FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 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: 0-14617
RHEOMETRIC SCIENTIC, INC.
(Exact name of registrant as specified in its charter)
New Jersey 61-070841
________________________________ ___________________________
(State or other jurisdiction of (I.R.S. Employer Identi-
incorporation or organization) fication Number)
One Possumtown Road, Piscataway, NJ 08854
_________________________________________ _____________
(Address of principal executive offices) (Zip Code)
(908) 560-8550
____________________________________________________________
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
_____ _____
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 1, 1995
__________________________ ______________________________
Common Stock, no par value 13,161,739
<PAGE>
RHEOMETRIC SCIENTIFIC, INC.
FORM 10-Q
INDEX
Page
PART I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
March 31, 1995 and December 31, 1994 3
Condensed Consolidated Statements of Operations
Three Ended March 31, 1995 and 1994 4
Condensed Consolidated Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994 5
Notes to Condensed Consolidated Financial
Statements 6-8
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition
Results of Operations 8-9
Liquidity and Capital Resources 9-10
PART II - Other Information
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
<PAGE>
RHEOMETRIC SCIENTIFIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
March December
ASSETS 31, 1995 31, 1994
Current Assets
Cash $ 885 $ 747
Net receivables 9,681 10,106
Net inventories
Finished goods 3,691 2,952
Work in process 1,606 2,247
Assembled Components, materials,and parts 5,832 4,607
_______ _______
11,129 9,806
Prepaid expenses and other assets 903 687
________ ________
Total current assets 22,598 21,346
_______ _______
Property, Plant, and Equipment 22,465 21,311
Less accumulated depreciation and
amortization 12,144 10,827
_______ _______
Net property, plant, and equipment 10,321 10,484
Goodwill and other intangible assets 3,844 2,283
Other Assets 1,017 997
_______ _______
Total Assets $37,780 $35,110
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term bank borrowings $ 7,066 $ 6,429
Current maturities of long-term debt 548 595
Accounts payable 3,851 3,648
Restructuring reserve -- 132
Payable to affiliate 188 150
Accrued liabilities 4,537 4,200
Other current liabilities 300 --
_______ _______
Total current liabilities 16,490 15,154
Long-term debt 5,564 5,688
Long-term debt - affiliate 3,715 3,715
Other Non-Current Liabilities 1,462 0
_______ _______
Total liabilities 27,231 24,557
Shareholders' Equity
Common stock, stated value of $.001,
authorized 20,000 shares; issued and 13 13
outstanding 13,162 shares
Additional paid-in capital 24,759 24,759
Accumulated deficit (14,666) (14,262)
Cumulative translation adjustment 443 43
_______ _______
Total shareholders' equity 10,549 10,553
_______ _______
$37,780 $35,110
======= =======
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
RHEOMETRIC SCIENTIFIC, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data)
Three Months Ended
March 31
1995 1994
Sales $8,601 $6,737
Cost of sales 4,580 3,539
Gross profit 4,021 3,198
General and administrative 828 663
expenses
Marketing and selling expenses 2,490 1,957
Research and development expenses 754 601
Goodwill and intangible
amortization 162 30
Total Operating Expenses 4,234 3,251
Operating loss (213) (53)
Interest expense - Banks 273 277
Interest expense - Affiliate 146 50
Interest income 1 1
Foreign currency gain 235 214
_______ ________
Loss before income taxes (396) (165)
Income tax expense (7) (1)
_______ ________
Net loss $ (403) $(166)
======= ========
Net loss per share $ (0.03) $ (0.02)
======= ========
Average number of shares 13,162 9,545
outstanding ======= ========
See Notes to Consolidated Financial Statements.
<PAGE>
RHEOMETRIC SCIENTIFIC, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands) (Unaudited) Three Months Ended
March 31,
1995 1994
Cash Flows from Operating Activities:
Net loss $( 403) $(165)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation and amortization of plant and
equipment 240 227
Amortization of goodwill and intangibles 162 30
Provision for slow moving inventory 148 --
Loss on sale/retirement of property, plant
and equipment -- (47)
Unrealized currency (gain) loss (203) (223)
Changes in assets and liabilities:
Receivables 1,108 693
Inventories (1,017) (142)
Prepaid expenses and other current
assets (17) 82
Accounts payable and accrued
liabilities 214 (423)
Income tax payable (23) --
Other assets (27) (30)
Other Non-Current Liabilities (7) --
Net cash provided by operating activities 175 2
Cash Flows from Investing Activities:
Proceeds from sale of property, plant, and 114
equipment --
Purchases of property, plant, and
equipment (16) (47)
Net cash (used in) provided by investing
activities (16) 67
Cash Flows from Financing Activities:
Net borrowings (repayments) under line of
credit agreements 165 159
Repayment of long-term debt (124) (169)
Net cash provided by financing activities 41 (10)
Effect of exchange rate changes on cash (62) 16
Net increase in cash 139 75
Cash at beginning of period 747 401
Cash at end of period $885 $476
===== =====
Cash payments for interest $441 $330
===== =====
Cash payments for income taxes $29 $ 22
===== =====
See Notes to Condensed Consolidated Financial Statements.
<PAGE>
RHEOMETRIC SCIENTIFIC, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Accounting Policies
The information included in the foregoing interim financial state-
ments is unaudited. In the opinion of management, all adjustments,
consisting of normal recurring accruals, necessary for a fair
presentation of financial position and results of operations for the
interim periods presented have been reflected herein. The results of
operations for the interim periods are not necessarily indicative of
the results to be expected for the entire year. Prior year results
have been restated to reflect the results of the Polymer Laboratories
Thermal Sciences Business acquired as of March 3, 1994 (see Note 3).
2. Liquidity
Management believes that the cash generated from operations, funds
available under the lines of credit, and funds received from Axess's
investments, should be sufficient to meet the Company's working
capital needs for the remainder of the fiscal year. Adequacy of cash
flows generated beyond 1995 will depend upon continued relationships
with banks or other lenders and the Company's ability to achieve
expected sales volumes to support profitable operations.
