<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
June 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to ___________
Commission file number: 0-13857
NOBLE DRILLING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 73-0374541
(State of incorporation) (I.R.S. employer identification number)
10370 Richmond Avenue, Suite 400 77042
Houston, Texas (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (713) 974-3131
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 / /
Number of shares of Common Stock outstanding as of August 9, 1995: 94,436,609
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<PAGE> 2
FORM 10-Q
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1995 1994
--------- ------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents ................................ $ 61,724 $ 95,163
Restricted cash .......................................... 913 898
Investment in marketable debt securities ................. 33,522 39,673
Investment in marketable equity securities ............... 7,618 9,489
Accounts receivable ...................................... 61,495 61,563
Costs of uncompleted contracts in excess of billings ..... 4,533 841
Inventories .............................................. 14,527 14,008
Other current assets ..................................... 19,127 18,584
--------- ---------
Total current assets ............................... 203,459 240,219
--------- ---------
PROPERTY AND EQUIPMENT
Drilling equipment and facilities ........................ 814,846 804,445
Other .................................................... 21,686 20,461
--------- ---------
836,532 824,906
Accumulated depreciation ................................. (334,417) (331,584)
--------- ---------
502,115 493,322
--------- ---------
OTHER ASSETS ................................................... 7,600 6,348
--------- ---------
$ 713,174 $ 739,889
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current installments of long-term debt and short-term debt $ 2,428 $ 6,244
Accounts payable ......................................... 27,288 34,662
Accrued payroll and related costs ........................ 12,480 14,888
Taxes payable ............................................ 11,194 12,972
Interest payable ......................................... 2,858 2,853
Other current liabilities ................................ 9,600 10,715
--------- ---------
Total current liabilities .......................... 65,848 82,334
LONG-TERM DEBT ................................................. 126,286 126,546
OTHER LIABILITIES .............................................. 1,902 2,767
MINORITY INTEREST .............................................. 419 631
--------- ---------
194,455 212,278
--------- ---------
SHAREHOLDERS' EQUITY
$2.25 Preferred stock .................................... -- 2,989
$1.50 Preferred stock .................................... 4,025 4,025
Common stock ............................................. 9,443 7,808
Capital in excess of par value ........................... 589,288 590,733
Unrealized losses on marketable securities ............... (471) (1,847)
Minimum pension liability ................................ (3,825) (3,825)
Cumulative translation adjustment ........................ (1,914) (2,325)
Accumulated deficit ...................................... (77,375) (68,197)
Treasury stock, at cost .................................. (452) (1,750)
--------- ---------
518,719 527,611
--------- ---------
COMMITMENTS AND CONTINGENCIES .................................. -- --
--------- ---------
$ 713,174 $ 739,889
========= =========
</TABLE>
See notes to interim financial statements.
2
<PAGE> 3
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30,
---------------------------
1995 1994
-------- --------
<S> <C> <C>
OPERATING REVENUES
Contract drilling services .................. $ 43,603 $ 60,911
Labor contract drilling services ............ 9,331 9,073
Turnkey drilling services ................... 17,515 15,229
Engineering and consulting services ......... 960 1,047
Other revenue ............................... 2,576 1,335
-------- --------
73,985 87,595
-------- --------
OPERATING COSTS AND EXPENSES
Contract drilling services .................. 29,057 39,478
Labor contract drilling services ............ 6,795 7,115
Turnkey drilling services ................... 18,029 12,486
Engineering and consulting services ......... 1,599 708
Other expense ............................... 1,981 1,044
Depreciation and amortization ............... 9,007 9,810
Selling, general and administrative ......... 9,805 11,369
Minority interest ........................... 15 276
-------- --------
76,288 82,286
-------- --------
OPERATING (LOSS) INCOME .......................... (2,303) 5,309
OTHER INCOME (EXPENSE)
Interest expense ............................ (3,058) (3,114)
Interest income ............................. 1,594 1,373
Other, net .................................. 387 10,551
-------- --------
(LOSS) INCOME BEFORE INCOME TAXES ................ (3,380) 14,119
INCOME TAX PROVISION ............................. (958) (1,721)
-------- --------
NET (LOSS) INCOME ................................ (4,338) 12,398
PREFERRED STOCK DIVIDENDS ........................ (1,509) (3,192)
-------- --------
NET (LOSS) INCOME APPLICABLE TO COMMON SHARES .... $ (5,847) $ 9,206
======== ========
NET (LOSS) INCOME APPLICABLE TO COMMON SHARES
PER SHARE (See Note 4) ........................ $ (0.07) $ 0.12
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ....... 88,519 77,321
</TABLE>
See notes to interim financial statements.
3
<PAGE> 4
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1995 1994
--------- ---------
<S> <C> <C>
OPERATING REVENUES
Contract drilling services .................. $ 97,535 $ 129,376
Labor contract drilling services ............ 19,921 18,146
Turnkey drilling services ................... 34,693 15,229
Engineering and consulting services ......... 2,527 1,356
Other revenue ............................... 4,405 2,409
--------- ---------
159,081 166,516
--------- ---------
OPERATING COSTS AND EXPENSES
Contract drilling services .................. 65,176 81,953
Labor contract drilling services ............ 14,905 14,360
Turnkey drilling services ................... 34,406 12,486
Engineering and consulting services ......... 3,056 966
Other expense ............................... 3,669 1,645
Depreciation and amortization ............... 17,841 19,308
Selling, general and administrative ......... 20,361 19,888
Minority interest ........................... (43) 239
--------- ---------
159,371 150,845
--------- ---------
OPERATING (LOSS) INCOME .......................... (290) 15,671
OTHER INCOME (EXPENSE)
Interest expense ............................ (6,082) (6,114)
Interest income ............................. 3,086 2,533
Other, net .................................. 965 11,694
--------- ---------
(LOSS) INCOME BEFORE INCOME TAXES ................ (2,321) 23,784
INCOME TAX PROVISION ............................. (2,678) (3,265)
--------- ---------
NET (LOSS) INCOME ................................ (4,999) 20,519
PREFERRED STOCK DIVIDENDS ........................ (4,179) (6,383)
--------- ---------
NET (LOSS) INCOME APPLICABLE TO COMMON SHARES .... $ (9,178) $ 14,136
========= =========
NET (LOSS) INCOME APPLICABLE TO COMMON SHARES
PER SHARE (See Note 4) ........................ $ (0.13) $ 0.18
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ....... 84,293 77,122
</TABLE>
See notes to interim financial statements.
4
<PAGE> 5
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1995 1994
-------- --------
<S> <C> <C>
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
Net (loss) income .................................................... $ (4,999) $ 20,519
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization ................................... 17,841 19,308
Loss (gain) on sale of assets ................................... 133 (8,540)
(Gain) loss on foreign exchange ................................. (1,348) 200
Deferred income tax (benefit) provision ......................... (578) 1,732
Other ........................................................... (208) (1,037)
Changes in current assets and liabilities:
Accounts receivable ......................................... 1,518 17,674
Other assets ................................................ (4,035) 4,998
Accounts payable ............................................ (3,533) (10,773)
Other liabilities ........................................... (3,596) (3,709)
-------- --------
1,195 40,372
-------- --------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
Purchase of property and equipment ................................... (32,067) (25,668)
Proceeds from acquisition, net of negative non-cash working capital
of $3,532 acquired ................................................ -- 13,600
Proceeds from sale of property and equipment ......................... 483 11,979
Sale of (investment in) marketable securities ........................ 7,527 (30,880)
Sale of (investment in) unconsolidated affiliate and equity securities 2,074 (263)
Payments to minority interest holders, net ........................... -- (3,978)
-------- --------
(21,983) (35,210)
-------- --------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
Payment of long-term debt ............................................ (260) (273)
Dividends paid on preferred stock .................................... (7,370) (6,383)
Issuance of common stock, net of preferred conversion payment ........ (1,501) 991
Payment of short-term debt ........................................... (3,816) (4)
Other ................................................................ 69 (137)
-------- --------
(12,878) (5,806)
-------- --------
EFFECT OF EXCHANGE RATE CHANGES ON CASH ................................. 227 (715)
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS ................................... (33,439) (1,359)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .......................... 95,163 69,177
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD ................................ $ 61,724 $ 67,818
======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest .......................................................... $ 5,781 $ 5,794
Income taxes ...................................................... $ 3,265 $ 2,110
Noncash investing and financing activities:
Triton acquisition with common stock .............................. $ 1,500 $ 5,169
Triton acquisition with notes payable ............................. $ -- $ 4,000
Triton acquisition, minority interest assumed ..................... $ -- $ 5,392
</TABLE>
See notes to interim financial statements.
5
<PAGE> 6
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
NOTE 1 -- BASIS OF ACCOUNTING
The Consolidated Balance Sheet as of June 30, 1995 of Noble Drilling
Corporation ("Noble Drilling" or, together with its consolidated subsidiaries,
unless the context requires otherwise, the "Company"), the related Consolidated
Statements of Operations for the three-month and six-month periods ended June
30, 1995 and 1994 and Consolidated Statements of Cash Flows for the six-month
periods ended June 30, 1995 and 1994 are unaudited. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of such financial statements have been
included. These interim financial statements and notes are presented in
condensed form as permitted by Form 10-Q.
On September 15, 1994, the Company completed the merger of Chiles Offshore
Corporation ("Chiles") with a wholly owned subsidiary of Noble Drilling (the
"Chiles Merger"). The consolidated financial statements reflect the restatement
of the Company's historical financial statements to reflect the Chiles Merger as
a pooling of interests as of the beginning of the earliest period presented.
Certain reclassifications have been made to the 1994 consolidated
financial statements to conform to the classifications used in the 1995
consolidated financial statements.
NOTE 2 -- CONVERSION OF $2.25 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
In March 1995, an aggregate of 923,862 shares of Noble Drilling's $2.25
Convertible Exchangeable Preferred Stock ("$2.25 Preferred Stock") were
converted into 5,006,830 shares of Noble Drilling common stock. The Company paid
an aggregate of approximately $1.5 million in cash ("Preferred Conversion
Payment") in the first quarter in connection with this conversion. In the second
quarter of 1995, the Company called for redemption all remaining outstanding
shares of the $2.25 Preferred Stock. Of the 2,065,238 shares then outstanding,
2,062,537 were surrendered for conversion and 2,701 were redeemed by the
Company, resulting in the Company's issuance of 11,192,359 shares of common
stock (including 14,637 shares sold to a standby underwriter).
NOTE 3 -- CHANGE IN ACCOUNTING ESTIMATES
Effective January 1, 1995, the Company revised its estimates of salvage
values and remaining depreciable lives of certain rigs to better reflect their
economic lives and to be consistent with other similar assets owned by the
Company. The effect of this change in estimates was a decrease in the net loss
applicable to common shares for the six-month period ended June 30, 1995 of $2.2
million, or $0.03 per share. If the change in estimates had been made on January
1, 1994, net income applicable to common shares for the six-month period ended
June 30, 1994 would have been increased by approximately $1.6 million, or $0.02
per share.
