SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
FORM 10-Q
-----------------
(MARK ONE)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
___ OF THE SECURITIES EXCHANGE ACT OF 1934
X FOR THE QUARTERLY PERIOD ENDED APRIL 30, 1997
- ---- -----------------
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 1-9299
-----------------------------
HARNISCHFEGER INDUSTRIES, INC.
-------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 39-1566457
- -------------------- ------------------
(State of Incorporation) (I.R.S. Employer
Identification No.)
3600 South Lake Drive, St. Francis, Wisconsin
- ---------------------------------------------
(Address of principal executive offices)
53235-3716
- --------------
(Zip Code)
(414)486-6400
- --------------
(Registrant's Telephone Number, Including Area Code)
Indicate by checkmark 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, and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
-----
------
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest
practicable date.
Class Outstanding at June 11, 1997
- ---------------- -----------------------------
Common Stock, $1 par value 49,408,392 shares
HARNISCHFEGER INDUSTRIES, INC.
------------------------------
FORM 10-Q
---------
April 30, 1997
---------------
INDEX
Page No.
----------
PART I. Financial Information:
Consolidated Statement
of Income - 1
Three and Six Months Ended
April 30, 1997 and 1996
Consolidated Balance Sheet -2-3
April 30, 1997 and
October 31, 1996
Consolidated Statement of
Cash Flows - 4-5
Six Months Ended
April 30, 1997 and 1996
Consolidated Statement of
Shareholders' Equity - 6
Six Months Ended
April 30, 1997 and 1996
Notes to Consolidated Financial
Statements 7-10
Management's Discussion
and Analysis of Results of
Operations and Financial
Condition 11-16
PART II. Other Information 17-19
Signatures 20
PART I. FINANCIAL INFORMATION
-----------------------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------
CONSOLIDATED STATEMENT OF INCOME
- --------------------------------
(Amounts in thousands except per share amounts)
(Unaudited)
Three Months Ended
April 30,
-----------------------
1997 1996
--------- -------
<S> <C> <C>
Revenues
Net Sales $794,578 $739,509
Other Income 12,563 2,337
--------- --------
807,141 741,846
Cost of Sales 604,946 560,820
Product Development, Selling
and Administrative Expenses 110,822 108,377
-------- --------
Operating Income 91,373 72,649
Interest Expense - Net (17,671) (15,800)
-------- --------
Income Before Provision For Income
Taxes and Minority Interest 73,702 56,849
Provision for Income Taxes (25,775) (20,475)
Minority Interest (2,956) (2,819)
-------- --------
Net Income $ 44,971 $ 33,555
======== ========
Earnings Per Share $ 0.94 $0.71
===== =====
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -------------------------------
CONSOLIDATED STATEMENT OF INCOME
- --------------------------------
(Amounts in thousands except per share amounts)
(Unaudited)
Six Months Ended
April 30,
-------------------
1997 1996
-------- --------
<S> <C> <C>
Revenues
Net Sales $1,493,989 $1,372,193
Other Income 21,323 13,219
------------- -----------
1,515,312 1,385,412
Cost of Sales 1,132,583 1,052,352
Product Development, Selling
and Administrative Expenses 223,856 207,233
---------- ---------
Operating Income 158,873 125,827
Interest Expense - Net (34,168) (29,037)
---------- ---------
Income Before Provision For Income
Taxes and Minority Interest 124,705 96,790
Provision for Income Taxes (43,625) (34,850)
Minority Interest (5,251) (5,194)
--------- ---------
Net Income $ 75,829 $ 56,746
======== ========
Earnings Per Share $1.59 $ 1.21
===== ======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------
CONSOLIDATED BALANCE SHEET
- -----------------------------
(Dollar amounts in thousands)
April 30, October 31,
1997 1996
--------------- ---------------
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 45,378 $ 36,936
Accounts receivable-net 791,326 667,786
Inventories 601,532 547,115
Other current assets 150,469 132,261
Businesses held for sale 15,692 26,152
----------- ----------
1,604,397 1,410,250
Property, Plant and Equipment:
Land and improvements 58,108 48,371
Buildings 309,229 301,010
Machinery and equipment 803,809 776,332
----------- -----------
1,171,146 1,125,713
Accumulated depreciation (511,501) (491,668)
----------- ----------
659,645 634,045
Investments and Other Assets:
Goodwill 514,005 512,693
Intangible assets 33,419 39,173
Other assets 98,497 93,868
----------- -----------
645,921 645,734
----------- -----------
$2,909,963 $2,690,029
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CONSOLIDATED BALANCE SHEET
- ------------------------------
(Dollar amounts in thousands)
April 30, October 31,
1997 1996
--------------- ---------------
(Unaudited)
<S> <C> <C>
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term notes payable, including current
portion of long-term obligations $ 31,326 $ 49,633
Trade accounts payable 441,350 346,056
Employee compensation and benefits 139,012 160,488
Advance payments and progress billings 152,634 155,199
Accrued warranties 49,860 50,718
Other current liabilities 287,418 315,033
----------- ----------
1,101,600 1,077,127
Long-term Obligations 765,155 657,765
Other Liabilities:
Liability for postretirement benefits 66,919 78,814
Accrued pension costs 36,899 39,902
Other liabilities 11,612 14,364
Deferred income taxes 69,875 54,920
----------- ---------
185,305 188,000
Minority Interest 97,943 93,652
Shareholders' Equity:
Common stock (51,462,407 and
51,406,946 shares issued, respectively) 51,462 51,407
Capital in excess of par value 621,760 615,089
Retained earnings 214,137 148,175
Cumulative translation adjustments (29,390) (37,584)
Less: Stock Employee Compensation
Trust (1,433,147 and 1,533,993
shares, respectively) at market (59,655) (61,360)
Treasury stock (2,065,240 and
2,274,613 shares, respectively)
at cost (38,354) (42,242)
----------- -----------
759,960 673,485
----------- -----------
$2,909,963 $2,690,029
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -----------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
- ------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Six Months Ended
April 30,
------------------------------
1997 1996
------------ -------------
<S> <C> <C>
Operating Activities
Net income $ 75,829 $ 56,746
Add (deduct) - Items not affecting cash:
Depreciation and amortization 49,059 42,685
Minority interest, net of dividends paid 5,145 5,194
Other - net 2,031 4,540
Changes in working capital
(Increase) in accounts receivable - net (123,726) (65,997)
(Increase) in inventories (46,481) (74,228)
(Increase) in other current assets (10,962) (5,705)
Increase (decrease) in trade accounts
payable 94,326 (3,441)
(Decrease) in employee compensation
and benefits (21,251) (14,812)
(Decrease) increase in advance payments
and progress
billings (2,884) 1,409
(Decrease) increase in other current
liabilities (28,070) 21,334
------------- ----------
Net cash (applied to) operating activities (6,984) (32,275)
------------- ----------
Investment and Other Transactions
Purchase of Dobson Park Industries plc,
net of cash acquired of $4,631 - (325,369)
Purchase of the Pulp Machinery Division
of Ingersoll- Rand Company, net of
cash acquired of $6,858 - (112,372)
Other acquisitions, net of cash acquired (15,987) (2,189)
Net proceeds from sale of Dobson Park
Industries plc non-core businesses 9,585 50,601
Net proceeds from sale of New
Philadelphia Fan Co. 18,051 -
Net proceeds from sale of Joy
Environmental Technologies - 11,651
Property, plant and equipment acquired (82,171) (35,548)
Property, plant and equipment retired 23,841 5,846
Other - net (18,974) (13,416)
------------ -----------
Net cash (applied to) investment
and other transactions (65,655) (420,796)
------------ -----------
Financing Activities
Dividends paid (9,575) (9,395)
Exercise of stock options 3,152 4,624
Issuance of long-term obligations less discount 150,122 211,587
Redemption of long-term obligations (43,111) (397)
(Decrease) increase in short-term notes payable (18,207) 50,498
------------ -----------
Net cash provided by financing
activities 82,381 256,917
------------ ----------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents (1,300) 955
----------- ----------
Increase (Decrease) in Cash and Cash Equivalents 8,442 (195,199)
Cash and Cash Equivalents at Beginning of Period 36,936 239,043
------------ -----------
Cash and Cash Equivalents at End of Period $ 45,378 $ 43,844
============ ===========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
- ----------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Capital in
Common Excess of
Stock Par Value
--------- -----------
<S> <C> <C>
Six Months Ended April 30, 1997
- -------------------------------
Balance at October 31, 1996 $51,407 $615,089
Net income
Translation adjustments
Exercise of 156,307 stock options 55 1,117
Dividends paid ($.20 per share)
Dividends on shares held by SECT 292
Adjust SECT shares to market value 275
209,373 shares purchased by
employee and director
benefit plans 4,581
Amortization of unearned
compensation
on restricted stock 406
-------- --------
Balance at April 30, 1997 $51,462 $621,760
======== ========
- ---------------------------
Balance at October 31, 1995 $51,118 $603,712
Net income
Translation adjustments
Exercise of 222,799 stock options 223 4,401
Dividends paid ($.20 per share)
Dividends on shares held by SECT 384
Adjust SECT shares to market value 17,281
230,000 shares purchased by
employee benefit plans 2,964
Issuance of restricted stock 7 88
------- ---------
Balance at April 30, 1996 $51,348 $628,830
======= =========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
- ----------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Cumulative
Retained Translation
Earnings Adjustments
-------- --------
<S> <C> <C>
Six Months Ended April 30, 1997
- -------------------------------
Balance at October 31, 1996 $148,175 $(37,584)
Net income 75,829
Translation adjustments 8,194
Exercise of 156,307 stock options
Dividends paid ($.20 per share) (9,867)
Dividends on shares held by SECT
Adjust SECT shares to market value
209,373 shares purchased by employee
and director benefit plans
Amortization of unearned compensation
on restricted stock
-------- -------
Balance at April 30, 1997 $214,137 $(29,390)
======= =======
Six Months Ended April 30, 1996
- ----------------------------------------
Balance at October 31, 1995 $53,560 $(42,118)
Net income 56,746
Translation adjustments (15,461)
Exercise of 222,799 stock options
Dividends paid ($.20 per share) (9,779)
Dividends on shares held by SECT
Adjust SECT shares to market value
230,000 shares purchased by employee
benefit plans
Issuance of restricted stock
--------- --------
Balance at April 30, 1996 $100,527 $(57,579)
======= =======
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
- ----------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Treasury
SECT Stock
-------- -----
<S> <C> <C>
Six Months Ended April 30, 1997
- -------------------------------
Balance at October 31, 1996 $(61,360) $(42,242)
Net income
Translation adjustments
Exercise of 156,307 stock options 1,980
Dividends paid ($.20 per share)
Dividends on shares held by SECT
Adjust SECT shares to market value (275)
209,373 shares purchased by employee
and director benefit plans 3,888
Amortization of unearned compensation
on restricted stock
--------- -------
Balance at April 30, 1997 $(59,655) $(38,354)
========= =======
Six Months Ended April 30, 1996
- ----------------------------------------
Balance at October 31, 1995 $(60,483) $(46,513)
Net income
Translation adjustments
Exercise of 222,799 stock options
Dividends paid ($.20 per share)
Dividends on shares held by SECT
Adjust SECT shares to market value (17,281)
230,000 shares purchased by employee
benefit plans 4,271
Issuance of restricted stock
-------- --------
Balance at April 30, 1996 $(77,764) $(42,242)
========= ========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- ------------------------------
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
- ----------------------------------------------
(Dollar amounts in thousands)
(Unaudited)
Total
---------
<S> <C>
Six Months Ended April 30, 1997
- -------------------------------
Balance at October 31, 1996 $673,485
Net income 75,829
Translation adjustments 8,194
Exercise of 156,307 stock options 3,152
Dividends paid ($.20 per share) (9,867)
Dividends on shares held by SECT 292
Adjust SECT shares to market value -
209,373 shares purchased by employee
and director benefit plans 8,469
Amortization of unearned compensation
on restricted stock 406
--------
Balance at April 30, 1997 $759,960
=========
Six Months Ended April 30, 1996
- ----------------------------------------
Balance at October 31, 1995 $559,276
Net income 56,746
Translation adjustments (15,461)
Exercise of 222,799 stock options 4,624
Dividends paid ($.20 per share) (9,779)
Dividends on shares held by SECT 384
Adjust SECT shares to market value -
230,000 shares purchased by employee
benefit plans 7,235
Issuance of restricted stock 95
---------
Balance at April 30, 1996 $603,120
=========
</TABLE>
<PAGE>
HARNISCHFEGER INDUSTRIES, INC.
