract to an unconsolidated joint venture company
in return for a participation in future performance fees. The
Company owns a 49 percent interest in the new company. Although
the revenues are no longer consolidated, the joint venture
arrangement permits a level of participation in net income
associated with this contract.
Operating profit for the technology segment improved
significantly due to a one time adjustment of $3.9 million to
reduce prior years' accruals of employee benefits.
Corporate General and Administrative expenses decreased 16
percent or $.4 million in the first quarter of 1995. The decrease
was primarily the result of reduced expenditures for employee
costs and professional services.
Interest Expense increased 20 percent or $1.9 million in the
first quarter of 1995. The increase was a result of higher
average borrowing rates on higher average outstanding debt.
Other Expenses, net decreased $2.2 million in the first quarter
of 1995. The decrease was primarily a result of a gain on the
sale of a property held for sale and the reduction of goodwill
amortization as a result of goodwill written off as a part of the
1994 restructuring.
Restructuring Charges of $2.1 million, related to the 1994
restructuring plan, are included in results of operations in the
first quarter of 1995. These charges represent $2.0 million of
costs for an early retirement program and $.1 million of other
costs of consolidation. The workforce reductions and
consolidation of manufacturing facilities and product lines will
be substantially complete by December 31, 1995, and are an effort
to concentrate resources allowing the Company to achieve its
long-term strategic growth objectives. The Company expects
additional 1995 charges to be consistent with 1994 estimates.
Minority Share of Income increased $2.0 million for the first
quarter when compared to the first quarter of 1994. The increase
is primarily a result of the minority share, net of tax, of the
one time adjustment for employee benefit accruals in the
technology segment ($.7 million) and the consolidation of a
previously unconsolidated joint venture ($.7 million).
Income from Disposal of Discontinued Operations of $.7 million
represents the estimated gain on the sale of the business.
Income prior to the first quarter 1994 measurement date is
recorded as "Income from discontinued operations." In February
1995, the Company entered into a contract for the sale of
Schrader. The transaction was completed on February 16, 1995.
Financial Condition
Liquidity During the first quarter of 1995, working capital
decreased $6.4 million. The primary reason for the decrease is
from the reclassification, to current portion of long term debt,
of the Company's 9.97 percent notes maturing in the first quarter
of 1996. The current ratio decreased from 1.5 at the end of 1994
to 1.4 at the end of the first quarter of 1995.
Cash and Cash Equivalents increased $19.5 million from the end of
1994 to the end of the first quarter of 1995. The primary reason
for the increase is the consolidation of the Company's previously
unconsolidated joint venture with cash and cash equivalents of
$17.1 million.
Accounts Receivable and Accounts Payable both increased
substantially (12 percent and 22 percent) primarily as a result
of a 27 percent increase in March sales over December sales.
Other Current Assets increased $25.5 million. The primary reason
for the increase is the consolidation of the Company's previously
unconsolidated joint venture, increased customer tooling and a
receivable for property sold.
Capital Resources Based on the Company's projected cash flow
from operations and existing financing credit facility
arrangements, management believes that sufficient liquidity is
available to meet anticipated capital and dividend requirements
over the foreseeable future as well as the cash outlays resulting
from the 1994 restructuring program.
Planned capital expenditures for 1995 are adequate for normal
growth and replacement and are consistent with projections for
future sales and earnings. Near-term expenditures are expected
to be funded from internally generated funds.
Funds generated from the February 16, 1995 sale of Schrader (See
Note 3) were used to reduce the Company's debt and for other
corporate purposes.
Legal/Environmental Matters The Company is defending various
environmental claims and legal actions that arise in the normal
course of its business, including matters in which the Company
has been designated a potentially responsible party at certain
waste disposal sites or has been notified that it may be a
potentially responsible party at other sites as to which no
proceedings have been initiated. At a majority of these sites,
the information currently available leads the Company to believe
it has very limited or even de minimis responsibility. At other
sites, neither the remediation method, amount of remediation
costs nor the allocation among potentially responsible parties
has been determined. Where reasonable estimates are possible,
the Company has provided for the costs of study, cleanup,
remediation, and certain other costs, taking into account, as
applicable, available information regarding site conditions,
potential cleanup methods and the extent to which other parties
can be expected to bear those costs.
The Company is a participant with the EPA and the current owner
of a site previously owned by the Company's Maremont subsidiary
in a corrective action proceeding under the Resource Conservation
and Environmental Recovery Act. In the fourth quarter of 1994,
based on the results of an environmental study, the Company
accrued for its share of the reasonably estimable minimum
remediation costs at this site, which include costs incurred in
connection with further studies and design of a remediation plan,
remedial costs, including cleanup activities, and administrative,
legal and consulting fees. Given the inherent uncertainties in
evaluating legal and environmental exposures, actual costs to be
incurred in future periods may vary from the currently recorded
estimates. The Company expects that any sum it may be required
to pay in connection with legal and environmental matters in
excess of the amounts recorded will not have a material adverse
effect on its financial condition.
Part II
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
- ------------
03 Amended and Restated Bylaws
including Amendment to 6.1
of the Bylaws approved
by the Board of Directors
on February 9, 1995 filed herewith as Exhibit 3
11 Computation of Earnings Per Share filed herewith as Exhibit 11
27 Financial Data Schedule filed herewith as Exhibit 27
b. Reports Filed on Form 8-K
- -----------------------------
None
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
the report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Arvin Industries, Inc.
by: /s/ R. A. Smith
------------------------------
R.A. Smith
Vice President-Finance & Chief
Financial Officer
by: /s/ W. M. Lowe, Jr.
------------------------------
W. M. Lowe, Jr.
Controller & Chief Accounting Officer
Date: May 15, 1995
Exhibit 3
AMENDED AND RESTATED
BYLAWS
OF
ARVIN INDUSTRIES, INC.
(Adopted 09/13/90)
ARTICLE I
SECTION 1.1. Registered Office. The registered office of
the Corporation in the State of Indiana shall be in the City of
Columbus, County of Bartholomew.
SECTION 1.2. Principal Business Office. The principal
office of the Corporation shall be in the City of Columbus,
County of Bartholomew, in the State of Indiana.