NOTE 4 -- NET (LOSS) INCOME APPLICABLE TO COMMON SHARES PER SHARE
Net (loss) income applicable to common shares per share has been computed
on the basis of the weighted average number of common shares and, where
dilutive, common share equivalents outstanding during the indicated periods. The
calculation of net (loss) income applicable to common shares per share assuming
full dilution was antidilutive; therefore, fully diluted amounts are not
presented. The Preferred Conversion Payment of approximately $1.5 million in
March 1995 was accounted for as a reduction of net earnings applicable to common
shares for purposes of calculating the net loss per common share. This
accounting treatment increased the net loss applicable to common shares per
share from $0.11 to $0.13 for the six-month period ended June 30, 1995.
NOTE 5 -- MERGER AND ACQUISITION
The Chiles Merger was consummated on September 15, 1994, through the
exchange of 28,598,777 shares of Noble Drilling common stock for all the
outstanding shares of common stock of Chiles. In addition, 4,025,000 shares of
$1.50 Convertible Preferred Stock ("$1.50 Preferred Stock") were issued at the
time of the Chiles Merger and exchanged for all of the outstanding shares of the
Chiles $1.50 convertible preferred stock. Noble Drilling also issued 480,000
shares of its common stock in exchange for the cancellation of outstanding
Chiles stock options. The Chiles Merger was accounted for as a pooling of
interests and all financial information for the current and prior periods has
been restated to reflect this merger.
6
<PAGE> 7
FORM 10-Q
NOBLE DRILLING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(DOLLAR AMOUNTS IN TABLES ARE IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
On April 22, 1994, the Company acquired all of the issued and outstanding
shares of common stock (the "Shares") of Triton Engineering Services Company
("Triton") pursuant to the terms of the Stock Purchase Agreement dated April 22,
1994 ("Triton Acquisition"). In consideration for the Shares, the Company paid
$4,085,000 in cash, issued promissory notes in the aggregate amount of
$4,000,000 and issued 751,864 shares of Noble Drilling common stock valued at
$5,169,000. The promissory notes were paid on October 21, 1994. In addition, the
Company has a contingent obligation on April 22, 1996 to pay additional
consideration of up to 254,551 shares of Noble Drilling common stock. As of June
30, 1995, the Company has recorded a liability of $1.5 million related to this
contingent obligation. The Triton Acquisition has been accounted for under the
purchase method, and accordingly, the operating results have been included in
the consolidated operating results since the date of acquisition.
The following table summarizes certain unaudited pro forma condensed
consolidated results of operations information that gives effect to the Triton
Acquisition as if this transaction had occurred on January 1, 1994.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1994
-------------
<S> <C>
Operating revenues ............................. $192,651
Net income applicable to common shares ......... $ 14,230
Net income applicable to common shares per share $ 0.18
</TABLE>
NOTE 6 -- MARKETABLE SECURITIES
During 1994, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." Under the provisions of SFAS No. 115, investments in debt
and equity securities are required to be classified into one of three
categories: held to maturity, available for sale or trading securities. At each
reporting date, the appropriateness of such classification is required to be
reassessed.
As of June 30, 1995, the Company classified all of its debt securities,
with original maturities of three months or more, as available for sale. These
investments are classified as marketable securities within current assets on the
accompanying consolidated balance sheets. The following table highlights
information applicable to the Company's investments classified as available for
sale as of June 30, 1995:
<TABLE>
<CAPTION>
NET
AMORTIZED UNREALIZED
DEBT SECURITY/MATURITY COST FAIR VALUE GAIN (LOSSES)
- -------------------------------------- --------- ---------- -------------
<S> <C> <C> <C>
Corporate Obligations:
Mature within 1 year .............. $ 6,088 $ 6,094 $ 6
Mature after 1 year through 5 years 3,611 3,553 (58)
-------- -------- --------
9,699 9,647 (52)
-------- -------- --------
U.S. Government Obligations:
Mature within 1 year .............. 10,659 10,507 (152)
Mature after 1 year through 3 years 13,635 13,368 (267)
-------- -------- --------
24,294 23,875 (419)
-------- -------- --------
Total ................................ $ 33,993 $ 33,522 $ (471)
======== ======== ========
</TABLE>
7
<PAGE> 8
FORM 10-Q
An allowance for unrealized losses has been included as a reduction of
shareholders' equity. Total realized losses related to short-term investments
for the six-month period ended June 30, 1995 amounted to $15,000. Total realized
gains related to short-term investments for the three-month period ended June
30, 1995 amounted to $7,000.
The Company categorizes its investments in marketable equity securities of
$7.6 million as trading securities and such investments are classified as
current assets and are recorded at fair value at June 30, 1995. Total net
unrealized and realized gains related to these equity investments for the
six-month period ended June 30, 1995 were $184,000 and $247,000, respectively.
Total net unrealized and realized gains related to these equity investments for
the three-month period ended June 30, 1995 were $386,000 and $247,000,
respectively.
NOTE 7 -- SUPPLEMENTAL EARNINGS PER SHARE DISCLOSURE
The following table highlights information applicable to the Company's
analysis of the pro forma effect assuming that all shares of $2.25 Preferred
Stock had been converted on January 1, 1995:
<TABLE>
<CAPTION>
ACTUAL ADJUSTMENTS PRO FORMA
-------- ----------- ---------
<S> <C> <C> <C>
FOR THE THREE MONTHS ENDED JUNE 30, 1995:
Net loss applicable to common shares ............... $ (5,847) $ -- $ (5,847)
======== ======== ========
Net loss applicable to common shares per share ..... $ (0.07) $ 0.01 $ (0.06)
Weighted average common shares ..................... 88,519 6,931 95,450
FOR THE SIX MONTHS ENDED JUNE 30, 1995:
Net loss applicable to common shares ............... $ (9,178) -- $ (9,178)
Preferred conversion payment ....................... (1,524) $ 387 (1,137)
Dividends paid on $2.25 preferred stock
(1st quarter 1995) ............................... -- 1,161 1,161
-------- -------- --------
Total .............................................. $(10,702) $ 1,548 $ (9,154)
======== ======== ========
Net loss applicable to common shares per share ..... $ (0.13) $ 0.03 $ (0.10)
Weighted average common shares ..................... 84,293 10,925 95,218
</TABLE>
The pro forma treatment presented above would have decreased net loss
applicable to common shares per share from $0.07 to $0.06 for the three months
ended June 30, 1995. The effect of converting all the shares on January 1, 1995
for the six months ended June 30, 1995 would have been a decrease in the net
loss applicable to common shares per share from $0.13 to $0.10.
NOTE 8 -- STOCKHOLDER RIGHTS PLAN
The Company adopted a stockholder rights plan on June 28, 1995 designed to
assure that the Company's stockholders receive fair and equal treatment in the
event of any proposed takeover of the Company and to guard against partial
tender offers and other abusive takeover tactics to gain control of the Company
without paying all stockholders a fair price. The rights plan was not adopted in
response to any specific takeover proposal. Under the rights plan, the Company
declared a dividend of one right ("Right") on each share of Noble Drilling
common stock. Each Right will entitle the holder to purchase one one-hundredth
of a share of a new Series A Junior Participating Preferred Stock, par value
$1.00 per share, at an exercise price of $35.00. The Rights are not currently
exercisable and will become exercisable only in the event a person or group
acquires beneficial ownership of 15 percent or more of Noble Drilling's
outstanding common stock or announces a tender offer or exchange offer to
acquire such ownership level. The Rights are subject to redemption by the
Company for $.01 per Right at any time prior to the tenth day after the first
public announcement of the acquisition by any person or group of beneficial
ownership of 15 percent or more of Noble Drilling common stock. The dividend
distribution was made on July 10, 1995 to stockholders of record at the close of
business on that date. The Rights will expire on July 10, 2005.
8
<PAGE> 9
FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The Company
The Company's offshore fleet at June 30, 1995 consisted of 44 rigs,
comprising 32 jackup drilling rigs, eight submersible rigs and four posted
barges. As of June 30, 1995, the offshore fleet was diversified geographically
as follows: U.S. Gulf - 29 rigs; Mexican Gulf - two rigs; West Africa - eight
rigs; Venezuela - four rigs; and India - one rig. Subsequently, the Company
commenced mobilization of three rigs. Two rigs are currently in transit from the
U.S. Gulf to West Africa. A third rig is being prepared for mobilization from
the Mexican Gulf to the Middle East. The Company's offshore operations also
include labor contracts for drilling and workover activities covering 14 rigs
operating in the U.K. North Sea and one rig operating in the Middle East. These
rigs are not owned or leased by the Company. Through its wholly owned
subsidiary, Triton Engineering Services Company ("Triton"), the Company provides
turnkey drilling services and other engineering and consulting services to the
oil and gas industry. The Company's land drilling operations are conducted
principally in Canada, Texas and Louisiana with an active fleet of 20 land
drilling rigs. As used herein, unless otherwise required by the context, "Noble
Drilling" refers to Noble Drilling Corporation and the "Company" refers to Noble
Drilling and its consolidated subsidiaries.
Industry Conditions and Risks
The Company's operating strategy has been to pursue drilling opportunities
in the U.S. and in certain international markets. Worldwide drilling conditions
vary substantially from region to region; however, the Company operates in most
markets where there is a demand for offshore drilling rigs.
During late 1992, U.S. natural gas prices improved, resulting in greater
demand and higher dayrates for drilling rigs. Increasing U.S. natural gas prices
resulted in significant improvements in the U.S. Gulf of Mexico ("U.S. Gulf")
rig demand and dayrates during the second half of 1993. Declining world oil
prices during this period reduced rig demand outside the U.S. Gulf. As a result
of declining international rig demand and improved market conditions in the U.S.
Gulf, certain contractors mobilized rigs from international markets to the U.S.
Gulf in late 1993 and early 1994. The increased supply of drilling rigs in the
U.S. Gulf more than offset the increased level of U.S. Gulf rig demand during
1994 and the first half of 1995, causing dayrates to deteriorate.
U.S. natural gas prices have declined from a several year high in February
1994 to a low which has not existed since mid-1992. U.S. natural gas prices have
remained relatively flat since September 1994. Oil prices have improved slightly
during the same period. The average dayrate charged by the Company in the first
six months of 1995 in the U.S. Gulf was 18 percent lower than the average
dayrate charged by the Company in the first six months of 1994. If the price of
natural gas remains at current levels indefinitely, the Company's dayrates and
utilization rates in the U.S. Gulf could be adversely affected. The Company also
believes that, absent further improvement in rig demand outside the U.S. Gulf,
the supply of rigs in the U.S. Gulf could continue to cause pressure on dayrates
and utilization levels of the Company's rig fleet through 1995 and into 1996.
The Company cannot predict either the future level of demand for its drilling
services or future conditions in the offshore contract drilling industry.
