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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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For the Quarterly Period Ended July 31, 1996 Commission file number 0685
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PETROLITE CORPORATION
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(Exact name of Registrant as specified in its charter)
Delaware 43-0617572
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
369 Marshall Avenue, St. Louis, Missouri 63119
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 961-3500
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Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
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On August 1, 1996, there were 11,341,448 outstanding shares of
capital stock, without par value.
No. of Pages 8
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<TABLE>
PART 1. ITEM 1. FINANCIAL STATEMENTS
PETROLITE CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(Unaudited)
Jul. 31, 1996 Oct.31, 1995
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(Thousands of $)
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 43,143 $ 33,662
Accounts receivable, less estimated doubtful
accounts of $1,119,000 and $1,121,000 respectively 61,003 63,352
Inventories-
Raw materials, parts and supplies 22,298 19,984
Finished goods 35,520 35,574
Reserve for adjustment to LIFO (18,315) (18,541)
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39,503 37,017
Contracts in process (3,367) 13
Less progress billings 3,035 (321)
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Net inventories 39,171 36,709
Prepaid income tax 9,468 6,968
Other current assets 2,749 5,147
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Total Current Assets 155,534 145,838
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Investment in affiliated companies 11,979 13,116
Patents and other intangibles 7,661 9,505
Prepaid pension costs 12,016 7,330
Other assets 5,634 5,422
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37,290 35,373
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Properties
Buildings 62,846 63,325
Machinery and equipment 151,548 152,346
Other fixed assets 44,946 51,180
Construction in progress 7,067 4,159
Accumulated depreciation (172,749) (166,369)
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93,658 104,641
Land 6,721 6,733
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100,379 111,374
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Total Assets $293,203 $292,585
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $ 7,090 $ 4,594
Accounts payable 31,169 33,880
Accrued vacation pay 4,000 4,000
Estimated income taxes 2,986 3,378
Accrued reorganization costs 2,734 2,734
Other current liabilities 17,864 18,248
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Total Current Liabilities 65,843 66,834
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Other Liabilities
Long term debt 38,000 40,000
Retiree medical benefits 13,598 13,192
Minority interest in consolidated subsidiaries 1,647 1,404
Other liabilities 2,734 1,165
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55,979 55,761
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Deferred Income Taxes, net 8,150 10,778
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Total Liabilities 129,972 133,373
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Stockholders' Equity
Capital stock, without par value-
Authorized - 35,000,000 shares
Issued - 12,229,197 and 12,216,697, respectively 9,591 9,389
Less treasury stock, at cost (887,749 and 887,919 shares, respectively) (18,694) (18,694)
Reinvested earnings, beginning of year 170,943 177,404
Earnings for the period 12,924 6,231
Dividends (9,523) (12,691)
Cumulative translation adjustment (2,010) (2,427)
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Total Stockholders' Equity 163,231 159,212
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Total Liabilities and Stockholders' Equity $293,203 $292,585
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</TABLE>
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<TABLE>
PETROLITE CORPORATION
CONSOLIDATED STATEMENTS OF CURRENT AND ACCUMULATED EARNINGS
FOR NINE MONTHS ENDED JULY 31
<CAPTION>
(Unaudited)
3 Months to July 31 9 Months to July 31
---------------------- -----------------------
1996 1995 1996 1995
------- ------- -------- --------
(In thousands, except per share data)
<S> <C> <C> <C> <C>
Net revenues $92,055 $87,212 $264,896 $273,545
Cost of product sold and other direct costs 54,912 54,462 159,000 167,669
------- ------- -------- --------
Gross profit 37,143 32,750 105,896 105,876
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Expenses:
Selling 21,485 21,262 63,525 63,630
Research 3,673 3,091 11,429 9,534
General and Administrative 5,945 5,666 17,240 14,960
Write-off of investment in subsidiary - - 5,137 -
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31,103 30,019 97,331 88,124
------- ------- -------- --------
Earnings from operations 6,040 2,731 8,565 17,752
Equity in earnings of affiliates 1,570 1,372 4,119 1,926
Other income, net (175) (276) (193) (34)
------- ------- -------- --------
Earnings before income taxes 7,435 3,827 12,491 19,644
U.S. and foreign income taxes 2,454 1,280 (433) 6,579
------- ------- -------- --------
Net earnings $ 4,981 $ 2,547 $ 12,924 $ 13,065
======= ======= ======== ========
Earnings per share $ 0.44 $ 0.22 $ 1.14 $ 1.15
======= ======= ======== ========
Average shares outstanding 11,340 11,331 11,337 11,329
======= ======= ======== ========
Dividends per share $ 0.28 $ 0.28 $ 0.28 $ 0.28
======= ======= ======== ========
</TABLE>
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<TABLE>
PETROLITE CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR NINE MONTHS ENDED JULY 31
<CAPTION>
(Unaudited)
1996 1995
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(Thousands of $)
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings $12,924 $13,065
Adjustments to reconcile net earnings to net cash
provided by operations -
Depreciation and amortization 13,414 13,919
Deferred income taxes (2,628) -
Writedown of fixed assets 2,000 -
Gain on sale of fixed assets (542) (1,567)
Changes in assets and liabilities -