ARTICLE 2
MEETING OF SHAREHOLDERS
SECTION 2.1. Place of Meetings. Each meeting of
shareholders of the Corporation shall be held at such place, in
or outside of the State of Indiana, as the Board of Directors may
designate in the notice of such meeting, but if no such
designation is made, then at the principal business office of the
Corporation.
SECTION 2.2. Annual Meetings. An annual meeting of
shareholders for the purpose of electing directors and
transacting such other business as may properly be brought before
the meeting shall be held on (i) the second Thursday in April of
each year at 10:30 a.m. Columbus, Indiana time, unless such day
is a legal holiday in which case the meeting shall be held on the
next succeeding business day that is not a legal holiday or (ii)
such other date and at such other time as the Board of Directors
may determine.
If for any reason any annual meeting shall not be held at
the time herein provided, the same may be held at any time
thereafter, upon notice as hereinafter provided, or the business
thereof may be transacted at any special meeting of shareholders
called for that purpose.
The Board of Directors may, upon public notice given prior
to the scheduled meeting date, postpone, for as long as and to
the extent permitted by the Indiana Business Corporation Law, any
previously scheduled annual or special meeting of shareholders.
SECTION 2.3. Special Meetings. Special meetings of
shareholders, unless otherwise required by statute and subject to
the rights of holders of any class of Preferred Shares of the
Corporation, may be called only by (i) the Chairman of the Board
of Directors (the "Chairman") or the Secretary at the request in
writing of the Chairman or (ii) the Board of Directors pursuant
to a resolution adopted by two-thirds of the total number of
directors which the Corporation would have if there were no
vacancies (the "Whole Board"). Business transacted at any
special meeting shall be confined to the purpose or purposes
stated in the notice of such special meeting. Meetings may be
held without notice if all shareholders entitled to vote are
present or if notice is waived by those not present.
SECTION 2.4. Notice of Shareholders' Meetings. Notice of
each meeting of shareholders, stating the date, time and place,
and, in the case of special meetings, the purpose or purposes for
which such meeting is called, shall be given to each shareholder
entitled to vote thereat not less than 10 nor more than 60 days
before the date of the meeting unless otherwise prescribed by
statute.
SECTION 2.5. Record Dates. (a) In order that the
Corporation may determine the shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, 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
shares or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a future date as the record
date, which shall not be more than 70 nor less than 10 days
before the date of such meeting or any other action requiring a
determination by shareholders.
(b) If a record date has not been fixed as provided in
preceding subsection (a), then:
(i) The record date for determining shareholders
entitled to notice of or to vote at a meeting of shareholders of
the Corporation shall be at the close of business on the day next
preceding the day on which notice is given, or, if notice is
waived, at the close of business on the day next preceding the
day on which the meeting is held; and
(ii) The record date for determining shareholders for
any other purpose shall be at the close of business on the day on
which the Board of Directors adopts the resolution relating
thereto.
(c) Only those who shall be shareholders of record on the
record date so fixed as aforesaid shall be entitled to such
notice of, and to vote at, such meeting and any adjournment
thereof, or to receive payment of such dividend or other
distribution, or to receive such allotment of rights, or to
exercise such rights, as the case may be, notwithstanding the
transfer of any shares on the books of the Corporation after the
applicable record date, provided, however, the Corporation shall
fix a new record date if a meeting is adjourned to a date more
than 120 days after the date originally fixed for the meeting.
SECTION 2.6. List of Shareholders. The Secretary of the
Corporation shall make, before each meeting of shareholders, an
alphabetical list of shareholders entitled to vote thereat,
arranged by voting group, showing the address of and number of
shares registered in the name of each shareholder. Such list
shall be open to the examination of any such shareholder or such
shareholder's agent or attorney authorized in writing
("shareholder agent"), for any purpose germane to the meeting,
during ordinary business hours, for a period of at least 5 days
prior to the meeting for which the list was prepared and
continuing through the meeting, either at a place in the city
where the meeting is being held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the
place where said meeting is to be held. Such list shall be
produced and kept at the time and place of meeting during the
whole time thereof for inspection by any such shareholder or
shareholder agent who is present.
SECTION 2.7. Quorum and Adjournments. The holders of a
majority of the voting power of the shares of the Corporation
entitled to vote, present in person or by proxy, shall constitute
a quorum of shareholders for all purposes unless the
representation of a larger proportion is required by statute or
by the Corporation's Restated Articles of Incorporation, as
amended (the "Articles of Incorporation"), and, in such cases,
the representation of the proportion so required shall constitute
a quorum. Whether or not there is such a quorum, the Chairman of
the meeting or the shareholders present or represented by proxy
representing a majority of the shares present or represented may
adjourn the meeting from time to time without notice other than
an announcement at the meeting. 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 original
meeting.
SECTION 2.8. Voting by Shareholders; Proxies. Election of
directors at all meetings of the shareholders at which directors
are to be elected shall be by ballot, and, except as otherwise
set forth in the Articles of Incorporation with respect to the
right of the holders of any class or series of Preferred Shares
to elect additional directors under specified circumstances, a
plurality of the votes cast thereat shall elect. If a quorum
exists, action on a matter (other than the election of directors)
submitted to shareholders entitled to vote thereon at any meeting
shall be approved if the votes cast favoring the action exceed
the votes cast opposing the action, unless a greater number of
affirmative votes is required by law or the Articles of
Incorporation. (Amended 2/14/91)
SECTION 2.9. Conduct of Business.
(a) Presiding Officer. The Chairman of the Board of
Directors shall preside as Chairman of shareholder meetings and
shall determine the order and conduct of business and all matters
of procedure at such meetings. The Chairman shall fix and
announce at the meeting the date and time of the opening and the
closing of the polls for each matter upon which the shareholders
will vote at the meeting. In the absence of the Chairman, the
Vice Chairman of the Board of Directors (the "Vice Chairman"), or
if the Vice Chairman is also absent, the President, shall assume
the duties of the Chairman specified in this paragraph (a) of
Section 2.9. If each of the Chairman, the Vice Chairman and the
President is absent, a vice president chosen by the Board of
Directors shall assume the duties of the Chairman specified in
this paragraph (a) of Section 2.9. (Amended 11/10/94)
(b) Annual Meetings of Shareholders. (i) Nominations of
persons for election to the Board of Directors of the Corporation
and the proposal of business to be considered by the shareholders
may be made at an annual meeting of shareholders (A) pursuant to
the Corporation's notice of meeting, (B) by or at the direction
of the Board of Directors or (C) by any shareholder of the
Corporation who was a shareholder of record at the time of giving
of notice provided for in this Section 2.9, who is entitled to
vote at the meeting and who complies with the notice procedures
set forth in this Section 2.9.