A major portion of the Company's revenues has been attributable to
international operations. Revenues from international sources accounted for
approximately 51 percent and 48 percent, respectively, of the Company's
operating revenues for the six-month period ended June 30, 1995 and the year
ended December 31, 1994.
Currently, the Company has five offshore drilling rigs under contract and
two offshore drilling rigs available for bidding in Nigeria. Two additional rigs
are currently being mobilized from the U.S. Gulf to Nigeria for new term
contracts. Both rigs are expected to commence operations during the third
quarter of 1995. The Company maintains war and political risk insurance
(covering physical damage or loss up to the insured value of each rig), subject,
in the case of certain coverages, to immediate termination upon the occurrence
of certain events or upon termination by the underwriter on seven days' notice.
Revenues from drilling activities in Nigeria accounted for approximately 11
percent and 13 percent, respectively, of the Company's operating revenues for
the six-month period ended June 30, 1995 and the year ended December 31, 1994.
No assurance can be given that the political and economic climate in Nigeria
will remain stable or that it will not worsen.
The Company began to operate in Venezuela in late 1993. The Company's
operations commenced with four rigs under long-term contracts with Lagoven, a
subsidiary of the government-owned oil company of Venezuela. The contracts with
Lagoven relative to these four rigs expired in the first quarter of 1995. The
Company has subsequently contracted two of the four rigs with Lagoven under new
long-term contracts terminating in the year 2000. A third rig is currently
undergoing refurbishment and is scheduled to commence work under a long-term
contract in August 1995 with Shell de Venezuela S.A. This contract will run
through 1997. The Company's fourth rig in Venezuela is currently operating on a
well-to-well basis for Lagoven. The Company is actively pursuing long-term
9
<PAGE> 10
FORM 10-Q
commitments for this rig in Venezuela and elsewhere. In recent periods, the
Venezuelan economy has experienced high inflation and a shortage of foreign
currency. During a banking crisis in July 1994, the Venezuelan government
imposed a program of currency exchange controls and taxes on certain financial
transactions that temporarily limited the ability of the government-owned oil
companies and their affiliates to make payment in U.S. dollars or other hard
currencies to oilfield service contractors. The Company's operations have not
been materially affected, and the Company continues to receive timely payment
for its services in U.S. dollars. Although timely U.S. dollar payments are
currently being made to the Company, future exchange control actions of the
Venezuelan government could adversely affect the Company's operations in
Venezuela. Revenues from drilling activities in Venezuela accounted for
approximately 11 and nine percent, respectively, of the Company's operating
revenues for the six-month period ended June 30, 1995 and the year ended
December 31, 1994.
At the beginning of 1995, the Company had two rigs under long-term
contracts offshore Mexico. During the second quarter of 1995, both contracts
expired. The Company currently has one of the two rigs working under a term
contract offshore Mexico. The second rig has secured a long-term commitment
until 1998 offshore Qatar. This rig is currently being prepared for mobilization
and is expected to commence operations offshore Qatar during the fourth quarter
of 1995.
Selected Financial Information
The following table sets forth selected consolidated financial information
of the Company expressed as a percentage of total operating revenues for the
periods indicated.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------- -------------------------
1995 1994 1995 1994
----- ----- ----- -----
<S> <C> <C> <C> <C>
Operating revenues
Contract drilling services
International offshore ................. 28.4 % 32.3 % 28.0 % 33.5%
Domestic offshore ...................... 22.2 31.0 23.5 36.1
International land ..................... 4.3 3.6 6.3 5.5
Domestic land .......................... 4.1 2.7 3.5 2.7
Labor contract drilling services .......... 12.5 10.4 12.5 10.9
Turnkey drilling services ................. 23.7 17.4 21.8 9.1
Engineering and consulting services ....... 1.3 1.1 1.6 0.8
Other revenue ............................. 3.5 1.5 2.8 1.4
----- ----- ----- -----
100.0 100.0 100.0 100.0
Operating costs (1) ......................... (77.7) (69.4) (76.2) (67.0)
Depreciation and amortization ............... (12.2) (11.2) (11.2) (11.6)
Selling, general and administrative ......... (13.3) (13.0) (12.8) (11.9)
Minority interest ........................... 0.0 (0.3) 0.0 (0.1)
----- ----- ----- -----
Operating (loss) income ..................... (3.2) 6.1 (0.2) 9.4
Interest expense ............................ (4.1) (3.6) (3.8) (3.7)
Interest income ............................. 2.2 1.6 1.9 1.5
Other, net .................................. 0.5 12.0 0.6 7.0
----- ----- ----- -----
(Loss) income before income tax ............. (4.6) 16.1 (1.5) 14.2
Income tax provision ........................ (1.3) (2.0) (1.7) (2.0)
----- ----- ----- -----
Net (loss) income ........................... (5.9) 14.1 (3.2) 12.2
Preferred stock dividends ................... (2.0) (3.6) (2.6) (3.8)
----- ----- ----- -----
Net (loss) income applicable to common shares (7.9) % 10.5 % (5.8) % 8.4%
===== ===== ===== =====
</TABLE>
(1) Consists of operating costs and expenses other than depreciation and
amortization, selling, general and administrative, and minority interest.
10
<PAGE> 11
FORM 10-Q
RESULTS OF OPERATIONS
For the Three Months Ended June 30, 1995 and 1994
Operational Review. During the three-month period ended June 30, 1995 (the
"Current Quarter"), the Company generated operating revenues of $74.0 million
compared to $87.6 million during the three-month period ended June 30, 1994 (the
"Comparable Quarter"). The decrease in operating revenues was primarily due to a
softening of market conditions in the U.S. Gulf of Mexico and lower
international utilization.
The utilization rate for the Company's domestic offshore rig fleet was 75
percent in the Current Quarter compared to 79 percent in the Comparable Quarter.
The Company's international offshore rig utilization rate decreased to 71
percent during the Current Quarter from 84 percent in the Comparable Quarter. At
June 30, 1995 , the Company had 15 rigs under labor contracts on operator-owned
rigs in its international operations, unchanged from June 30, 1994. The
Company's domestic land rig utilization rate was 73 percent in the Current
Quarter as compared to 49 percent in the Comparable Quarter. The utilization
rate for the Company's international land rig fleet decreased to 50 percent in
the Current Quarter compared to 62 percent in the Comparable Quarter.
Gross margins from contract drilling operations were $14.5 million, or 33
percent of contract drilling revenues, in the Current Quarter as compared to
$21.4 million, or 35 percent of drilling revenues, in the Comparable Quarter.
The decrease in gross margins was principally due to fewer operating days and
lower average dayrates from the domestic contract drilling operations. Labor
contract gross margins were $2.5 million, or 27 percent of labor contract
revenues, in the Current Quarter compared to $2.0 million, or 22 percent of
labor contract revenues, in the Comparable Quarter. Turnkey drilling operations
gross loss was $1.4 million in the Current Quarter compared to a gross margin of
$2.7 million in the Comparable Quarter, primarily due to losses resulting from
operational issues.
Depreciation and Amortization Expense. Depreciation and amortization
expenses were $9.0 million in the Current Quarter as compared to $9.8 million in
the Comparable Quarter, a decrease of eight percent. In the first quarter of
1995, estimated salvage values and remaining depreciable lives of certain rigs
were adjusted to better reflect their remaining economic lives and to be
consistent with other similar assets held by the Company. The effect of this
change in accounting estimates was a decrease to the Current Quarter net loss
applicable to common shares of approximately $1.1 million, or $0.01 per share.
Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses were $9.8 million in the Current Quarter
compared to $11.4 million in the Comparable Quarter. The 14 percent decrease in
SG&A expenses was principally attributable to reductions in overhead achieved as
a result of restructuring and consolidation efforts which commenced in the
fourth quarter of 1994. Reported SG&A costs include field office expenses.
Interest Income (Expense). Interest expense, net of interest income, was
$1.5 million in the Current Quarter compared to $1.7 million in the Comparable
Quarter. This net decrease was principally due to higher average interest rates
earned on the Company's investments.
Other, Net. Other, net was $387,000 in the Current Quarter as compared to
$10.6 million in the Comparable Quarter. The decrease in other, net reflected an
$8.0 million gain from the sale of a drilling unit and a $1.6 million gain from
the recovery of a previously written-off note receivable in the Comparable
Quarter.
11
<PAGE> 12
FORM 10-Q
RESULTS OF OPERATIONS
For the Six Months Ended June 30, 1995 and 1994
Operational Review. During the six-month period ended June 30, 1995 (the
"Current Period"), the Company generated operating revenues of $159.1 million
compared to $166.5 million during the six-month period ended June 30, 1994 (the
"Comparable Period"). The five percent decline in operating revenues was
primarily due to a decrease in offshore contract drilling services revenues,
partially offset by Triton revenues; Triton was acquired in April 1994.
The utilization rate for the Company's domestic offshore rig fleet was 78
percent in the Current Period compared to 76 percent in the Comparable Period.
The Company's international offshore rig utilization rate decreased to 75
percent during the Current Period from 84 percent in the Comparable Period. At
June 30, 1995, the Company had 15 rigs under labor contracts on operator-owned
rigs in its international operations, unchanged from June 30, 1994. The
Company's domestic land rig utilization rate was 64 percent in the Current
Period as compared to 48 percent in the Comparable Period. The utilization rate
for the Company's international land rig fleet was 72 percent in the Current
Period, unchanged from the Comparable Period.
Gross margins from contract drilling operations were $32.4 million, or 33
percent of contract drilling revenues, in the Current Period as compared to
$47.4 million, or 37 percent of drilling revenues, in the Comparable Period. The
decrease in gross margins was principally due to fewer operating days and lower
average dayrates from the contract drilling operations in the Current Period.
Labor contract gross margins were $5.0 million, or 25 percent of labor contract
revenues, in the Current Period compared to $3.8 million, or 21 percent of labor
contract revenues, in the Comparable Period. Turnkey drilling operations gross
loss was $1.3 million in the Current Period compared to a gross margin of $2.7
million in the Comparable Period. This decrease was primarily due to losses
resulting from operational issues.
Depreciation and Amortization Expense. Depreciation and amortization
expenses were $17.8 million in the Current Period as compared to $19.3 million
in the Comparable Period. The decrease of $1.5 million was due to a change in
accounting estimates. In the first quarter of 1995, estimated salvage values and
remaining depreciable lives of certain rigs were adjusted to better reflect
their remaining economic lives and to be consistent with other similar assets
held by the Company. The effect of this change in accounting estimates was a
decrease in the Current Period net loss applicable to common shares of
approximately $2.2 million, or $0.03 per share.
Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses were $20.4 million in the Current Period
compared to $19.9 million in the Comparable Period. The increase was principally
due to operations of Triton, which was acquired in April 1994, offset by
reductions in overhead achieved as a result of restructuring and consolidation
efforts which commenced in the fourth quarter of 1994. Reported SG&A costs
include field office expenses.
