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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 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 1-9215
---------------------------------------
UNITED ASSET MANAGEMENT CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 04-2714625
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110
(Address of principal executive offices)
Registrant's telephone number, including area code: (617) 330-8900
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. [X] Yes [ ] No
The number of shares outstanding of the registrant's common stock as of
May 5, 2000 was 56,491,561.
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PART I
FINANCIAL INFORMATION
Item 1. Financial Statements. (Pages F-1 to F-6)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations. (Pages F-6 to F-8)
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
(Page F-9)
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
The Company and certain of the Company's subsidiaries are subject
to legal proceedings arising in the ordinary course of business.
On the basis of information presently available and advice
received from legal counsel, it is the opinion of management that
the disposition or ultimate determination of such legal
proceedings will not have a material adverse effect on the
Company's consolidated financial position, its consolidated
results of operations or its consolidated cash flows.
Item 2. Changes in Securities.
During the first quarter of 2000, UAM issued an aggregate of
125,455 shares of its Common Stock upon the exercise of warrants.
This issuance was exempt from registration under Section 4(2) of
the Securities Act of 1933. UAM had originally issued the warrants
as consideration for its acquisitions of certain of its
subsidiaries. The exercise price of the warrants was $16.50 per
share.
Item 3. Defaults Upon Senior Securities. None
Item 4. Submission of Matters to a Vote of Security Holders. None
Item 5. Other Information. None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 3 - Amended and Restated By-laws of the Registrant
(effective as of March 29, 2000)
Exhibit 10 - United Asset Management Corporation Profit
Sharing and 401(k) Plan, Sixth Amendment
Exhibit 11 - Calculation of Earnings Per Share (Page F-10)
Exhibit 27 - Financial Data Schedule
(b) There have been no reports on Form 8-K filed by the
Company during the quarter ended March 31, 2000.
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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.
UNITED ASSET MANAGEMENT CORPORATION
MAY 5, 2000 /s/ William H. Park
- ------------------------- --------------------------------
(Date) William H. Park
Executive Vice President and
Chief Financial Officer
<PAGE> 4
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED ASSET MANAGEMENT CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Three Months Ended March 31, 2000 1999
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues $239,048,000 $217,695,000
- -------------------------------------------------------------------------------------------------------------
Operating expenses:
Compensation and related
expenses 125,075,000 109,069,000
Amortization of cost assigned
to contracts acquired 26,294,000 26,088,000
Other operating expenses 38,248,000 39,146,000
- -------------------------------------------------------------------------------------------------------------
189,617,000 174,303,000
- -------------------------------------------------------------------------------------------------------------
Operating income 49,431,000 43,392,000
- -------------------------------------------------------------------------------------------------------------
Non-operating expenses:
Interest expense, net 16,789,000 15,834,000
Other amortization 1,139,000 1,159,000
- -------------------------------------------------------------------------------------------------------------
17,928,000 16,993,000
- -------------------------------------------------------------------------------------------------------------
Income before income tax expense 31,503,000 26,399,000
Income tax expense 13,042,000 11,298,000
- -------------------------------------------------------------------------------------------------------------
Net income $ 18,461,000 $ 15,101,000
=============================================================================================================
Basic earnings per share $.33 $.25
Diluted earnings per share $.33 $.25
Dividends declared per share $.20 $.20
=============================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-1
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UNITED ASSET MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
March 31, December 31,
2000 1999
(Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 147,369,000 $ 123,754,000
Investment advisory fees receivable 175,244,000 169,566,000
Other current assets 12,437,000 11,621,000
- ---------------------------------------------------------------------------------------------------------------------------
Total current assets 335,050,000 304,941,000
Fixed assets, net 35,406,000 37,391,000
Cost assigned to contracts acquired, net 815,127,000 841,454,000
Other assets 141,353,000 137,905,000
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $1,326,936,000 $1,321,691,000
===========================================================================================================================
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 123,403,000 $ 134,556,000
Accrued compensation 78,831,000 87,994,000
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 202,234,000 222,550,000
Senior notes payable 736,622,000 700,401,000
Subordinated notes payable 179,886,000 181,737,000
Deferred income taxes and other 27,654,000 31,883,000
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,146,396,000 1,136,571,000
- ---------------------------------------------------------------------------------------------------------------------------
Commitments and contingencies
Stockholders' equity:
Common stock, par value $.01 per share 690,000 703,000
Capital in excess of par value 354,855,000 361,808,000
Retained earnings 127,174,000 139,044,000
Accumulated other comprehensive income (7,179,000) (6,495,000)
- ---------------------------------------------------------------------------------------------------------------------------
475,540,000 495,060,000
Less treasury shares at cost (295,000,000) (309,940,000)
- ---------------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 180,540,000 185,120,000
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $1,326,936,000 $1,321,691,000
===========================================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-2
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UNITED ASSET MANAGEMENT CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Three Months Ended March 31, 2000 1999
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash flow related to operating activities:
Net income $ 18,461,000 $ 15,101,000
Adjustments to reconcile net income to net cash flow
from operating activities:
Amortization of cost assigned to contracts acquired 26,294,000 26,088,000
Depreciation 3,481,000 3,618,000
Amortization of goodwill and other 2,075,000 1,968,000
- ----------------------------------------------------------------------------------------------------------------
Net income plus amortization and depreciation 50,311,000 46,775,000
Changes in assets and liabilities:
Decrease (increase) in investment advisory fees receivable (5,851,000) 13,401,000
Increase in other current assets (835,000) (1,445,000)
Decrease in accounts payable and accrued expenses (10,808,000) (24,243,000)
Decrease in accrued compensation (9,128,000) (28,031,000)
Increase (decrease) in deferred income taxes and other (5,035,000) 474,000
- ----------------------------------------------------------------------------------------------------------------
Net cash flow from operating activities 18,654,000 6,931,000
- ----------------------------------------------------------------------------------------------------------------
Cash flow related to investing activities:
Cash additions to cost assigned to contracts acquired - (4,997,000)
Change in other assets (6,236,000) (3,785,000)
- ----------------------------------------------------------------------------------------------------------------
Net cash flow used in investing activities (6,236,000) (8,782,000)
- ----------------------------------------------------------------------------------------------------------------
Cash flow related to financing activities:
Purchase of treasury shares (13,149,000) (71,159,000)
Additions to notes payable, net 35,393,000 47,329,000
Issuance or reissuance of equity securities 844,000 11,274,000
Dividends paid (11,459,000) (12,290,000)
- ----------------------------------------------------------------------------------------------------------------
Net cash flow from (used in) financing activities 11,629,000 (24,846,000)
- ----------------------------------------------------------------------------------------------------------------
Effect of foreign exchange rate changes on cash flow (432,000) (850,000)
- ----------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents 23,615,000 (27,547,000)
Cash and cash equivalents at beginning of quarter 123,754,000 153,616,000
- ----------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of quarter $147,369,000 $126,069,000
================================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
F-3
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UNITED ASSET MANAGEMENT CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1
In the opinion of management, the accompanying unaudited Condensed
Consolidated Financial Statements contain all adjustments, consisting only of
normal recurring accruals, necessary to present fairly the financial position of
the Company and its subsidiaries at March 31, 2000, and their results of
operations and cash flows for the three months ended March 31, 2000 and 1999.