(ii) For nominations or other business to be properly
brought before any annual meeting by a shareholder pursuant to
clause (C) of paragraph (b)(i) of this Section 2.9, the
shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's
notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 60 days nor
more than 90 days prior to the first anniversary of the preceding
year's annual meeting; provided, however, that in the event that
the date of the annual meeting is advanced by more than 30 days
or delayed by more than 60 days from such anniversary date,
notice by the shareholder to be timely must be so delivered not
earlier than the 90th day prior to such annual meeting and not
later than the close of business on the later of the 60th day
prior to such annual meeting or the 10th day following the day on
which public announcement of the date of such meeting is first
made. Such shareholder's notice shall set forth (A) as to each
person whom the shareholder proposes to nominate for election or
reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") (including such person's
written consent to being named in the proxy statement as a
nominee and to serving a director if elected); (B) as to any
other business that the shareholder proposes to bring before the
meeting, a brief description of the business desired to be
brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such
business of such shareholder and the beneficial owner, if any, on
whose behalf the proposal is made; (C) as to the shareholder
giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (x) the name and
address of such shareholder, as they appear on the Corporation's
books, and of such beneficial owner and (y) the class and number
of shares of the Corporation which are owned beneficially and of
record by such shareholder and such beneficial owner.
(iii) Notwithstanding anything in the second sentence of
paragraph (b)(ii) of this Section 2.9 to the contrary, in the
event that any person nominated by the Board of Directors for
election as a director (other than a person nominated to fill a
vacancy created by the death of a director) was not a director or
nominee named (A) in the Corporation's proxy statement for the
preceding annual meeting or (B) in a public announcement made by
the Corporation at least 60 days prior to the first anniversary
of the preceding year's annual meeting (a "New Nominee"), a
shareholder's notice required by this Section 2.9 shall also be
considered timely if it is delivered to the Secretary at the
principal executive offices of the Corporation not later than the
close of business on the 10th day following the day on which
public announcement is first made by the Corporation of the
election or nomination of such New Nominee to the Board of
Directors.
(iv) The notice procedures of this Section 2.9 shall not
apply to any annual meeting if (A) with respect to annual
meetings of shareholders subsequent to the 1992 annual meeting of
shareholders the Corporation shall not have set forth in its
proxy statement for the preceding annual meeting of shareholders
the date by which notice of nominations by shareholders of
persons for election as directors or of other business proposed
to be brought by shareholders at the next annual meeting of
shareholders must be received by the Corporation to be considered
timely pursuant to this Section 2.9 or (B) with respect to the
1992 annual meeting of shareholders the Corporation shall have
failed to issue a public announcement setting forth such
information not less than 30 days prior to the date by which a
shareholder's notice must be received by the Secretary. (Amended
11/14/91)
(c) Special Meetings of Shareholders. Only such business
shall be conducted at a special meeting of shareholders as shall
have been brought before the meeting pursuant to the
Corporation's notice of meeting. Nominations of persons for
election to the Board of Directors may be made at a special
meeting of shareholders at which directors are to be elected
pursuant to the Corporation's notice of meeting (A) by or at the
direction of the Board of Directors or (B) by any shareholder of
the Corporation of the Corporation who is a shareholder of record
at the time of giving of notice provided for in this Section 2.9,
who shall be entitled to vote at the meeting and who complies
with the notice procedures set forth in this Section 2.9.
Nominations by shareholders of persons for election to the Board
of Directors may be made at such a special meeting of
shareholders if the shareholder's notice required by paragraph
(b)(ii) of this Section 2.9 shall be delivered to the Secretary
at the principal executive offices of the Corporation not earlier
than the 90th day prior to such Special Meeting and not later
than the close of business on the later of the 60th day prior to
such special meeting or the 10th day following the date on which
public announcement is first made of the date of the special
meeting and of the nominees proposed by the Board of Directors to
be elected at such meeting.
(d) General. (i) Except where the terms of any class or
series of Preferred Shares of the Corporation require the
election of one or more directors by the holders of such
Preferred Shares voting as a single class and except a provided
in Section 3.2 of these By-Laws, only such persons who are
nominated in accordance with the procedures set forth in this
Section 2.9 shall be eligible to serve as directors and only such
business shall be conducted at a meeting of shareholders as shall
have been brought before the meeting in accordance with the
procedures set forth in this Section 2.9. The person presiding
at the meeting shall have the power and duty to determine whether
a nomination or any business proposed to be brought before the
meeting was made in accordance with the procedures set forth in
this Section 2.9 and, if any proposed nomination or business is
not in compliance with this Section 2.9, to declare that such
defective proposal shall be disregarded. (Amended 2/14/91)
(ii) For purposes of this Section 2.9, "public announcement"
shall mean disclosure in a press release reported by the Dow
Jones News Service, Associated Press or comparable national news
service or a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14 or
15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this
Section 2.9, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section
2.9. Nothing in this Section 2.9 shall be deemed to affect any
rights of shareholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
Section 2.10. Inspectors. There shall be appointed by the
Board of Directors, before each meeting of the shareholders, two
inspectors of the vote. Such inspectors shall first take and
subscribe an oath or affirmation faithfully to execute the duties
of inspector at such meeting with strict impartiality and
according to the best of their ability. If two inspectors are
not appointed in advance of any such meeting by the Board of
Directors or one or both appointed inspectors fail or refuse to
act, then one or both inspectors, as the case may be, shall be
appointed for the meeting by the person presiding thereat. Such
inspectors shall be responsible for tallying and certifying the
vote taken on any matter at each meeting which is required to be
tallied and certified by them in the resolution of the Board of
Directors appointing them or the appointment of the person
presiding at such meeting as the case may be. Except as
otherwise provided by these By-Laws or the laws of the State of
Indiana, such inspectors shall also decide all questions touching
upon the qualification of voters, the validity of proxies and
ballots, and the acceptance and rejection of votes. In the case
of a tie vote by the inspectors on any question, the person
presiding at the meeting shall decide such question. The Board
of Directors shall have the authority to make rules establishing
presumptions as to the validity and sufficiency of proxies.