Interest Income (Expense). Interest expense, net of interest income, was
$3.0 million in the Current Period compared to $3.6 million in the Comparable
Period. This net decrease of $600,000 was principally due to higher average
interest rates earned on the Company's investments.
Other, Net. Other, net was $1.0 million in the Current Period as compared
to $11.7 million in the Comparable Period. The decrease in other, net reflected
an $8.0 million gain on the sale of a drilling unit and a $1.6 million gain on
the recovery of a previously written-off note receivable in the Comparable
Period.
12
<PAGE> 13
FORM 10-Q
LIQUIDITY AND CAPITAL RESOURCES
Overview
The Company had working capital of $137.6 million and $157.9 million as of
June 30, 1995 and December 31, 1994, respectively. The decrease in working
capital was primarily due to increased capital expenditures during the Current
Quarter. The ratio of current assets to current liabilities at June 30, 1995 was
3.09:1 as compared to 2.92:1 at December 31, 1994. The ratio of long-term debt
to total debt plus shareholders' equity was 0.20:1 at June 30, 1995, compared to
0.19:1 at December 31, 1994.
At June 30, 1995, the Company had cash, cash equivalents, restricted cash
and investments in marketable debt securities of $96.2 million and $26.0 million
of funds available under various lines of credit. The Company expects to
generate positive cash flow from operations for the remainder of 1995 and the
first six months of 1996, assuming no material decrease in demand for contract
drilling and turnkey services. The Company will continue to have cash
requirements for debt principal and interest payments and preferred dividends,
when and if declared. For the remainder of 1995 and the first six months of
1996, debt principal and interest payments are estimated to be approximately
$14.1 million. Cumulative dividends on the $1.50 Preferred Stock for the
remainder of 1995 and the first six months of 1996 are approximately $6.0
million. The Company expects to fund these obligations, totaling $20.1 million,
out of cash and short-term investments as well as cash expected to be provided
by operations.
Capital expenditures for the remainder of 1995 and the first six months of
1996 are planned to aggregate approximately $65.0 million, of which the majority
are discretionary and relate to upgrades of equipment which management considers
desirable to improve the marketability of the fleet, but which could be deferred
if necessary. These capital expenditures will be funded from operating cash
flows to the extent available, existing cash balances and/or with available
lines of credit.
Credit Facilities and Long-Term Debt
At June 30, 1995, the Company had lines of credit totaling $31.0 million
and letter of credit facilities totaling $5.0 million subject to the Company's
maintenance of certain levels of collateral. Based on levels of collateral at
June 30, 1995, the Company had $26.0 million available under these lines of
credit and $2.2 million available to support the issuance of letters of credit.
In connection with the initial construction of the NN-1, the predecessor
of NN-1 Limited Partnership issued U.S. Government Guaranteed Ship Financing
Sinking Fund Bonds, of which $1.8 million was outstanding at June 30, 1995.
Interest and principal is payable semi-annually on June 15 and December 15 of
each year with interest at 8.95 percent, and the bonds mature in 1998. The bonds
are secured by the vessel, and the applicable security agreement contains
certain restrictions, among others, on distributions to partners, dispositions
of assets, and the provision of services to related parties. In addition, there
are minimum working capital, net worth and long-term debt to net worth
requirements applicable to NN-1 Limited Partnership. The Company's sharing
percentage in NN-1 Limited Partnership's distributions from operations is
generally 90 percent.
In 1993, the Company issued $125,000,000 aggregate principal amount of
9 1/4% Senior Notes Due 2003 (the "Senior Notes"). The Senior Notes will mature
on October 1, 2003. Interest on the Senior Notes is payable semi-annually on
April 1 and October 1 of each year. The Senior Notes are redeemable at the
option of the Company, in whole or in part, on or after October 1, 1998 at
103.47 percent of principal amount, declining ratably to par on or after October
1, 2001, plus accrued interest. Mandatory sinking fund payments of 25 percent of
the original principal amount of the Senior Notes at par plus accrued interest
will be required on October 1, 2001 and October 1, 2002. The indenture governing
the Senior Notes contains certain restrictive covenants, including limitations
on additional indebtedness and the ability to secure such indebtedness;
restrictions on dividends and certain investments; and limitations on sales of
assets, sales and leasebacks, transactions with affiliates, and mergers or
consolidations.
13
<PAGE> 14
FORM 10-Q
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
The information required by this Item 6(a) is set forth in the Index to
Exhibits accompanying this quarterly report and is incorporated herein
by reference.
(b) The following report on Form 8-K was filed by the Company during the
quarter ended June 30, 1995:
Form 8-K dated June 30, 1995 (Date of Event: June 28, 1995),
which reported the Company's adoption of a stockholder rights plan.
14
<PAGE> 15
FORM 10-Q
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.
NOBLE DRILLING CORPORATION
DATE: August 11, 1995 /s/ JAMES C. DAY
--------------- ---------------------------------------------
JAMES C. DAY, Chairman, President and
Chief Executive Officer
DATE: August 11, 1995 /s/ BYRON L. WELLIVER
--------------- ---------------------------------------------
BYRON L. WELLIVER,
Senior Vice President--Finance,
Treasurer and Controller
(Principal Financial and Accounting Officer)
15
<PAGE> 16
FORM 10-Q
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ---------- -----------------------------------------------------------------------------------------------
<S> <C> <C>
3.1 -- Certificate of Elimination of shares of $2.25 Convertible Exchangeable Preferred Stock of the
Registrant dated June 8, 1995.
3.2 -- Certificate of Designations of Series A Junior Participating Preferred Stock of the Registrant,
dated as of June 29, 1995.
3.3 -- Amendment of the Bylaws of the Registrant adopted on July 27, 1995.
3.4 -- Composite copy of the Bylaws of the Registrant as currently in effect.
4 -- Rights Agreement dated as of June 28, 1995, between Noble Drilling Corporation and Liberty Bank
and Trust Company of Oklahoma City, N.A. (filed as Exhibit 4 to the Registrant's Form 8-K dated
June 30, 1995 and incorporated herein by reference).
27 Financial Data Schedule.
</TABLE>
16
<PAGE> 1
EXHIBIT 3.1
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
----------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "NOBLE DRILLING CORPORATION", FILED IN THIS OFFICE ON THE EIGHTH
DAY OF JUNE, A.D. 1995, AT 2 O'CLOCK P.M.
[SEAL] /s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 7534163
DATE: 06-09-95
<PAGE> 2
CERTIFICATE OF ELIMINATION
OF
SHARES OF $2.25 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK
OF
NOBLE DRILLING CORPORATION
Noble Drilling Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware,
Does hereby certify:
FIRST: That the total number of shares which said corporation has
authority to issue is 200,000,000 shares of Common Stock of the par value of
$.10 each and 15,000,000 shares of Preferred Stock of the par value of $1.00
each.
SECOND: That pursuant to the provisions of the Certificate of
Designations filed by the corporation with the Delaware Secretary of State on
November 18, 1991 (the "Certificate of Designations"), the corporation created
a series of the class of authorized Preferred Stock designated as "$2.25
Convertible Exchangeable Preferred Stock."
THIRD: That pursuant to the provisions of the Certificate of
Designations, 2,987,299 shares of $2.25 Convertible Exchangeable Preferred
Stock have been surrendered to the corporation for conversion into shares of
its Common Stock, and 2,701 shares of $2.25 Convertible Exchangeable Preferred
Stock have been redeemed.
FOURTH: That the 2,987,299 shares of $2.25 Convertible Exchangeable
Preferred Stock so surrendered for conversion and the 2,701 shares of $2.25
Convertible Exchangeable Preferred Stock so redeemed, in the aggregate
constitute all the outstanding shares of said $2.25 Convertible Exchangeable
Preferred Stock; and that pursuant to Section 12 of the Certificate of
Designations, said shares of $2.25 Convertible Exchangeable Preferred Stock
when so redeemed or surrendered for conversion were restored to the status of
authorized and unissued shares of Preferred Stock, without designation as to
series, and may thereafter be issued, but not as shares of $2.25 Convertible
Exchangeable Preferred Stock.
IN WITNESS WHEREOF, said Noble Drilling Corporation has caused this
certificate to be signed by James C. Day, its Chairman, President and Chief
Executive Officer on this 8th day of June, 1995.
NOBLE DRILLING CORPORATION
By: /s/ James C. Day
-------------------------------------------
James C. Day, Chairman, President and Chief
Executive Officer
<PAGE> 1
EXHIBIT 3.2
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "NOBLE DRILLING CORPORATION", FILED IN THIS OFFICE ON THE
TWENTY-NINTH DAY OF JUNE, A.D. 1995, AT 10 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW
CASTLE COUNTY RECORDER OF DEEDS FOR RECORDING.
[SEAL] /s/ EDWARD J. FREEL
-----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 7559126
DATE: 06-29-95
<PAGE> 2
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
NOBLE DRILLING CORPORATION
----------------------
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
----------------------
NOBLE DRILLING CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that, pursuant to the authority conferred on the Board of
Directors of the Corporation by the Restated Certificate of Incorporation, as
amended, of the Corporation (the "Certificate of Incorporation") and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation on June 28, 1995, adopted
the following resolution establishing and creating a series of Preferred Stock,
par value $1.00 per share, of the Corporation designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions of
the Restated Certificate of Incorporation, as amended, of the
Corporation, a series of Preferred Stock, par value $1.00 per share, of
the Corporation is hereby established and created, and that the
designation and number of shares thereof and the voting and other
powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications,
limitations and restrictions thereof, are as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock"). The number of shares initially constituting the Series A
Preferred Stock shall be 1,100,000; provided, however, that, if more than a
total of 1,100,000 shares of Series A Preferred Stock shall be issuable upon the
exercise of Rights (the "Right") issued pursuant to the Rights Agreement dated
as of June 28, 1995 between the Corporation and Liberty Bank and Trust Company
of Oklahoma City, N.A., as Rights Agent (the "Rights Agreement"), the Board of
Directors of the Corporation, pursuant to Section 151(g) of the General
Corporation Law of the State of
1
<PAGE> 3
Delaware, shall direct by resolution or resolutions that a certificate be
properly executed, acknowledged, filed and recorded, in accordance with the
provisions of Section 103 thereof, providing for the total number of shares of
Series A Preferred Stock authorized to be issued to be increased (to the extent
that the Certificate of Incorporation then permits) to the largest number of
whole shares (rounded up to the nearest whole share) issuable upon exercise of
such Rights.