Accounts receivable 1,819 4,245
Inventories (2,734) (491)
Other current assets 234 412
Accounts payable and accrued liabilities (3,138) (7,397)
Accrued reorganization costs - (4,342)
Other (649) (1,170)
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Net cash provided by (used in) operating activities 20,700 16,674
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Cash flow from Investing Activities:
Capital expenditures, net (7,930) (9,751)
Net gain on sale of fixed assets 205 163
Proceeds from sale of airplane 5,250 -
Proceeds from sale of plant - 10,335
Proceeds from sale of equity securities - 827
Investment in joint venture & business alliance - (1,855)
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Net cash provided by investing activities (2,475) (281)
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Cash Flows from Financing Activities:
Additional borrowing, net 577 3,187
Dividends paid (9,523) (9,517)
Sales of Common Stock 202 186
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Net cash used in financing activities (8,744) (6,144)
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Net increase (decrease) in Cash and Equivalents 9,481 10,249
Cash and Equivalents at Beginning of Period 33,662 19,801
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Cash and Equivalents at End of Period $43,143 $30,050
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</TABLE>
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PART 1. ITEM 1. (CONT.) NOTES TO FINANCIAL STATEMENTS
Financial Statement note disclosures, normally included in financial
statements prepared in conformity with generally accepted accounting
principles, have been omitted in this Form 10-Q pursuant to the Rules and
Regulations of the Securities and Exchange Commission. However, in the opinion
of Petrolite Corporation (the "Registrant"), the disclosures contained in this
Form 10-Q are adequate to make the information presented not misleading. See
"Notes to the Financial Statements" in the Registrant's 1995 Annual Report
incorporated by reference in the Registrant's Form 10-K for the year ended
October 31, 1995, for information relevant to the financial statements
contained herein, including information as to significant accounting policies
followed by the Registrant.
In the opinion of the Registrant, the accompanying unaudited
financial statements reflect all adjustments (consisting only of normal
recurring adjustments) necessary to present fairly the Balance Sheets as of
July 31, 1996 and October 31, 1995, the Statements of Earnings for the nine
months ended July 31, 1996 and 1995 and the Statements of Cash Flows for
the nine months ended July 31, 1996 and 1995. Due to seasonal and other
factors, interim period results are not necessarily indicative of results
to be expected for the year.
PART 1. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.
FINANCIAL CONDITION AND LIQUIDITY
Reference is made to Notes to Financial Statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
presented in the Registrant's 1995 Annual Report incorporated by reference
in the Registrant's Form 10-K for the year ended October 31, 1995.
The Registrant's financial position at July 31, 1996 reflected a
current ratio of 2.4:1, a low debt-to-equity ratio of .3:1, and cash and
securities of $43.1 million.
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Capital expenditures (net) during the third quarter and the nine
months ended July 31, 1996 were $2.4 million and $7.9 million,
respectively. Capital expenditures in fiscal 1996 are now projected to be
approximately $12 million as compared to fiscal 1995 capital expenditures
of $12.6 million. Major capital projects for 1996 include the continued
expansion and upgrade of the Bayport and Kirkby manufacturing plants;
additional investment in containers that are more environmentally safe, and
additional investment in distribution vehicles, including both contract
treating and delivery trucks.
QUARTER AND NINE MONTHS ENDED JULY 31, 1996 COMPARED TO QUARTER
AND NINE MONTHS ENDED JULY 31, 1995.
Petrolite's third quarter net earnings were $5.0 million or $0.44 per
share as compared to $2.5 million or $0.22 per share earned in the period a
year ago. The earnings turnaround came primarily from improving margins
and a positive shift in sales mix. Operating margins in the third quarter
expanded by 3.5 percentage points to 6.6 percent as efforts to improve
internal efficiency yielded results despite continuing restructuring costs.
Revenues for the quarter increased 5.6 percent to $92 million. Increasing
business retention and growth with existing customers were contributing
factors in the revenue increase.
Chemicals Group earnings for the quarter were stronger, led by the
oil field business in the United States and Canada. Asia and Latin America
posted a good earnings gain on higher sales, despite the discontinuance of
the domestic Venezuelan operation. Stronger EuroChem Division earnings
were supported by growing energy chemicals business in the Middle East,
Africa and Europe. The Polymers Division had higher earnings on flat
revenues. Petreco Division, the process equipment and engineering services
group, had flat sales and earnings compared with year-ago results.
For the first nine months of fiscal 1996, net income totaled $12.9
million or $1.14 per share, which includes a $0.10 benefit from closure of
the Venezuelan subsidiary, on revenues
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of $264.9 million. This compares with net income of $13.1 million or $1.15 per
share on revenues of $273.5 million for the same period a year ago. The
overall revenue decline reflects the closure of the domestic Venezuelan
operation, the continued transfer of wax business to Bareco Products, a
marketing partnership with Pennzoil started in April of last year, and the
reduced revenues from the Registrant's equipment business. The Registrant's
domestic and international energy sectors posted revenue gains over the first
nine months of last fiscal year.
PART II - OTHER INFORMATION
Part II. Item 1. Legal Proceedings
None
Part II. Item 2. Changes in Securities
None
Part II. Item 3. Defaults upon senior securities
None
Part II, Item 4. Submission of Matters to a Vote of Security-Holders.