3. Acquisition
On November 10, 1994, at the Annual Meeting of Shareholders, the
shareholders approved the issuance by Rheometrics of 4,226,348 shares
of Rheometrics Common Stock to Axess in exchange for the contribution
by Axess of all the outstanding capital stock of two wholly-owned
subsidiaries of Axess, ATS US and ATS UK. Shareholders also approved
the issuance of 1,023,652 shares of Rheometrics Common Stock to Axess
in connection with the exercise by Axess of the convertible note of
Rheometrics (the "Convertible Note") in the principal amount of
$1,339,000. These transactions represent the transfer by Axess to
Rheometrics of all of the PL Thermal Sciences Business previously
acquired by Axess.
The acquisition of the PL Thermal Sciences Business by Axess was
accounted for as a purchase for accounting and financial reporting
purposes and the subsequent acquisition of the PL Thermal Sciences
Business by Rheometrics was accounted for as a transfer and exchange
between companies under common control in a manner similar to a
pooling of interests. The Company's consolidated financial
statements reflect the assets and the liabilities so transferred at
historical cost (representing Axess's cost of the PL Thermal Sciences
Business). The transfer from Axess to Rheometrics indicated above
principally consisted of accounts receivable of $2,576,000, inventory
of $3,159,000, certain other assets of $495,000, certain accounts
payable and other liabilities of $1,676,000 and goodwill of
$2,592,000. The Company's consolidated financial statements reflect
the acquisition from March 3, 1994, since at that date both the
Company and the PL Thermal Sciences Business were under the common
control of Axess.
4. Mettler-Toledo Agreement
On January 1, 1995, the Company acquired from Mettler-Toledo AG
("Mettler") the exclusive, worldwide rights for two rheological test
instruments, the RM180 and RM260, that serve the coatings, paints,
biological fluids, cosmetics, and lubricants industries.
The Company will pay Mettler for manufacturing the products plus a
10% royalty payment on sales. After the Company assumes
manufacturing, Mettler will receive quarterly royalty payments based
upon a percentage of sales or a minimum payment formula.
The Company established the liability by discounting the
expected payments at the Company's incremental borrowing rates.
An intangible asset was established and is being amortized over
the six-year life of the agreement on a straight-line basis
6. Loss Per Share
Loss per share is computed based on the weighted average number of
common shares outstanding during each period. The loss per share
calculation does not include shares reserved for stock options and
convertible securities since the effects are immaterial or
antidilutive.
7. Long-term Debt and Short-term Borrowings
Long-term debt consists March 31, December 31,
of the following: 1995 1994
Mortgage loans payable through $ 6,061,000 $ 6,185,000
November 1997, with interest at
prime plus 1/2% (9.5% at March 31,
1995 and 9.0% at December 31, 1994)
and fixed interest at 9.6%
Obligations under capital leases, 51,000 98,000
with interest imputed at a
weighted-average rate of 12% __________ _________
6,112,000 6,283,000
Less current maturities 548,000 595,000
__________ __________
$ 5,564,000 $ 5,688,000
========== ==========
The Company has working capital lines of credit with certain domestic
and foreign banks aggregating $7,324,000 of which approximately
$258,000 was available at March 31, 1995. Borrowings at March 31,
1995 amounted to $3,770,000 with domestic banks and $3,296,000 with
foreign banks. Interest on the domestic lines of credit at March 31,
1995 is 10%, 9.5% at December 31, 1994. Interest rates on the
foreign lines of credit range between 3.5% to 11.5% as of March 31,
1995 and between 3.875% to 11.5% at December 31, 1994. The long-term
and short-term borrowings with domestic banks are cross-
collateralized by the Company's assets. The borrowings with foreign
banks are partially collateralized by letters of credit issued by a
domestic bank ($2,400,000) and a lease deposit held by a foreign
bank. Under the terms of the letters of credit, the Company must
maintain a cash collateral account on behalf of the domestic bank.
As of March 31, 1995, this restricted cash was approximately $46,000
and is included in prepaid expenses and other current assets.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION
Results of Operations
Sales for the three months ended March 31, 1995 increased $1,864,000 (or
27.7%), compared to the corresponding period in 1994. The increase in
revenues for the three-month period resulted primarily from a full
quarter of the PL Thermal Sciences Business. The increase in revenue
for the three-month period represents an increase of American sales and
sales in Europe of $1,284,000 and $2,023,000, respectively, and a
decrease in Japan of $631,000. For the three-month period, total
international sales of $4,974,000 represented 58% of total sales,
compared to last year's three-month international sales of $4,413,000,
which represented 65% of total sales.
The gross profit percentage for the three months ended March 31, 1995
was 46.7%, versus 47.5% for the corresponding period in the prior year.
The decrease in gross profit percentage can be attributed to the shift
in regional sales mix as well as a full quarter of the PL Thermal
Sciences Business.
Operating expenses for the three months ended March 31, 1995 were up
$1,003,000 compared to the corresponding period in the prior year.
Approximately $700,000 of this increase is due to the effect of a full
quarter of the PL Thermal Sciences Business.
Net interest expense for the three months ended March 31, 1995 increased
$92,000, as compared to the corresponding period in the prior year. The
increase in the quarter was due principally to the increase in average
outstanding debt during the period.
The foreign currency gains for the three months ended March 31, 1995 of
$235,000 was due primarily to unrealized translation gains resulting
from the French Franc, German Mark, Japanese Yen, and British Pound
against the U.S. Dollar, which were offset by an unrealized loss in Swiss
Francs resulting from the Mettler agreement. The foreign currency gains
of $214,000 for the three months ended March 31, 1994 were due principally
to translation gains resulting from the German Mark and the Japanese Yen.
Inherent in the Company's business is the potential for inventory
obsolescence for older products as the Company develops new products.
Obsolescence has historically related principally to parts inventory.