------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
April 30, 1997
---------------
(Amounts in thousands unless indicated)
(a) Basis of Presentation
-------------------------
In the opinion of management, all adjustments necessary
for the fair presentation of the results of operations for
the three and six months ended April 30, 1997 and 1996,
cash flows for the six months ended April 30, 1997 and
1996, and financial position at April 30, 1997 have been
made. All adjustments made are of a normal recurring
nature. See note (b) for discussions regarding
acquisitions.
These financial statements should be read in conjunction
with the financial statements and the notes thereto
included in the Harnischfeger Industries, Inc. Annual
Report on Form 10-K for the year ended October 31, 1996.
The results of operations for any interim period are not
necessarily indicative of the results to be expected for
the full year.
(b) Acquisitions
--------------
In early fiscal 1996, the Company completed the
acquisition of Dobson Park Industries plc ("Dobson") for
a purchase price of approximately $330,000 including
acquisition costs, plus the assumption of net debt of
approximately $40,000. The acquisition was accounted for
as a purchase transaction with the purchase price
allocated to specific assets acquired and liabilities
assumed. Resultant goodwill is being amortized over 40
years.
Dobson, headquartered in the United Kingdom, was an
industrial engineering group with interests in underground
mining equipment, industrial electronic control systems,
toys and plastics. Longwall International ("Longwall"),
the main subsidiary of Dobson, was engaged in the
manufacture, sale and service of underground mining
equipment for the international coal mining industry. Its
principal products included electronically controlled roof
support systems and armored face conveyors.
The Company is fully integrating Longwall's operations
into its wholly owned subsidiary, Joy Technologies Inc.
("Joy"); thus enabling Joy to offer integrated underground
longwall mining systems to the worldwide mining industry.
As a result of this plan, the Company has established
purchase accounting reserves to provide for the estimated
costs of this effort. The reserves related primarily to
the closure of selected manufacturing and service
facilities, severance and relocation costs approximate
$71,000. As of April 30, 1997, approximately $19,900 of
these reserves had been used.
As part of the Dobson acquisition, the industrial
electronic and plastics businesses are held for sale and
classified as such in the Consolidated Balance Sheet. The
original value of the businesses was set at $100,000.
Several of the businesses were sold, aggregating net
proceeds of $84,308. The remaining balance represents the
net realizable value including the expected cash flow from
the remaining businesses. These businesses are expected
to be sold within the next year. Profit/losses of these
businesses generated during the period have been excluded
from operating results.
On March 27, 1996, the Company's Beloit Corporation
subsidiary purchased the assets of the Pulp Machinery
Division of Ingersoll-Rand Company for $119,230, including
acquisition costs. The acquisition was accounted for as
a purchase transaction with the purchase price allocated
to specific assets acquired and liabilities assumed.
Resultant goodwill is being amortized over 40 years.
(c) Restructuring Charge
-------------------------
In the fourth quarter of fiscal 1996, the Company's Beloit
Corporation subsidiary recorded a restructuring charge of
$43,000. Included in the charge are costs related to
severance for approximately 500 employees worldwide, the
disposition of machinery and equipment, closure of certain
facilities and the sale of businesses. As of April 30,
1997, approximately $14,850 had been charged against the
reserve and approximately 260 employees had been
terminated in accordance with the plan. The focus of
Beloit Corporation's restructuring is to better serve its
customers and strengthen its market position in the
worldwide pulp and paper industry. The restructuring
initiative involves organizing engineering and
manufacturing operations into Centers of Excellence and
expanding the aftermarket capabilities of the subsidiary.
(d) Inventories
-------------
<TABLE>
<CAPTION>
Consolidated inventories consisted of the following:
April 30, October 31,
1997 1996
------------ -------------
<S> <C> <C>
Finished goods $276,824 $ 198,160
Work in process and purchased parts 251,591 278,671
Raw materials 137,224 134,448
----------- ------------
665,639 611,279
Less excess of current cost over stated
LIFO value (64,107) (64,164)
----------- ------------
$601,532 $547,115
=========== ============
</TABLE>
Inventories valued using the LIFO method represented
approximately 55% and 56% of consolidated inventories at April
30, 1997 and October 31, 1996, respectively.
(e) Research and Development Expense
-------------------------------------------
Research and development costs are expensed as incurred.
Such costs incurred in the development of new products or
significant improvements to existing products amounted to
$11,046 and $9,179 for the three months and $21,187 and
$16,324 for the six months ended April 30, 1997 and 1996,
respectively. Certain capital expenditures used in
research activities are capitalized and depreciated over
their expected useful lives.
(f) Interest Expense - Net
--------------------------
<TABLE>
<CAPTION>
Net interest expense consisted of the following:
Three Months Ended
April 30,
-----------------------
1997 1996
-------- ----------
<S> <C> <C>
Interest income $ 867 $ 1,078
Interest expense (18,538) (16,878)
---------- ----------
Interest expense - net $ (17,671) $(15,800)
========= ========
</TABLE>
<TABLE>
<CAPTION>
Net interest expense consisted of the following:
Six Months Ended
April 30,
-----------------------
1997 1996
-------- ---------
<S> <C> <C>
Interest income $ 1,665 $ 3,439
Interest expense (35,833) (32,476)
--------- ---------
Interest expense - net $(34,168) $(29,037)
========= =========
</TABLE>
(g) Long-Term Obligations
----------------------------
Long-term obligations at April 30, 1997 and October 31,
1996 consisted of the following:
<TABLE>
<CAPTION>
April 30, October 31,
1997 1996
------------- ---------------
<S> <C> <C>
10 1/4% Senior Notes due 2003 $188,380 $188,380
8.9% Debentures, due 2022 75,000 75,000
8.7% Debentures, due 2022 75,000 75,000
7 1/4% Debentures, due 2025
(net of discount of $1,254
and $1,261, respectively ) 148,746 148,739
6 7/8% Debentures, due 2027
(net of discount
of $112) 149,888 -
Senior Notes, Series A through D, at
interest rates of between 8.9% and
9.1%, due 1997 to 2006 73,182 73,182
Revolving Credit Facility - 40,000
Industrial Revenue Bonds, at interest
rates of between 5.9% and 8.8%
due 1997 to 2017 34,425 34,629
Other 24,609 27,207
--------- --------
769,230 662,137
Less: Amounts payable within one year 4,075 4,372
--------- --------
$765,155 $657,765
======== ========
</TABLE>
The 7 1/4% debentures were issued on December 19, 1995 at
99.153% in connection with the Company's acquisition of
Dobson. The debentures will mature on December 15, 2025,
are not redeemable prior to maturity and are not subject
to sinking fund requirements.
On February 25, 1997, $150,000 of 6 7/8% debentures were
issued at 99.925%. Proceeds were used to repay short-term
indebtedness and to increase cash. The debentures will
mature on February 15, 2027, are not redeemable by the
Company prior to maturity and are not subject to sinking
fund requirements. Each holder of the debentures has the
right to require the Company to repay the holders, in
whole or in part, on February 15, 2007, at a repayment
price equal to 100% of the aggregate principal amount
thereof plus accrued and unpaid interest. Interest on the
debentures is payable semi-annually on February 15 and
August 15 of each year commencing on August 15, 1997.
In November, 1993, the Company entered into a four-year
Revolving Credit Facility Agreement with certain domestic
and foreign financial institutions that allowed for
borrowings of up to $150,000 at rates expressed in
relation to LIBOR and other rates. In November, 1994, the
facility was increased to $240,000 and expires in
November, 2000. A facility fee is payable on the
Revolving Credit Facility. At April 30, 1997, there were
no direct outstanding borrowings under the facility.
(h) Contingent Liabilities
--------------------------
At April 30, 1997, the Company was contingently liable to
banks, financial institutions, and others for
approximately $276,000 for outstanding letters of credit
securing performance of sales contracts and other
guarantees in the ordinary course of business excluding
the H-K System, Inc. backup bond guarantee facility. The
Company may also guarantee performance of its equipment at
levels specified in sales contracts without the
requirement for letters of credit.
On October 29, 1993, the Company completed the sale of H-K Systems, Inc.
(formerly known as Harnischfeger Engineers
Inc.) to that unit's senior management and some equity
partners. The Company agreed to make available a back-up
bonding guarantee facility for certain bid, performance
and other contract bonds issued by H-K Systems, Inc.
Outstanding contract bonds under the guarantee arrangement
totaled approximately $47,800 at April 30, 1997. The bonds under the
guarantee arrangement are required to decrease to $20,000 on
November 1, 1997. Under the terms of the facility, no new bonds
can be issued.
The Company is a party to litigation matters and claims
which are normal in the course of its operations. Also,
as a normal part of their operations, the Company's
subsidiaries undertake certain contractual obligations,
warranties and guarantees in connection with the sale of
products or services. In the case of Beloit Corporation,
certain litigation matters and claims are currently
pending in connection with its contractual undertakings.