These Financial Statements should be read in conjunction with the Company's
Annual Report on Form 10-K for the year ended December 31, 1999.
Note 2
Accumulated depreciation of fixed assets was $64,946,000 and
$62,997,000 at March 31, 2000 and December 31, 1999, respectively. The
accumulated amortization of cost assigned to contracts acquired was $717,280,000
and $700,410,000 at March 31, 2000 and December 31, 1999, respectively.
Note 3
The Company has a program to repurchase shares of its common stock to
meet the requirements for future issuance of shares upon the exercise of stock
options and warrants. During the three-month period ended March 31, 2000, the
Company repurchased 815,300 shares of its common stock at a cost of $13,149,000.
In addition, exercises of warrants resulted in the Company extinguishing
subordinated notes, receiving cash and issuing stock as follows:
Three Months
Ended
March 31, 2000
--------------
Subordinated notes extinguished $ 1,245,000
Cash received $ 825,000
Treasury shares reissued 125,455
As of March 31, 2000, the Company held 12,500,571 treasury shares.
Warrants for the purchase of 7,173,000 shares and stock options for the purchase
of 9,845,000 shares were outstanding at weighted average exercise prices of
$24.61 and $21.01, respectively.
During the three-month period ending March 31, 2000, the Company
retired 1,354,445 shares of treasury stock, which had a total cost of
$24,326,000 and resulted in a charge to capital in excess of par value and
retained earnings of $6,972,000 and $17,340,000, respectively.
F-4
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Note 4
The components of comprehensive income for the three months ended March
31, 2000 and 1999, respectively, are set forth below:
Three Months Ended
------------------
March 31, 2000 March 31, 1999
-------------- --------------
Net income $18,461,000 $15,101,000
Other comprehensive income:
Foreign currency translation
adjustment, net of tax (909,000) 91,000
Unrealized gain on marketable
securities, net of tax 225,000 102,000
Less: reclassification adjustment
for gains realized in net
income, net of tax -- (309,000)
----------- -----------
Comprehensive income $17,777,000 $14,985,000
=========== ===========
Note 5
The Company operates in one business segment, that is, as investment
advisors managing both domestic and international investment portfolios for
corporate, government and union benefit plans, mutual funds, individuals,
endowments, and foundations. Although each affiliated firm operates under its
own name with its own investment philosophy and approach, the firms' regulatory
environments and the economic characteristics of their products, services,
client bases and manner of distribution are similar. Therefore, the affiliated
firms are aggregated as one business segment.
Revenues and long-lived assets shown below are classified according to
the affiliate's geographic location. The majority of the foreign long-lived
assets are domiciled in Canada. These Canadian assets totaled $137,157,000 and
$144,096,000 at March 31, 2000 and 1999, respectively. Revenues are derived
primarily from fees for investment advisory services provided to institutional
and other clients. These fees are generally a function of the overall fee rate
charged to each account and the level of assets under management by the
affiliated firms.
Three Months Ended
------------------
March 31, 2000 March 31, 1999
-------------- --------------
Domestic revenues $ 218,978,000 $ 198,005,000
Foreign revenues $ 20,070,000 $ 19,690,000
Domestic long-lived assets $ 837,101,000 $ 921,514,000
Foreign long-lived assets $ 154,785,000 $ 161,398,000
F-5
<PAGE> 9
Note 6
Effective April 19, 2000, the Company entered into a closing agreement
with the Internal Revenue Service for the tax years 1984 through 1992. As part
of the agreement, all intangibles arising in taxable transactions prior to 1993
will be fully deductible over a 15-year life beginning with the date of
acquisition. The Company will make payments for certain previously deferred tax
accruals during the current year. As a result tax deductions will be increased
in current and future years.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The revenues of UAM's affiliated firms are derived primarily from fees
for investment advisory services provided to institutional and other clients.
Investment advisory fees are generally a function of the overall fee rate
charged to each account and the level of assets under management by the
affiliated firms. Assets under management can be affected by the addition of new
client accounts or client contributions to existing accounts, withdrawals of
assets from or terminations of client accounts, and investment performance,
which may depend on general market conditions.
UAM's assets under management were $203.2 billion as of March 31, 2000,
compared to $202.6 billion at the start of the year. Investment performance
added $8.1 billion to assets under management during the quarter. This was
partially offset by negative net client cash flow of $7.0 billion. The sale of
an affiliate reduced assets under management by approximately $500 million.