The Company continuously monitors its exposure relating to excess and
obsolete inventory and establishes appropriate valuation reserves. The
Company's development efforts generally enhance existing products or
relate to new markets for existing technology and, therefore, existing
products are generally not rendered obsolete.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121") in
March 1995. FAS 121 requires companies to review their long-lived
assets and certain identifiable intangibles (collectively, "Long-Lived
Assets") for impairment whenever events or changes in circumstances
indicate that the carrying value of a Long-Lived Asset may not be
recoverable. Impairment is measured using the lower of a Long-Lived
Asset's book value or fair value, as defined. Management believes that
the future adoption of FAS 121 will not have a material impact on the
Company's financial position or results of operations.
Liquidity and Capital Resources
Management believes that the cash generated from operations, funds
available under the lines of credit, and funds received from Axess's
investments, should be sufficient to meet the Company's working capital
needs for the remainder of the fiscal year. Adequacy of cash flows
generated beyond 1995 will depend upon continued relationships with
banks or other lenders and the Company's ability to achieve expected
sales volumes to support profitable operations.
Cash Flows from Operations. Net cash provided by operating activities
for the quarter ended March 31, 1995, was approximately $175,000, an
increase of $173,000 over the same period last year. During the quarter
receivables declined by $415,000 as collections improved. In order to
meet backlog requirements for the second quarter, the Company needed to
build up inventory which caused the increase of $875,000 and $637,000 in
inventories and accounts payable, respectively.
Cash Flows from Investing. Net cash used in investing activities during
the quarter ended March 31, 1995 was $16,000 as compared to $67,000
provided in the same period last year.
Cash Flows from Financing. Net cash provided by financing activities
during the quarter ended March 31, 1995 was $41,000 as compared to a use
of $10,000 in the same period last year.
On April 13, 1995, Axess agreed that it would provide $2,400,000 in
additional working capital to the Company in the form of subordinated
debt. The subordinated debt will mature on April 30, 1996 and will bear
interest at 12% payable monthly. In addition, Axess agreed that it
would extend the maturities on all debt obligations ($3,715,000 at March
31, 1995) of the Company to Axess until April 30, 1996, the interest of
which would also be subject to deferral. On April 13, 1995 Axess also
agreed to defer interest payments on all debt obligations (including the
$2,400,000) through September 30, 1995. On April 17, 1995, Axess funded
the $2,400,000 to the Company as subordinated debt.
On April 26, 1995, the Company and the domestic banks revised and
extended the existing line of credit agreements to April 30, 1996.
Under the terms of the commitment, the Company's domestic lines of
credit were extended to April 30, 1996 and will remain at $3,720,000
until September 30, 1995, and will be reduced to $3,545,000 on September
30, 1995, to $3,220,000 on December 31, 1995, and to $2,720,000 on March
31, 1996. Under the revised agreements (including the mortgage loans
payable), the most restrictive financial covenants are (a) the
maintenance of minimum tangible net worth, as defined, of at least
$4,753,000 as of March 31, 1995, $5,900,000 as of June 30, 1995,
$5,800,000 as of September 30, 1995 and $6,720,000 as of December 31,
1995; (b) the maintenance of a maximum debt to tangible net worth ratio,
as defined, of 5.56 to 1 as of March 31, 1995, 4.55 to 1 as of June 30,
1995, 4.37 to 1 as of September 30, 1995 and 3.66 to 1 as of December
31, 1995; (c) the maintenance of a current ratio, as defined, of at
least 0.98 to 1 as of March 31, 1995, 1.07 to 1 as of June 30, 1995,
1.08 to 1 as of September 30, 1995 and 1.13 to 1 as of December 31,
1995.
The Company's letters of credit of approximately $2,400,000 which
partially collateralized its foreign bank borrowings, were extended to
June 1, 1995. On April 26, 1995, the domestic banks were extended the
letters of credit to April 30, 1996.
On April 26, 1995, the Company and the domestic banks agreed to a
moratorium on the mortgage loan principal payments from April 26, 1995
to September 29, 1995 (amounting to $41,416 per month), at which time
the Company shall pay in full the deferred principal payments.
Commencing on October 1, 1995, the Company will resume scheduled
principal payments.
The Company's mortgage loans, lines and letters of credit are subject to
acceleration in the event that there is a material and adverse change in
the condition or affairs, financial or otherwise, of the Company which
in the reasonable opinion of the domestic banks impairs the banks'
collateral or increases its risk so as to jeopardize the repayment of
the obligations.
See Statement of Cash Flows for further details of the Company's cash
flows.
PART II. OTHER INFORMATION
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
3(i) Articles of Incorporation with Amendments
3(ii) By-Laws
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
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.
RHEOMETRIC SCIENTIFIC, INC.
(Registrant)
May 22, 1995 By /s/ R. E. Davis
Robert E. Davis, President and
Chief Executive Officer
May 22, 1995 By /s/ J. C. Fuhrmeister
John C. Fuhrmeister
Chief Financial Officer
Exhibit 3(i)
CERTIFICATE OF INCORPORATION
OF
RHEOMETRICS, INC.
To: Secretary of State
State of New Jersey
The undersigned, of the age of 21 years or over, for
the purpose of forming a corporation pursuant to the
provisions of Title 14A, Corporations, General, of the New
Jersey Statutes, does hereby execute the following
Certificate of Incorporation:
FIRST: The name of the Corporation is RHEOMETRICS, INC.
SECOND: The purpose of the Corporation is to engage in
any activity within the purposes for which corporations may
be organized under the provisions of Title 14A,
Corporations, General, of the New Jersey Statutes.
THIRD: The Corporation is authorized to issue two
million (2,000,000) shares of common stock without par
value.
FOURTH: The address of the Corporation's initial
registered office is 2438 U.S. Highway No. 22, Union, New
Jersey 07083, and the name of the Corporation's initial
registered agent at such address is Joseph M. Starita.