Section 2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of shares
of any other series of Preferred Stock or other class of stock of the
Corporation ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors, out of
the assets of the Corporation legally available therefor, (i) quarterly
dividends payable in cash on the last day of each fiscal quarter in each year,
or such other dates as the Board of Directors of the Corporation shall approve
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or a fraction of a share of Series A Preferred Stock, in the
amount of $.01 per whole share (rounded to the nearest cent) less the amount of
all cash dividends declared on the Series A Preferred Stock pursuant to the
following clause (ii) since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred Stock
(the total of which shall not, in any event, be less than zero) and (ii)
dividends payable in cash on the payment date for each cash dividend declared on
the Common Stock in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect multiplied
times the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any distribution on
the Common Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of Common
Stock), then, in each such case, the Corporation shall simultaneously pay or
make on each outstanding whole share of Series A Preferred Stock a dividend or
distribution in like kind equal to the Formula Number then in effect multiplied
times such dividend or distribution on each share of the Common Stock. As used
herein, the "Formula Number" shall be 100; provided, however, that, if at any
time after June 28, 1995, the Corporation shall (x) declare or pay any dividend
on the Common Stock payable in shares of Common Stock or make any distribution
on the Common Stock in shares of Common Stock, (y) subdivide (by a stock split
or otherwise) the outstanding shares of Common Stock into a larger number of
shares of Common Stock or (z) combine (by a reverse stock split or otherwise)
the outstanding shares of Common Stock into a smaller number of shares of Common
Stock, then in each such event the Formula Number shall be adjusted to a number
determined by multiplying the Formula Number in effect immediately prior to such
event by a fraction, the numerator of which is the number of shares of Common
Stock that are outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that are outstanding immediately
prior to such event (and rounding the result to the nearest whole number); and
provided further, that, if at any time after June 28, 1995, the Corporation
shall issue any shares of its stock in a merger, reclassification, or change of
the outstanding shares of Common Stock, then in each such event the Formula
Number shall be appropriately adjusted to reflect such merger, reclassification
or change so that each share of
2
<PAGE> 4
Series A Preferred Stock continues to be the economic equivalent of a Formula
Number of shares of Common Stock prior to such merger, reclassification or
change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section
immediately prior to or at the same time it declares a dividend or distribution
on the Common Stock (other than a dividend or distribution solely in shares of
Common Stock); provided, however, that, in the event no dividend or distribution
(other than a dividend or distribution solely in shares of Common Stock) shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $.01 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from and after the Quarterly Dividend Payment
Date next preceding the date of original issue of such shares of Series A
Preferred Stock; provided, however, that dividends on such shares which are
originally issued after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly dividend and
on or prior to the next succeeding Quarterly Dividend Payment Date shall begin
to accrue and be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of Series A Preferred Stock
which are originally issued prior to the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend on the first Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter next preceding the
date of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share- by-share basis
among all such shares at the time outstanding.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied times
the maximum number of votes per share which any holder of
3
<PAGE> 5
the Common Stock or stockholders generally then have with respect to such matter
(assuming any holding period or other requirement to vote a greater number of
shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Preferred Stock are in
default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of stockholders (and at any subsequent annual meeting of stockholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to cast
a number of votes per share of Series A Preferred Stock equal to the Formula
Number. Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the shares of Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Preferred Stock shall
be divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of
all persons who have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for authorizing or taking
any corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
4
<PAGE> 6
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock; provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series, and may thereafter be issued
as part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of Incorporation,
or in any other Certificate of Designations creating a series of Preferred Stock
or any similar stock of the Corporation or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon the
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received an amount equal to
accrued
5
<PAGE> 7
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, plus an amount equal to the greater of (x) $1.00 per whole
share and (y) an aggregate amount per share equal to the Formula Number then in
effect multiplied times the aggregate amount to be distributed per share to
holders of Common Stock, or (ii) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination thereof, then in any
such case the then outstanding shares of Series A Preferred Stock shall at the
same time be similarly exchanged for or changed into an amount per share equal
to the Formula Number then in effect multiplied times the aggregate amount of
stock, securities, cash or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is exchanged or changed.
In the event both this Section 7 and Section 2 appear to apply to a transaction,
this Section 7 shall control.
Section 8. No Redemption; No Sinking Fund.
(a) The shares of Series A Preferred Stock shall not be subject to
redemption by the Corporation; provided, however, that the Corporation may
purchase or otherwise acquire outstanding shares of Series A Preferred Stock in
the open market or by offer to any holder or holders of shares of Series A
Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
Section 9. Ranking. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and as to distributions of assets upon
liquidation, dissolution or winding up of the Corporation, junior to the $1.50
Convertible Preferred Stock of the Corporation and to all other series of
Preferred Stock of the Corporation, unless the Board of Directors shall
specifically determine otherwise in fixing the powers, preferences and relative,
participating, optional and other special rights of the shares of any such other
series and the qualifications, limitations and restrictions thereof.
Section 10. Fractional Shares. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth of a share
or any integral multiple of such fraction which shall entitle the holder, in
proportion to such holder's fractional shares, to receive dividends, exercise
voting rights, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Stock. In lieu of fractional shares, the
Corporation, prior to the first issuance of a share or a fraction of a share of
Series A Preferred Stock, may elect (i) to make a cash payment as provided in
the Rights Agreement for fractions of a share other than one one-hundredth of a
share or any integral multiple thereof or (ii) to issue depository receipts
evidencing such authorized fraction of a share of Series A Preferred Stock
pursuant to an
6
<PAGE> 8
appropriate agreement between the Corporation and a depository selected by the
Corporation; provided that such agreement shall provide that the holders of such
depository receipts shall have all the rights, privileges and preferences to
which they are entitled as holders of the Series A Preferred Stock.
Section 11. Amendment. None of the powers, preferences or relative,
participating, optional or other special rights of the Series A Preferred Stock
as provided herein or in the Certificate of Incorporation of the Corporation
shall be amended in any manner that would alter or change the powers,
preferences, rights or privileges of the holders of Series A Preferred Stock so
as to affect them adversely without the affirmative vote of the holders of at
least 66-2/3 percent of the outstanding shares of Series A Preferred Stock,
voting as a separate class.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be duly executed in its corporate name on this 28th day of June,
1995.
NOBLE DRILLING CORPORATION
By /s/ James C. Day
---------------------------
James C. Day
Chairman, President and
Chief Executive Officer
7
<PAGE> 1
EXHIBIT 3.3
NOBLE DRILLING CORPORATION
RESOLUTION ADOPTED BY THE
BOARD OF DIRECTORS
JULY 27, 1995
RELATING TO AMENDMENT OF BYLAWS
RESOLVED, that the Bylaws of the Corporation are hereby amended in the
following particulars:
1. Section 3 of Article VI is hereby amended in its entirety to
read as follows:
Section 3. Determination of Indemnification. Any
indemnification under Section 1 or 2 of this Article VI (unless ordered
by a court) shall be made by the Corporation only as authorized in the
specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances
because such person has met the applicable standard of conduct set
forth in Section 1 or 2 of this Article VI. Such determination shall be
made (i) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or
(ii) if there are no such directors, or if such directors so direct, by
independent legal counsel in a written opinion, or (iii) by the
stockholders.
2. Article VI is hereby amended by adding a new Section 10 to
read as follows:
Section 10. Exclusive Jurisdiction. The Delaware Court of
Chancery is vested with exclusive jurisdiction to hear and determine
all actions for advancement of expenses or indemnification brought
under this Article VI or under any statute, agreement, vote of
stockholders or disinterested directors, or otherwise. The Delaware
Court of Chancery may summarily determine the Corporation's obligation
to advance expenses (including attorneys' fees).
<PAGE> 1
EXHIBIT 3.4
BYLAWS
OF
NOBLE DRILLING CORPORATION
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of Noble Drilling
Corporation (hereinafter called the "Corporation") in the State of Delaware
shall be at Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, and the registered agent in charge thereof
shall be The Corporation Trust Company.
Section 2. Other Offices. The Corporation may also have an office or
offices, and keep the books and records of the Corporation, except as may
otherwise be required by law, at such other place or places, either within or
without the State of Delaware, as the Board of Directors may from time to time
determine or the business of the Corporation require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meeting. All meetings of the stockholders of the
Corporation shall be held at the office of the Corporation or at such other
places, within or without the State of Delaware, as may from time to time be
fixed by the Board of Directors, the Chairman of the Board or the President.
Section 2. Annual Meetings. The annual meeting of the stockholders of
the Corporation for the election of directors and for the transaction of such
other business as may properly come before the meeting shall be held on the
fourth Thursday in April in each year, if not a legal holiday under the laws of
the place where the meeting is to be held, and, if a legal holiday, then on the
next succeeding day not a legal holiday under the laws of such place, or on such
other date and at such hour as may from time to time be fixed by the Board of
Directors, the Chairman of the Board or the President.
In order for business to be properly brought before the meeting by a
stockholder, the business must be legally proper and written notice thereof must
have been filed with the Secretary of the Corporation not less than 60 nor more
than 120 days prior to the meeting. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the proposal as the same
appear in the Corporation's records; (b) the class and number of shares of stock
of the Corporation that are beneficially owned, directly or indirectly, by such
stockholder; and (c) a clear and concise statement of the proposal and the
stockholder's reasons for supporting it.
The filing of a stockholder notice as required above shall not, in and
of itself, constitute the making of the proposal described therein.
Article II, Section 2 amended
effective as of January 31, 1991
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<PAGE> 2
If the chairman of the meeting determines that any proposed business
has not been properly brought before the meeting, he shall declare such business
out of order; and such business shall not be conducted at the meeting.
Section 3. Special Meetings. Except as otherwise required by law and
subject to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, special
meetings of the stockholders for any purpose or purposes may be called only by
(i) the Chairman of the Board, (ii) the President, or (iii) a majority of the
entire Board of Directors. Only such business as is specified in the notice of
any special meeting of the stockholders shall come before such meeting.
Section 4. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of the stockholders, whether annual or special,
shall be given, either by personal delivery or by mail, not less than 10 nor
more than 60 days before the date of the meeting to each stockholder of record
entitled to notice of the meeting. If mailed, such notice shall be deemed given
when deposited in the United States mail, postage prepaid, directed to the
stockholder at such stockholder's address as it appears on the records of the
Corporation. Each such notice shall state the place, date and hour of the
meeting, and the purpose or purposes for which the meeting is called. Notice of
any meeting of stockholders shall not be required to be given to any stockholder
who shall attend such meeting in person or by proxy without protesting, prior to
or at the commencement of the meeting, the lack of proper notice to such
stockholder, or who shall waive notice thereof as provided in Article X of these
Bylaws. Notice of adjournment of a meeting of stockholders need not be given if
the time and place to which it is adjourned are announced at such meeting,
unless the adjournment is for more than 30 days or, after adjournment, a new
record date is fixed for the adjourned meeting.
Section 5. Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation of the Corporation, the holders of a majority of
the votes entitled to be cast by the stockholders entitled to vote, which if any
vote is to be taken by classes shall mean the holders of a majority of the votes
entitled to be cast by the stockholders of each such class, present in person or
represented by proxy, shall constitute a quorum for the transaction of business
at any meeting of the stockholders.