ARTICLE 3
DIRECTORS
SECTION 3.1. Number, Election and Terms of Office. (a)
Subject to the rights of the holders of any class or series of
Preferred Shares to elect additional directors under specified
circumstances, the number of directors shall be thirteen (13)
persons and from time to time may be increased or decreased to
the extent provided for in the Articles of Incorporation
exclusively by the Board of Directors pursuant to a resolution
adopted by a majority of the Whole Board. The directors, other
than those who may be elected by the holders of any class or
series of Preferred Shares, shall be divided, with respect to the
time for which they severally hold office, into three classes,
each class being (and shall be) as nearly equal as possible. At
each annual meeting of shareholders, (i) directors elected to
succeed those directors whose terms then expire shall be elected
for a term of office to expire at the third succeeding annual
meeting of shareholders after their election, with each director
to hold office until his or her successor shall have been duly
elected and qualified and (ii), if authorized by a resolution of
the Board of Directors, directors may be elected to fill any
vacancy on the Board of Directors regardless of how such vacancy
shall have been created. All directors so elected shall hold
office until their respective successors are elected and
qualified. (Amended 6/17/93)
SECTION 3.2. Vacancies. Except where the terms of any
class or series of Preferred Shares of the Corporation require
the election of one or more directors by the holders of such
Preferred Shares voting as a single class and except to the
extent the Board of Directors determines otherwise, vacancies
occurring on the Board of Directors and newly-created
directorships resulting from any increase in the number of
directors may be filled only by the affirmative vote of a
majority of the directors then in office, although less than a
quorum, or by a sole remaining director, and any director so
chosen shall hold office for a term expiring at the annual
meeting of shareholders at which the term of office of the class
of directors to which such director has been elected expires and
until his or her successor is duly elected and qualified or until
the earlier of his or her death, resignation or removal in a
manner permitted by statute or these By-Laws. No decrease in the
number of authorized directors constituting the Whole Board shall
shorten the term of any incumbent director.
SECTION 3.3. Powers. The business of the Corporation shall
be managed by the Board of Directors which may exercise all
powers of the Corporation and do all lawful acts and things not
by statute or by the Articles of Incorporation or these By-Laws
directed or required to be exercised or done by the shareholders.
SECTION 3.4. Place of Meetings. The place of any meeting
of the Board of Directors may be either in or outside the State
of Indiana.
SECTION 3.5. Annual Meetings. Annual meetings of the Board
of Directors shall be held each year on the same day as the
shareholder's annual meeting for such year, at the time and place
determined by the Board of Directors or at such date, time and
place otherwise set by the Chairman.
SECTION 3.6. Regular Meetings. Regular meetings of the
Board of Directors shall be held in the months of February, June,
September and November at the times and places designated by the
Board of Directors in the notice of any such meeting, or at such
dates, times and places otherwise set by the Chairman.
SECTION 3.7. Special Meetings. Special meetings of the
Board of Directors may be called by the Chairman; and shall be
called by the Chairman upon the written request of a majority of
the entire Board of Directors of the Corporation, and in the case
of death, disability or absence from the State of Indiana of the
Chairman, the Secretary shall call the meeting upon such request.
Amended 11/10/94)
SECTION 3.8. Notice of Meetings. Notice of each meeting of
the Board of Directors shall be given to each director. Meetings
of the Board of Directors may be held at any time and for any
purpose, without notice, when all members of the Board of
Directors are present.
SECTION 3.9. Quorum. Except as provided in Section 3.2, a
whole number of directors equal to at least a majority of the
Whole Board shall constitute a quorum for the transaction of
business at all meetings of the Board of Directors. If a quorum
shall not be present at any meeting of the Board of Directors,
the directors present may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum is present.
SECTION 3.10. Informal Action. Unless otherwise restricted
by statute, the Articles of Incorporation or these By-Laws, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken
without a meeting if a written consent thereto is signed by all
directors or by all members of such committee, as the case may
be, and such written consent is filed with the minutes of
proceedings of the Board of Directors or of such committee.
SECTION 3.11. Attendance by Conference Telephone. Members
of the Board of Directors or any committee designated by the
Board of Directors may participate in a meeting of such Board of
Directors or committee by means of conference telephone or
similar communications equipment by means of which all persons
participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at
such meeting.
SECTION 3.12. Committees. (a) The Board of Directors may
from time to time, in its discretion, by resolution passed by a
majority of the Whole Board, designate, and appoint, from the
directors, committees of one or more persons which shall have and
may exercise such lawfully delegable powers and duties conferred
or authorized by the resolutions of designation and appointment.
The Board of Directors shall have power at any time to change the
members of any such committee, to fill vacancies, and to
discharge any such committee.
(b) Unless the Board of Directors shall provide otherwise,
the presence of one-half of the total membership of any committee
of the Board of Directors shall constitute a quorum for the
transaction of business at any meeting of such committee and the
act of a majority of those present shall be necessary and
sufficient for the taking of any action thereat.
SECTION 3.13. Compensation of Directors. The directors may
be paid their expenses, if any, of attendance at each meeting of
the Board of Directors and at each meeting of a committee of the
Board of Directors of which they are members. Unless otherwise
provided in these By-Laws, the Chairman shall have the authority
to fix compensation of all directors for their services to the
Corporation as directors and for their services to the
Corporation as members of committees of the Board of Directors.
SECTION 3.14. Removal. Subject to the rights of the
holders of any class or series of Preferred Shares, any director
or the entire Board of Directors may be removed from office at
any time, but only for cause and only by the affirmative vote by
the holders of at least two-thirds of the voting power of all of
the then outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors, voting
together as a single class.