AMORTIZATION OF COST ASSIGNED TO CONTRACTS
Cost assigned to contracts acquired, net of accumulated amortization,
represented approximately 61% of the Company's total assets as of March 31,
2000. Amortization of cost assigned to contracts acquired, which is a non-cash
charge, represented 14% of the Company's operating expenses for the three months
ended March 31, 2000. Recording the cost assigned to contracts acquired as an
asset, with the resulting amortization as an operating expense, reflects the
application of generally accepted accounting principles to acquisitions by UAM
of investment management firms in transactions accounted for as purchases. The
principal assets acquired are the investment advisory contracts that evidence
the firms' ongoing relationships with their clients.
The cost assigned to contracts acquired is amortized on a straight-line
basis over the estimated weighted average useful life of the contracts of
individual firms acquired. These lives are estimated through statistical
analysis of historical patterns of terminations and the size and age of the
contracts acquired as of the acquisition date.
The Company regularly performs reviews of the remaining estimated lives
as well as for potential impairment of the value of acquired contracts. If any
review were to indicate that any of the estimated lives should be shortened, the
remaining cost assigned to contracts acquired would be amortized over the
shorter life commencing in the year in which the new estimate is determined. If
any review were to indicate that the carrying value of the contracts is
impaired, the asset would be adjusted to its estimated fair value.
F-6
<PAGE> 10
Cost assigned to contracts acquired is amortized as an operating
expense. It does not, however, require the use of cash and, therefore,
management believes that it is important to distinguish this expense from other
operating expenses in order to evaluate the performance of the Company.
Amortization of cost assigned to contracts acquired per share, referred to
below, has been calculated by dividing total amortization by the same number of
shares used in the diluted earnings-per-share calculation.
OPERATING RESULTS
THREE MONTHS ENDED MARCH 31, 2000
COMPARED TO
THREE MONTHS ENDED MARCH 31, 1999
Revenues were $239,048,000 for the three months ended March 31, 2000
compared to $217,695,000 for the first quarter of 1999. Revenues increased due
to positive market performance which generated higher fee revenues, partially
offset by the effect of negative client cash flows and the divestiture of three
small affiliates.
Compensation and related expenses together with other operating
expenses were $163,323,000 compared to $148,215,000 in 1999, primarily
reflecting higher compensation earned by employees of existing affiliated firms
in accordance with revenue sharing plans, partially offset by lower operating
expenses. Amortization of cost assigned to contracts acquired was $26,294,000
compared to $26,088,000 in 1999. The increase was the result of the recording of
additional purchase price commitments associated with prior-year acquisitions,
partially offset by certain cost assigned to contracts acquired being fully
amortized at the end of 1999.
Net interest expense increased to $16,789,000 from $15,834,000,
primarily as the result of an increase in the average interest rate charged on
borrowings, offset in part by lower average borrowings.
Income before income tax expense was $31,503,000 compared to
$26,399,000 in 1999, reflecting the circumstances described above. The Company's
annual effective tax rate approximated 41% for the three-month period ended
March 31, 2000 compared to 43% in 1999.
Net income was $18,461,000 compared to $15,101,000, reflecting the net
result of the events discussed above. Diluted earnings per share were $.33 for
the first quarter of 2000 compared to $.25 in the first quarter of 1999,
reflecting the effect of the Company's common stock repurchased and the
Company's lower average common stock price, partially offset by the impact of
the issuance of shares of common stock and the hypothetical exercise of warrants
and stock options on the calculation of earnings per share under the treasury
stock method. Amortization of cost assigned to contracts acquired per share
increased to $.46 in the first quarter of 2000 from $.43 in 1999 due to the
smaller number of shares outstanding. Net income plus amortization and
depreciation was $50,311,000 in the first quarter of 2000 compared to
$46,775,000 in 1999, and EBITDA (earnings before interest, taxes, depreciation
and amortization) was $80,142,000 in the first quarter of 2000 compared to
$73,907,000 in 1999 due to the circumstances discussed above. Management uses
the last two statistics not to the exclusion of net income, but rather as an
additional important measure of the Company's performance.
F-7
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CHANGES IN FINANCIAL CONDITION; LIQUIDITY AND CAPITAL RESOURCES
The Company's internally generated cash totaled $50,311,000 for the
three months ended March 31, 2000. This cash and additional borrowings under the
Company's line of credit were primarily used to repurchase shares of the
Company's common stock and to pay dividends to shareholders. The Company invests
its excess cash in deposits with major banks, money market funds or in
securities, principally commercial paper, of companies with strong credit
ratings in diversified industries. As of March 31, 2000, the Company had drawn
down $333,000,000, leaving $417,000,000 available under its $750,000,000
Reducing Revolving Credit Agreement.
Management believes that the Company's existing capital, together with
internally generated cash and borrowings available under its revolving line of
credit, will provide the Company with sufficient resources to meet its present
and reasonably foreseeable future cash needs. Management expects that the
principal uses of financial resources will be to provide further support for
investing in the growth initiatives of existing affiliates, satisfy deferred tax
obligations in connection with the IRS settlement, repurchase shares of the
Company's common stock, pay shareholder dividends, acquire additional investment
management firms, and to fund commitments due or potentially due to former
owners of affiliated firms.
Increases or decreases in interest rates affect UAM's costs of
operations chiefly through raising or lowering the interest expense related to
the Company's variable-rate debt outstanding. To mitigate the risks associated
with increases in interest rates, UAM has entered into and plans to continue to
enter into interest-rate protection agreements. Rates of interest on the Senior
Notes and existing subordinated debt are fixed. Increases and decreases in
interest rates may also affect market prices of assets managed by the Company's
affiliated firms. Changes in such prices may affect the affiliated firms'
revenues, and therefore UAM's consolidated revenues.