Section 6. Adjournments. In the absence of a quorum, the holders of a
majority of the votes entitled to be cast by the stockholders, present in person
or represented by proxy, may adjourn the meeting from time to time. At any such
adjourned meeting at which a quorum may be present, any business may be
transacted which might have been transacted at the meeting as originally called.
Section 7. Order of Business. At each meeting of the stockholders, the
Chairman of the Board, or, in the absence of the Chairman of the Board, the
President, shall act as chairman. The order of business at each such meeting
shall be as determined by the chairman of the meeting. The chairman of the
meeting shall have the right and authority to prescribe such rules, regulations
and procedures and to do all such acts and things as are necessary or desirable
for the proper conduct of the meeting, including, without limitation, the
establishment of procedures for the maintenance of order and safety, limitations
on the time allotted to questions or comments on the affairs of the Corporation,
restrictions on entry to such meeting after the time prescribed for the
commencement thereof, and the opening and closing of the voting polls. The
chairman of the meeting shall announce at each such meeting the date and time of
the opening and the closing of the voting polls for each matter upon which the
stockholders will vote at such meeting.
Section 8. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who has charge of the stock ledger to
prepare and make, at least 10 days before each meeting of the stockholders, a
complete list of the stockholders entitled to vote thereat, arranged in
alphabetical order,
Article II, Section 7 amended
effective as of January 31, 1991
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<PAGE> 3
and showing the address of each stockholder and the number of shares registered
in such stockholder's name. Such list shall be produced and kept available at
the times and places required by law.
Section 9. Voting. Except as otherwise provided by law or by the
Certificate of Incorporation of the Corporation, each stockholder of record of
any class or series of stock having a preference over the Common Stock of the
Corporation as to dividends or upon liquidation shall be entitled at each
meeting of stockholders to such number of votes for each share of such stock as
may be fixed in the Certificate of Incorporation or in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of such
stock, and each stockholder of record of Common Stock shall be entitled at each
meeting of stockholders to one vote for each share of such stock, in each case,
registered in such stockholder's name on the books of the Corporation:
(a) on the date fixed pursuant to Section 6 of Article VII of
these Bylaws as the record date for the determination of stockholders
entitled to notice of and to vote at such meeting; or
(b) if no such record date shall have been so fixed, then at
the close of business on the day next preceding the date on which
notice of such meeting 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.
Each stockholder entitled to vote at any meeting of stockholders may
authorize not in excess of three persons to act for such stockholder by a proxy
signed by such stockholder or such stockholder's attorney-in-fact. Any such
proxy shall be delivered to the secretary of such meeting at or prior to the
time designated for holding such meeting but, in any event, not later than the
time designated in the order of business for so delivering such proxies. No such
proxy shall be voted or acted upon after three years from its date, unless the
proxy provides for a longer period.
At each meeting of the stockholders, all corporate actions, other than
the election of directors, to be taken by vote of the stockholders (except as
otherwise required by law and except as otherwise provided in the Certificate of
Incorporation) shall be authorized by a majority of the votes cast by the
stockholders entitled to vote thereon, present in person or represented by
proxy. Directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the election of the directors. Where a separate vote by a class or classes is
required, the affirmative vote of the majority of shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class.
Unless required by law or determined by the chairman of the meeting to
be advisable, the vote on any matter, including the election of directors, need
not be by written ballot. In the case of a vote by written ballot, each ballot
shall be signed by the stockholder voting, or by such stockholder's proxy, and
shall state the number of shares voted.
Section 10. Inspectors of Election. Either the Board of Directors or,
in the absence of an appointment of inspectors by the Board, the Chairman of the
Board or the President shall, in advance of each meeting of the stockholders,
appoint one or more inspectors to act at such meeting and make a written report
thereof. In connection with any such appointment, one or more persons may, in
the discretion of the body or person making such appointment, be designated as
alternate inspectors to replace any inspector who fails to act. If no inspector
or alternate is able to act at any meeting of stockholders, the chairman of such
meeting shall appoint one or more inspectors to act at such meeting. Each such
inspector shall perform such duties
Article II, Section 9 amended
effective as of October 29, 1987;
Article II, Section 10 amended
effective as of January 31, 1991
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<PAGE> 4
as are required by law and as shall be specified by the Board, the Chairman of
the Board, the President or the chairman of the meeting. Each such inspector,
before entering upon the discharge of his duties, shall take and sign an oath
faithfully to execute the duties of inspector with strict impartiality and
according to the best of his ability. Inspectors need not be stockholders. No
director or nominee for the office of director shall be appointed such an
inspector.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors, which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by law or by the Certificate of Incorporation of the
Corporation directed or required to be exercised or done by the stockholders.
Section 2. Number, Qualification and Election. Except as otherwise
provided in any resolution or resolutions adopted by the Board of Directors
pursuant to the provisions of Article IV of the Certificate of Incorporation of
the Corporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation, the number of directors of the Corporation shall be fixed from time
to time by resolution adopted by vote of a majority of the entire Board of
Directors, provided that the number so fixed shall not be less than three.
The directors, other than those who may be elected by the holders of
shares of any class or series of stock having a preference over the Common Stock
as to dividends or upon liquidation pursuant to the terms of any resolution or
resolutions providing for the issuance of such stock adopted by the Board, shall
be classified, with respect to the time for which they severally hold office,
into three classes as follows: one class of one director shall be originally
elected for a term expiring at the annual meeting of stockholders to be held in
1986, another class of two directors shall be originally elected for a term
expiring at the annual meeting of stockholders to be held in 1987, and another
class of two directors shall be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1988, with each class to hold
office until its successors are elected and qualified. Any newly created
directorships resulting from any increase in the number of directors shall be
allocated to the classes of directors described in the immediately preceding
sentence in such manner so as to maintain, as nearly as possible, the equality
in number of the directors in each class. At each annual meeting of the
stockholders of the Corporation, the successors of the class of directors whose
term expires at that meeting shall be elected to hold office for a term expiring
at the annual meeting of stockholders held in the third year following the year
of their election.
Each director shall be at least 21 years of age. A person shall be
eligible to be elected a director of the Corporation until the annual meeting of
stockholders of the Corporation next succeeding such person's
Article III, Section 2 amended
December 28, 1987, but effective
as of January 29, 1988; amended
effective as of February 4, 1988;
amended January 30, 1992;
amended effective as of
February 10, 1993; amended
effective as of July 29, 1993
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<PAGE> 5
70th birthday, and any person serving as a director on such director's 70th
birthday shall be eligible to complete such director's term as such. Directors
need not be stockholders of the Corporation.
Subject to the rights of the holders of any class or series of stock
having a preference over the Common Stock as to dividends or upon liquidation,
at each annual meeting of the stockholders, there shall be elected the directors
of the class the term of office of which shall then expire.
In any election of directors, the persons receiving a plurality of the
votes cast, up to the number of directors to be elected in such election, shall
be deemed elected.
Section 3. Notification of Nominations. Subject to the rights of the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, nominations for the election of
directors may be made by the Board of Directors or by any stockholder entitled
to vote for the election of directors. Any stockholder entitled to vote for the
election of directors at a meeting may nominate persons for election as
directors only if written notice of such stockholder's intent to make such
nomination is given, either by personal delivery or by United States mail,
postage prepaid, to the Secretary of the Corporation not later than (i) with
respect to an election to be held at an annual meeting of stockholders, 90 days
in advance of such meeting, and (ii) with respect to an election to be held at a
special meeting of stockholders for the election of directors, the close of
business on the seventh day following the date on which notice of such meeting
is first given to stockholders. Each such notice shall set forth: (a) the name
and address of the stockholder who intends to make the nomination of the person
or persons to be nominated; (b) a representation that the stockholder is a
holder of record of stock of the Corporation entitled to vote at such meeting
and intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice; (c) a description of all arrangements
or understandings between the stockholder and each nominee and any other person
or persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (d) such other information
regarding each nominee proposed by such stockholder as would have been required
to be included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had each nominee been nominated, or intended
to be nominated, by the Board of Directors; and (e) the consent of each nominee
to serve as a director of the Corporation if so elected. The chairman of the
meeting may refuse to acknowledge the nomination of any person not made in
compliance with the foregoing procedure.
Section 4. Quorum and Manner of Acting. Except as otherwise provided by
law, the Certificate of Incorporation of the Corporation or these Bylaws, a
majority of the entire Board of Directors shall constitute a quorum for the
transaction of business at any meeting of the Board, and, except as so provided,
the vote of a majority of the directors present at any meeting at which a quorum
is present shall be the act of the Board. In the absence of a quorum, a majority
of the directors present may adjourn the meeting to another time and place. At
any adjourned meeting at which a quorum is present, any business that might have
been transacted at the meeting as originally called may be transacted.
Section 5. Place of Meeting. The Board of Directors may hold its
meetings at such place or places within or without the State of Delaware as the
Board may from time to time determine or as shall be specified or fixed in the
respective notices or waivers of notice thereof.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
shall be held at such times and places as the Board shall from time to time by
resolution determine. If any day fixed for a regular meeting shall be a legal
holiday under the laws of the place where the meeting is to be held, the meeting
that would otherwise be held on that day shall be held at the same hour on the
next succeeding business day.
Section 7. Special Meetings. Special meetings of the Board of Directors
shall be held whenever called by the Chairman of the Board or the President or
by a majority of the directors.
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<PAGE> 6
Section 8. Notice of Meetings. Notice of regular meetings of the Board
of Directors or of any adjourned meeting thereof need not be given. Notice of
each special meeting of the Board shall be mailed or transmitted by delivery
service to each director, addressed to such director at such director's
residence or usual place of business, at least two days before the day on which
the meeting is to be held or shall be sent to such director at such place by
telegraph or facsimile telecommunication or be given personally or by telephone,
not later than the day before the meeting is to be held, but notice need not be
given to any director who shall, either before or after the meeting, submit a
signed waiver of such notice or who shall attend such meeting without
protesting, prior to or at its commencement, the lack of notice to such
director. Every such notice shall state the time and place but need not state
the purpose of the meeting.
Section 9. Rules and Regulations. The Board of Directors may adopt such
rules and regulations not inconsistent with the provisions of law, the
Certificate of Incorporation of the Corporation or these Bylaws for the conduct
of its meetings and management of the affairs of the Corporation as the Board
may deem proper.
Section 10. Participation in Meeting by Means of Communication
Equipment. Any one or more members of the Board of Directors or any committee
thereof may participate in any meeting of the Board or of any such 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 11. Action Without Meeting. Any action required or permitted to
be taken at any meeting of the Board of Directors or any committee thereof may
be taken without a meeting if all of the members of the Board or of any such
committee consent thereto in writing and the writing or writings are filed with
the minutes of proceedings of the Board or of such committee.