While the outcome of such litigation matters and claims
cannot be predicted with certainty and favorable or
unfavorable judgements or resolutions may affect income on
a quarter-to-quarter basis, management believes that such
matters will not have a materially adverse effect on the
Company's consolidated financial position or annual
results of operations.
The Company is also involved in a number of proceedings
and potential proceedings relating to environmental
matters. Although it is difficult to estimate the
potential exposure to the Company related to these
environmental matters, the Company believes that these
matters will not have a materially adverse effect on its
consolidated financial position or results of operations
(i) Tender Offer for Giddings and Lewis, Inc. Stock
---------------------------------------------------------
On April 25, 1997, Harnischfeger Industries, Inc.
announced an all-cash tender offer for all shares of
Giddings & Lewis, Inc. at a price of $19 per share to
expire on May 23, 1997. The total consideration for the
offer approximates $747 million including the assumption
of approximately $116 million in outstanding Giddings and
Lewis, Inc. indebtedness. The total is based on 34.4
million shares of Giddings & Lewis stock outstanding at
the time of the offer. On May 27, 1997, the offer was
extended at which time it was noted that $19 per share was
the Company's best and final offer.
The offer was extended again on June 2, 1997 and June 9, 1997,
to expire at midnight on June 13, 1997 at which time the Company will
evaluate its alternatives. The acquisition will be fully
financed through a revolving credit facility provided by
Chase Manhatten Bank. It is expected that Chase will
syndicate the debt with a number of banks.<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
THREE AND SIX MONTHS ENDED APRIL 30, 1997 AND 1996
- -----------------------------------------------------------
(Amounts in thousands unless indicated)
The commentary in Management's Discussion and Analysis
contains forward-looking statements. When used in this
document, terms such as "anticipate", "believe", "estimate",
"expect", "indicate", "may be", "objective", "plan",
"predict", and "will be" are intended to identify such
statements. Forward-looking statements are subject to certain
risks, uncertainties and assumptions which could cause actual
results to differ materially from those projected, including
those described in Item 5. Other Information - "Cautionary
Factors" in Part II of this report.
Net income for the three and six months ended April 30, 1997
amounted to $44,971, or $0.94 per share, and $75,829, or $1.59
per share, as compared to net income of $33,555, or $0.71 per
share, and $56,746, or $1.21 per share for the three and six
months ended April 30, 1996.
Per share calculations for the first six months of 1997 and
1996 were based on 47,828 and 46,929 average shares
outstanding, respectively.
Significant factors contributing to the $19,083 increase in
net income for the first six months of 1997 as compared to
1996 included: (1) a $33,046 increase in operating income as
described in the Segment Information section
----------
which follows, offset by (2) a $5,131 increase in interest
expense and (3) an $8,775 increase in the provision for
income taxes due to higher pre-tax income.
<PAGE>
Segment Information
- -------------------------
Operating results of the Company's business segments for the
second quarter and first six months of 1997 and 1996 are
summarized as follows:
<TABLE>
<CAPTION>
Second Quarter Net Sales Operating Income
- ------------------ --------------- -----------------
1997 1996 1997 1996
--------- -------- -------- -------
<S> <C> <C> <C> <C>
Mining Equipment $365,392 $358,069 $57,057 $45,950
Pulp and Paper Machinery 332,114 302,047 29,461 23,298
Material Handling 97,072 79,393 10,455 8,346
--------- --------- ------- ------
Total Business Segments $794,578 $739,509 96,973 77,594
========= =========
Corporate Administration (5,600) (4,945)
-------- -------
Operating Income $91,373 $72,649
======== =======
Six Months Net Sales Operating Income
- --------------------- ---------- -------------------
1997 1996 1997 1996
---------- --------- --------- ------
Mining Equipment $ 715,846 $ 673,045 $102,135 $ 81,332
Pulp and Paper
Machinery 601,089 554,400 50,335 41,860
Material Handling 177,054 144,748 17,651 12,678
--------- ---------- -------- ---------
Total Business
Segments $1,493,989 $1,372,193 170,121 135,870
========= ==========
Corporate Administration (11,248) (10,043)
-------- --------
Operating Income $158,873 $125,827
======== ========
</TABLE>
Segment Information
- -------------------------
Operating results of the Company's business segments for the
second quarter and first six months of 1997 and 1996 are
summarized as follows:
<TABLE>
<CAPTION>
Second Quarter Orders Booked Backlog at
- --------------- ------------------------ ---------------------------
1997 1996 4/97 1/97
-------- -------- ----- -----
<S> <C> <C> <C> <C>
Mining Equipment $365,972 $323,377 $ 464,063(A) $ 481,443
Pulp and Paper
Machinery 402,049 260,124 880,139 810,204
Material Handling 82,902 86,290 97,731 111,901
----------- ------------ ------------- ---------
Total Business
Segments $ 850,923 $669,791 $1,441,933 $1,403,548
========== =========== ========= ==========
Six Months Orders Booked Backlog at
- ----------------------- --------------------------- ---------------------
1997 1996 4/97 10/96
------- --------- ------ ---------
Mining Equipment $ 744,389 $ 614,429 $ 464,063(A)$ 453,480
Pulp and Paper
Machinery 805,091 521,497 880,139(B) 846,137
Material Handling 142,235 167,773 97,731 132,550
--------- ----------- ------------ ----------
Total Business
Segments $1,691,715 $1,303,699 $1,441,933 $1,432,167
=========== ========== ============= =========
</TABLE>
(A) Backlog has been reduced by $17,960 due to sale of New
Philadelphia Fan Co. in March, 1997.
(B) Backlog has been reduced by $170,000 due to change of
scope and indefinite deferments on certain contracts booked in
prior years.
Segment Information - Continuing Operations
- ------------------------------------------------------
Net sales of the Mining Equipment segment amounted to $715,846
and $673,045 for the first six months of 1997 and 1996,
respectively, representing a 6% increase in 1997 as compared
to 1996. The sales increase is primarily due to an increase
in original equipment activity for both surface and
underground mining. Operating profit increased to $102,135
for the first six months of 1997 as compared to $81,332 in
1996. The increase in operating profit is primarily due to
stronger sales and margins in both surface and underground
mining as well as savings and synergistic benefits from the
Longwall integration. Bookings for the first six months of
1997 amounted to $744,389 as compared to $614,429 for the same
period in 1996.
The Mining Equipment business, while still exhibiting strength
globally and in the U.S. aftermarket, has had a substantial
mix change as well as anticipated weakness in the U.S.
original equipment marketplace. We believe this is a short-term
phenomenon and clearly not one we anticipated, but
remediable by year-end so as to have little impact on our 1998
performance. Harnischfeger's global mining businesses remain
fundamentally strong with market shares increasing and the
profit enhancement produced by the Longwall International
merger on track.
The Pulp and Paper Machinery segment contributed sales and
operating profit of $601,089 and $50,335, respectively, for
the first six months of 1997, as compared to net sales of
$554,400 and operating profit of $41,860 for the corresponding
period in 1996. Sales increased 8% in 1997 over 1996 due to
an increase in sales of both original equipment and
aftermarket activity. Operating profit reflected stronger
sales. Bookings for the first six months of 1997 amounted to
$805,091 as compared to $521,497 for the same period in 1996,
due primarily to strong original equipment activity in the
Pacific Rim.
The Material Handling segment contributed sales and operating
profit of $177,054 and $17,651, respectively, for the first
six months of 1997, as compared to sales of $144,748 and
operating profit of $12,678 for the comparable period in 1996.
Sales increased due to an increase in both original equipment
and aftermarket sales. Operating profit increased as a result
of increased sales and improved margins. Bookings for the
first six months of 1997 and 1996 amounted to $142,235 and
$167,773, respectively.
Income Taxes
- ----------------
The Company's estimated annual effective tax rate for
continuing operations for the first six months of 1997 was 35%
compared to a 35% federal statutory tax rate.
Liquidity and Cash Flows
- -----------------------------
The Company's capital structure at April 30, 1997 and October
31, 1996 was as follows:
<TABLE>
<CAPTION>
April 30, October 31,
1997 1996
------------- --------------
<S> <C> <C>
Short-term notes payable $ 27,251 $ 45,261
Long-term obligations, including
current portion 769,230 662,137
---------- ---------
796,481 707,398
Minority interest 97,943 93,652
Shareholders' equity 759,960 673,485
---------- ----------
Total capitalization $1,654,384 $1,474,535
=========== ==========
Debt to capitalization ratio 48.1% 48.0%
===== =====
</TABLE>
Cash Flow from Operating Activities
- -------------------------------------------
Cash flow used by operating activities was $6,984 for the six
months ended April 30, 1997 compared to cash flows used by
operating activities of $32,275 for the comparable period in
1996. The improvement in cash flows between periods is
primarily the result of an increase in operating profit and
trade accounts payable, offset by an increase in accounts
receivable and a decrease in other current liabilities.
Net working capital, exclusive of businesses held for sale,
increased $180,134 during the six months ended April 30, 1997
primarily due to an increase in accounts receivable.
Cash Flow from Investment Activities
- --------------------------------------------
Cash flow applied to investment activities was $54,382 for the
six months ended April 30, 1997 compared to cash flow applied
to investment activities of $420,796 for the comparable period
in 1996. The change is primarily due to the $330,000
acquisition of Dobson in early fiscal 1996 and the $119,230
acquisition of the Pulp Machinery Division of Ingersoll-Rand
Company in March 1996, offset by proceeds from the sale of
certain of the industrial electronic and toys/plastics
businesses of Dobson and the proceeds from the sale of New
Philadelphia Fan Company.
Cash Flow for Financing Activities
- ----------------------------------------
The $82,381 cash provided by financing activities in the first
six months of fiscal 1997 compared to cash flow provided by
financing activities of $256,917, with the change due to the
1997 issuance of $150,000, 6 7/8% debentures offset by the
$43,111 redemption of long-term obligations and a $18,207
decrease in short-term notes payable. In 1996 the Company
issued $150,000, 7 1/4% debentures, $60,000 of borrowings
from the Revolving Credit Facility and a $50,498 increase in
short-term notes payable in connection with the acquisition of
the Pulp Machinery Division of Ingersoll-Rand Company and
Dobson.
The Company maintains the ability to expand its borrowings in
several ways, including the following:
(1) A five-year Revolving Credit Financing Facility
Agreement, expiring in November, 2000, between the
Company and certain domestic and foreign financial
institutions that allows for borrowings of up to $240,000
at rates expressed in relation to LIBOR and other rates.