There were no matters submitted to a vote of security - holders
during the period covered by this report.
Part II, Item 5. Other Information.
On June 12, 1996, the Registrant's Board of Directors amended
the Registrant's By-Laws by adding to Article II thereof a new section,
Section 12, relating to proposals by stockholders, by adding to Article
III thereof a new section, Section 6, relating to the nomination of
persons for election as director, and by amending Article III Section 1
to change the size of the Board of Directors from 11 members to 10
members.
On August 14, 1996, the Registrant's Board of Directors amended
the Registrant's By-Laws by adding to Article II thereof a new section,
Section 13, relating to stockholder
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actions by consent.
The amendments to the By-Laws of the Company are set out in
Exhibit 3 and are incorporated herein by reference. The foregoing
reference to the By-Law amendments is qualified in its entirety by
reference to Exhibit 3.
Part II, Item 6. Exhibits and Reports on From 8-K
(a) Exhibit 3. By-laws as amended through August 14, 1996.
(b) Exhibit 27. Financial Data Schedule
(c) There were no reports on Form 8-K filed during the quarter
ended July 31, 1996.
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.
PETROLITE CORPORATION
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(Registrant)
s/John M. Casper
--------------------
John M. Casper
Chief Financial Officer -
Authorized Officer and
Principal Financial Officer
DATE: August 20, 1996
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<PAGE> 1
Exhibit 3
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BY-LAWS
OF
PETROLITE CORPORATION
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ARTICLE I
OFFICES
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Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware, and the name of the resident agent
in charge thereof is The Corporation Trust Company.
Section 2. The Corporation may also have offices at such other places
both within and without the State of Delaware as the Board of Directors may
from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
Section 1. All meetings of the stockholders shall be held at such
place either within or without the State of Delaware as shall be designated
from time to time by the Board of Directors and stated in the notice of the
meeting.
Section 2. An annual meeting of stockholders shall be held on the
first Monday in March in each year, if not a legal holiday, and if a legal
holiday, then on the next business day following, at
As Amended 8/14/96 Page 1 of 35
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11:00 a.m. or at such other date and time and at such place as may be
determined from time to time by resolution adopted by the Board of Directors,
when they shall elect by a plurality vote a Board of Directors, and transact
such other business as may properly be brought before the meeting.
Section 3. A majority of the stock issued and outstanding and entitled
to vote at any meeting of stockholders, the holders of which are present in
person or represented by proxy, shall constitute a quorum for the transaction
of business except as otherwise provided by law, by the Certificate of
Incorporation, or by these By-Laws. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, a majority of the
voting stock represented in person or by proxy may adjourn the meeting from
time to time, without notice other than announcement at 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 meeting as originally noticed. If the
adjournment is for more than thirty (30) days, or if after the adjournment a
new record date is fixed for the adjourned meeting, a notice of the adjourned
meeting shall be given to each stockholder of record entitled to vote
thereat.
Section 4. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question
As Amended 8/14/96 Page 2 of 35
<PAGE> 3
brought before such meeting, unless the question is one upon which by express
provision of the statutes, or the Certificate of Incorporation, or these
By-Laws, a different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 5. At each meeting of the stockholders, each stockholder
having the right to vote may vote in person or may authorize another person
or persons to act for him by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than three (3)
years prior to said meeting, unless said instrument provides for a longer
period. All proxies must be filed with the Secretary of the Corporation at
the beginning of each meeting in order to be counted in any vote at the
meeting. A proxy shall be deemed signed if the stockholder's name is placed
on the proxy (whether by manual signature, typewriting, facsimile,
telegraphic transmission or otherwise) by the stockholder or the
stockholder's attorney in fact. Each stockholder shall have one vote for
each share of stock having voting power, registered in his name on the books
of the Corporation on the record date set by the Board of Directors as
provided in Article V, Section 6 hereof. All elections shall be had and all
questions decided by a plurality vote.
Section 6. Special meetings of the stockholders, for any purpose, or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called at any time by the
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Board of Directors, or by a majority of the members of the Board of Directors,
or by a committee of the Board of Directors which has been duly designated by
the Board of Directors and whose power and authority, as provided in a
resolution of the Board of Directors or in the By-Laws, includes the power to
call such meetings. Special meetings of stockholders of the Corporation may not
be called by any other person or persons. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 7. Notice of any meeting of stockholders shall be given either
personally or by mail or telegraphic or other written communication, charges
and postage prepaid, addressed to the stockholder at the address of such
stockholder appearing on the books of the Corporation or given by the
stockholder to the Corporation for the purpose of notice. Notice shall be
deemed to have been given at the time when delivered personally or deposited
in the mail or sent by telegram or other means of written communication.
If any notice addressed to a stockholder at the address of such
stockholder appearing on the books of the Corporation is returned to the
Corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the
stockholder at such address, all future notices shall be deemed to have been
duly given without further mailing if the same shall be available to the
stockholder upon written demand of the stockholder at the principal executive
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office of the Corporation for a period of one (1) year from the date of the
giving of such notice.
Section 8. Attendance of a person at a meeting shall constitute a
waiver of notice to such person of such meeting, except when the person
objects at the beginning of the meeting to the transaction of any business
because the meeting is not lawfully called or convened, or objects to the
consideration of matters not included in the notice of the meeting.