ARTICLE 4
NOTICES
SECTION 4.1. Notices. Notices to directors and
shareholders shall be in writing and delivered personally or
mailed to their addresses appearing on the records of the
Corporation or, if to directors, by telegram, cable, telephone,
telecopy, facsimile or a nationally recognized overnight delivery
service. Notice to directors by mail shall be given at least two
days before the meeting. Notice to directors by telegram, cable,
personal delivery, telephone or wireless shall be given a
reasonable time before the meeting, but in no event less than one
hour before the meeting. Notice by mail shall be deemed to be
given when mailed to the director at his or her address appearing
on the records of the Corporation. Notice by telegram or cable
shall be deemed to be given when the telegram or cable addressed
to the director at his or her address appearing on the records of
the Corporation is delivered to the telegraph company. Notice by
telephone or wireless shall be deemed to be given when
transmitted by telephone or wireless to the telephone number or
wireless call designation appearing on the records of the
Corporation for the director (regardless of whether the director
shall have personally received such telephone call or wireless
message), provided confirmation of transmission shall be made
promptly by telegram or cable in the manner specified above.
SECTION 4.2. Waiver of Notice. Whenever any notice is
required, a waiver thereof signed by the person entitled to such
notice and filed with the minutes or corporate records, whether
before or after the time stated therein, shall be deemed
equivalent thereto. Attendance of any person at any meeting of
shareholders or directors shall constitute a waiver of notice of
such meeting, except when such person attends only for the
express purpose of objecting, at the beginning of the meeting (or
in the case of a director's meeting, promptly upon such
director's arrival), to the transaction of any business at the
meeting and does not thereafter vote for or assent to action
taken at the meeting.
ARTICLE 5
OFFICERS
SECTION 5.1. Designation; Number; Election. The Board of
Directors shall elect the officers of the Corporation. Such
officers shall be a chairman of the Board of Directors, a vice
chairman of the Board of Directors, a president, one or more vice
presidents as the Board of Directors shall determine from time to
time, a controller, a treasurer, and a secretary. The Chairman,
Vice Chairman and the President shall be chosen from the
directors.
In addition to any vice president elected by the Board of
Directors, the President, at any time, may appoint one or more
vice presidents as the President may determine from time to time.
In addition to the foregoing officers elected by the Board
of Directors and/or appointed by the President, the Board of
Directors and/or the President, at any time, may elect or appoint
one or more assistant controllers, assistant treasurers,
assistant secretaries and other officers.
In addition to the foregoing officers elected by the Board
of Directors and/or appointed by the President, the Controller,
the Treasurer and the Secretary, at any time, may appoint one or
more assistant controllers, assistant treasurers and assistant
secretaries, respectively, as the Controller, the Treasurer and
the Secretary may determine from time to time.
One person may hold more than one office at the same time
provided the duties of such officers as prescribed by these By-
Laws may be properly and consistently performed by one person.
SECTION 5.2. Term of Office; Removal; Vacancies. The term
of each officer shall be for one year and continue until his or
her successor is chosen and qualified or until the earlier of his
or her death, resignation or removal, except that any such
officer elected by the Board of Directors, excluding the
Chairman, the Vice Chairman and the President, at any time, may
be suspended by the Chairman, the Vice Chairman or the President
until the Board of Directors convenes, and any such officer,
including the Chairman, the Vice Chairman and the President, may
be removed at any time by the affirmative vote of a majority of
the members of the Whole Board.
Vacancies occurring among officers elected by the Board of
Directors may be filled at any time by the Board of Directors.
All agents and representatives of the Corporation shall hold
office only during the pleasure of the Board of Directors or the
officer appointing them.
SECTION 5.3. Compensation of Officers. The compensation
committee of the Board of Directors shall have the authority to
fix compensation of the Chairman, the Vice Chairman and the
President. The President and/or such officer as the President
may designate shall have the authority to fix compensation of all
other officers of the Corporation.
SECTION 5.4. Chairman of the Board of Directors. The
Chairman of the Board of Directors shall, subject to the Board of
Directors, have general management and oversight of the
administration and operation of the Corporation's business and
general supervision of its policies and affairs. He or she shall
see that all orders and resolutions of the Board of Directors and
of any committee thereof are carried into effect.
He or she shall (a) preside at all meetings of the
shareholders and of the Board of Directors, and shall have
plenary power to set the agenda, determine the procedure and
rules of order and make definitive rulings at meetings of
shareholders; (b) be ex-officio a member of all committees except
the audit committee and the stock option committee; (c) have
power to appoint officers for any division who, as such, shall
not be officers of the Corporation; (d) subject to the Board of
Directors, be in general and active charge of the entire business
and all the affairs of the Corporation; and (e) have such other
powers and perform such other duties as may be prescribed by the
Board of Directors or provided in these By-Laws. (Amended
6/17/93)
Section 5.5. Vice Chairman of the Board of Directors. The
Vice Chairman shall have such powers and duties prescribed in
these By-Laws or assigned to him or her by the Board of
Directors. In the absence or disability of the Chairman, the
Vice Chairman shall preside at meetings of the Board of Directors
and shall perform such other duties of the Chairman as may be
assigned to him or her by the Board of Directors.
Section 5.6. President. The President shall have such
powers and duties prescribed in these By-Laws or assigned to him
or her by the Board of Directors. In the absence or disability
of the Chairman and the Vice Chairman, the President shall
preside at meetings of the Board of Directors and shall perform
such other duties of the Chairman as may be assigned to him or
her by the Board of Directors. In the absence or disability of
the Chairman, the Vice Chairman and the President, on assembling
for a regular or special meeting of the Board of Directors, the
directors shall choose one of the Vice Presidents in attendance
to preside at such meeting.
Section 5.7. Vice Presidents. Each Vice President shall
have the powers and duties prescribed in these By-Laws or
assigned to him or her by the Board of Directors, the Chairman or
the President. The Board of Directors and/or the President may
designate one or more of such vice presidents, as executive,
senior or assistant vice presidents.
SECTION 5.8. Controller. Subject to control and
supervision by the President or such officer as the President may
designate and by the Board of Directors, the Controller shall be
in charge of the accounts of the Corporation and its
subsidiaries; maintain adequate records of all assets,
liabilities and business transactions; and have such other powers
and duties prescribed by these By-Laws or by the Board of
Directors, the President or such officer as the President may
designate, and the usual powers and duties pertaining to his or
her office.
SECTION 5.9. Assistant Controllers. The Assistant
Controllers shall have the powers and duties prescribed by these
By-Laws or assigned by the Controller. IN the absence or
disability of the Controller, they shall have all his other
powers and duties.