At April 30, 1997, there were no direct outstanding
borrowings related to the facility.
(2) Short-term bank credit lines of foreign subsidiaries of
approximately $118,600, of which approximately $27,250
was outstanding at April 30, 1997.
(3) On February 25, 1997, $150,000 of 6 7/8% debentures were
issued at 99.925% and the proceeds used to reduce short-term
debt outstanding and increase cash. The debentures
were issued pursuant to a shelf registration filed with
the Securities and Exchange Commission in April, 1996 for
the sale of up to $200,000 of debt securities. To date,
no other securities covered by the registration have been
offered for sale.
The Company believes its available cash, cash flow provided by
operating activities and committed credit lines provide
adequate liquidity on both a short- and long-term basis.
The Company has no significant capital commitments as of April
30, 1997; any future capital commitments are expected to be
funded through cash flow from operations and, if necessary,
available lines of credit.
The Company intends to continue to expand its businesses, both
internally and through acquisitions. It is expected that new
acquisitions would be financed primarily by
internally-generated funds or additional borrowings.
Acquisitions
- --------------
In early fiscal 1996, the Company completed the acquisition of
Dobson for a purchase price of approximately $330,000
including acquisition costs, plus the assumption of net debt
of approximately $40,000. The acquisition was accounted for
as a purchase transaction with the purchase price allocated to
specific assets acquired and liabilities assumed. Resultant
goodwill is being amortized over 40 years.
Dobson, headquartered in the United Kingdom, was an industrial
engineering group with interests in underground mining
equipment, industrial electronic control systems, toys and
plastics. Longwall International, the main subsidiary of
Dobson, is engaged in the manufacture, sale and service of
underground mining equipment for the international coal mining
industry. Longwall's products include electronically
controlled roof support systems and armored face conveyors.
Longwall's operating results were included in the Consolidated
Statement of Income in the first half of fiscal 1996.
The Company is fully integrating Longwall's operations into
Joy, thus enabling Joy to offer integrated underground
longwall mining systems to the worldwide mining industry. As
a result of this integration, the Company has established
purchase accounting reserves to provide for the estimated
costs of this effort. The reserves related primarily to the
closure of selected manufacturing and service facilities,
severance and relocation costs approximate $71,000. As of
April 30, 1997, approximately $19,900 of these reserves had
been used.
As part of the Dobson acquisition, the industrial electronic
and plastics businesses are held for sale and classified as
such on the Consolidated Balance Sheet. The original value of
the businesses was set at $100,000. Several of the
businesses were sold, aggregating net proceeds of $84,308. The
remaining balance represents the net realizable value
including the expected cash flow from the remaining
businesses. These businesses are expected to be sold within
the next year. Profit/losses of these businesses generated
during the period have been excluded from operating results.
On March 27, 1996, the Company's Beloit Corporation subsidiary
purchased the assets of the Pulp Machinery Division of
Ingersoll-Rand Company for $119,230, including acquisition
costs. The acquisition was accounted for as a purchase
transaction with the purchase price allocated to specific
assets acquired and liabilities assumed. Resultant goodwill
is being amortized over 40 years.
Tender Offer for Giddings and Lewis, Inc. Stock
- ---------------------------------------------------------
On April 25, 1997, Harnischfeger Industries, Inc. announced an
all-cash tender offer for all shares of Giddings & Lewis, Inc.
at a price of $19 per share to expire on May 23, 1997. The
total consideration for the offer approximates $747 million
including the assumption of approximately $116 million in
outstanding Giddings and Lewis, Inc. indebtedness. The total
is based on 34.4 million shares of Giddings & Lewis stock
outstanding at the time of the offer. On May 27, 1997, the
offer was extended at which time it was
noted that $19 per share was the Company's best and final
offer. The offer was extended again on June 2, 1997 and June 9, 1997, to
expire at midnight on June 13, 1997 at which time the Company
will evaluate its alternatives. The acquisition will be fully
financed through a revolving credit facility provided by Chase
Manhatten Bank. It is expected that Chase will syndicate the
debt with a number of banks.
<PAGE>
PART II. OTHER INFORMATION
----------------------------
Item 4 Submission of Matters to a Vote of Security Holders
----------------------------------------------------
The following two matters were submitted to a vote of
security holders at the Annual Shareholders' Meeting
held April 15, 1997.
1. Management's nominees were elected as directors
to terms ending in 1999. The number of Common
Stock shares voted for each nominee were:
<TABLE>
<CAPTION>
For Against
----------- -----------
<S> <C> <C>
Donna M. Alvardo 43,919,040 281,032
Harry L. Davis 43,936,164 263,907
John Nils Hanson 43,930,672 269,400
Ralph C. Joynes 43,934,393 265,679
</TABLE>
2. A proposal to amend the Company's Restated
Certificate of Incorporation to increase the
number of authorized shares of common stock from
100,000,000 to 150,000,000 was approved. In a
vote to approve the Plan, the following number of
shares of Common Stock were voted.
<TABLE>
<CAPTION>
<S> <C>
41,847,815 For
2,252,092 Against
99,729 Abstained
0 Non-votes
</TABLE>
Item 5 Other Information - "Cautionary Factors"
------------------------------------------------
This report and other documents or oral statements
which have been and will be prepared or made in the
future contain or may contain forward-looking
statements by or on behalf of the Company. Such
statements are based upon management's expectations
at the time they are made. In addition to the
assumptions and other factors referred to
specifically in connection with such statements, the
following factors, among others, could cause actual
results to differ materially from those contemplated.
The Company's principal businesses involve designing,
manufacturing, marketing and servicing large, complex
machines for the mining, papermaking and capital
goods industries. Long periods of time are
necessary to plan, design and build these machines.
With respect to new machines and equipment, there are
risks of customer acceptances and start-up or
performance problems. Large amounts of capital are
required to be devoted by the Company's customers to
purchase these machines and to finance the mines,
paper mills, steel mills and other facilities that
use these machines. The Company's success in
obtaining and managing a relatively small number of
sales opportunities, including warranties and
guarantees associated therewith, can affect the
Company's financial performance. As a normal part of
their operations, the Company's subsidiaries
undertake certain contractual obligations, warranties
and guarantees in connection with the sale of
products or services. In the case of Beloit
Corporation, certain litigation matters and claims
are currently pending in connection with its
contractual undertakings. The outcome of such
litigation and claims cannot be predicted with
certainty and favorable or unfavorable judgements or
resolutions may affect income on a quarter-by-quarter
basis. In addition, many projects are located in
undeveloped or developing economies where business
conditions are less predictable. In recent years more
than 50% of the Company's total sales occurred
outside the United States.
Other factors that could cause actual results to
differ materially from those contemplated include:
- Factors affecting purchases of new equipment,
rebuilds, parts and services such as: production
capacity, stockpiles and production and
consumption rates of coal, copper, iron, gold,
fiber, pulp, paper/paperboard, recycled paper,
steel and other commodities; seasonal factors
impacting consumption such as unusually mild or
severe winter or summer temperatures; the cash
flows of customers; the cost and availability of
financing to customers and the ability of
customers to obtain regulatory approval for
investments in mining, papermaking, steel making,
automotive manufacturing and other heavy
industrial projects; the ages, efficiencies and
utilization rates of existing equipment; the
development of new technologies; the availability
of used or alternative equipment; consolidations
among customers; work stoppages at customers or
providers of transportation; shifts in the mix
of products purchased by customers; and the
timing, severity and duration of customer buying
cycles, particularly in the paper and mining
businesses.
- Factors affecting the Company's ability to
capture available sales opportunities, including:
customers' perceptions of the quality and value
of the Company's products as compared to
competitors' products; the existence of patents
protecting or restricting the Company's ability
to offer features requested by customers; whether
the Company has successful reference
installations to show customers, especially for
papermaking and mining equipment; customers'
perceptions of the health and stability of the
Company as compared to its competitors; the
availability of manufacturing capacity at the
Company's factories; and whether the Company can
offer the complete package of products and
services sought by its customers.
- Factors affecting the Company's ability to
successfully manage sales it obtains, such as:
the accuracy of the Company's cost and time
estimates for major projects; the Company's
success in completing projects on time and within
budget; the Company's success in recruiting and
retaining managers and key employees; wage
stability and cooperative labor relations; union
contract negotiations; plant capacity and
utilization; work stoppages and slowdowns; and
whether acquisitions are assimilated and
divestitures completed without notable surprises
or unexpected difficulties.
- Factors affecting the Company's general business,
such as: unexpectantly large patent, tax,
product, environmental, employee health or
benefit or contractual liabilities; nonrecurring
restructuring charges; changes in accounting or
tax rules or regulations; and reassessments of
asset valuations such as inventories.
- Factors affecting general business levels, such
as: political turmoil and economic growth in
major markets such as the United States, Canada,
Europe, The Far East, South Africa, Australia and
South America; environmental and trade
regulations; and the stability and ease of
exchange of currencies.
Item 6 Exhibits and Reports on Form 8-K
-----------------------------------------
(a) Exhibits:
3(a) Restated Certificate of Incorporation of
Harnischfeger Industries, Inc.
(b) Bylaws of Harnischfeger Industries,
Inc., as amended April 15, 1997.
11 Statement re: Calculation of Earnings Per Share
(b) Reports on Form 8-K
None
FORM 10-Q
- ---------------
SIGNATURES
-------------------
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
HARNISCHFEGER INDUSTRIES, INC.
--------------------------------------------
(Registrant)
/s/Francis M. Corby, Jr.
------------------------
Francis M. Corby, Jr.
Executive Vice President For Finance
Date June 12, 1997 and Administration and Chief Financial
- ------------------ Officer
/s/James C. Benjamin
----------------------------------
James C. Benjamin
Vice President and Controller
Date June 12, 1997 and Chief Accounting Officer
- ------------------
Exhibit 11
------------
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -------------------------------
CALCULATION OF EARNINGS PER SHARE
- ---------------------------------
(Amounts in thousands except per share amounts)
Three Months Ended
April 30,
------------------
1997 1996
-------- ---------
<S> <C> <C>
Average Shares Outstanding 47,937 47,063
====== ======
Net Income $44,971 $33,555
====== ======
Net income per share $0.94 $0.71
====== ======
</TABLE>
<TABLE>
<CAPTION>
HARNISCHFEGER INDUSTRIES, INC.
- -------------------------------
CALCULATION OF EARNINGS PER SHARE
- ---------------------------------
(Amounts in thousands except per share amounts)
Six Months Ended
April 30,
-------------------
1997 1996
------- --------
<S> <C> <C>
Average Shares Outstanding 47,828 46,929
====== ======
Net Income $75,829 $56,746
====== ======
Net income per share $1.59 $1.21
====== ======
</TABLE>
Exhibit 3(a)
RESTATED CERTIFICATE OF INCORPORATION
OF
HARNISCHFEGER INDUSTRIES, INC.