FIFTH: The number of directors constituting the initial
Board of Directors shall be two (2); and the names and
addresses of the directors are as follows:
Joseph M. Starita
13 Beverly Drive
Belle Meade, New Jersey 08502
Mary M. Starita
13 Beverly Drive
Belle Meade, New Jersey 08502
SIXTH: The name and address of the sole Incorporator is
John Kandravy, 95 Madison Avenue, Morristown, New Jersey
07960.
SEVENTH: One or more or all of the directors of the
Corporation may be removed for cause or without cause by the
stockholders of the Corporation by the affirmative vote of
the majority of the votes cast by the holders of shares
entitled to vote for the election of directors.
EIGHTH: All corporate officers, directors, employees
and agents shall be indemnified to the full extent provided
by law. Such indemnification may be funded through
insurance or otherwise as authorized by the Board of
Directors.
IN WITNESS WHEREOF, the undersigned, the sole
Incorporator of the above named Corporation, has signed this
Certificate of Incorporation on the 2nd day of June, 1981.
/s/ John Kandravy
John Kandravy
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF
RHEOMETRICS, INC.
To: Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:9-2(4) and
Section 14A:9-4(3) Corporations, General, of the New Jersey
Statutes, Rheometrics, Inc. (the "Corporation") executes the
following Certificate of Amendment to its Certificate of
Incorporation:
1. The name of the corporation is RHEOMETRICS, INC.
2. The following amendment to the Certificate of
Incorporation were approved by unanimous written consent of
the directors of the Corporation on October 7, 1985, and
thereafter duly adopted by unanimous written consent of the
shareholders of the Corporation on the 7th day of October,
1985.
RESOLVED, that Article Third of the Company's
Certificate of Incorporation be amended in its
entirety, to read as follows:
"THIRD: The Corporation is
authorized to issue ten million
(10,000,000) shares of Common Stock
without par value."
3. The number of shares outstanding and entitled to
vote at the time of the adoption of the foregoing amendment
was 1,472,500 shares.
4. All 1,472,500 shares outstanding and entitled to
vote at the time of the adoption of the foregoing amendment
were voted in favor of such amendment.
Dated this 16th day of October, 1985.
RHEOMETRICS, INC.
By: /s/ Ronald F. Garritano
Vice President
/s/ Michael Starita, V. Pres.
CERTIFICATE OF AMENDMENT
TO THE CERTIFICATE OF INCORPORATION
OF RHEOMETRICS, INC.
To: Secretary of State
CN-308
State of New Jersey
FEIN: 61-0708419
Pursuant to the provisions of Section 14A:9-2(4) and
Section 14A:9-4(3) Corporations, General, of the New Jersey
Statutes, Rheometrics, Inc. (the "Corporation") executes the
following Certificate of Amendment to its Certificate of
Incorporation:
1. The name of the corporation is Rheometrics, Inc.
2. The following amendments to the Certificate of
Incorporation were approved by the Board of Directors, and
thereafter, duly adopted by the shareholders of the
Corporation on the 10th day of November 1994:
RESOLVED, that Article First of the Company's
Certificate of Incorporation be amended in its entirety to
read as follows:
FIRST: The name of the Corporation is Rheometric
Scientific, Inc.
RESOLVED, that Article Third of the Company's
Certificate of Incorporation be amended in its entirety to
read as follows:
THIRD: The Corporation is authorized to issue twenty
million (20,000,000) shares of Common Stock without par value.
3. The number of shares outstanding and entitled to
vote at the time of the adoption of the foregoing amendment
was 7,911,739.
4. The number of shares voted were as follows:
The number of shares voted for the amendment to change
the name of the Corporation to Rheometric Scientific, Inc.
was 6,562,897; the number of shares voted to abstain was
2,385; the number of shares voted against the amendment was
275.
The number of shares voted for the amendment to
increase the number of authorized shares of Common Stock to
twenty million (20,000,000) was 6,561,326; the number of
shares voted to abstain was 3,496; the number of shares
voted against the amendment was 735.
Dated this 10th day of November, 1994
Rheometric Scientific, Inc.
By /s/ R. E. Davis
Robert E. Davis
President and Chief Executive Officer
Exhibit 3(ii)
BY-LAWS
OF
RHEOMETRICS, INC.
1. Offices.
1.1 Registered Office.
The registered office of the corporation shall
be located at its corporate headquarters at One
Possumtown Road, Piscataway, New Jersey.
1.2 Other Offices.
The corporation may also have offices at such
other places, both within and without the State of New
Jersey, as the board of directors may from time to time
determine or the business of the corporation may require.
2. Meetings of Stockholders.
2.1 Place of Meetings.
Meetings of the stockholders for any purpose
shall be held at the corporation's Registered Office, or
at such other place either within or without the State of
New Jersey as shall be designated from time to time by
the board of directors and stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
2.2 Annual Meetings.
Annual meetings of stockholders shall be held
during the last week of April, or at such other date and
time as shall be designated from time to time by the
board of directors and stated in the notice of the
meeting (or in a duly executed waiver of notice thereof),
at which they shall elect a board of directors and
transact such other business as may properly be brought
before the meeting.
2.3 Special Meetings.
Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed in
statute or by the certificate of incorporation, may be
called by the president or the chairman of the board of
directors, and shall be called by the president or
secretary (1) at the request of a majority of the board
of directors, or (2) at the request in writing of
stockholders owning one-third (1/3) or more of the entire
capital stock of the corporation issued and outstanding
and entitled to vote. Such request shall state the
purpose or purposes of the proposed meeting.
2.4 Notices of Meetings.
Written notice of every meeting of
stockholders, stating the place, date, hour, and purpose
or purposes of the meeting, shall be given to each
stockholder of record entitled to vote at such meeting
not less than ten nor more than sixty days before the
date of the meeting.
2.5 Business at Special Meetings.
Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in
the notice.