SECTION 5.10. Treasurer. Subject to control and
supervision by the President or such officer as the President may
designate and by the Board of Directors, the Treasurer shall
propose financial policies, negotiate loans and be responsible
for the maintenance of proper insurance coverages; and have such
other powers and duties prescribed by these By-Laws or by the
Board of Directors, the President or such officer as the
President may designate, and the usual powers and duties
pertaining to his or her office.
SECTION 5.11. Assistant Treasurers. The Assistant
Treasurers shall have the powers and duties prescribed by these
By-Laws or assigned by the Treasurer. In the absence of the
Treasurer, they shall have all his other powers and duties.
SECTION 5.12. Secretary. Subject to control and
supervision by the President or such officer as the President may
designate and by the Board of Directors and the Chairman of the
Board of Directors, the secretary shall attend and record
proceedings of meetings of shareholders and directors and have
such other powers and duties prescribed by these By-Laws or by
the Board of Directors, the President or such officer as the
President may designate, and the usual powers and duties
pertaining to his or her office.
SECTION 5.13. Assistant Secretaries. The Assistant
Secretaries shall have the powers and duties prescribed by these
By-Laws or assigned by the Secretary. In the absence or
disability of the Secretary, they shall have all his or her
powers and duties.
ARTICLE 6
CONDUCT OF BUSINESS
SECTION 6.1. Contracts, Deeds and Other Instruments. All
agreements evidencing indebtedness of the Corporation, including
but not limited to contracts, trust deeds, promissory notes,
sight drafts, time drafts and letters of credit (including
applications therefor), and all guarantees of or letters of
comfort regarding debt or other obligations of the Corporation or
any of its wholly-owned subsidiaries, may be signed by any one of
the Chairman, the Vice Chairman, the President, any Executive
Vice President, the Vice President-Finance, the Treasurer, the
Secretary, the Assistant Treasurer, any Assistant Secretary, and
any person authorized by a resolution of the Board of Directors.
Such documents pertaining to the business of a division of the
Corporation, in excess of the principal amount determined from
time to time for each division by the Chairman, may be signed by
appropriate officers of such division only upon written
authorization signed by any one of the Chairman, the Vice
Chairman, the President, any Executive Vice President, the Vice
President-Finance and the Treasurer or upon authorization by a
resolution of the Board of Directors.
A certified copy of these By-Laws and/or any authorization
given hereunder may be furnished as evidence of the authorities
herein granted, and all persons shall be entitled to rely on such
authorities in the case of a specific contract, conveyance or
other transaction without the need of a resolution of the Board
of Directors specifically authorizing the transaction involved.
(Amended 2/9/95)
Section 6.2. Checks. Checks and other negotiable
instruments for the disbursement of Corporation funds may be
signed by the Chairman, the Vice Chairman, the President, any
Executive Vice President, the Vice President-Finance and the
Treasurer. In addition to the foregoing, other persons may sign
instruments for the disbursement of Corporation funds under
written authorization signed by any two of the foregoing officers
acting jointly. Electronic or wire transfers of funds may be
authorized by any officer of the Corporation who is authorized
pursuant to this Section 6.2 to disburse Corporation funds by
check or other negotiable instrument. (Amended 2/14/91)
Section 6.3. Banking. Any two of the Chairman, the
President, an Executive Vice President, the Vice President -
Finance and the Treasurer, at least one of whom must be either
the Vice President - Finance or the Treasurer, shall be empowered
to establish and maintain, for and on behalf of the Corporation,
one or more accounts with such banks, depositories, trust
companies or other financial institutions as they may designate
("Banks") for the deposit of checks, drafts and other funds, and
for the keeping of securities, notes and other evidences of
indebtedness, and to enter into such agreements with Banks with
respect to the establishment and maintenance of such accounts, or
effecting foreign exchange or derivative transactions, as they
deem necessary or proper in their sole discretion, and to bind
and obligate the Corporation with respect thereto. In addition
to the authority heretofore set forth, any two of the foregoing
corporate officers, at least one of whom must be either the Vice
President - Finance or the Treasurer, acting jointly, shall also
have the authority to designate in writing to any Bank those
other officers, employees and agents of the Corporation
("Representatives") who shall be authorized to sign checks or
other drafts, and to issue written, telephonic, electronic or
oral instructions with respect to the transfer of funds of the
Corporation on deposit with a Bank (or transferable by or to a
Bank), by wire or otherwise, without any written order for the
payment of money being issued with respect to such transfer, and,
for on behalf of the Corporation, to enter into such agreements
with a Bank with respect to any such transfer, or with respect to
foreign exchange or derivative transactions, as such
Representatives, in their sole discretion, deem advisable.
(Amended 9/8/94)
Section 6.4. Voting of Stock. Unless otherwise ordered by
the Board of Directors, the Chairman, the Vice Chairman, the
President or any Vice President elected by the Board of Directors
or appointed by the President shall have the power to execute and
deliver on behalf of the Corporation proxies on stock owned by
the Corporation appointing a person or persons to represent and
vote such stock at any meeting of stockholders, with full power
of substitution, and shall have power to alter or rescind such
appointment. Unless otherwise ordered by the Board of Directors,
the Chairman, the Vice Chairman, the President, any Vice
President elected by the Board or appointed by the President
shall have the power on behalf of the Corporation to attend and
to act and vote at any meeting of stockholders of any corporation
in which the Corporation holds stock and shall possess and may
exercise any and all rights and powers incident to the ownership
of such stock, which, as the owner thereof, the Corporation might
have possessed and exercised if present. The Board may confer
like powers upon any other person or persons.
Section 6.5. Transfer of Stock. Such form of transfer or
assignment customary or necessary to effect a transfer of stocks
or other securities standing in the name of the Corporation shall
be signed by the Chairman, the Vice Chairman, the President, any
Executive Vice President, the Vice President-Finance or the
Treasurer, and the Secretary or an Assistant Secretary shall sign
as witness if required on the form. A corporation or person
transferring any such stocks or other securities pursuant to a
form of transfer or assignment so executed shall be fully
protected and shall be under no duty to inquire whether the Board
of Directors has taken action in respect thereof. (Amended
2/14/91)
ARTICLE 7
SHARE CERTIFICATES AND THEIR TRANSFER
SECTION 7.1. Share Certificates. Certificates for shares
of the Corporation shall be signed by the Chairman, the Vice
Chairman, the President, any Executive Vice President or the Vice
President-Finance, and by the Secretary or any Assistant
Secretary, and shall not be valid unless so signed. Such
certificates shall be appropriately numbered and contain the name
of the registered holder, the number of shares and the date of
issue. If such certificates is countersigned (a) by a transfer
agent other than the Corporation or its employee, or (b) by a
registrar other than the Corporation or its employee, any other
signature on the certificate may be a facsimile. (Amended
2/14/91)
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, she or it were
such officer, transfer agent, or registrar at the date of issue.