HARNISCHFEGER INDUSTRIES, INC., a corporation organized
and existing under the laws of the State of Delaware,
hereby certifies as follows:
1.The name of the corporation is HARNISCHFEGER INDUSTRIES,
INC.
The date of the filing of its original Certificate of
Incorporation with the Secretary of State was September 17,
1986.
2.This Restated Certificate of Incorporation only restates and
integrates and does not further amend the provisions of the
Certificate of Incorporation of this corporation as
heretofore amended or supplemented and there is no
discrepancy between those provisions and the provisions of
this Restated Certificate of Incorporation.
3.The text of the Certificate of Incorporation as amended or
supplemented heretofore is hereby restated without further
amendments or changes to read as herein set forth in full:
Article 1
The name of the Corporation shall be HARNISCHFEGER
INDUSTRIES, INC.
Article 2
The Corporation's registered office in the State of
Delaware shall be Corporate Trust Center, 1209 Orange
Street, City of Wilmington, County of New Castle. The name
of the Corporation's registered agent at such address shall
be The Corporation Trust Company.
Article 3
The purposes shall be:
(a) to manufacture, buy, sell and deal in machinery,
equipment and appliances of all kinds and class, including,
but not limited to, cranes, power shovels, excavators,
hoists, paper making machinery and industrial electrical
equipment, and in parts and accessories therefor; and
(b) to engage in any other lawful act or activity for
which corporations may be organized under the General
Corporation Law of Delaware.
Article 4
The number of shares which the Corporation shall have
authority to issue, itemized by classes, par value of
shares, shares without par value, and series, if any,
within a class, is:
<TABLE>
<CAPTION>
Par Value
Per Share
or Statement
That Shares
Series Number of Are Without
Class (if any) Shares Par Value
---------- ---------- --------- ------------
<S> <C> <C> <C>
Preferred............ To be issued
in series 250,000 $100
Common............. None 150,000,000 $ 1
</TABLE>
The powers, preferences and rights, and the
qualifications, limitations or restrictions thereof,
relative to the Preferred Stock and the Common Stock are:
(a)The Preferred Stock
(1) The Preferred Stock may be issued from time to time
in one or more series and with such designation for each
such series as shall be stated and expressed in the
resolution or resolutions providing for the issue of each
such series adopted by the board of directors. The board
of directors in any such resolution or resolutions is
expressly authorized to state and express for each such
series:
(A) The voting powers, if any, of the holders of stock of
such series;
(B) The rate per annum and the times at and conditions upon
which the holders of stock of such series shall be entitled
to receive dividends, and whether such dividends shall be
cumulative or non-cumulative and if cumulative the terms
upon which such dividends shall be cumulative;
(C) The price or prices and the time or times at and the
manner in which the stock of such series shall be
redeemable;
(D) The rights to which the holders of the shares of stock
of such series shall be entitled upon any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation;
(E) The terms, if any, upon which shares of stock of such
series shall be convertible into, or exchangeable for,
shares of stock of any other class or classes or of any
other series of the same or any other class or classes,
including the price or prices or the rate or rates of
conversion or exchange and the terms of adjustment, if any;
and
(F) Any other designations, preferences and relative,
participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, so far
as they are not inconsistent with the provisions of the
Certificate of Incorporation and to the full extent now or
hereafter permitted by the laws of Delaware.
(2) All shares of the Preferred Stock of any one series
shall be identical to each other in all respects, except
that shares of any one series issued at different times may
differ as to the dates from which dividends thereon, if
cumulative, shall be cumulative.
(3) The Certificate of Designations of Preferred Stock,
Series D, adopted by the Board of Directors on February 6,
1989, which is attached as Exhibit A, is incorporated
herein by reference.
(b)The Common Stock
(1) The Common Stock may be issued by the Corporation
from time to time for such consideration and upon such
terms as may be fixed from time to time by the board of
directors and as may be permitted by law, without action by
any stockholders.
(2) The holders of Common Stock shall be entitled to
dividends only if, when and as the same shall be declared
by the board of directors and as may be permitted by law.
(3) Each share of the Common Stock shall entitle the
holder thereof to one vote, in person or by proxy, at any
and all meetings of the stockholders of the Corporation on
all propositions before such meetings.
Article 5
The number of directors constituting the board of
directors shall be fixed by or in the manner provided in
the bylaws, but shall not be less than three. The
directors shall be divided into three classes, as nearly
equal in number as may be, the term of office of those of
the first class to expire at the annual meeting of
stockholders next ensuing after the organizational meeting
of the incorporator to elect directors, the term of office
of those of the second class to expire one year thereafter,
and the term of office of those of the third class to
expire two years thereafter. At each annual election,
directors elected to succeed those whose terms expire shall
be elected for a term of office to expire at the third
annual meeting of stockholders after their election.
Article 6
To the fullest extent permitted by the General
Corporation Law of the State of Delaware as it now exists
or may hereafter be amended, no director of the Corporation
shall be liable to the Corporation or its stockholders for
monetary damages arising from a breach of fiduciary duty
owed to the Corporation or its stockholders.
Any repeal or modification of the foregoing paragraph by
the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the
Corporation existing at the time of such repeal or
modification.
Article 7
The following provisions are inserted for the regulation
of the business and for the conduct of the affairs of the
Corporation.
Section 7.1
(a) The board of directors shall have the sole power to
make, alter, amend or repeal the Bylaws of the
Corporation and to adopt new Bylaws.
(b) The Corporation may sell, lease or exchange all or
substantially all of its property and assets, including
its goodwill and its corporate franchises, upon such
terms and conditions and for such consideration, which
may consist in whole or in part of money or other
property, including shares of stock in, and/or other
securities of, any other corporation or corporations, as
its board of directors deems expedient and for the best
interest of the Corporation, only when and as authorized
by the affirmative vote of the holders of at least two-thirds
of the combined voting power of the then
outstanding shares of stock of the Corporation entitled
to vote thereon, voting together as a single class.
(c) The Corporation may enter into any plan and agreement of
merger or consolidation with any one or more other
corporations (whether or not the Corporation is to be the
surviving corporation in such merger) as its board of
directors deems expedient and for the best interest of
the Corporation, only when and as authorized by the
affirmative vote of the holders of at least two-thirds of
the combined voting power of the then outstanding shares
of stock of the Corporation entitled to vote thereon,
voting together as a single class.
(d) Notwithstanding the requirements of subsection (c)
above, the board of directors, without any vote of
stockholders, may authorize a merger in which this
Corporation is to be the surviving corporation if the
terms of such merger meet the requirements of subsection
(f) of Section 251 of Title 8 of the Delaware Code as it
may from time to time be amended.
(e) The Corporation may be voluntarily dissolved as is
deemed advisable in the judgment of its board of
directors, and expressed in a resolution adopted by a
majority of the whole board of directors, only when and
as authorized by the affirmative vote of the holders of
at least two-thirds of the combined voting power of the
then outstanding shares of stock of the Corporation
entitled to vote thereon, voting together as a single
class.
Section 7.2 The stockholders and directors shall have
power to hold their meetings if the Bylaws so provide, and
keep the books, documents and papers of the Corporation,
outside of the State of Delaware, except as otherwise
required by the laws of Delaware.
Section 7.3 The Corporation reserves the right to amend,
alter or repeal any provision contained in its Certificate
of Incorporation in the manner now or hereafter prescribed
by the laws of Delaware, and all rights and powers
conferred on directors and stockholders herein are granted
subject to this reservation. The affirmative vote of the
holders of at least two-thirds of the combined voting power
of the then outstanding shares of stock of the Corporation
entitled to vote thereon, voting together as a single
class, shall be required to amend, alter or repeal any
provision of this Certificate of Incorporation or to add
any new provisions to this Certificate of Incorporation.
This Restated Certificate of Incorporation was duly
adopted by the Board of Directors in accordance with
Section 245 of the General Corporation Law of the State of
Delaware.
This Restated Certificate of Incorporation shall be
effective on April 21, 1997.
IN WITNESS WHEREOF, said HARNISCHFEGER INDUSTRIES, INC.
has caused this Certificate to be signed by Jeffery T.
Grade, its Chairman, pursuant to Section 103(b)(2) of the
General Corporation Law of the State of Delaware, this 21st
day of April, 1997.
HARNISCHFEGER INDUSTRIES, INC.
By: /s/ Jeffery T. Grade
-------------------------------------------------------
Jeffery T. Grade, Chairman
ATTEST:
By: /s/ K. Thor Lundgren
- -------------------------------------------------
K. Thor Lundgren, Secretary
Exhibit A
CERTIFICATE OF DESIGNATIONS
OF PREFERRED STOCK, SERIES D
of
HARNISCHFEGER INDUSTRIES, INC.
Pursuant to Section 151
of the Delaware General Corporation Law
We, William W. Goessel, Chairman and John R. Teitgen,
Secretary, of Harnischfeger Industries, Inc., a corporation
organized and existing under the Delaware General
Corporation Law, in accordance with the provisions of
Section 151 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of this
Corporation, the Board of Directors on February 6, 1989,
adopted the following resolution creating a series of
Preferred Stock designated as Preferred Stock, Series D:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the
provisions of its Certificate of Incorporation a series of
Preferred Stock of the Corporation be, and it hereby is,
created, and that the designations and amount thereof and
the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Preferred Stock; Series D"
(the "Series D Preferred Stock") and the number of shares
constituting such series shall be 100,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking
prior and superior to the shares of Series D Preferred
Stock with respect to dividends, the holders of shares of
Series D Preferred Stock, in preference to the holders of
Common Stock, $1.00 par value per share, of the
Corporation (the "Common Stock") and of any other
junior stock, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in
cash on the fifteenth day of March, June, September and
December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of Series
D Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $50.00 or (b)
subject to the provision for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all
cash dividends, and 1000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding Common
Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceeding Quarterly
Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series D Preferred
Stock. In the event the Corporation shall at any time on
or after February 17, 1989 declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a
subdivision of combination or consolidation of the
outstanding Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of
shares of Series D Preferred Stock were entitled
immediately prior to such event under clause (b) of the
preceeding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series D Preferred Stock as provided in paragraph
(A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $50.00
<PAGE>
per share on the Series D Preferred Stock shall
nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series D Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares of Series D Preferred Stock, unless
the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of
shares of Series D Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall
no bear interest. Dividends paid on the shares of Series D
Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such
shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the
determination of holders of shares of Series D Preferred
Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series
D Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series D Preferred Stock shall entitle
the holder thereof to 1000 votes on all matters submitted
to a vote of the stockholders of the Corporation. In the
event the Corporation shall at any time on or after
February 17, 1989 declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the
outstanding Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock,
then in each such case the 100 votes per share to which
holders of shares of Series D Preferred Stock may be
entitled immediately prior to such event pursuant to
the
<PAGE>
preceeding sentence shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after
such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series D Preferred Stock and the
holders of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, holders of Series D
Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series D Preferred Stock as
provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series D Preferred Stock
outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series D Preferred Stock:
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series D Preferred Stock, except
dividends paid ratably on the Series D Preferred Stock and
all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the
holders of all such shares are then entitled:
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding
up) to the
<PAGE>
Series D Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends
or upon dissolution, liquidation or winding up) to the
Series D Preferred Stock or
(iv) purchase or otherwise acquire for consideration any
shares of Series D Preferred Stock, or any shares of stock
ranking on a parity with the Series D Preferred Stock,
except in accordance with a purchase offer made in writing
or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time
and in such manner.