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains "forward-looking"
statements. These statements include descriptions of UAM's operational plans,
expectations about future earnings and other results of operations, views of
future industry or market conditions, and other statements that include words
like "may," "expects," "believes," and "intends," and that describe opinions
about future events.
Investors should not rely on these statements as though they were
guarantees. These statements are current only when they are made. UAM's
management has no obligation to revise or update these statements based on
future developments. Known and unknown risks may cause UAM's actual results and
performances to be materially different from those expressed or implied by these
statements. Some of these risks, uncertainties and other factors are that: most
of UAM's revenues are based on the market value of managed assets and,
therefore, will rise and fall with changes in the economy and financial markets;
the investment management business is highly competitive; the investment
management business is susceptible to internal shifts and frequently requires
firms to adapt; and UAM's affiliated firms depend significantly on key
employees. These and other factors are identified and more thoroughly explained
in Exhibit 99.1 to UAM's Annual Report on Form 10-K filed on March 21, 2000 with
the SEC.
F-8
<PAGE> 12
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information provided below updates that which was previously
presented in Item 7A, Quantitative and Qualitative Disclosures About Market
Risk, of the Company's Form 10-K for the year ended December 31, 1999.
The Company had $333,000,000 outstanding under its $750,000,000
Reducing Revolving Credit Agreement (the Credit Agreement) as of March 31, 2000.
Interest rates available for amounts outstanding under the Credit Agreement are
currently: prime, 1.875% over 30-day LIBOR or a money market bid option. In
addition, an annual commitment fee, payable on the daily average unused portion
of the Credit Agreement, is currently .375%. The effective interest rate on the
outstanding borrowings at March 31, 2000 was 7.9% compared to 6.5% at March 31,
1999. To mitigate against the risks associated with increases in interest rates,
the Company has entered into and plans to continue to enter into interest-rate
protection agreements with members of the Company's banking group. As of March
31, 2000, these agreements extend up to 18 months and limit interest rates to
no more than 10%.
At March 31, 2000, the Company also had $179,886,000 of subordinated
notes outstanding which mature at various dates through March 2005 and have
interest rates ranging from 5.5% to 7.5%.
F-9
<PAGE> 1
Exhibit 3
UNITED ASSET MANAGEMENT CORPORATION
AMENDED AND RESTATED BY-LAWS
(effective as of March 29, 2000)
ARTICLE I
OFFICES AND RECORDS
Section 1. Registered Office. The registered office shall be in
the City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may also have offices
at such other places both within and without the State of Delaware as the Board
of Directors may from time to time determine or the business of the Corporation
may require.
Section 3. Books and Records. The books and records of the
Corporation may be kept within or outside the State of Delaware at such place or
places as may from time to time be designated by the Board.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. 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. Annual Meeting - Date and Time. Annual meetings of
stockholders shall be held on such date and time as shall be designated by the
Board of Directors and stated in the notice of the meeting.
Section 3. Inspectors of Elections; Opening and Closing the
Polls. The Board by resolution shall appoint, or shall authorize an officer of
the Corporation to appoint, one or more inspectors, which inspector or
inspectors may include individuals who serve the Corporation in other
capacities, including, without limitation, as officers, employees, agents or
representatives, to act at the meetings of stockholders and make a written
report thereof. One or more persons may be designated as alternate inspectors to
replace any inspector who fails to act. If no inspector or alternate has been
appointed to act or is able to act at a meeting of stockholders, the Chairman of
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before discharging such person's duties, shall take and sign an oath
to execute faithfully the duties of inspector with strict impartiality and
according to the best of such person's ability. The inspector(s) shall have the
duties prescribed by law. The Chairman of the meeting shall fix and announce at
the meeting the date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote at a meeting.
Section 4. Calling of Special Meetings. Subject to the rights of
the holders of any shares of stock having a preference over the common stock of
the Corporation as to dividends or
<PAGE> 2
upon liquidation with respect to such shares of preferred stock, special
meetings of the stockholders, for any purpose or purposes, may be called only by
President or the Chairman of the Board of Directors pursuant to a resolution
adopted by majority of the total number of directors which the Corporation would
have if there were no vacancies (the "whole board").
Section 5. Notice of Meetings. Written or printed notice of each
annual or special meeting stating the place, date and hour of the meeting and
the purpose or purposes for which the meeting is called, shall be prepared and
delivered by the Corporation not less than ten (10) days nor more than sixty
(60) days before the date of the meeting, either personally or by mail, to each
stockholder of record entitled to vote at such meeting. If mailed, such notice
shall be deemed to be delivered when deposited in the United States mail with
postage thereon prepaid, addressed to the stockholder at such person's address
as it appears on the stock transfer books of the Corporation. Such further
notice shall be given as may be required by law. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Meetings may be
held without notice if all stockholders entitled to vote are present, or if
notice is waived by those not present. Any previously scheduled meeting of the
stockholders may be postponed, and any special meeting of the stockholders may
be cancelled, by resolution of the Board of Directors upon public notice given
prior to the date previously scheduled for such meeting of stockholders.
Section 6. Notice of Stockholder Business and Nominations;
Annual Meetings of Stockholders. Nominations of persons for election to the
Board of Directors of the Corporation and the proposal of business to be
considered by the stockholders may be made at an annual meeting of stockholders
(a) pursuant to the Corporation's notice of meeting pursuant to Section 5 of
this Article II, (b) by or at the direction of the Board of Directors or (c) by
any stockholder of the Corporation who was a stockholder of record at the time
of giving of notice provided for in this By-law, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this By-law.