During any period when more than one class of shares of the
Corporation is authorized, there shall be set forth on the face
or back of certificates issued to represent each class or series
of shares, a statement that the Corporation will furnish without
charge to each shareholder who so requests, the designation,
preferences and relative, participating, optional or other
special rights of each class of shares or series thereof and the
qualifications, limitations or restrictions of such preferences
and/or rights.
SECTION 7.2. Transfer of Shares. Upon surrender to the
Corporation or a transfer agent of the Corporation of a
certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignment or authority to transfer, it
shall be the duty of the Corporation and such transfer agent to
issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction. No certificate
shall be issued in exchange for any certificate until the former
certificate for the same number of shares of the same class and
series shall have been surrendered and canceled, except as
provided in Section 7.4.
SECTION 7.3. Regulations. The Board of Directors shall
have authority to make rules and regulations concerning the
issue, transfer and registration of certificates for shares of
the Corporation.
SECTION 7.4. Lost, Stolen and Destroyed Certificates. The
Corporation may issue a new certificate or certificates for
shares in place of any issued certificate alleged to have been
lost, stolen or destroyed upon such terms and conditions as the
Board of Directors may prescribe.
SECTION 7.5. Registered Shareholders. The Corporation
shall be entitled to treat the holder or record (according to the
books of the Corporation) of any share or shares as the holder in
fact thereof and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of
any other party whether or not the Corporation shall have express
or other notice thereof, except as expressly provided by the laws
of Indiana.
SECTION 7.6. Transfer Agents and Registrars. The Board of
Directors may from time to time appoint a transfer agent and a
registrar in one or more cities, may require all certificates
evidencing shares of the Corporation to bear the signatures of a
transfer agent and a registrar, may provide that such
certificates shall be transferable in more than one city, and may
provide for the functions of transfer agent and registrar to be
combined in one agency.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1. Litigation Brought By Third Parties. The
Corporation shall indemnify any person who was or is 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, formal or informal (other than
an action by or in the right of the Corporation) (an "Action") by
reason of the fact that he or she is or was a director, officer,
employee or agent of the Corporation (a "Corporate Person"), or
is or was serving at the request of the Corporation as a
director, officer, employee, agent, partner, trustee or member or
in another authorized capacity (collectively, an "Authorized
Capacity") of or for another corporation, unincorporated
association, business trust, state, partnership, joint venture,
individual or other legal entity, whether or not organized or
formed for profit (collectively, "Another Entity"), against
expenses (including attorneys' fees), judgments, penalties, fines
and amounts paid in settlement actually and reasonably incurred
by him or her in connection with such Action ("Expenses") if he
or she acted in good faith and in a manner he or she 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 his or her conduct
was unlawful. The termination of any Action by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which he or she
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 reasonable cause to believe his conduct was
unlawful.
SECTION 8.2. Litigation by or in the Right of the
Corporation. The Corporation shall indemnify any person who was
or is a party or is threatened to be made a party to any Action
suit by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he or she is or was a
Corporate Person, or is or was serving at the request of the
Corporation in an Authorized Capacity of or for Another Entity
against Expenses actually and reasonably incurred by him or her
in connection with that defense or settlement of such Action if
he or she acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests
of the Corporation, except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for willful negligence or
misconduct in the performance of his duty to the Corporation
unless and only to the extent that a court of equity or the court
in which such Action was pending 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 indemnity for such expenses which such
court of equity or other court shall deem proper.
SECTION 8.3. Successful Defense. To the extent that a
person who is or was a Corporate Person or in an Authorized
Capacity of Another Entity serving at the request of the
Corporation and has been successful on the merits or otherwise in
defense of any Action, referred to in Section 8.1 and 8.2 of this
Article, or in defense of any claim, issue or matter therein, he
or she shall be indemnified against Expenses actually and
reasonably incurred by him or her in connection therewith.
SECTION 8.4. Determination of Conduct. Any indemnification
under Section 8.1 or 8.2 of this Article (unless ordered by a
court) shall be made by the Corporation only upon a determination
that indemnification of the person is proper in the circumstances
because he or she has met the applicable standard of conduct set
forth in said Sections 8.1 or 8.2. Such determination shall be
made (a) by the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to such action,
suit or proceeding, or (b) if a quorum cannot be obtained by a
majority vote of a committee duly designated by the Board of
Directors (in which designation directors who are parties may
participate) consisting of two or more directors not at the time
parties to such action suit or proceeding or (c) by special legal
counsel or (d) by the shareholders, provided, however, shares
owned by or voted under the control of persons who are at the
time parties to such action, suit or proceeding may not be voted
on the determination.
SECTION 8.5. Advance Payment. The Corporation shall
advance Expenses reasonably incurred by any Corporate Person in
any Action in advance of the final disposition thereof upon the
undertaking of such party to repay the advance unless it is
ultimately determined that such party is entitled to
indemnification hereunder, if (a) the indemnitee furnishes the
Corporation a written affirmation of his or her good faith belief
that he or she has satisfied the standard of conduct in Section
8.1 or 8.2 and (b) a determination is made by those making the
decision pursuant to Section 8.4 that the facts then known would
not preclude indemnification under these By-Laws.
SECTION 8.6. By-Law Not Exclusive. The indemnification
provided by this Article 8 shall not be deemed exclusive of any
other rights to which any person may be entitled under any by-
law, agreement, vote of shareholders or disinterested directors,
or otherwise, both as to action in his or her 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, officer, employee, agent or participant and shall inure
to the benefit of the heirs, executors and administrators of such
a person.
SECTION 8.7. Insurance. The Corporation may purchase and
maintain insurance on behalf of any person who is or was a
Corporate Person or is or was serving at the request of the
Corporation in an Authorized Capacity of or for Another Entity
against any liability asserted against him or her and incurred by
him or her in any such capacity, or arising out of his or her
status as such, whether or not the Corporation would have the
power to indemnify him or her against such liability under the
provisions of this Article or the Business Corporation Law of the
State of Indiana.