2.6 List of Stockholders.
The officer or agent having charge of the stock
transfer books of the corporation shall make and certify
a complete list of the stockholders entitled to vote at
the meeting or any adjournment thereof, arranged in
alphabetical order, and showing the address of each
stockholder and the number of shares registered in the
name of each stockholder. The list shall be produced and
kept at the time and place of the meeting during the
whole time thereof, and may be inspected by any
stockholder who is present. This stockholder list shall
be prima facie evidence as to who are the stockholders
entitled to examine the stock transfer books, the list
required by this section or the books of the corporation,
or to vote in person or by proxy at any meeting of
stockholders.
2.7 Quorum at Meetings.
The holders of a majority of the stock which is
issued and outstanding and entitled to vote thereat,
present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders
for the transaction of business except as otherwise
provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be
present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have
power to adjourn the meeting, until a quorum shall be
present or represented. At such adjourned meeting at
which a quorum shall be present or represented, any
business may be transacted which might have been
transacted at the original meeting. If, however, after
the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting
shall also be given to each new stockholder of record
entitled to vote at the meeting.
2.8 Voting and Proxies.
Unless otherwise provided in the certificate of
incorporation and in Section 3.3 of Article 3 hereof,
each stockholder shall at every meeting of the
stockholders be entitled to one vote in person or by
proxy for each share of the corporation's capital stock
having voting power which is held by such stockholder.
Every proxy shall be executed in writing by the
stockholder or his agent. No proxy shall be valid after
eleven months from the date of its execution, unless the
proxy expressly provides for a longer period; in no event
shall a proxy be valid after three years from the date of
its execution. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and if,
and only as long as, it is coupled with an interest
sufficient in law to support an irrevocable power. A
proxy shall not be revoked by the death or incapacity of
the stockholder, but such proxy shall continue in force
until revoked by the personal representative or guardian
of the stockholder. The presence at any meeting of any
stockholder who has given a proxy shall not revoke such
proxy unless the stockholder shall file written notice of
such revocation with the secretary of the meeting prior
to the voting of such proxy. A person named in a proxy as
the attorney or agent of the stockholder may, if the
proxy so provides, substitute another person to act in
his place, including any other person named as an
attorney or agent in the same proxy. Such substitution
shall not be effective until an instrument effecting it
is filed with the secretary of the corporation.
2.9 Required Vote.
When a quorum is present at any meeting of
stockholders, any action, other than the election of
directors (as provided in Section 3.3 of Article 3
hereof), shall be authorized by a majority of the votes
cast by the holders of shares entitled to vote thereon,
unless the proposed action is one upon which, by express
provision of the New Jersey Business Corporation Act or
of the certificate of incorporation, a greater plurality
is specified and required, in which case such express
provision shall govern and control the decision of such
question.
2.10. Organization of Meetings.
The president of the corporation (and in his
absence a chairman appointed by majority vote of the
stockholders present) shall call the meetings to order
and act as chairman thereof. The secretary of the
company (and in his absence any person appointed by the
chairman) shall act as secretary at all meetings of
stockholders. The order of business at all meetings of
stockholders shall be as determined by the chairman of
the meeting.
2.11. Action Without a Meeting.
Subject to the provisions of the certificate of
incorporation and the New Jersey Business Corporation
Law, any action required or permitted to be taken at any
annual or special meeting of stockholders of the
corporation may be taken without a meeting, without prior
notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the
minimum number of votes that would be necessary to
authorize or take such action at a meeting at which all
shares entitled to vote thereon
were present. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous
written consent shall be given to those stockholders who
have not consented in writing. The written consents of
the stockholders so consenting shall be filed with the
minutes of proceedings of stockholders.
3. Directors.
3.1. Powers.
The business and affairs of the corporation
shall be managed by its board of directors which may
exercise all such powers of the corporation and do all
such lawful acts and things as are not by statute or by
the certificate of incorporation or by these by-laws
directed or required to be exercised or done by the
stockholders. Directors need not be stockholders.
3.2. Number.
The number of directors which shall constitute
the whole board shall be not less than three nor more
than fifteen. Within such limits, the number of
directors shall be determined by resolution of the board
of directors.
3.3. Election and Term.
The directors shall be elected at the annual
meeting of the stockholders, except as provided in
Section 3.5 of this Article, and each director elected
shall hold office until the next succeeding annual
meeting and until his successor shall have been elected
and qualified. Elections of directors need not be by
ballot unless a stockholder demands election by ballot at
the election and before the voting begins. At each
election of directors every stockholder entitled to vote
at such election shall have the right to vote the number
of shares owned by him for as many persons as there are
directors to be elected and for whose election he has a
right to vote, but shall have no rights to cumulate such
votes. Members of the board of directors shall be
elected by a plurality vote.
3.4. Resignation and Removal.
A director may resign by written notice to the
corporation. The resignation shall be effective upon
receipt thereof by the corporation or at such subsequent
time as shall be specified in the notice of resignation.
Directors may be removed by the stockholders with cause.
If permitted by the provisions of the certificate of
incorporation of the corporation, directors may also be
removed by the stockholders without cause.
3.5. Vacancies.
Any directorship not filled at the annual
meeting of stockholders, any vacancy (however caused),
and any newly created directorship resulting from any
increase in the authorized number of directors may be
filled by the affirmative vote of a majority of the
remaining directors, and each director so chosen shall
hold office until the next succeeding annual meeting of
stockholders and until his successor is elected and
qualified, or until his earlier resignation or removal.
3.6. Place of Meetings.
The board of directors of the corporation may
hold meetings, both regular and special, either within or
without the State of New Jersey.
3.7. First Meeting of Each Board.
The first meeting of each newly elected board
of directors shall be held immediately after the Annual
Meeting of Shareholders, or as shall be specified in a
written waiver signed by all of the directors.
3.8. Regular Meetings.
Regular meetings of the board of directors may
be held without notice at such time and at such place as
shall from time to time be determined by the board.