Section 9. The officer who has charge of the stock ledger of the
Corporation shall prepare and make, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote
at the meeting, arranged in alphabetical order, and showing the address of
each stockholder and the number of shares registered in the name of each
stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also 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.
As Amended 8/14/96 Page 5 of 35
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Section 10. Action may be taken by stockholders either at an annual or
special meeting of stockholders, or stockholders may act by written consent.
Section 11. Before any meeting of stockholders, the Board of Directors
may appoint any persons other than nominees for office to act as inspectors
of election at the meeting or its adjournment. If no inspectors of election
are so appointed, the chairman of the meeting may appoint inspectors of
election at the meeting. The number of inspectors shall be either one (1) or
two (2). If any person appointed as inspector fails to appear or fails or
refuses to act, the chairman of the meeting may appoint a person to fill such
vacancy.
The duties of these inspectors shall be as follows:
(a) Determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies;
(b) Receive votes or ballots;
(c) Hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) Count and tabulate all votes;
(e) Determine the result; and
(f) Do any other acts that may be proper to conduct the
election or vote with fairness to all stockholders.
As Amended 8/14/96 Page 6 of 35
<PAGE> 7
Section 12. At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting, business must be
(a) specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors,
or (c) otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in writing
to the Secretary of the Corporation. To be timely, a stockholder's notice
must be received at the principal executive offices of the Corporation not
less than 60 days nor more than 90 days prior to the meeting; provided,
--------
however, if less than 70 days' notice or prior public disclosure of the
- -------
meeting date is given or made to stockholders, notice by the stockholder
shall be timely if it is so received not later than the close of business on
the 10th day following the day on which such notice of the annual meeting
date was mailed or such public disclosure was made.
A stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting (a) a
brief description of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting,
(b) the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business, (c) the class and number of shares of the
As Amended 8/14/96 Page 7 of 35
<PAGE> 8
Corporation which are owned beneficially by the stockholder, and (d) any
material interest of the stockholder in such business.
No later than the 10th day following the date of receipt of a
stockholder notice submitted pursuant to this Section 12, the Chairman of the
Board of Directors of the Corporation shall, if the facts warrant, determine
and notify the stockholder submitting such notice in writing that such notice
was not made in accordance with the time limits and/or other procedures
prescribed by the By-Laws. If no such notification is mailed to the
stockholder within this ten-day period, the stockholder notice shall be
deemed to have been made in accordance with the provisions of this Section
12.
No business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 12. The Chairman of
the annual meeting shall, if the facts warrant, determine and declare to the
meeting that a matter of business was not brought before the meeting in
accordance with the provisions of this Section 12, and any such business
shall not be transacted.
Section 13. In order that the Corporation may determine the
stockholders entitled to consent to corporate action in writing without a
meeting, 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 date shall not be more than
ten (10) days after the date upon which the resolution fixing the record date
is adopted by the Board of Directors. Any stockholder of record seeking to
have the stockholders authorize or take corporate action
As Amended 8/14/96 Page 8 of 35
<PAGE> 9
by written consent shall, by written notice to the Secretary, request the Board
of Directors to fix a record date. The Board of Directors shall promptly, but
in all events within ten (10) days after the date on which such a request is
received, adopt a resolution fixing the record date. If no record date has
been fixed by the Board of Directors within ten (10) days of the date on which
such a request is received, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting, when no
prior action by the Board of Directors is required by applicable law, shall be
the first date on which a signed written consent setting forth the action taken
or proposed to be taken is delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business,
or any officer or agent of the Corporation having custody of the book in
which proceedings of stockholders meetings are recorded, to the attention of
the Secretary of the Corporation. Delivery shall be by hand or by certified
or registered mail, return receipt requested. If no record date has been
fixed by the Board of Directors and prior action by the Board of Directors is
required by applicable law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be
the close of business on the date on which the Board of Directors adopts the
resolution taking such prior action.
As Amended 8/14/96 Page 9 of 35
<PAGE> 10
ARTICLE III
DIRECTORS
---------
Section 1. The business and property of this Corporation shall be
managed and controlled by its Board of Directors, ten (10) in number. Unless
the Board of Directors shall otherwise determine, no Director shall stand for
re-election after he has attained the age of seventy-two (72) years.
Directors need not be stockholders.
Section 2. The Board of Directors, by majority vote of its members,
may at any time and from time to time, appoint one or more Advisory Directors
who shall advise and counsel the Board of Directors. Advisory Directors may
attend meetings of said Board but without the right to vote on any matter
that may come before the Board for consideration. Advisory Directors shall
hold office at the pleasure of the Board of Directors; provided, however,
that the term of office of any Advisory Director shall expire in any event at
the Annual Stockholders' Meeting next following his appointment as an
Advisory Director. No Advisory Director shall be appointed or reappointed
after he has attained the age of seventy-five (75) years.
Section 3. The Directors shall be elected at the Annual Meeting of the
Stockholders, except as provided in Section 4 of this Article, and each
Director elected shall hold office until his successor is elected and
qualified.