Section 5. Reacquired Shares. Any shares of Series D
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of preferred stock and may be reissued as
part of a new series of preferred stock to be created by
resolution or resolutions of the Board of Directors,
subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up)
to the Series D Preferred Stock unless, prior thereto, the
holders of shares of Series D Preferred Stock shall have
received $1,000 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or
not declared, to the date of such payment, provided that
the holders of shares of Series D Preferred Stock shall be
entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth,
<PAGE>
equal to 1000 times the aggregate amount to be distributed
per share to holders of Common Stock, or (2) to the holders
of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the
Series D Preferred Stock, except distributions made ratably
on the Series D Preferred Stock and all other such parity
stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the
Corporation shall at any time on or after February 17, 1989
declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or
combinations or consolidation of the outstanding Common
Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such
case the aggregate amount to which holders of shares of
Series D Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the Common Stock
are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any
such case the shares of Series D Preferred Stock then
outstanding shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 1000 times
the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time
on or after February 17, 1989 declare or pay any dividend
on Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the
outstanding Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock,
then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change
of shares of Series D Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which
is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which
would change the powers, preferences or special
<PAGE>
rights of the Series D Preferred Stock in any manner
substantially prejudicial to the holders of the Series D
Preferred Stock, without the affirmative vote of the
holders of two-thirds of the outstanding shares of Series D
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
penalties of perjury as of the 15th day of February, 1989.
/s/ William W. Goessel
-----------------------------------------------
William W. Goessel
Chairman
ATTEST:
/s/ John R. Teitgen
- ------------------------------------
John R. Teitgen
retary
Exhibit 3(b)
4/15/97
B Y L A W S
OF
HARNISCHFEGER INDUSTRIES, INC.
ARTICLE I
OFFICES
-------------------
The initial registered office of the corporation required
by the Delaware General Corporation Law shall be 100 West
Tenth Street, City of Wilmington, County of New Castle,
State of Delaware, and the address of the registered office
may be changed from time to time by the Board of Directors.
The principal business office of the corporation shall be
located in the Village of Brookfield, County of Waukesha,
State of Wisconsin. The corporation may have such other
offices, either within or without the State of Wisconsin,
as the Board of Directors may designate or as the business
of the corporation may require from time to time.
The registered office of the corporation required by the
Wisconsin Business Corporation Law may be, but need not be,
the same as its place of business in the State of
Wisconsin, and the address of the registered office may be
changed from time to time by the Board of Directors.
ARTICLE II
STOCKHOLDERS
------------------------
SECTION 1. Annual Meeting. The annual meeting of
stockholders shall be held at a time and on a date in the
month of April designated by resolution adopted by the
Board of Directors for the purpose of electing directors
and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual
meeting shall be a legal holiday in the state where the
meeting is to be held, such meeting shall be held on the
next succeeding business day. If the election of directors
shall not be held on the day designated herein for the
annual meeting of the stockholders, or at any adjournment
thereof, the Board of Directors shall cause the election to
be held at a special meeting of the stockholders as soon
thereafter as is convenient.
SECTION 2. Special Meeting. Special meetings of the
stockholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the Chief Executive
Officer or by the Board of Directors.
SECTION 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of
Delaware, as the place of meeting for any annual meeting or
for any special meeting called by the Board of Directors.
If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the
principal business office of the corporation in the State
of Wisconsin.
SECTION 4. Notice of Meeting. Written notice stating
the place, day and hour of the meeting and, in the case of
a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten
days nor more than sixty days before the date of the
meeting, either personally or by mail, by or at the
direction of the Chief Executive Officer, or the Secretary,
or the officer or persons calling the meeting, to each
stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be given when
deposited in the United States mail, addressed to the
stockholder at the stockholder's address as it appears on
the records of the corporation, with postage thereon
prepaid. 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 5. Fixing of Record Date. For the purpose of
determining stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof,
or entitled to receive payment of any dividend, or in order
to make a determination of stockholders for any other
proper purpose, the Board of Directors of the corporation
may fix in advance a date as the record date for any such
determination of stockholders, such date in any case to be
not more than sixty days and, in case of a meeting of
stockholders, not less than ten days prior to the date on
which the particular action, requiring such determination
of stockholders, is to be taken. If no record date is
fixed for the determination of stockholders entitled to
notice of or to vote at a meeting of stockholders, or
stockholders entitled to receive payment of a dividend, the
close of business on the date next preceding the date on
which notice of the meeting is mailed or the date on which
the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the
record date for such determination of stockholders. When a
determination of stockholders entitled to vote at any
meeting of stockholders has been made as provided in this
section, such determination shall apply to any adjournment
thereof; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
SECTION 6. Voting Lists. The officer or agent having
charge of the stock ledger of the corporation shall make,
at least ten days before each meeting of stockholders, a
complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of
shares held by each; which list, for a period of ten days
prior to such meeting, shall be kept at the place where the
meeting is to be held, or at another place within the city
where the meeting is to be held, which other place shall be
specified in the notice of meeting and the list shall be
subject to inspection by any stockholder for any purpose
germane to the meeting, at any time during usual business
hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to
the inspection of any stockholder during the whole time of
the meeting. The original stock ledger shall be prima
facie evidence as to who are the stockholders entitled to
examine such list or ledger or to vote at any meeting of
stockholders. Failure to comply with the requirements of
this section will not affect the validity of any action
taken at such meeting.
SECTION 7. Quorum. A majority of the shares entitled to
vote, represented in person or by proxy, shall constitute a
quorum at a meeting of stockholders. If a quorum is
present, the affirmative vote of a majority of the shares
represented at the meeting and entitled to vote on the
subject matter shall be the act of the stockholders, unless
the vote of a greater number or voting by classes is
required by Delaware law, the Articles of Incorporation, or
these Bylaws. If less than a majority of the outstanding
shares are represented at a meeting, a majority of the
shares so represented may adjourn the meeting from time to
time without further notice. Any stockholders' meeting,
annual or special, whether or not a quorum is present, may
be adjourned from time to time by the Chairman of the
meeting without further notice. 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 called.
SECTION 8. Proxies. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the
stockholder or by the stockholder's duly authorized
attorney in fact. Such proxy shall be filed with the
Secretary of the corporation before or at the time of the
meeting. No proxy shall be valid after three years from
the date of its execution, unless otherwise provided in the
proxy.
SECTION 9. Voting of Shares. Each
outstanding share, regardless of class, shall be entitled
to one vote on each matter submitted to a vote at a meeting
of stockholders, except to the extent that the voting
rights of any class or classes are enlarged, limited or
denied by the Articles of Incorporation or in the manner
therein provided.
SECTION 10. Voting of Shares by Certain Holders.
Neither treasury shares nor shares of the corporation held
by another corporation, if a majority of the shares
entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the
corporation, shall be entitled to vote or to be counted for
quorum purposes. Nothing in this paragraph shall be
construed as limiting the right of the corporation to vote
its own stock held by it in a fiduciary capacity.
Shares standing in the name of another corporation,
domestic or foreign, may be voted in the name of such
corporation by its President or such other officer as the
President may appoint or pursuant to any proxy executed in
the name of such corporation by its President or such other
officer as the President may appoint in the absence of
express written notice filed with the Secretary that such
President or other officer has no authority to vote such
shares.
Shares held by an administrator, executor, guardian,
conservator, trustee in bankruptcy, receiver or assignee
for creditors may be voted by such administrator, executor,
guardian, conservator, trustee in bankruptcy, receiver or
assignee for creditors, either in person or by proxy,
without a transfer of such shares into the name of such
administrator, executor, guardian, conservator, trustee in
bankruptcy, receiver or assignee for creditors. Shares
standing in the name of a fiduciary may be voted by such
fiduciary, either in person
or by proxy.
A stockholder whose shares are pledged shall be entitled
to vote such shares unless in the transfer by the pledgor
on the books of the corporation the pledgor has expressly
empowered the pledgee to vote thereon, in which case only
the pledgee, or the pledgee's proxy, may represent such
stock and vote thereon.
SECTION 11. Stockholder Proposals. No proposal for a
stockholder vote shall be submitted by a stockholder (a
"Stockholder Proposal") to the corporation's stockholders
unless the stockholder submitting such proposal (the
"Proponent") shall have filed a written notice setting
forth with particularity (i) the names and business
addresses of the Proponent and all Persons acting in
concert with the Proponent (ii) the name and address of the
Proponent and the Persons identified in clause (i), as they
appear on the corporation's books (if they so appear),
(iii) the class and number of shares of the corporation
beneficially owned by the Proponent and the Persons
identified in clause (i); (iv) a description of the
Stockholder Proposal containing all material information
relating thereto; and (v) whether the Proponent or any
Person identified in clause (i) intends to solicit proxies
from holders of a majority of shares of the corporation
entitled to vote on the Stockholder Proposal. The
Proponent shall also submit such other information as the
Board of Directors reasonably determines is necessary or
appropriate to enable the Board of Directors and
stockholders to consider the Stockholder Proposal. As used
in this Section, the term "Person" means any individual,
partnership, firm, corporation, association, trust,
unincorporated organization or other entity.
The presiding officer at any stockholders' meeting may
determine that any Stockholder Proposal was not made in
accordance with the procedures prescribed in these Bylaws
or is otherwise not in accordance with law, and if it is so
determined, such officer shall so declare at the meeting
and the Stockholder Proposal shall be disregarded.