For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of the first
paragraph of this By-law, the stockholder must have given timely notice thereof
in writing to the Secretary of the Corporation and such other business must
otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on the
90th day nor earlier than the close of business on the 120th day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
that in the event that the date of the annual meeting is more than 30 days prior
to or more than 60 days after such anniversary date, notice by the stockholder
to be timely must be so delivered not earlier than the close of business on the
120th day prior to such annual meeting and not later than the close of business
on the later of the 90th day prior to such annual meeting or the 10th day
following the day on which public announcement of the date of such meeting is
first made by the Corporation. In no event shall the public announcement of an
adjournment of an annual meeting commence a new time period for the giving of a
stockholder's notice as described above. Such stockholder's notice shall set
forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors in an election contest, or is otherwise required, in each case
pursuant to Regulation 14A
-2-
<PAGE> 3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and
Rule 14a-11 thereunder (including such person's written consent to being named
in the proxy statement as a nominee and to serving as a director if elected);
(b) as to any other business that the stockholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial owner,
if any, on whose behalf the proposal is made; and (c) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made (i) the name and address of such stockholder, as
they appear on the Corporation's books, and of such beneficial owner and (ii)
the class and number of shares of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner.
Notwithstanding anything in the second sentence of the second
paragraph of this By-law to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement naming all of the nominees for
director or specifying the size of the increased Board of Directors made by the
corporation at least 100 days prior to the first anniversary of the preceding
year's annual meeting, a stockholder's notice required by this By-law shall also
be considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.
Section 7. Notice of Stockholder Business and Nominations;
Special Meetings of Stockholders. Only such business shall be conducted at a
special meeting of stockholders as shall have been brought before the meeting
pursuant to the Corporation's notice of meeting pursuant to Section 5 of this
Article II. Nominations of persons for election to the Board of Directors may be
made at a special meeting of stockholders at which directors are to be elected
pursuant to the Corporation's notice of meeting (a) by or at the direction of
the Board of Directors or (b) by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
By-law, who shall be entitled to vote at the meeting and who complies with the
notice procedures set forth in this By-law. In the event the Corporation calls a
special meeting of stockholders for the purpose of electing one or more
directors to the Board of Directors, any such stockholder may nominate a person
or persons (as the case may be), for election to such position(s) as specified
in the Corporation's notice of meeting, if the stockholder's notice required by
the second paragraph of Section 6 of this Article II shall be delivered to the
Secretary at the principal executive offices of the Corporation not earlier than
the close of business on the 120th day prior to such special meeting and not
later than the close of business on the later of the 90th day prior to such
special meeting or the 10th day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting. In no event shall the
public announcement of an adjournment of a special meeting commence a new time
period for the giving of a stockholder's notice as described above.
Section 8. Notice of Stockholder Business and Nominations;
General. Only such persons who are nominated in accordance with the procedures
set forth in these By-laws shall be eligible to serve as directors and only such
business shall be conducted at a meeting of
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stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in these By-laws. Except as otherwise provided by law,
the Certificate of Incorporation or the By-laws, the Chairman of the meeting
shall have the power and duty to determine whether a nomination or any business
proposed to be brought before the meeting was made or proposed, as the case may
be, in accordance with the procedures set forth in these By-laws and, if any
proposed nomination or business is not in compliance with these By-laws, to
declare that such defective proposal or nomination shall be disregarded.
For purposes of these by-laws, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
Notwithstanding the foregoing provisions of these By-laws, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in these By-laws. Nothing in these By-laws shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of preferred stock to elect directors under
specified circumstances.
Section 9. Quorum and Adjournment. The holders of a majority of
the stock 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. The Chairman of the meeting may
adjourn the meeting from time to time, whether or not there is such a quorum. No
notice of the time and place of adjourned meetings need be given except as
required by law. The stockholders present at a duly called meeting at which a
quorum is present may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less than a
quorum.
Section 10. Action of Stockholders. 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
brought before such meeting, unless the question is one upon which by express
provision of the statutes or of the Certificate of Incorporation, a different
vote is required in which case such express provision shall govern and control
the decision of such question. Election of directors at all meetings of the
stockholders at which directors are to be elected shall be by ballot, and,
subject to the rights of the holders of any series of preferred stock to elect
directors, a plurality of the votes cast thereat shall elect directors.
Section 11. Proxies. Unless otherwise provided in the
Certificate of Incorporation each stockholder shall, at every meeting of the
stockholders, be entitled to one vote in person or by proxy for each share of
the capital stock having voting power held by such stockholder, but no proxy
shall be voted on after three years from its date, unless the proxy provides for
a longer period.
Section 12. Record Date for Action by Written Consent. In order
that the Corporation may determine the stockholders entitled to consent to
corporate action in writing
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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 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 by written consent shall, by
written notice to the Secretary of the Corporation, request the Board of
Directors to fix a record date. The Board of Directors shall promptly, but in
all events within 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 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 it principal place of business or to
any officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office 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 at the close of business
on the date on which the Board of Directors adopts the resolution taking such
prior action.
Section 13. Inspectors of Written Consent. In the event of the
delivery, in the manner provided by Section 12 of this Article II, to the
Corporation of the requisite written consent or consents to take corporate
action and/or any related revocation or revocations, the Corporation shall
engage nationally recognized independent inspectors of elections for the purpose
of promptly performing a ministerial review of the validity of the consents and
revocations. For the purpose of permitting the inspectors to perform such
review, no action by written consent without a meeting shall be effective until
such date as the independent inspectors certify to the Corporation that the
consents delivered to the Corporation in accordance with Section 12 of this
Article II represent at least the minimum number of votes that would be
necessary to take the corporate action. Nothing contained in this paragraph
shall in any way be construed to suggest or imply that the Board of Directors or
any stockholder shall not be entitled to contest the validity of any consent or
revocation thereof, whether before or after such certification by the
independent inspectors, or to take any other action (including, without
limitation, the commencement, prosecution or defense of any litigation with
respect thereto, and the seeking of injunctive relief in such litigation).