Section 12. Resignations. Any director of the Corporation may at any
time resign by giving written notice to the Board of Directors, the Chairman of
the Board, the President or the Secretary of the Corporation. Such resignation
shall take effect at the time specified therein or, if the time be not
specified, upon receipt thereof; and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Section 13. Removal of Directors. Directors may be removed only as
provided in Section 4 of Article VI of the Certificate of Incorporation of the
Corporation.
Section 14. Vacancies. Subject to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, any vacancies on the Board of Directors resulting
from death, resignation, removal or other cause shall be filled only in the
manner provided in Section 3 of Article VI of the Certificate of Incorporation
of the Corporation, and newly created directorships resulting from any increase
in the number of directors shall be filled in the manner provided in Section 3
of Article VI of the Certificate of Incorporation of the Corporation or, if not
so filled, by the stockholders at the next annual meeting thereof or at a
special meeting called for that purpose in accordance with Section 3 of Article
II of these Bylaws.
Section 15. Compensation. Each director who shall not at the time also
be a salaried officer or employee of the Corporation or any of its subsidiaries
(hereinafter referred to as an "outside director"), in consideration of such
person serving as a director, shall be entitled to receive from the Corporation
such amount per annum and such fees for attendance at meetings of the Board of
Directors or of committees of the Board, or both, as the Board shall from time
to time determine. In addition, each director, whether or not
Article III, Section 8
amended January 30, 1992
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<PAGE> 7
an outside director, shall be entitled to receive from the Corporation
reimbursement for the reasonable expenses incurred by such person in connection
with the performance of such person's duties as a director. Nothing contained in
this Section 15 shall preclude any director from serving the Corporation or any
of its subsidiaries in any other capacity and receiving proper compensation
therefor.
Section 16. Directors Emeritus. The Board of Directors may appoint one
or more directors emeritus as it shall from time to time determine. Each
director emeritus appointed shall hold office at the pleasure of the Board of
Directors. A director emeritus shall be entitled, but shall have no obligation,
to attend and be present at the meetings of the Board of Directors, although a
meeting of the Board of Directors may be held without notice to any director
emeritus and no director emeritus shall be considered in determining whether a
quorum of the Board of Directors is present. A director emeritus shall advise
and counsel the Board of Directors on the business and operations of the
Corporation as requested by the Board of Directors; however, a director emeritus
shall not be entitled to vote on any matter presented to the Board of Directors.
A director emeritus, in consideration of such person serving as a director
emeritus, shall be entitled to receive from the Corporation such fees for
attendance at meetings of the Board of Directors as the Board shall from time to
time determine. In addition, a director emeritus shall be entitled to receive
from the Corporation reimbursement for the reasonable expenses incurred by such
person in connection with the performance of such person's duties as a director
emeritus.
ARTICLE IV
EXECUTIVE AND OTHER COMMITTEES
Section 1. Executive Committee. The Board of Directors may, by
resolution adopted by a majority of the entire Board, designate annually three
or more of its members to constitute members or alternate members of an
Executive Committee, which Committee shall have and may exercise, between
meetings of the Board, all the powers and authority of the Board in the
management of the business affairs of the Corporation, including, if such
Committee is so empowered and authorized by resolution adopted by a majority of
the entire Board, the power and authority to declare a dividend and to authorize
the issuance of stock, and may authorize the seal of the Corporation to be
affixed to all papers that may require it, except that the Executive Committee
shall not have such power or authority in reference to:
(a) amending the Certificate of Incorporation of the
Corporation;
(b) adopting an agreement of merger or consolidation involving
the Corporation;
(c) recommending to the stockholders the sale, lease or
exchange of all or substantially all of the property and assets of the
Corporation;
(d) recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution;
(e) adopting, amending or repealing any Bylaw;
(f) taking any action, including the approval or determination
of any matter, in connection with any Business Combination (as therein
defined) pursuant to Article V of the Certificate of Incorporation;
Article III, Section 16 added
effective as of February 12, 1987
-7-
<PAGE> 8
(g) filling vacancies on the Board or on any committee of the
Board, including the Executive Committee; or
(h) amending or repealing any resolution of the Board which by
its terms may be amended or repealed only by the Board.
The Board shall have power at any time to change the membership of the Executive
Committee, to fill all vacancies in it and to discharge it, either with or
without cause.
Section 2. Other Committees. The Board of Directors may, by resolution
adopted by a majority of the entire Board, designate from among its members one
or more other committees, each of which shall, except as otherwise prescribed by
law, have such authority of the Board as may be specified in the resolution of
the Board designating such committee. A majority of all the members of such
committee may determine its action and fix the time and place of its meetings,
unless the Board shall otherwise provide. The Board shall have power at any time
to change the membership of, to fill all vacancies in and to discharge any such
committee, either with or without cause.
Section 3. Procedure; Meetings; Quorum. Regular meetings of the
Executive Committee or any other committee of the Board of Directors, of which
no notice shall be necessary, may be held at such times and places as shall be
fixed by resolution adopted by a majority of the members thereof. Special
meetings of the Executive Committee or any other committee of the Board shall be
called at the request of any member thereof. Notice of each special meeting of
the Executive Committee or any other committee of the Board shall be sent by
mail, delivery service, facsimile telecommunication, telegraph or telephone, or
be delivered personally to each member thereof not later than the day before the
day on which the meeting is to be held, but notice need not be given to any
member who shall, either before or after the meeting, submit a signed waiver of
such notice or who shall attend such meeting without protesting, prior to or at
its commencement, the lack of such notice to such member. Any special meeting of
the Executive Committee or any other committee of the Board shall be a legal
meeting without any notice thereof having been given, if all the members thereof
shall be present thereat. Notice of any adjourned meeting of any committee of
the Board need not be given. The Executive Committee or any other committee of
the Board may adopt such rules and regulations not inconsistent with the
provisions of law, the Certificate of Incorporation of the Corporation or these
Bylaws for the conduct of its meetings as the Executive Committee or any other
committee of the Board may deem proper. A majority of the Executive Committee or
any other committee of the Board shall constitute a quorum for the transaction
of business at any meeting, and the vote of a majority of the members thereof
present at any meeting at which a quorum is present shall be the act of such
committee. The Executive Committee or any other committee of the Board of
Directors shall keep written minutes of its proceedings and shall report on such
proceedings to the Board.
ARTICLE V
OFFICERS
Section 1. Number; Term of Office. The officers of the Corporation
shall be a Chairman of the Board, a President, one or more Vice Presidents, a
Treasurer, a Secretary, a Controller, and such other officers or agents with
such titles and such duties as the Board of Directors may from time to time
determine, each to have such authority, functions or duties as in these Bylaws
provided or as the Board may from time to time determine, and each to hold
office for such term as may be prescribed by the Board and until such person's
successor shall have been chosen and shall qualify, or until such person's death
or resignation, or
Article IV, Section 3
amended January 30, 1992
-8-
<PAGE> 9
until such person's removal in the manner hereinafter provided. The Chairman of
the Board and the President shall be elected from among the directors. One
person may hold the offices and perform the duties of any two or more of said
officers; provided, however, that no officer shall execute, acknowledge or
verify any instrument in more than one capacity if such instrument is required
by law, the Certificate of Incorporation of the Corporation or these Bylaws to
be executed, acknowledged or verified by two or more officers. The Board may
from time to time authorize any officer to appoint and remove any such other
officers and agents and to prescribe their powers and duties. The Board may
require any officer or agent to give security for the faithful performance of
such person's duties.
Section 2. Removal. Any officer may be removed, either with or without
cause, by the Board of Directors at any meeting thereof called for that purpose,
or, except in the case of any officer elected by the Board, by any committee or
superior officer upon whom such power may be conferred by the Board.
Section 3. Resignation. Any officer may resign at any time by giving
notice to the Board of Directors, the President or the Secretary of the
Corporation. Any such resignation shall take effect at the date of receipt of
such notice or at any later date specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal or any other cause may be filled for the unexpired portion
of the term in the manner prescribed in these Bylaws for election to such
office.
Section 5. The President. The President shall be the chief executive
officer of the Corporation and as such shall have general supervision and
direction of the business and affairs of the Corporation, subject to the control
of the Board of Directors. The President shall, if present and in the absence of
the Chairman of the Board, preside at meetings of the stockholders, meetings of
the Board and meetings of the Executive Committee. The President shall perform
such other duties as the Board may from time to time determine. The President
may sign and execute in the name of the Corporation deeds, mortgages, bonds,
contracts or other instruments authorized by the Board or any committee thereof
empowered to authorize the same.
Section 6. Chairman of the Board. The Chairman of the Board shall, if
present, preside at meetings of the stockholders, meetings of the Board and
meetings of the Executive Committee. The Chairman of the Board shall counsel
with and advise the President and perform such other duties as the President or
the Board or the Executive Committee may from time to time determine.
Section 7. Vice Presidents. Each Vice President shall have such powers
and duties as shall be prescribed by the President, the Chairman of the Board or
the Board of Directors. Any Vice President may sign and execute in the name of
the Corporation deeds, mortgages, bonds, contracts or other instruments
authorized by the Board or any committee thereof empowered to authorize the
same.
Section 8. Treasurer. The Treasurer shall perform all duties incident
to the office of Treasurer and such other duties as from time to time may be
assigned to the Treasurer by the President, the Chairman of the Board or the
Board of Directors.
Section 9. Secretary. It shall be the duty of the Secretary to act as
secretary at all meetings of the Board of Directors, of the Executive Committee
and of the stockholders and to record the proceedings of such meetings in a book
or books to be kept for that purpose; the Secretary shall see that all notices
required to be given by the Corporation are duly given and served; the Secretary
shall be custodian of the seal of the Corporation and shall affix the seal or
cause it to be affixed to all certificates of stock of the Corporation (unless
the seal of the Corporation on such certificates shall be a facsimile, as
hereinafter provided) and to all documents, the execution of which on behalf of
the Corporation under its seal is duly authorized in accordance with the
provisions of these Bylaws. The Secretary shall have charge of the stock ledger
and also
-9-
<PAGE> 10
of the other books, records and papers of the Corporation and shall see that the
reports, statements and other documents required by law are properly kept and
filed; and the Secretary shall in general perform all the duties incident to the
office of Secretary and such other duties as from time to time may be assigned
to such person by the President, the Chairman of the Board or the Board of
Directors.
Section 10. Controller. The Controller shall perform all of the duties
incident to the office of the Controller and such other duties as from time to
time may be assigned to such person by the President, the Chairman of the Board
or the Board of Directors.
Section 11. Assistant Treasurers, Secretaries and Controllers. The
Assistant Treasurers, the Assistant Secretaries and the Assistant Controllers
shall perform such duties as shall be assigned to them by the Treasurer,
Secretary or Controller, respectively, or by the President, the Chairman of the
Board or the Board of Directors.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS
Section 1. Third Party Actions. 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 (other than an action by or in the
right of the Corporation), by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was 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 expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement 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 such person 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, 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 the person did not act in good
faith and in a manner which such person 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 that his or her
conduct was unlawful.