3.9. Special Meetings.
Special meetings of the board may be called by
the president on two days' notice to each director,
either personally or by telephone, by mail or by
telegram; special meetings shall be called by the
president or secretary in like manner and on like notice
on the written request of onethird (1/3) of the total
number of directors.
3.10. Quorum and Votes.
At all meetings of the board of directors or
any committee thereof, a majority of the total number of
members thereof shall constitute a quorum for the
transaction of business. The act of a majority present
at any meeting at which a quorum is present shall be the
act of the board or committee, except as may be otherwise
specifically provided by statute, by the certificate of
incorporation or by these by-laws. If a quorum shall not
be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting.
3.11. Adjourned Meetings.
Notice of an adjourned meeting need not be
given if the time and place are fixed at the meeting
adjourning and if the period of adjournment does not
exceed ten days in any one adjournment.
3.12. Telephone Meetings.
Any or all members of the board of directors or
any committee designated by the board may participate in
a meeting of such board or committee by means of
conference telephone or similar communications equipment
by means of which all persons participating in the
meeting are able to hear each other, and participation in
a meeting pursuant to this section shall constitute
presence in person at such meeting.
3.13. Action Without Meeting.
Unless otherwise restricted by the certificate
of incorporation or these by-laws, any action required or
permitted to be taken at any meeting of the board of
directors or of any committee thereof may be taken
without a meeting if, prior or subsequent to such action,
all members of the board or committee, as the case may
be, consent thereto by resolution in writing, and the
writing or writings are filed with the minutes of
proceedings of the board of directors or committee.
3.14. Committees of Directors.
The board of directors, by resolution adopted
by the majority of the entire board, may appoint from
among its members an executive committee and one or more
other committees, each of which shall have at least three
members. To the extent provided in such resolution, each
such committee shall have and may exercise all of the
authority of the board, except that no such committee
shall
(a) make, alter or repeal any by-law of the
corporation;
(b) elect or appoint any director, or remove
any officer or director;
(c) submit to stockholders any action that
requires stockholders' approval; or
(d) amend or repeal any resolution theretofore
adopted by the board of directors
which by its terms is amendable or
repealable only by the board of directors.
The board of directors, by resolution adopted by a
majority of the entire board, may
(a) fill any vacancy in any such committee;
(b) appoint one or more directors to serve as
alternate members of any such
committee, to act in the absence or
disability of members of any such
committee with all the powers of such
absent or disabled member;
(c) abolish any such committee at its
pleasure; and
(d) remove any director from membership on
such committee at any time, with or
without cause.
Actions shall be taken by any such committee in
accordance with Sections 3.10, 3.12 and 3.13 hereof, and
such actions
shall be reported to the board of directors at its next
meeting following such committee meeting.
3.15. Effect of Interest of Directors in
Transactions.
3.15.1. Common Directors.
No contract or other transaction between
the corporation and one or more of its directors, or
between the corporation and any domestic or foreign
corporation, firm, or association of any type or kind in
which one or more of its directors are directors or
otherwise interested, shall be void or voidable solely by
reason of such common directorship or interest, or solely
because such director or directors are present at the
meeting of the board or a committee thereof which
authorizes or approves the contract or transaction, or
solely because his or their votes are counted for such
purpose, if
(a) the contract or other transaction is fair
and reasonable as to the corporation at the
time it is authorized, approved or ratified; or
(b) the fact of the common directorship or
interest is disclosed or known to the board or
committee and the board or committee
authorizes, approves or ratifies the contract
or transaction by unanimous written consent,
provided at least one director so consenting is
disinterested, or by affirmative vote of a
majority of disinterested directors, even
though the disinterested directors be less than
a quorum; or
(c) the fact of the common directorship or
interest is disclosed or known to the
stockholders, and they authorize, approve or
ratify the contract or transaction.
Common or interested directors may be counted in
determining the presence of a quorum at a board or
committee meeting at which a contract or transaction
described in this subsection is authorized, approved or
ratified.
3.15.2 Compensation of Directors.
The board of directors, by the affirmative
vote of a majority of directors in office and
irrespective of any personal interest of any of them,
shall have authority to establish reasonable compensation
of directors for services to the corporation as
directors, officers, or otherwise.
3.16 Organization of Meetings.
At all meetings of the board of directors, the
president (and in his absence, a chairman chosen by the
directors present) shall preside. The presiding officer
shall appoint any person to act as secretary at all such
meetings. The order of business shall be as determined
by the presiding officer.
4. Notices of Meetings.
4.1 Notice of Procedure.
Whenever, under the provisions of the statutes
or of the certificate of incorporation or of these by-
laws, notice is required to be given to any director or
stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail,
addressed to such director or stockholder, at his address
as it appears on the records of the corporation, with
postage thereon prepaid, and such notice shall be deemed
to be given at the time when the same shall be deposited
in the United States mail. Notice to directors may also
be given by telegram or telephone.
4.2 Waivers of Notice.
Whenever any notice is required to be given
under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, such
notice need not be given to any person entitled to said
notice who signs a waiver of such notice. Attendance of
a person at a meeting shall constitute a waiver of notice
of such meeting, except when the person attends a meeting
for the sole and express purpose of objecting, prior to
the conclusion of the meeting, to the transaction of any
business because of the lack of notice. Neither the
business to be transacted at, nor the purpose of, any
regular or special meeting of the stockholders,
directors, or members of a committee of directors need be
specified in any written waiver of notice unless so
required by the certificate of incorporation, by statute
or by these by-laws.
5. Officers.
5.1 Positions.
The officers of the corporation shall be a
president, a secretary and a treasurer, and such other
officers as the board of directors may appoint, including
a chairman of the board, and one or more vice presidents,
assistant secretaries and assistant treasurers, who shall
exercise such authority and perform such duties as shall
be determined from time to time by the board. Any number
of offices may be held by the same person, unless the
certificate of incorporation or
these by-laws otherwise provide, but no officer shall
execute, acknowledge or verify any instrument in more
than one capacity if such instrument is required by law
or these by-laws to be executed, acknowledged or verified
by two or more officers.