The notice required by these Bylaws to be delivered by the
Proponent shall be delivered to the Secretary at the
principal executive office of the corporation (i) not less
than ninety (90) days before the date of the previous
year's annual meeting of stockholders if such Stockholder
Proposal is to be submitted at an annual stockholders'
meeting and (ii) no later than the close of business on the
15th day following the day on which notice of the date of a
special meeting of stockholders was given if the
Stockholder Proposal is to be submitted at a special
stockholders' meeting (provided, however, if notice of the
date of the special meeting of stockholders was given less
than 20 days before the date of the special meeting of
stockholders, the notice required by these Bylaws to be
given by the Proponent shall be delivered no later than the
close of business on the 5th day following the day on which
notice of the special stockholder's meeting was given).
SECTION 12. Inspectors of Election; Opening and Closing the
Polls. The Board of Directors by resolution shall 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 his or her
duties, shall take and sign an oath faithfully to execute
the duties of inspector with strict impartiality and
according to the best of his or her ability. The inspector
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 closing of the
polls for each matter upon which the stockholders will vote
at a meeting.
SECTION 13. Stockholder Consent Procedures. (a) Record
Date for Action by Written Consent. 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 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, 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 after 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
Delaware, its 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.
(b) Inspectors of Written Consent. In the event of the
delivery, in the manner provided by Section 13(a), 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 13(a) 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 test 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).
(c) Effectiveness of Written Consent. Every written consent
shall bear the 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 13(a), 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 13(a).
ARTICLE III
BOARD OF DIRECTORS
----------------------------------
SECTION 1. General Powers. The business and affairs of
the corporation shall be managed by its Board of Directors.
SECTION 2. Number. Tenure and Qualifications. The
number of directors of the corporation shall be fourteen.
Two of the three classes of Directors established by the
corporation's Certificate of Incorporation shall consist of
five members and the third class shall consist of four
members. Each director shall hold office for the term
provided in the Certificate of Incorporation and until such
director's successor shall have been elected and qualified,
or until such director's earlier death or resignation. No
director shall be or be deemed to be removed from office
prior to the expiration of such director's term in office
by virtue of a reduction in the number of directors.
Directors need not be residents of the State of Delaware or
stockholders of the corporation.
SECTION 3. Annual Meetings. An annual meeting of the
Board of Directors shall be held without other notice than
this Bylaw immediately after, and at the same place as, the
Annual Meeting of Stockholders.
SECTION 4. Special Meetings. Special meetings of the
Board of Directors may be called by or at the request of
the Chairman or any two directors. The person or persons
authorized to call special meetings of the Board of
Directors may fix any place, either within or without the
State of Delaware, as the place for holding any special
meeting of the Board of Directors called by them.
SECTION 5. Notice. Notice of any special meeting shall
be given at least 48 hours previous thereto by written
notice delivered personally or mailed to each director at
such director's business address, or by telegram. If
mailed, such notice shall be deemed to be given when
deposited in the United States mail so addressed, with
postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be given when the telegram
is delivered to the telegraph company. Any director may
waive notice of any meeting. The attendance of a director
at a meeting shall constitute a waiver of notice of such
meeting, except where a director attends a meeting and
objects thereat to the transaction of any business because
of the meeting is not lawfully called or convened. Neither
the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need
be specified in the notice or waiver of notice of such
meeting.
SECTION 6. Quorum. A majority of the number of
directors fixed by Section 2 of this Article III shall
constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the
directors present may adjourn the meeting from time to time
without further notice.
SECTION 7. Manner of Acting. The act of the majority of
the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors.
SECTION 8. Nomination of Directors; Vacancies.
Candidates for director shall be nominated either (i) by
the Board of Directors or a committee appointed by the
Board of Directors or (ii) by nomination at any
stockholders' meeting by or on behalf of any stockholder
entitled to vote at such meeting provided that written
notice of such stockholder's intent to make such nomination
or nominations has been given, either by personal delivery
or by United States mail, postage prepaid, to the secretary
of the corporation not later than (1) with respect to an
election to be held at an annual meeting of stockholders,
ninety (90) days in advance of such meeting, and (2) with
respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of
business on the tenth (10th) day following the date on
which notice of such meeting is first given to
stockholders. Each such notice shall set forth: (a) the
name and address of the stockholder who intends to make the
nomination and of the person or persons to be nominated;
(b) a representation that the stockholder is a holder of
record of stock of the corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the
meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or
understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons)
pursuant to which the nomination or nominations are to be
made by the stockholder; (d) such other information
regarding each nominee proposed by such stockholder as
would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated, or intended to
be nominated, by the Board of Directors; and (e) the
consent of each nominee to serve as a director of the
corporation if so elected. The presiding officer of the
meeting may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure.
Any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of
directors, may be filled for the remainder of the unexpired
term by the affirmative vote of a majority of the directors
then in office although less than a quorum.
SECTION 9. Action by Directors Without a Meeting. Any
action required to be taken at a meeting of directors, or
at a meeting of a committee of directors, or any other
action which may be taken at a meeting, may be taken
without a meeting if a consent in writing setting forth the
action so taken shall be signed by all of the directors or
members of the committee thereof entitled to vote with
respect to the subject matter thereof and such consent
shall have the same force and effect as a unanimous vote.
SECTION 10. Participation in a Meeting by Telephone.
Members of the Board of Directors or any committee of
directors may participate in a meeting of such Board or
committee by means of conference telephone or similar
communication equipment by
means of which all persons participating in the meeting can
hear each other, and participating in a meeting pursuant to
this section 10 shall constitute presence in person at such
meeting.
SECTION 11. Compensation. The Board of Directors, by
majority vote of the directors then in office and
irrespective of any personal interest of any of its
members, shall have authority to establish reasonable
compensation of all directors for services to the
corporation as directors, officers or otherwise, or to
delegate such authority to an appropriate committee. The
Board of Directors also shall have authority to provide for
reasonable pensions, disability or death benefits, and
other benefits or payments, to directors, officers and
employees and to their estates, families, dependents and
beneficiaries on account of prior services rendered by such
directors, officers and employees to the corporation. The
Board of Directors may be paid their expenses, if any, of
attendance at each such meeting of the Board.
SECTION 12. Presumption of Assent. A director of the
corporation who is present at a meeting of the Board of
Directors at which action on any corporate matter is taken
shall be presumed to have assented to the action taken
unless such director's dissent is entered in the minutes of
the meeting or unless such director files a written dissent
to such action with the person acting as the Secretary of
the meeting before the adjournment thereof or forwards such
dissent by registered mail to the Secretary of the
corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
SECTION 13. Validity of Contracts. No contract or other
transaction entered into by the corporation shall be
affected by the fact that a director or officer of the
corporation is in any way interested in or connected with
any party to such contract or transaction, or is a party to
such contract or transaction, even though in the case of a
director the vote of the director having such interest or
connection shall have been necessary to obligate the
corporation upon such contract or transaction; provided,
however, that in any such case (i) the material facts of
such interest are known or disclosed to the directors or
stockholders and the contract or transaction is authorized
or approved in good faith by the stockholders or by the
Board of Directors or a committee thereof through the
affirmative vote of a majority of the disinterested
directors (even though not a quorum), or (ii) the contract
or transaction is fair to the corporation as of the time it
is authorized, approved or ratified by the stockholders, or
by the Board of Directors, or by a committee thereof.
SECTION 14. Indemnification and Insurance. Each person
who was or is made a party or is threatened to be made a
party to or is involved in any action, suit, arbitration,
mediation or proceeding, whether civil, criminal,
administrative or investigative, whether domestic or
foreign (hereinafter a "proceeding"), by reason of the fact
that he or she, or a person of whom he or she is the legal
representative, is or was a director or officer of the
corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of
another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect
to employee benefit plans, whether the basis of such
proceeding is alleged action or inaction in an official
capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer,
employee or agent, shall be indemnified and held harmless
by the corporation to the fullest extent not prohibited by
the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended (but, in the
case of any such amendment, with respect to alleged action
or inaction occurring prior to such amendment, only to the
extent that such amendment permits the corporation to
provide broader indemnification rights than said law
permitted the corporation to provide prior to such
amendment), against all expense, liability and loss
(including without limitation attorneys' fees and expenses,
judgments, fines, ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably
incurred or suffered by such person in connection
therewith. Such indemnification as to such alleged action
or inaction shall continue as to a person who has ceased
after such alleged action or inaction to be a director,
officer, employee or agent and shall inure to the benefit
of his or her heirs, executors and administrators;
provided, however, that, except as provided in the
following paragraph, the corporation shall indemnify any
such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the
Board unless such proceeding (or part thereof) is a counter
claim, cross-claim, third party claim or appeal brought by
such person in any proceeding. The right to
indemnification conferred in this Section shall be a
contract right and shall include the right to be paid by
the corporation the expenses incurred in defending any such
proceeding in advance of its final disposition; provided,
however, that, if the General Corporation law of the State
of Delaware requires, the payment of such expenses incurred
by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which
service was or is rendered by such person while a director
or officer, including, without limitation, service to an
employee benefit plan) in advance of the final disposition
of a proceeding, shall be made only upon delivery to the
corporation of an undertaking, by or on behalf of such
director or officer, to repay all amounts so advanced if it
shall ultimately be determined by final judicial decision
from which there is no further appeal that such director or
officer is not entitled to be indemnified for such expenses
under this Section or otherwise. The corporation may, by
action of the Board, provide indemnification to an employee
or agent of the corporation or to a director, trustee,
officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise of
which the corporation owns fifty percent or more with the
same scope and effect as the foregoing indemnification of
directors and officers or such lesser scope and effect as
shall be determined by action of the Board.
If a claim under the preceding paragraph is not paid in
full by the corporation within thirty days after a written
claim has been received by the corporation, the claimant
may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and,
if successful in whole or in part in any such claim or
suit, or in a claim or suit brought by the corporation to
recover an advancement of expenses under this paragraph,
the claimant shall be entitled to be paid also the expense
of prosecuting or defending any such claim or suit. It
shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final
disposition where the required undertaking, if any is
required, has been tendered to the corporation) that the
claimant has not met the applicable standard of conduct
which make it permissible under the General Corporation Law
of the State of Delaware for the corporation to indemnify
the claimant for the amount claimed, but the burden of
proving such defense shall be on the corporation. Neither
the failure of the corporation (including its Board of
Directors, independent legal counsel, or its stockholders)
to have made a determination prior to the commencement of
such action that indemnification of the claimant is proper
in the circumstances because he or she has met the
applicable standard of conduct set forth in the General
Corporation Law of the State of Delaware, nor an actual
determination by the corporation (including its Board of
Directors, independent legal counsel, or its stockholders)
that the claimant has not met such applicable standard of
conduct set forth in the General Corporation Law of the
State of Delaware, shall be a defense to the action or
create a presumption that the claimant has not met the
applicable standard of conduct. In any suit brought by
such person to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the corporation to
recover an advancement of expenses hereunder, the burden of
proving that such person is not entitled to be indemnified,
or to have or retain such advancement of expenses, shall be
on the corporation.