Section 2. Derivative Actions. 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 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 a director, officer, employee or agent of the Corporation, or
is or was 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 expenses (including attorneys' fees) 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 such
person 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 to the Corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought 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 the Court of Chancery of Delaware
or such other court shall deem proper.
Article VI amended
effective as of July 31, 1986
-10-
<PAGE> 11
Section 3. Determination of Indemnification. Any indemnification under
Section 1 or 2 of this Article VI (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances because such person has met the applicable standard of conduct
set forth in Section 1 or 2 of this Article VI. Such determination shall be made
(i) by a majority vote of the directors who are not parties to such action, suit
or proceeding, even though less than a quorum, or (ii) if there are no such
directors, or if such directors so direct, by independent legal counsel in a
written opinion, or (iii) by the stockholders.
Section 4. Right to Indemnification. Notwithstanding the other
provisions of this Article VI, to the extent that a director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Section 1 or 2 of this
Article VI, or in defense of any claim, issue or matter therein, such person
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection therewith.
Section 5. Advancement of Expenses. The Corporation shall pay the
expenses (including attorneys' fees) incurred in defending any civil, criminal,
administrative or investigative action, suit or proceeding in advance of the
final disposition of such action, suit or proceeding, provided, however, that
the payment of expenses incurred by a director, officer, employee or agent in
advance of the final disposition of the action, suit or proceeding shall be made
only upon receipt of an undertaking by or on behalf of the director, officer,
employee or agent to repay all amounts advanced if it should be ultimately
determined that such person is not entitled to be indemnified under this Article
VI or otherwise.
Section 6. Indemnification and Advancement of Expenses Not Exclusive.
The indemnification and advancement of expenses provided by, or granted pursuant
to the other Sections of this Article VI shall not be deemed exclusive of any
other rights to which any person seeking indemnification may be entitled under
any law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as to action
in another capacity while holding such office. All rights to indemnification
under this Article VI shall be deemed to be provided by a contract between the
Corporation and the director, officer, employee or agent who served in such
capacity at any time while these Bylaws and other relevant provisions of the
Delaware General Corporation Law and other applicable law, if any, are in
effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing.
Section 7. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was 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 any liability asserted against
such person and incurred by such person in any such capacity, or arising out of
such person's status as such, whether or not the Corporation would have the
power to indemnify such person against such liability under the applicable
provisions of the Delaware General Corporation Law.
Section 8. Definitions of Certain Terms. For purposes of this Article
VI, references to "the Corporation" shall include, in addition to the 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
directors, officers, employees or agents, so that any person who is or was a
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
Article VI, Section 5 amended
effective as of January 31, 1991;
amended effective as of
October 22, 1992;
Article VI, Section 3 amended
effective as of July 27, 1995
-11-
<PAGE> 12
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article VI with respect to the
resulting or surviving corporation as such person would have with respect to
such constituent corporation if its separate existence had continued.
For purposes of this Article VI, references to "other enterprise" shall
include employee benefit plans; references to "fines" shall include any excise
tax assessed on a person with respect to any employee benefit plan; and
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation that
imposes duties on, or involves services by, such director, officer, employee or
agent with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner such person
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this Article
VI.
Section 9. Continuation and Successors. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article VI
shall, unless otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
Section 10. Exclusive Jurisdiction. The Delaware Court of Chancery is
vested with exclusive jurisdiction to hear and determine all actions for
advancement of expenses or indemnification brought under this Article VI or
under any statute, agreement, vote of stockholders or disinterested directors,
or otherwise. The Delaware Court of Chancery may summarily determine the
Corporation's obligation to advance expenses (including attorneys' fees).
ARTICLE VII
CAPITAL STOCK
Section 1. Certificates for Shares. Certificates representing shares of
stock of each class of the Corporation, whenever authorized by the Board of
Directors, shall be in such form as shall be approved by the Board. The
certificates representing shares of stock of each class shall be signed by, or
in the name of, the Corporation by the Chairman of the Board or the President or
a Vice President and by the Secretary or an Assistant Secretary or the Treasurer
or an Assistant Treasurer of the Corporation, and sealed with the seal of the
Corporation, which may be by a facsimile thereof. Any or all such signatures may
be facsimiles if countersigned by a transfer agent or registrar. Although any
officer, transfer agent or registrar whose manual or facsimile signature is
affixed to such a certificate ceases to be such officer, transfer agent or
registrar before such certificate has been issued, it may nevertheless be issued
by the Corporation with the same effect as if such officer, transfer agent or
registrar were still such at the date of its issue.
The stock ledger and blank share certificates shall be kept by the
Secretary or by a transfer agent or by a registrar or by any other officer or
agent designated by the Board.
Section 2. Transfer of Shares. Transfer of shares of stock of each
class of the Corporation shall be made only on the books of the Corporation by
the holder thereof, or by such holder's attorney thereunto authorized by a power
of attorney duly executed and filed with the Secretary of the Corporation or a
transfer agent for such stock, if any, and on surrender of the certificate or
certificates for such shares properly endorsed or accompanied by a duly executed
stock transfer power and the payment of all taxes thereon. The person in whose
name shares stand on the books of the Corporation shall be deemed the owner
thereof for all purposes as regards the Corporation; provided, however, that
whenever any transfer of shares shall be made for collateral security and not
absolutely, and written notice thereof shall be given to the Secretary or
Article VI, Section 10 added
effective as of July 27, 1995
-12-
<PAGE> 13
to such transfer agent, such fact shall be stated in the entry of the transfer.
No transfer of shares shall be valid as against the Corporation, its
stockholders and creditors for any purpose, except to render the transferee
liable for the debts of the Corporation to the extent provided by law, until it
shall have been entered in the stock records of the Corporation by an entry
showing from and to whom transferred.
Section 3. Address of Stockholders. Each stockholder shall designate to
the Secretary or transfer agent of the Corporation an address at which notices
of meetings and all other corporate notices may be served or mailed to such
person, and, if any stockholder shall fail to designate such address, corporate
notices may be served upon such person by mail directed to such person at such
person's post office address, if any, as the same appears on the share record
books of the Corporation or at such person's last known post office address.
Section 4. Lost, Destroyed and Mutilated Certificates. The holder of
any share of stock of the Corporation shall immediately notify the Corporation
of any loss, theft, destruction or mutilation of the certificate therefor; the
Corporation may issue to such holder a new certificate or certificates for
shares, upon the surrender of the mutilated certificate or, in the case of loss,
theft or destruction of the certificate, upon satisfactory proof of such loss,
theft or destruction; the Board of Directors, or a committee designated thereby,
or the transfer agents and registrars for the stock, may, in their discretion,
require the owner of the lost, stolen or destroyed certificate, or such person's
legal representative, to give the Corporation a bond in such sum and with such
surety or sureties as they may direct to indemnify the Corporation and said
transfer agents and registrars against any claim that may be made on account of
the alleged loss, theft or destruction of any such certificate or the issuance
of such new certificate.
Section 5. Regulations. The Board of Directors may make such additional
rules and regulations as it may deem expedient concerning the issue and transfer
of certificates representing shares of stock of each class of the Corporation
and may make such rules and take such action as it may deem expedient concerning
the issue of certificates in lieu of certificates claimed to have been lost,
destroyed, stolen or mutilated.
Section 6. Fixing Date for Determination of Stockholders of Record. 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 receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date shall not be more than 60 nor less
than 10 days before the date of such meeting, nor more than 60 days prior to any
other action. A determination of stockholders entitled to notice of or to vote
at a meeting of the stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
ARTICLE VIII
SEAL
The Board of Directors shall provide a corporate seal, which shall be
in the form of a circle and shall bear the full name of the Corporation and the
words and figures "Corporate Seal Delaware 1939", or such other words or figures
as the Board of Directors may approve and adopt. The seal may be used by causing
it or a facsimile thereof to be impressed or affixed or in any other manner
reproduced.
Article VII, Section 6 amended
effective as of October 29, 1987
-13-
<PAGE> 14
ARTICLE IX
FISCAL YEAR
The fiscal year of the Corporation shall be fixed by resolution of the
Board of Directors.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice whatsoever is required to be given by these Bylaws,
by the Certificate of Incorporation of the Corporation or by law, the person
entitled thereto may, either before or after the meeting or other matter in
respect of which such notice is to be given, waive such notice in writing, which
writing shall be filed with or entered upon the records of the meeting or the
records kept with respect to such other matter, as the case may be, and in such
event such notice need not be given to such person and such waiver shall be
deemed equivalent to such notice.
ARTICLE XI
AMENDMENTS
Any Bylaw (other than this Article XI) may be adopted, repealed,
altered or amended by a majority of the entire Board of Directors at any meeting
thereof, provided that such proposed action in respect thereof shall be stated
in the notice of such meeting. The stockholders of the Corporation shall have
the power to adopt, repeal, alter or amend any provision of these Bylaws only to
the extent and in the manner provided in the Certificate of Incorporation of the
Corporation.
ARTICLE XII
MISCELLANEOUS
Section 1. Execution of Documents. The Board of Directors or any
committee thereof shall designate the officers, employees and agents of the
Corporation who shall have power to execute and deliver deeds, contracts,
mortgages, bonds, debentures, notes, checks, drafts and other orders for the
payment of money and other documents for and in the name of the Corporation and
may authorize such officers, employees and agents to delegate such power
(including authority to redelegate) by written instrument to other officers,
employees or agents of the Corporation. Such delegation may be by resolution or
otherwise and the authority granted shall be general or confined to specific
matters, all as the Board or any such committee may determine. In the absence of
such designation referred to in the first sentence of this Section 1, the
officers of the Corporation shall have such power so referred to, to the extent
incident to the normal performance of their duties.
Section 2. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board of Directors or any committee thereof or any officer
of the Corporation to whom power in that respect shall have been delegated by
the Board or any such committee shall select.
Section 3. Checks. All checks, drafts and other orders for the
payment of money out of the funds of the Corporation, and all notes or other
evidence of indebtedness of the Corporation, shall be signed on
-14-
<PAGE> 15
behalf of the Corporation in such manner as shall from time to time be
determined by resolution of the Board of Directors or of any committee thereof.
Section 4. Proxies in Respect of Stock or Other Securities of Other
Corporations. The Board of Directors or any committee thereof shall designate
the officers of the Corporation who shall have authority from time to time to
appoint an agent or agents of the Corporation to exercise in the name and on
behalf of the Corporation the powers and rights that the Corporation may have as
the holder of stock or other securities in any other corporation, and to vote or
consent in respect of such stock or securities; such designated officers may
instruct the person or persons so appointed as to the manner of exercising such
powers and rights; and such designated officers may execute or cause to be
executed in the name and on behalf of the Corporation and under its corporate
seal, or otherwise, such written proxies, powers of attorney or other
instruments as they may deem necessary or proper in order that the Corporation
may exercise its said powers and rights.
-15-
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