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<PAGE> 11
Section 4. Vacancies on the Board of Directors by reason of death,
resignation, retirement, disqualification, removal from office, or otherwise,
and newly created directorships resulting from any increase in the authorized
number of directors may be filled by a majority of the directors then in
office, although less than a quorum, or by a sole remaining director. The
directors so chosen shall hold office until the next annual election of
directors and until their successors are duly elected and shall qualify,
unless sooner displaced. If there are no directors in office, then an
election of directors may be held in the manner provided by statute.
Section 5. The property and business of the Corporation shall be
managed by or under the direction of its Board of Directors. In addition to
the powers and authorities by these By-Laws expressly conferred upon them,
the Board 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.
Section 6. Only persons who are nominated in accordance with the
procedures set forth in this Section 6 shall be eligible for election as
directors. Nominations of persons for election to the Board of Directors may
be made at a meeting of stockholders by, or at the direction of, the Board of
Directors, or by any stockholder of the Corporation entitled to vote for the
election of directors
As Amended 8/14/96 Page 11 of 35
<PAGE> 12
at the meeting who complies with the notice procedures set forth in this
Section 6. Such nominations, other than those made by or at the direction of
the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely, a stockholder's notice shall
be received at the principal executive offices of the Corporation not less than
60 days nor more than 90 days prior to the meeting; provided, however, if less
-------- -------
than 70 days' notice or prior public disclosure of the meeting date is given or
made to stockholders, notice by the stockholder shall be timely if it is so
received not later than the close of business on the 10th day following the day
on which such notice of the meeting date was mailed or such public disclosure
was made.
A stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or re-election as a director
(i) the name, age, business address and residence address of such person,
(ii) the principal occupation or employment of such person, (iii) the class
and number of shares of the Corporation which are beneficially owned by such
person, and (iv) any other information relating to such person that is
required to be disclosed in solicitations of proxies for election of
directors, or otherwise is required by Regulation 14A under the Securities
Exchange Act of 1934, as amended (including without limitation such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); and (b) as to the stockholder giving the
notice (i) the name and address, as they appear on the Corporation's books, of
As Amended 8/14/96 Page 12 of 35
<PAGE> 13
such stockholder, and (ii) the class and number of shares of the Corporation
which are owned beneficially by such stockholder. At the request of the Board
of Directors, any person nominated by the Board of Directors for election as a
director shall furnish to the Secretary of the Corporation that information
which pertains to the nominee and is required to be set forth in a
stockholder's notice of nomination.
No later than the 10th day following receipt of a stockholder
nomination submitted pursuant to this Section 6, the Chairman of the Board of
Directors of the Corporation shall, if the facts warrant, determine and
notify the stockholder making such nomination in writing that such nomination
was not made in accordance with the time limits and/or other procedures
prescribed by the By-Laws. If no such notification is mailed to such
stockholder within such ten-day period, such nomination shall be deemed to
have been made in accordance with the provisions of this Section 6.
No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 6. The Chairman of the annual meeting shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made
in accordance with the procedures prescribed by the By-Laws and, if he should
so determine, he shall declare to the meeting that the defective nomination
shall be disregarded.
As Amended 8/14/96 Page 13 of 35
<PAGE> 14
MEETINGS OF THE BOARD OF DIRECTORS
----------------------------------
Section 7. The directors may hold their meetings and have one or more
offices, and keep the books of the Corporation outside of the State of
Delaware.
Section 8. Regular meetings of the Board of Directors may be held
without notice at such time and place as shall from time to time be
determined by the Board.
Section 9. Special meetings of the Board of Directors may be called by
the Chairman of the Board, the President, any Vice President or the Secretary
on forty-eight (48) hours' notice to each director, either personally or by
mail, telephone, telegram or facsimile. Special meetings shall be called by
the Chairman of the Board, the President or the Secretary in like manner and
on like notice on the written request of three directors unless the Board
consists of only one director, in which case special meetings shall be called
by the Chairman of the Board, the President or Secretary in like manner or on
like notice on the written request of the sole director.
Section 10. At all meetings of the Board of Directors a majority of the
authorized number of directors shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the vote of a
majority of the directors present at any meeting at which there is a quorum,
shall be the act of the Board of Directors, except as may be otherwise
specifically
As Amended 8/14/96 Page 14 of 35
<PAGE> 15
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 from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
If only one director is authorized, such sole director shall constitute a
quorum. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action is
approved by at least a majority of the required quorum for such meeting.
Section 11. 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 all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board or committee.
Section 12. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting
of the Board of Directors, or any 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
As Amended 8/14/96 Page 15 of 35
<PAGE> 16
participation in a meeting shall constitute presence in person at such meeting.
COMMITTEES OF DIRECTORS
-----------------------
Section 13. The Board of Directors may at any time and from time to
time, create from its membership such committees as the Board may desire.
Any such committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise such powers and authority of the Board
of Directors in the management of the business and affairs of the
Corporation, as the Board of Directors at any time and from time to time may
delegate.
Section 14. There shall be a permanent committee of the Board of
Directors, which shall be known as the "Executive Committee".
Section 15. The Executive Committee shall consist of not more than
seven (7) members of the Board of Directors of Petrolite Corporation. The
Executive Committee may, at any time, and from time to time, by the
affirmative vote of a majority of its members, invite any other member of the
Board of Directors to meet with the Committee when the advice and counsel of
such other Board member is required or deemed desirable. The Chairman of the
Executive Committee shall be designated by the Board of Directors. The
Secretary of the Corporation shall be the Secretary of the Executive
Committee ex-officio.