Section 14. Effectiveness of Written Consent. Every written
consent shall bear the date of signature of each stockholder who signs the
consent and no written consent shall be effective to take the corporate action
referred to therein unless, within 60 days of the date the earliest dated
written consent was received in accordance with Section 12 of this Article II, a
written consent or consents signed by a sufficient number of holders to take
such action are delivered to the Corporation in the manner prescribed in Section
12 of this Article II.
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ARTICLE III
DIRECTORS
Section 1. Number, Tenure and Qualifications. The number of
directors which shall constitute the Board shall not be less than one or more
than fifteen. Within the limits above specified, the number of directors shall
be determined by resolution of the Board of Directors or by the stockholders at
the annual meeting. The directors shall be elected at the annual meeting of the
stockholders, except as provided in Section 2 of this Article, and each director
shall hold office until his successor is elected and qualified. Directors need
not be stockholders.
Section 2. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
only by a majority of the directors then in office, though less than a quorum,
or by a sole remaining director, and the directors so chosen shall hold office
until the next annual meeting of the stockholders 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 3. General Powers. The business of the Corporation shall
be managed by or under the direction of its Board of Directors which may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by statute or by the Certificate of Incorporation or by these
By-laws directed or required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4.General. The Board of Directors of the Corporation may
hold meetings, both regular and special, either within or without the State of
Delaware.
Section 5. First Meeting. The first meeting of each newly
elected Board of Directors shall be held at such time and place as shall be
fixed by the vote of the stockholders at the annual meeting and no notice of
such meeting shall be necessary to the newly elected directors in order legally
to constitute the meeting, provided a quorum shall be present. In the event of
the failure of stockholders to fix the time or place of such first meeting of
the newly elected Board of Directors, or in the event such meeting is not held
at the time and place so fixed by the stockholders, the meeting may be held at
such time and place as shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors, or as shall be
specified in a written waiver signed by all of the directors.
Section 6. 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 as determined by the Board.
Section 7. Special Meetings. Special meetings of the Board may
be called by the President, the Chairman of the Board or a majority of the Board
of Directors then in office on two days' notice to each director, either
personally or by mail, by facsimile or by telegram.
Section 8. Quorum. At all meetings of the Board a majority of
the Board of Directors shall constitute a quorum for the transaction of business
and the act of a majority of the
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directors present at any meeting at which there is a quorum shall be the act of
the Board of Directors, except as may be otherwise specifically provided by
statute or by the Certificate of Incorporation. 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.
Section 9. Action by Written Consent. 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 10. Conference Telephone Meetings. 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
participation in a meeting shall constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
Section 11. Executive and Other Committees. The Board of
Directors may designate one or more committees, each committee to consist of one
or more of the directors of the Corporation. The board may designate one or more
directors as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee.
Unless otherwise specified by resolution of the Board, in the
absence or disqualification of a member of a committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
Any such committee, to the extent consistent with law and
provided in the resolution of the Board of Directors, or in these By-laws, shall
have and may exercise all the powers and authority of the Board of Directors in
the management of the business and affairs of the Corporation. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.
Section 12. Minutes of Committee Meetings. Each committee shall
keep regular minutes of its meetings and report the same to the Board of
Directors when requested.
Section 13. Committee Meetings. A committee may hold meetings,
both regular and special, either within or without the State of Delaware.
Meetings of a committee may be called by the president or the Chairman of such
committee on two days' notice to each member, either personally or by mail or by
facsimile or telegram.
Unless otherwise specified by resolution of the Board, at all
meetings of a committee, a majority of the members thereof shall constitute a
quorum for the transaction of
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business and the act of a majority of the members present at any meeting at
which there is a quorum shall be the act of the committee. If a quorum shall not
be present at any meeting of a committee, the members present thereat may
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present.
Unless otherwise restricted by the Certificate of Incorporation
or these By-laws, any action required or permitted to be taken at any meeting of
a committee may be taken without a meeting, if all members of the committee
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the committee.
Unless otherwise restricted by the Certificate of Incorporation
or these By-laws, members of a committee may participate in a meeting of the
committee by means of conference telephone or similar communications equipment
by means of which all persons participating in the meeting can hear each other,
and such participation in a meeting shall constitute presence in person at the
meeting.
OTHER MATTERS
Section 14. Compensation of Directors. 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 and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor. Members of special or standing
committees may be allowed like compensation for attending committee meetings.
Section 15. Removal of Directors. Unless otherwise restricted by
the Certificate of Incorporation or by law, any director or the entire Board of
Directors may be removed, with or without cause, by the holders of a majority of
shares entitled to vote at an election of directors.
ARTICLE IV
NOTICES
Section 1. General. 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.
Section 2. Waiver. 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.
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ARTICLE V
OFFICERS
Section 1. Elected Officers. The Board of Directors shall elect
a Chief Executive Officer or a President or both, and a Secretary and a
Treasurer and may elect a Chairman of the Board and such other officers as the
Board shall determine. Each officer shall have such powers and perform such
duties as are provided in these By-laws and as may be provided from time to time
by the Board or by the Chief Executive Officer. Each officer shall at all times
be subject to the control of the Board, and any power or duty assigned to an
officer by these By-laws or the Board or the Chief Executive Officer shall be
subject to control, withdrawal or limitation 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.
Section 2. Election and Termination. The Board of Directors
shall elect officers at its first meeting after each annual meeting of
stockholders and may elect additional officers and fill vacancies at any other
time. Unless the Board shall otherwise specify, each officer shall hold office
until the first meeting of the Board after the next annual meeting of
stockholders, and until his or her successor has been elected and qualified,
except as hereinafter provided. The Board may remove any officer, or terminate
such officer's duties and powers, at any time, with or without cause. Any
officer may resign at any time by giving written notice thereof to the Chief
Executive Officer or to the Board, or by retiring or by leaving the employ of
the Corporation (without being employed by a subsidiary or affiliate) and any
such action shall take effect as a resignation without necessity of further
action. The Chief Executive Officer may suspend any officer until the next
meeting of the Board.