5.2 Election.
The officers of the corporation shall be chosen
by the board of directors at its first meeting after each
annual meeting of stockholders.
5.3 Compensation.
The compensation of the president and the
chairman of the board of the corporation shall be fixed
by the board of directors. The compensation of the other
officers of the corporation shall be fixed by the
president of the corporation, unless the board of
directors by resolution determines that it shall fix the
salaries of one or more specified officers.
5.4 Term of Office.
The officers of the corporation shall hold
office until their successors are chosen and qualify or
until their earlier resignation or removal. Any officer
may resign at any time upon written notice to the
corporation. Any officer elected or appointed by the
board of directors may be removed at any time, with or
without cause, by the affirmative vote of a majority of
the board of directors. Any vacancy occurring in any
office of the corporation shall be filled by the board of
directors.
5.5 Fidelity Bonds.
The corporation may secure the fidelity of any
or all of its officers or agents by bond or otherwise.
5.6 President.
The president shall be the chief executive
officer of the corporation, shall have general and active
management of the business of the corporation, shall see
that all orders and resolutions of the board of directors
are carried into effect, and, unless the directors have
elected a chairman of the board who is present, shall
preside at all meetings of the stockholders and the board
of directors. The president shall execute bonds,
mortgages and other contracts requiring the seal, under
the seal of the corporation, except where the signing and
execution thereof shall be expressly delegated by the
board of directors to some other officers or agent of the
corporation.
5.7 Vice President.
In the absence of the president or in the event
of his inability or refusal to act, the vice-president
(or in the event there be more than one vice-president,
the vicepresidents in order designated, or in the absence
of any designation, then in the order of their election)
shall perform the duties of the president, and when so
acting, shall have all the powers of and be subject to
all the restrictions upon the president. The vice-
presidents shall perform such other duties and have such
other powers as the board of directors may from time to
time prescribe.
5.8 Chairman of the Board.
If the directors shall appoint a chairman of
the board, he shall, when present, preside at all
meetings of the board of directors and shall have such
other duties and shall have such other powers as may be
vested in him by the board of directors.
5.9 Secretary.
The secretary shall attend all meetings of the
board of directors and all meetings of the stockholders
and record all the proceedings of the meetings of the
stockholders and of the board of directors in a book to
be kept for that purpose, and shall perform like duties
for the standing committees when required. He shall
give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the board of
directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under
whose supervision he shall be. He shall have custody of
the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the
same to any instrument requiring it, and when so affixed
it may be attested by his signature or by the signature
of such assistant secretary. The board of directors may
give general authority to any other officer to affix the
seal of the corporation and to attest the affixing by his
signature.
5.10 Assistant Secretary.
The assistant secretary, if there be one,
shall, in the absence of the secretary or in the event of
his inability or refusal to act, perform the duties and
exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board
of directors may from time to time prescribe.
5.11 Treasurer.
5.11.1 Duties.
The treasurer shall have the custody of
the corporate funds and securities and shall keep full
and accurate accounts of receipts and disbursements in
books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the
credit of the corporation in such depositories as may be
designated by the board of directors. The treasurer
shall disburse the funds of the corporation as ordered by
the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the
board of directors, at its regular meetings, or when the
board of directors so requires, an account of all his
transactions as treasurer and of the financial condition
of the corporation.
5.11.2 Bond.
If required by the board of directors, the
treasurer shall give the corporation a bond which shall
be renewed periodically in such sum and with such surety
or sureties as shall be satisfactory to the board of
directors for the faithful performance of the duties of
his office and for the restoration to the corporation, in
case of his death, resignation, retirement or removal
from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or
under his control belonging to the corporation.
5.12 Assistant Treasurer.
The assistant treasurer, if there be one,
shall, in the absence of the treasurer or in the event of
his inability or refusal to act, perform the duties and
exercise the powers of the treasurer and shall perform
such other duties and have such other powers as the board
of directors may from time to time prescribe.
6. Capital Stock.
6.1 Determination of Amount of Stated Capital.
The consideration received by the corporation
upon
the issuance of shares having a par value shall
constitute stated capital to the extent of the par value
and the excess, if any, shall constitute capital surplus.
The consideration received by the corporation upon the
issuance
of shares without par value shall constitute stated
capital unless, at the time of or within sixty days after
the issuance of such shares, the board of directors shall
allocate a portion of such consideration to capital
surplus.
6.2 Certificates of Stock.
The shares of the corporation shall be
represented by certificates signed by, or in the name of
the corporation by, the chairman or vice-chairman of the
board of directors, or the president or a vice-president,
and the treasurer or an assistant treasurer, or the
secretary or an assistant secretary of the corporation,
and may be sealed with the seal of the corporation or a
facsimile thereof. All certificates shall be
consecutively numbered, and bear the names of the owners,
the number of shares and the date of issue. The company
shall maintain such information in its books. Each
certificate shall state upon the face thereof
(a) That the corporation is organized under the laws
of the State of New Jersey;
(b) the name of the person to whom the certificate
is issued; and
(c) the number of shares, which such certificate
represents.
6.3 Lost Certificates.
The board of directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact
by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue
of a new certificate or certificates, the board of
directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of
such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to
give the corporation a bond in such sum as it may direct
as indemnity against any claim that may be made against
the corporation on account of the certificate alleged to
have been lost, stolen or destroyed or the issuance of
such new certificate.
6.4 Transfers.
The transfer of stock and certificates
representing stock shall be effected in accordance with
the laws of the State of New Jersey. Any restriction on
the transfer of a security imposed by the corporation
shall be noted conspicuously on the security. Except in
the case of lost or destroyed certificates, shares shall
be transferred on the books of the corporation and new
certificates issued only upon the surrender and
cancellation of properly endorsed certificates for the
same number of shares.
6.5 Closing of Transfer Books and Fixing
Record Date.