SECTION 8.8. Effect of Invalidity. The invalidity or
unenforceability of any provision of this Article 8 shall not
affect the validity or enforceability of the remaining provisions
of this Article 8.
SECTION 8.9. Definition of Corporation. For purposes of
this Article 8, references to "the Corporation" shall include, in
addition to the surviving or resulting corporation, any
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and
authority to indemnify its director, officer, employee or agent
of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same
position under the provisions of this Article 8 with respect to
the surviving or resulting corporation as he or she would have
with respect to such constituent corporation if its separate
existence had continued.
SECTION 8.10. Change in Law. Notwithstanding the foregoing
provisions of Article 8, the Corporation shall indemnify any
person who is or was a Corporate Person or is or was serving at
the request of the Corporation in an Authorized Capacity of or
for Another Entity to the full extent permitted by the Indiana
Business Corporation Law or by any other applicable law, as may
from time to time be in effect.
ARTICLE 9
GENERAL
SECTION 9.1. Dividends. Subject to any provisions of any
applicable statute or of the Articles of Incorporation, dividends
may be declared upon the capital stock of the Corporation by the
Board of Directors at any regular or special meeting thereof; and
such dividends may be paid in cash, property or shares of the
Corporation.
SECTION 9.2. Fiscal Year. The fiscal year of the
Corporation shall be the fifty-two or fifty-three week period
beginning the Monday following the Sunday nearest December 31 of
each year.
SECTION 9.3. Severability. If any provision of these By-
Laws, or its application thereof to any person or circumstances,
is held invalid, the remainder of these By-Laws and the
application of such provision to other persons or circumstances
shall not be affected thereby.
SECTION 9.4. Amendments. These By-Laws may be amended,
added to, rescinded or repealed only by an affirmative vote of at
least two-thirds of the directors then in office at any meeting
of the Board of Directors.
SECTION 9.5. Control Shares. The terms "control shares"
and "control share acquisition" used in this Section 9.5 shall
have the meanings set forth in Indiana Business Corporation Law
Section 23-1-42-1 et seq. (the "Act"). Control shares of the
Corporation acquired in a control share acquisition shall have
only such voting rights as are conferred by the Act.
Control shares of the Corporation acquired in a control
share acquisition with respect to the acquiring person has not
filed with the Corporation the Statement required by the Act may,
at any time during the period ending sixty days after the last
acquisition of control shares by the acquiring person, be
redeemed by the Corporation at the fair value thereof pursuant to
procedures authorized by a resolution of the Board of Directors.
Such authority may be exercised generally or confined to specific
instances.
Control shares of the Corporation acquired in a control
share acquisition with respect to which the acquiring person was
not granted full voting rights by the shareholders as provided in
the Act may, at any time after the shareholder vote required by
the Act, be redeemed by the Corporation at the fair value thereof
pursuant to procedures authorized by a resolution of the Board of
Directors. Such authority may be exercised generally or confined
to specific instances.
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
Arvin Industries, Inc.
Computation of Earnings Per Share of Common Stock
(Amounts in millions, except per share amounts)
Unaudited
----------------------------
Three Months Ended
----------------------------
April 2, April 3,
1995 1994
<S> <C> ---------- <C>----------
Primary Earnings Per Share
Income from continuing operations $ 4.4 $ 5.1
Income from discontinued operation, net of tax 0.7 0.2
-------- --------
Net income to common stock $ 5.1 $ 5.3
======== ========
Average shares of common stock outstanding 22.2 22.1
Incremental common shares applicable to common stock options based
on the common stock daily average market price during the period 0.1 0.4
-------- --------
Average common shares, as adjusted 22.3 22.5
======== ========
Earnings per average share of common stock (including
common stock equivalents):
Continuing operations $ 0.20 $ 0.23
Discontinued operations 0.03 0.01
-------- --------
$ 0.23 $ 0.24
Fully Diluted Earnings Per Share: <F1> ======== ========
Income from continuing operations $ 4.4 $ 5.1
Income from discontinued operation, net of tax 0.7 0.2
-------- --------
Net income 5.1 5.3
Add back 7.5% convertible debentures' after tax interest expense. 1.0 1.1
-------- --------
Net income to common stock assuming full dilution $ 6.1 $ 6.4
======== ========
Average shares of common stock outstanding 22.2 22.1
Incremental common shares applicable to common stock options
based on the more dilutive ending or average market price
of the common stock during the period 0.1 0.4
Average common shares issuable assuming conversion of 7.5 %
convertible subordinated debentures 3.1 3.4
-------- --------
Average common shares assuming full dilution 25.4 25.9
======== ========
Fully diluted earnings per average share assuming conversion of all
applicable securities:
Continuing operations $ 0.21 $ 0.24
Discontinued operations 0.03 0.01
-------- --------
$ 0.24 $ 0.25
======== ========
<F1> Fully diluted earnings per share amounts are shown for the first quarter of 1995 and 1994 in accordance with Securities and
Exchange Commission requirements although not in accordance with A.P.B. 15 because they result in anti-dilution.
See notes to consolidated financial statements.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted
from Form 10-Q for the period ended April 2, 1995 and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-02-1995
<PERIOD-END> Apr-02-1995
<PERIOD-TYPE> 3-MOS
<CASH> 37,100
<SECURITIES> 0
<RECEIVABLES> 345,700
<ALLOWANCES> (7,300)
<INVENTORY> 117,200
<CURRENT-ASSETS> 594,600
<PP&E> 950,900
<DEPRECIATION> 490,500
<TOTAL-ASSETS> 1,342,400
<CURRENT-LIABILITIES> 437,500
<BONDS> 364,300
0
0
<COMMON> 60,400
<OTHER-SE> 340,200
<TOTAL-LIABILITY-AND-EQUITY> 1,342,400
<SALES> 553,400
<TOTAL-REVENUES> 553,400
<CGS> 481,200
<TOTAL-COSTS> 525,600
<OTHER-EXPENSES> 3,500
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,500
<INCOME-PRETAX> 11,300
<INCOME-TAX> 4,400
<INCOME-CONTINUING> 4,400
<DISCONTINUED> 700
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,100
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