Section 3. Delegation of Powers. Each officer may delegate to
any other officer and to any official, employee or agent of the Corporation,
such portions of his or her powers as such officer shall deem appropriate,
subject to such limitations and expirations as such officer shall specify, and
may revoke such delegation at any time.
Section 4. Qualifications; Duties of the Chairman of the Board.
The Board may, but need not, elect a Chairman of the Board. The Chairman of the
Board may be, but need not be, a person other than the Chief Executive Officer,
and may be, but need not be, an officer or employee of the Corporation. If so
elected, the Chairman of the Board shall preside at meetings of the Board and
shall establish agendas for such meetings. In addition, the Chairman of the
Board shall assure that matters of significant interest to stockholders and the
investment community are addressed by management.
Section 5. Duties of the Chief Executive Officer. The Chief
Executive Officer shall, subject to the direction of the Board, have general and
active control of the affairs and business of the Corporation and general
supervision of its officers, officials, employees and agents; shall preside at
all meetings of the stockholders; shall see that all orders and resolutions of
the Board are carried into effect; and, in addition, shall have all the powers
and perform all the duties generally appertaining to the office of the Chief
Executive Officer of a corporation. The Chief Executive Officer shall designate
the person or persons who shall exercise his or her powers and perform his or
her duties in his or her absence or disability and the absence or disability of
the President.
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Section 6. Duties of the President. The President may be the
Chief Executive Officer of the Corporation, if so designated by the board. If
not, the President shall have such powers and perform such duties as are
prescribed by the Chief Executive Officer or by the Board, and, in the absence
or disability of the Chief Executive Officer, the President shall have the
powers and perform the duties of the Chief Executive Officer, except to the
extent that the Chief Executive Officer or the Board shall have otherwise
prescribed.
Section 7. Duties of the Secretary. The Secretary shall attend
all meetings and keep the minutes of all the proceedings of the stockholders,
the Board and any other committees unless it shall have chosen another
secretary. The Secretary shall give, or cause to be given, notice of all such
meetings and all other notices required by law or by these By-laws. The
Secretary shall have custody of the corporate seal of the Corporation and the
Secretary, or an Assistant Secretary, shall have the authority to affix the same
to any instrument requiring it and when so affixed, it may be attested by the
Secretary's signature or by the signature of such Assistant Secretary. The
Secretary shall maintain and have charge of all documents and other records,
including those required by law, and shall generally perform all duties
appertaining to the office of secretary of a corporation.
Section 8. Duties of the Treasurer. The Treasurer shall have the
care and custody of all of the corporate funds and securities, except to the
extent they shall be entrusted to other officers, employees or agents by
direction of the Chief Executive Officer or the Board. The Treasurer 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 Chief Executive Officer or the Board. The Treasurer shall
disburse the funds of the Corporation as may be ordered by the Chief Executive
Officer or the Board, taking proper vouchers for such disbursements, and shall
render to the Chief Executive Officer and the Board, at its regular meetings, or
when the Board so requires, an account of all his or her transactions as
Treasurer and of the financial condition of the Corporation.
Section 9. Bond. If required by the Board of Directors, the
Treasurer shall give the Corporation a bond (which shall be renewed every six
years) 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 such office
and for the restoration to the Corporation, in case of the Treasurer's death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in the Treasurer's possession or under
the Treasurer's control belonging to the Corporation.
Section 10. Appointment of Other Officials and Agents. The Chief
Executive Officer or his or her delegate may appoint such officials and agents
of the Corporation as the conduct of its business may require and assign to them
such titles, powers, duties and compensation as the Chief Executive Officer
shall see fit and may remove or suspend or modify such titles, powers, duties or
compensation at any time with or without cause.
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ARTICLE VI
CERTIFICATE OF STOCK
Section 1. Certificate. Every holder of stock in 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 the Treasurer or an Assistant Treasurer, or
the Secretary or an Assistant Secretary of the Corporation, certifying the
number of shares owned by him in the Corporation.
Certificates may be issued for partly paid shares and in such
case upon the face or back of the certificates issued to represent any such
partly paid shares, the total amount of the consideration to be paid therefor,
and the amount paid thereon shall be specified.
Section 2. Signature. Any of or all the signatures on the
certificate may be facsimile. In case any officer, transfer 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.
Section 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
with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Transfer of Stock. 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.
Section 5. 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, 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.
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Section 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, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Declaration of Dividends. 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 the capital stock, subject to the provisions of the Certificate
of Incorporation.
Section 2. Reserves. 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 or reserves 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 interest of
the Corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
Section 3. Annual Statement. 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.
Section 4. Checks. 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.
Section 5. Fiscal Years. The fiscal year of the Corporation
shall be fixed by resolution of the Board of Directors.
Section 6. Seal. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
Section 7. Indemnification. The Corporation shall, to the
fullest extent permitted by the General Corporation Law of Delaware, indemnify
each person who is or was serving as a director, officer or employee of the
Corporation against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, brought against such person by reason
of that person's acts or omissions in his or her capacity as a director, officer
or employee of this Corporation, or, in the
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case of an officer or employee of this Corporation, in his or her capacity as a
director, officer or employee of another entity controlled by this Corporation.
Expenses (including attorneys' fees) incurred by any person covered by
the first paragraph of this By-law in defending any such threatened, pending or
completed action, suit or proceeding shall be paid by the Corporation in advance
of the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such person to repay such amount if it shall
ultimately be determined that such person is not entitled to be indemnified by
the Corporation pursuant to the first paragraph of this By-law.