As Amended 8/14/96 Page 16 of 35
<PAGE> 17
Section 16. The members of the Executive Committee shall be elected by
the Board of Directors at the first meeting of the Board of Directors
following the regular Annual Meeting of Stockholders, and shall serve for a
period of one (1) year from the date of such election, and until their
respective successors are elected and shall qualify; provided, that any
member of the Executive Committee shall be subject to removal at any time by
a majority vote of the whole Board of Directors.
Section 17. The Board of Directors may fill vacancies in the Executive
Committee by election at any regular or special meeting.
Section 18. During the interval between the meetings of the Board of
Directors the Executive Committee shall possess and may exercise all the
powers of the Board of Directors in such management, direction and affairs of
the business of the Corporation. The Committee shall not have power or
authority in reference to amending the certificate of incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of a dissolution, amending the By-Laws, filling
newly created directorships and vacancies on the Board or the Committee, or
(unless expressly authorized by resolution of the Board) declaring a dividend
or authorizing the issuance of stock.
As Amended 8/14/96 Page 17 of 35
<PAGE> 18
Section 19. Meetings of the Executive Committee may be held as often as
may be necessary on call of the Chairman or of any two members of the
Committee. Two days' previous notice of any special meeting shall be given
to all members, unless waived in writing by all members of the Committee.
Notice may be given by telephone, telegram, facsimile or by mail.
Section 20. Four (4) members of the Executive Committee shall
constitute a quorum for the transaction of business, if the Committee
consists of seven (7) members. If the Executive Committee consists of six
(6) members or less, then three (3) members of the Committee shall constitute
a quorum. Each member of the Executive Committee shall be entitled to one
vote on all matters that may come before the Committee.
Section 21. All proceedings of the Executive Committee shall be
promptly recorded by the Secretary, and a full report thereof made to each
member of the Board of Directors. All proceedings of the Executive Committee
shall be subject to review, revision and alteration by the Board of
Directors; provided, however, that no rights or acts of third parties shall
be affected by any such review, revision or alteration.
Section 22. The Executive Committee may fix its own rules of procedure.
As Amended 8/14/96 Page 18 of 35
<PAGE> 19
Section 23. The Chairman of the Executive Committee shall preside at
all meetings of the Committee, but in his absence any member selected by the
Committee shall preside as Temporary Chairman.
Section 24. The Secretary of the Corporation shall keep the records and
minutes of the Executive Committee, and shall in general perform all the
duties usually incident to the office of the Secretary of any Executive
Committee.
COMPENSATION OF DIRECTORS
-------------------------
Section 25. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, the Board of Directors shall have the
authority to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the Board of
Directors or any committee thereof and may be paid a fixed sum for attendance
at each meeting of the Board of Directors or any Committee thereof, and a
stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor.
INDEMNIFICATION
---------------
Section 26. (a) 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
As Amended 8/14/96 Page 19 of 35
<PAGE> 20
than an action by or in the right of the Corporation) by reason of the fact
that he 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 him in
connection with such action, suit or proceeding if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) 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 he 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
As Amended 8/14/96 Page 20 of 35
<PAGE> 21
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and except that no such
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty 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 such Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of the
Corporation shall be successful on the merits or otherwise in defense, of any
action, suit or proceeding referred to in paragraphs (a) and (b), or in
defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) (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 he has met
the applicable
As Amended 8/14/96 Page 21 of 35
<PAGE> 22
standard of conduct set forth in paragraphs (a) and (b). Such determination
shall be made (1) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to such action, suit or
proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable
a quorum of disinterested directors so directs, by independent legal counsel in
a written opinion, or (3) by the stockholders.
(e) Expenses incurred in defending a civil or criminal action, suit
or proceeding may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding as authorized by the Board of
Directors in the manner provided in paragraph (d) upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the Corporation as authorized in this
Section 26.
(f) The indemnification provided by this Section 26 shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any statute, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as
to a person who has ceased to be a director, officer, employee or agent and
shall inure to the benefit of the heirs, executors and administrators of such
a person.
(g) The Board of Directors may authorize, by a vote of a majority of
a quorum of the Board of Directors, the Corporation to purchase and maintain
insurance on behalf of any person who is or
As Amended 8/14/96 Page 22 of 35
<PAGE> 23
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 him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Section 26.
(h) For the purposes of this Section 26, 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, and
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 corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Section with respect to the resulting or surviving corporation as he would
have with respect to such constituent corporation if its separate existence
had continued.
As Amended 8/14/96 Page 23 of 35
<PAGE> 24
ARTICLE IV
OFFICERS
--------
Section 1. The officers of the Corporation shall be a Chairman of the
Board, a President, one or more Vice President(s) (any one or more of whom
may be designated as Executive, Senior or Group Vice President), a Secretary,
a Treasurer and a Controller, all of whom shall be appointed by the Board of
Directors. The same person may hold more than one office. The Board of
Directors may also designate a chief executive officer and a chief operating
officer of the Corporation.