In order that the corporation may determine the
stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a
meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of
any other lawful action, the board of directors may fix,
in advance, a record date for any such determination of
stockholders, which shall not be more than sixty nor less
than ten days before the date of such meeting, nor more
than sixty days prior to any
other action. A determination of stockholders of record
entitled to notice of or to vote at a meeting of
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.
6.6 Registered Stockholders.
The corporation shall be entitled to recognize
the exclusive right of a person registered on its books
as the owner of shares to receive dividends, to receive
notifications, to vote as such owner, and to exercise all
the rights and powers of an owner; the corporation shall
not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any
other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the
laws of the State of New Jersey.
7. Indemnification.
The corporation shall indemnify to the full
extent permitted by law any person made, or threatened to
be made, a party to an action, suit or proceeding
(whether civil, criminal, administrative or
investigative) by reason of the fact that he, his
testator or intestate is or was a director, officer,
employee or agent of the corporation or serves or served
any other enterprise as such at the request of the
corporation.
8. General Provisions.
8.1 Dividends.
Dividends or other distributions upon the
capital stock of the corporation, subject to the
provisions of the certificate of incorporation, if any,
may be declared by the board of directors at any regular
or special meeting, pursuant to law. Such dividends
shall be paid out of surplus, subject to the provisions
of the New Jersey Business Corporation Act. Dividends
may be paid in cash, in property, or in shares of the
corporation's capital stock, subject to the provisions of
the New Jersey Business Corporation Act and of the
certificate of incorporation.
8.2 Books and Records.
The corporation shall keep books and records of
account, and minutes of the proceedings of its
stockholders and board of directors at an office which
may be located within or without the State of New Jersey.
The corporation shall keep at its registered office
designated in Section 1.1 of Article 1 hereof, or at the
office or a transfer agent located in the United States,
a record or records containing the names and addresses of
all stockholders, the number of shares held by each, and
the dates when they respectively became the owners.
8.3 Reserves.
The directors of the corporation may set apart
out of the funds of the corporation available for
dividends a reserve or reserves for any proper purpose
and may abolish any such reserve.
8.4 Execution of Instruments.
All checks or demands for money and notes of
the corporation shall be signed by such officer or
officers or such other person or persons as the board of
directors may from time to time designate.
8.5 Fiscal Year.
The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
8.6 Seal.
The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization
and the words "Corporate Seal, New Jersey." The seal may
be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
8.7 Contributions.
The board of directors is authorized,
irrespective of corporate benefit, to aid, singly or in
cooperation with other corporations and with natural
persons, in the creation or maintenance of institutions
or organizations engaged in community fund, hospital,
charitable, philanthropic, educational, scientific or
benevolent activities or patriotic or civic activities
conducive to the betterment of social and economic
conditions, and to appropriate, spend or contribute for
such purposes such reasonable sums as they may determine;
provided, that such a contribution shall not be
authorized if at the time of the contribution or
immediately thereafter the donee institution shall own
more than ten percent of the voting stock of the
corporation or one of its subsidiaries.
9. Amendments.
These by-laws may be altered, amended or
repealed or new by-laws may be adopted by a majority of
the entire board of directors at any regular or special
meeting, subject to the provisions of the Certificate of
Incorporation, but by-laws made by the board of directors
may be altered, amended or repealed or new by-laws made
by the stockholders. The stockholders may prescribe that
any by-law made by them shall not be altered or repealed
by the board of directors.
BY-LAW TOPIC INDEX
Page
1. Offices. 1
1.1 Registered Office. 1
1.2 Other Offices. 1
2. Meetings of Stockholders. 1
2.1 Place of Meetings. 1
2.2 Annual Meeting. 1
2.3 Special Meetings. 1
2.4 Notices of Meetings. 2
2.5 Business at Special Meetings. 2
2.6 List of Stockholders. 2
2.7 Quorum at Meetings. 2
2.8 Voting and Proxies. 2
2.9 Required Vote. 3
2.10. Organization of Meetings. 3
2.11. Action Without a Meeting. 3
3. Directors. 4
3.1. Powers. 4
3.2. Number. 4
3.3. Election and Term. 4
3.4. Resignation and Removal. 4
3.5. Vacancies. 5
3.6. Place of Meetings. 5
3.7. First Meeting of Each Board. 5
3.8. Regular Meetings. 5
3.9. Special Meetings. 5
3.10. Quorum and Votes. 5
3.11. Adjourned Meetings. 5
3.12. Telephone Meetings. 6
3.13. Action Without Meeting. 6
3.14. Committees of Directors. 6
3.15. Effect of Interest of Directors in
Transactions. 7
3.15.1. Common Directors. 7
3.15.2 Compensation of Directors. 7
3.16 Organization of Meetings. 8
4. Notices of Meetings. 8
4.1 Notice of Procedure. 8
4.2 Waivers of Notice. 8
5. Officers. 8
5.1 Positions. 8
5.2 Election. 9
5.3 Compensation. 9
5.4 Term of Office. 9
5.5 Fidelity Bonds. 9
5.6 President. 9
5.7 Vice President. 9
5.8 Chairman of the Board. 10
5.9 Secretary. 10
5.10 Assistant Secretary. 10
5.11 Treasurer. 10
5.11.1 Duties. 10
5.11.2 Bond. 11
5.12 Assistant Treasurer. 11
6. Capital Stock. 11
6.1 Determination of Amount of Stated Capital. 11
6.2 Certificates of Stock. 11
6.3 Lost Certificates. 12
6.4 Transfers. 12
6.5 Closing of Transfer Books and Fixing Record
Date. 12
6.6 Registered Stockholders. 12
7. Indemnification. 13
8. General Provisions. 13
8.1 Dividends. 13
8.2 Books and Records. 13
8.3 Reserves. 13
8.4 Execution of Instruments. 13
8.5 Fiscal Year. 13
8.6 Seal. 14
8.7 Contributions. 14
9. Amendments. 14
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