The Corporation may, but shall not be required to, indemnify any person
who is or was serving as an agent of the Corporation and any person, not covered
by the first paragraph of this By-law, who 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 to such
extent, permitted by the General Corporation Law of Delaware, as the Board of
Directors may authorize in the specific case.
ARTICLE VIII
AMENDMENTS
These By-laws may be altered, amended or repealed or new
By-laws may be adopted by the stockholders or by the Board of Directors, when
such power is conferred upon the Board of Directors by the Certificate of
Incorporation at any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the Board of
Directors if notice of such alteration, amendment, repeal or adoption of new
By-laws be contained in the notice of such special meeting, provided, however,
that, in the case of amendments by stockholders, notwithstanding any other
provisions of these By-laws or any provision of law which might otherwise permit
a lesser vote or no vote, but in addition to any affirmative vote of the holders
of any particular class or series of the capital stock of the Corporation
required by law, the Certificate of Incorporation or these By-laws, the
affirmative vote of the holders of at least 80 percent of the voting power of
all the then outstanding shares of the voting stock, voting together as a single
class, shall be required to alter, amend or repeal any provision of these
By-laws. If the power to adopt, amend or repeal By-laws is conferred upon the
Board of Directors by the Certificate of Incorporation it shall not divest or
limit the power of the stockholders to adopt, amend or repeal By-laws.
Notwithstanding the foregoing, any repeal or modification of the provisions of
Article VII, Section 7 shall not adversely affect any right or protection
thereunder of any person in respect of any act or omission occurring before the
time of such repeal or modification.
-13-
<PAGE> 1
Exhibit 10
UNITED ASSET MANAGEMENT CORPORATION
PROFIT SHARING AND 401(K) PLAN
SIXTH AMENDMENT
WHEREAS, United Asset Management Corporation (hereinafter referred to
as the "Company") adopted the United Asset Management Corporation Profit Sharing
and 401(k) Plan (hereinafter referred to as the "Plan") effective as of January
1, 1989 and restated effective January 1, 1990, to provide retirement benefits
for certain employees of the Company and its subsidiaries; and
WHEREAS, in accordance with Article 11, the Company wishes to amend the
Plan;
NOW, THEREFORE, the Plan is hereby amended effective as of January 1,
2000, unless otherwise indicated, as follows:
THE FOLLOWING PROVISION IS ADDED AS THE FINAL PARAGRAPH OF SECTION 6.3
OF ARTICLE 6: Notwithstanding the foregoing, a Participant who is
involuntarily terminated under a combination of two circumstances shall
be immediately and fully vested in such Participant's Company Account:
(a) The termination is for reasons unrelated to job performance; and
(b) In the circumstances of the termination, the Participant is
covered by a salary continuation plan adopted by his or her
Company (as defined at Section 1.10 of this Plan).
Except as specifically amended hereby, the Plan is hereby reaffirmed in
all respects. Signed as a sealed Massachusetts instrument effective as
of the date stated above.
<PAGE> 2
UNITED ASSET MANAGEMENT CORPORATION
/s/ William H. Park
BY: ____________________________________________
William H. Park, Executive Vice President
May 3, 2000
Date
2
<PAGE> 1
UNITED ASSET MANAGEMENT CORPORATION
Exhibit 11
CALCULATION OF EARNINGS PER SHARE
(In thousands, except per-share amounts)
(Unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
For the three-month period ended March 31, 2000
Basic Earnings per Share
Income available to common
shareholders $18,461,000 56,618,000 $.33
===========
Effect of Dilutive Securities (1) - 96,000
--------------- ------------------
Diluted Earnings per Share
Income available to common
shareholders + assumed conversions $18,461,000 56,714,000 $.33
=============== ================== ===========
=======================================================================================================================
For the three-month period ended March 31, 1999
Basic Earnings per Share
Income available to common
shareholders $15,101,000 60,573,000 $.25
===========
Effect of Dilutive Securities (1) - 658,000
--------------- ------------------
Diluted Earnings per Share
Income available to common
shareholders + assumed conversions $15,101,000 61,231,000 $.25
=============== ================== ===========
======================================================================================================================
</TABLE>
(1) Options on 7,901,000 and 3,842,000 shares of common stock and warrants on
7,285,000 and 3,018,000 shares of common stock were outstanding during the
three-month periods ended March 31, 2000 and 1999 respectively, but were not
included in computing diluted earnings per share because their effects were
antidilutive.
F-10
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLAR
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 147,369
<SECURITIES> 0
<RECEIVABLES> 175,244
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 335,050
<PP&E> 100,352
<DEPRECIATION> (64,946)
<TOTAL-ASSETS> 1,326,936<F1>
<CURRENT-LIABILITIES> 202,234
<BONDS> 916,508<F2>
0
0
<COMMON> 690
<OTHER-SE> 179,850
<TOTAL-LIABILITY-AND-EQUITY> 1,326,936
<SALES> 0
<TOTAL-REVENUES> 239,048
<CGS> 0
<TOTAL-COSTS> 163,323
<OTHER-EXPENSES> 26,294<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 17,928
<INCOME-PRETAX> 31,503
<INCOME-TAX> 13,042
<INCOME-CONTINUING> 18,461
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 18,461
<EPS-BASIC> .33
<EPS-DILUTED> .33
<FN>
<F1>INCLUDES COST ASSIGNED TO CONTRACTS ACQUIRED, NET OF 711,280 ACCUMULATED
AMORTIZATION.
<F2>INCLUDES SENIOR NOTES PAYABLE OF 736,622 AND SUBORDINATED NOTES PAYABLE OF
179,886.
<F3>REPRESENTS AMORTIZATION OF COST ASSIGNED TO CONTRACTS ACQUIRED.
</FN>
</TABLE>