Section 2. The officers of the Corporation, except such officers as
may be appointed in accordance with the provisions of Section 3 or Section 5
of this Article, shall be chosen by the Board of Directors, and each shall
serve at the pleasure of the Board, subject to the rights, if any, of any
officer under any contract of employment.
Section 3. The Board of Directors may appoint, and may empower the
Chairman of the Board to appoint, such other officers as the business of the
Corporation may require, each of whom shall hold office for such period, have
such authority and perform such duties as are provided in the By-Laws or as
the Board of Directors may from time to time determine.
Section 4. Any officer may be removed, either with or without cause,
by the Board of Directors, at any regular or special
As Amended 8/14/96 Page 24 of 35
<PAGE> 25
meeting thereof, or, except in case of an officer chosen by the Board of
Directors, by any officer upon whom such power of removal may be conferred by
the Board of Directors.
Any officer may resign at any time by giving written notice to the
Corporation. Any such resignation shall take effect on receipt or at any
later time specified therein. Unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
Any such resignation is without prejudice to the rights, if any, of the
Corporation under any contract to which the officer is a party.
Section 5. A vacancy in any office because of death, resignation,
removal, disqualification or any other cause shall be filled in the manner
prescribed in these By-Laws for regular appointments to such office.
Section 6. The Chairman of the Board shall, if present, preside at all
meetings of the Board of Directors and of the stockholders, and shall,
subject to the control of the Board of Directors, have general supervision,
direction and control of the business and affairs of the Corporation and
shall exercise and perform such other powers and duties as may be from time
to time assigned to him by the Board of Directors or prescribed by the
By-Laws.
As Amended 8/14/96 Page 25 of 35
<PAGE> 26
Section 7. The President shall exercise and perform such powers and
duties as may be from time to time assigned to him by the Board of Directors
or the Chairman of the Board.
Section 8. In the absence or disability of the Chairman of the Board,
the President shall perform all of the duties of the Chairman of the Board,
and when so acting, shall have all of the powers of, and be subject to all of
the restrictions upon, the Chairman of the Board. In the absence or
disability both of the Chairman of the Board and of the President, and until
the Board of Directors designates otherwise, the Vice Presidents, if any,
shall perform all of the duties of the President, and when so acting shall
have all of the powers of, and be subject to all of the restrictions upon,
the President. The Vice Presidents shall have such other powers and perform
such other duties as from time to time may be prescribed for them
respectively by the Board of Directors, the Chairman of the Board, the
President or the By-Laws.
Section 9. The Secretary shall keep or cause to be kept, at the
principal office or such other place as the Board of Directors may order, a
book of minutes of all meetings and actions of directors, committees of
directors and stockholders, with the time and place of holding, whether
regular or special, and, if special, how authorized, the notice thereof
given, the names of those present at directors and committee meetings, the
number of shares present or represented at stockholders meetings, and the
proceedings thereof.
As Amended 8/14/96 Page 26 of 35
<PAGE> 27
The Secretary shall keep, or cause to be kept, at the principal office
or at the office of the Corporation's transfer agent or registrar, a share
register, or a duplicate share register, showing the names of all
stockholders and their addresses, the number and classes of shares held by
each, the number and date of certificates issued for the same, and the number
and date of cancellation of every certificate surrendered for cancellations.
The Secretary shall give, or cause to be given, notice of all meetings
of the stockholders and of the Board of Directors required by the By-Laws or
by law to be given, and he shall keep the seal of the Corporation, if one be
adopted, in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board of Directors or by the
By-Laws.
Section 10. The Treasurer and the Controller shall each have such
powers and perform such duties as from time to time may be prescribed for him
by the Board of Directors, the Chairman of the Board, the President or by the
By-Laws.
ARTICLE V
CERTIFICATES OF STOCK
---------------------
Section 1. Every holder of stock of the Corporation shall be entitled
to have a certificate 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 by the Secretary or an Assistant Secretary, or the
Treasurer or an
As Amended 8/14/96 Page 27 of 35
<PAGE> 28
Assistant Treasurer of the Corporation, certifying the number of shares
represented by the certificate owned by such stockholder in the Corporation.
Section 2. Any or all of the signatures on the certificate may be a
facsimile. In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued by the Corporation with the same
effect as if he were such officer, transfer agent, or registrar at the date
of issue.
LOST, STOLEN OR DESTROYED CERTIFICATES
--------------------------------------
Section 3. The Board of Directors, the Secretary and the Treasurer
each 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 require the owner of such lost,
stolen or destroyed certificate or certificates or his legal representative
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 with respect to
the certificate alleged to have been lost, stolen or destroyed.
As Amended 8/14/96 Page 28 of 35
<PAGE> 29
TRANSFERS OF STOCK
------------------
Section 4. Upon surrender to the Corporation or the transfer agent of
the Corporation, of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall
be the duty of the Corporation to issue a new certificate to the person
entitled thereto, cancel the old certificate and record the transaction upon
its books.
FIXING RECORD DATE
------------------
Section 5. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of the
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 shall not be more than sixty (60) nor less than ten (10)
days before the date of such meeting, nor more than sixty (60) 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.
REGISTERED STOCKHOLDERS
-----------------------
Section 6. The Corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in
As Amended 8/14/96 Page 29 of 35
<PAGE> 30
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim or interest in such share on the part of any other person, whether
or not it shall have express or other notice thereof, save as expressly
provided by the laws of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
------------------
DIVIDENDS
---------
Section 1. Dividends 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. Dividends may be paid in cash, in property, or in shares of capital
stock, subject to the provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend there may be set aside out
of any funds of the Corporation available for dividends such sum or sums as
the directors from time to time, in their absolute discretion, think proper
as a reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for such other
purpose as the directors shall think conducive to the interests of the
Corporation, and the directors may abolish any such reserve.
As Amended 8/14/96 Page 30 of 35
<PAGE> 31
CHECKS
------
Section 3. All checks, drafts or other orders for payment of money,
notes or other evidences of indebtedness, issued in the name of or payable to
the Corporation shall be signed by such officer or officers as the Board of
Directors, the Chairman of the Board, the President or any Vice President may
from time to time designate.
Section 4. To the extent authorized by the Board of Directors or
otherwise provided in these By-Laws:
(a) The President, any Vice President, the Secretary or the
Treasurer may enter into contracts and execute instruments on behalf of
the Corporation;
(b) The Board of Directors, the Chairman of the Board, the
President or any Vice President may authorize any officer or officers, and
any employee or employees or agent or agents of the Corporation or any of
its subsidiaries, to enter into any contract or execute any instrument in
the name of and on behalf of the Corporation, and such authority may be
general or confined to specific instances.
FISCAL YEAR
-----------
Section 5. The fiscal year of the Corporation shall be November 1
through October 31, unless otherwise fixed by resolution of the Board of
Directors.
As Amended 8/14/96 Page 31 of 35
<PAGE> 32
SEAL
----
Section 6. The corporate seal shall have inscribed thereon the name of
the Corporation, the year of its organization and the words "Seal, Delaware".
Said seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
NOTICES
-------
Section 7. 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 require
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 facsimile.
Section 8. 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, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto.
As Amended 8/14/96 Page 32 of 35
<PAGE> 33
ANNUAL STATEMENT
----------------
Section 9. The Board of Directors shall present at each annual
meeting, and at any special meeting of the stockholders when called for by
vote of the stockholders, a full and clear statement of the business and
condition of the Corporation.
DELEGATION OF AUTHORITY
-----------------------
Section 10. Pursuant to Section 141 of the General Corporation Law of
the State of Delaware, the Board of Directors hereby delegates, subject to
such limitations as the Chairman of the Board or the President may impose, to
the officers of the Corporation the management of the day-to-day business and
affairs of the Corporation, including authority, provided the transaction is
in the ordinary course of the Corporation's business:
(1) To sell or otherwise dispose of real or personal property
for such consideration as deemed proper;
(2) To purchase or otherwise acquire real or personal property
for such consideration as deemed proper;
(3) To enter into leases of real and personal property as
lessor or lessee, subject to the limitation below regarding financing
arrangements, and to enter into contracts, obligations and other
agreements;
(4) To enter into any instrument in the name and on behalf of
the Corporation;
(5) To open, maintain, and close checking, savings and other
banking accounts, brokerage and other investment accounts, and to deposit,
transfer, invest and withdraw funds
As Amended 8/14/96 Page 33 of 35
<PAGE> 34
to, in and from said accounts, which accounts shall be maintained in the
name and on behalf of the Corporation; and
(6) To do all other such acts and things as are necessary to
effectuate the foregoing and to exercise all powers which are necessary or
useful to carry on the business of the Corporation.
The officers shall not, without approval of the Board of Directors of
this Corporation:
(a) Incur indebtedness for borrowed money or otherwise enter
into financing arrangements;
(b) Dispose of any of the Corporation's divisions, subsidiaries
or principal product lines, or in any one transaction assets having a
value in excess of two percent (2%) of the disposing Corporation's total
assets;
(c) Acquire any corporation, partnership or other entity if the
fair value of the consideration paid is in excess of two percent (2%) of
the acquiring corporation's total assets; or
(d) Take any action which would cause this Corporation to be in
default of its debt obligations.
ARTICLE VII
AMENDMENTS
----------
Section 1. These By-Laws may be altered, amended or rescinded or new
By-Laws may be adopted by the Board of Directors.
As Amended 8/14/96 Page 34 of 35
<PAGE> 35
Section 2. These By-Laws may not be altered, amended or rescinded and
new By-Laws may not be adopted by the stockholders of the Corporation except
by the vote of the holders of not less than seventy-five percent (75%) of the
total shares of stock of the Corporation entitled to vote in the election of
directors.
- ----------
As Amended 8/14/96 Page 35 of 35
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<FISCAL-YEAR-END> OCT-31-1996
<PERIOD-START> MAY-01-1996
<PERIOD-END> JUL-31-1996
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<COMMON> 9,591
0
0
<OTHER-SE> 172,334
<TOTAL-LIABILITY-AND-EQUITY> 293,204
<SALES> 92,055
<TOTAL-REVENUES> 92,055
<CGS> 54,912
<TOTAL-COSTS> 86,015
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4
<INTEREST-EXPENSE> 614
<INCOME-PRETAX> 7,435
<INCOME-TAX> 2,454
<INCOME-CONTINUING> 4,981
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,981
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.44
</TABLE>