The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final
disposition conferred in this Section shall not be
exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the
Certificate of Incorporation, By-law, agreement, vote of
stockholders or disinterested directors or otherwise.
The corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or
agent of the corporation or another corporation,
partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not
the corporation would have the power to indemnify such
person against such expense, liability or loss under the
General Corporation Law of the State of Delaware.
In the event that any of the provisions of this Section
14 (including any provision within a single section,
paragraph or sentence) is held by a court of competent
jurisdiction to be invalid, void or otherwise
unenforceable, the remaining provisions are severable and
shall remain enforceable to the full extent permitted by
law.
SECTION 15. Committees of Directors. The Board of
Directors may, by resolution passed by a majority of the
whole Board, 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 committee members, who may replace any absent
or disqualified member at any committee meeting. In the
absence or disqualification of a committee member, the
member or members present at any meeting and not
disqualified from voting, whether such member or members
constitute a quorum, may unanimously appoint another
director to act at the meeting in place of the absent or
disqualified member. Any such committee 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, and may authorize the seal of the
corporation to be affixed to all papers which may require
it; but no such committee shall have the power or authority
in reference to amending the Certificate of Incorporation
(except that a committee may, to the extent authorized in
the resolution(s) providing for the issuance of shares of
stock adopted by the Board, fix any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation
or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of
the same or any other class or classes of stock of the
corporation), 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, or amending the Bylaws of the
corporation; and, unless the resolution expressly so
provides, no such committee shall have the power or
authority to declare a dividend or to authorize the
issuance of stock, or to adopt a certificate of ownership
and merger.
ARTICLE IV
OFFICERS
SECTION 1. Number. The officers of the corporation
shall be a Chairman of the Board (who must be a member of
the Board of Directors and who also may be an employee of
the corporation), a Chief Executive Officer, a President,
one or more Vice Presidents (the number thereof to be
determined by the Board of Directors), a Secretary, a
Treasurer and a Controller, each of whom shall be elected
by the Board of Directors. The Board of Directors may also
elect a Chief Operating Officer and one or more Group
Presidents and may designate one or more of the Vice
Presidents as Executive Vice Presidents or Senior Vice
Presidents. Such other officers and assistant officers and
agents as may be deemed necessary may be elected or
appointed by the Board of Directors. Any two or more
offices may be held by the same person, except the offices
of President and Secretary, and the offices of President
and Vice President.
SECTION 2. Election and Term of Office. The officers of
the corporation shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors
held after each annual meeting of the stockholders. If the
election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as
convenient. Each officer shall hold office until such
officer's successor shall have been duly elected or until
such officer's death or until such officer
shall resign or shall have been removed in the manner
hereinafter provided.
SECTION 3. Removal. Any officer or agent elected or
appointed by the Board of Directors may be removed by the
Board of Directors whenever in its judgment the best
interests of the corporation would be served thereby, but
such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or
appointment shall not of itself create contract rights.
SECTION 4. Vacancies. A vacancy in any office because
of death, resignation, removal, disqualification or
otherwise, may be filled by the Board of Directors for the
unexpired portion of the term.
SECTION 5. Chairman of the Board. The Chairman of the
Board shall preside at all meetings of the Board of
Directors and stockholders.
SECTION 6. Chief Executive Officer. The Chief Executive
Officer shall be the principal executive officer of the
corporation and, subject to the control of the Board of
Directors, shall supervise and control all of the business
and affairs of the corporation, and establish current and
long-range objectives, plans and policies. The Chief
Executive Officer shall have authority, subject to such
rules as may be prescribed by the Board of Directors, to
appoint such agents and employees of the corporation as the
Chief Executive Officer shall deem necessary, to prescribe
their powers, duties and compensation, and to delegate
authority to them. Such agents and employees shall hold
office at the discretion of the Chief Executive Officer.
The Chief Executive Officer shall have authority to sign,
execute and acknowledge, on behalf of the corporation, all
deeds, mortgages, bonds, stock certificates, contracts,
leases, reports and all other documents or instruments
necessary or proper to be executed in the course of the
corporation's regular business or which shall be authorized
by resolution of the Board of Directors; and, except as
otherwise provided by law or the Board of Directors, the
Chief Executive Officer may authorize the President, an
Executive Vice President, Senior Vice President, or other
officer or agent of the corporation to sign, execute and
acknowledge such documents or instruments in the Chief
Executive Officer's place and stead. In general, the Chief
Executive Officer shall perform all duties incident to the
office of Chief Executive Officer and such other duties as
may be prescribed by the Board of Directors from time to
time. In the absence of the Chairman of the Board, the
Chief Executive Officer shall, when present, preside at all
meetings of the stockholders and the Board of Directors.
SECTION 7. President. The President shall direct,
administer and coordinate the activities of the corporation
in accordance with policies, goals and objectives
established by the Chief Executive Officer and the Board of
Directors. The President shall also assist the Chief
Executive Officer in the development of corporate policies
and goals. In the absence of both the Chairman of the
Board and the Chief Executive Officer, the President shall,
when present, preside at all meetings of the stockholders
and the Board of Directors.
SECTION 8. The Chief Operating Officer, Group Presidents
and the Vice Presidents. In the absence of the President
or in the event of the President's death, inability or
refusal to act, the Chief Operating Officer, the Group
Presidents and the Executive Vice Presidents in the order
designated at the time of their election, or, in the
absence of any designation, then in the order of their
election (or in the event there be no Chief Operating
Officer, Group Presidents or Executive Vice Presidents or
they are incapable of acting, the Senior Vice Presidents in
the order designated at the time of their election, or, in
the absence of any designation, then in the order of their
election) shall perform the duties of the President, and
when so acting shall have all the powers of and be subject
to all the restrictions upon the President. The Board of
Directors may designate certain Vice Presidents as being in
charge of designated divisions, plants, or functions of the
corporation's business and add appropriate description to
their title. Any Chief Operating Officer, Group President
or Vice President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the
corporation; and shall perform such other duties as from
time to time may be assigned to such Chief Operating
Officer, Group President or Vice President by the Chief
Executive Officer or by the Board of Directors.
SECTION 9. The Secretary. The Secretary shall: (a)
keep the minutes of the stockholders' and of the Board of
Directors' meetings in one or more books provided for that
purpose; (b) see that all notices are duly given in
accordance with the provisions of these Bylaws or as
required by law; (c) be custodian of the corporate records
and of the seal of the corporation and see that the seal of
the corporation is affixed to all documents, the execution
of which on behalf of the corporation under its seal is
duly authorized; (d) keep or cause to be kept a register of
the post office address of each stockholder which shall be
furnished to the Secretary by such stockholder; (e) sign
with the Chief Executive Officer, President, or any Vice
President, certificates for shares of the corporation, the
issuance of which shall have been authorized by resolution
of the Board of Directors; (f) have general charge of the
stock transfer books of the corporation; and (g) in
general, perform all duties incident to the office of
Secretary and such other duties as from time to time may be
assigned to the Secretary by the Chief Executive Officer or
by the Board of Directors.
SECTION 10. The Treasurer. The Treasurer shall give a
bond for the faithful discharge of the Treasurer's duties
in such sum and with such surety or sureties as the Board
of Directors shall determine. The Treasurer shall: (a)
have charge and custody of and be responsible for all funds
and securities of the corporation; receive and give
receipts for monies due and payable to the corporation from
any source whatsoever, and deposit all such monies in the
name of the corporation in such banks, trust companies or
other depositories as shall be selected in accordance with
the provisions of Article VI of these Bylaws; and (b) in
general, perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may
be assigned to the Treasurer by the Chief Executive Officer
or by the Board of Directors.
SECTION 11. The Controller. The Controller shall: (a)
keep, or cause to be kept, correct and complete books and
records of account, including full and accurate accounts of
receipts and disbursements in books belonging to the
corporation; and (b) in general, perform all duties
incident to the office of Controller and such other duties
as from time to time may be assigned to the Controller by
the Chief Executive Officer or by the Board of Directors.
SECTION 12. Assistant Secretaries and Assistant
Treasurers. The Assistant Secretaries may sign with the
President, or any Vice President, certificates for shares
of the corporation, the issuance of which shall have been
authorized by a resolution of the Board of Directors.
Assistant Treasurers shall respectively give bonds for the
faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine.
The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties as shall be assigned to
them by the Secretary or the Treasurer, respectively, or by
the Chief Executive Officer or the Board of Directors.
SECTION 13. Salaries. The salaries of the officers
shall be fixed from time to time by the Board of Directors
and no officer shall be prevented from receiving such
salary by reason of the fact that such officer is also a
director of the corporation.
ARTICLE V
APPOINTED EXECUTIVES
-----------------------------------
SECTION 1. Vice Presidents. The Chief Executive Officer
may appoint, from time to time, as the Chief Executive
Officer may see fit, and fix the compensation of, one or
more Vice Presidents whose title will include words
describing the function of such Vice President's office and
the group, division or other unit of the Company in which
such Vice President's office is located. Each of such
appointed Vice Presidents shall hold office during the
pleasure of the Chief Executive Officer, shall perform such
duties as the Chief Executive Officer may assign, and shall
exercise the authority set forth in the Chief Executive
Officer's letter appointing such Vice President.
SECTION 2. Assistants. The Chief Executive Officer may
appoint, from time to time, as the Chief Executive Officer
may see fit, and fix the compensation of, one or more
Assistants to the Chairman, one or more Assistants to the
President, and one or more Assistants to the Vice
Presidents, each of whom shall hold office during the
pleasure of the Chief Executive Officer, and shall perform
such duties as the Chief Executive Officer may assign.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
------------------------------------------------
SECTION 1. Contracts. The Board of Directors may
authorize any officer or officers, agent or agents, to
enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation,
and such authority may be general or confined to specific
instances.
SECTION 2. Loans. No loans shall be contracted on
behalf of the corporation and no evidences of indebtedness
shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may
be general or confined to specific instances.
SECTION 3. Checks, Drafts, etc. All checks, drafts or
other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the
corporation, shall be signed by such officer or officers,
agent or agents, of the corporation and in such manner as
shall from time to time be determined by resolution of the
Board of Directors.
SECTION 4. Deposits. All funds of the corporation not
otherwise employed shall be deposited from time to time to
the credit of the corporation in such banks, trust
companies or other depositories as the Board of Directors
may select.
ARTICLE VII
CERTIFICATE FOR SHARES AND THEIR TRANSFER
-------------------------------------------------------
SECTION 1. Certificates for Shares. Certificates
representing shares of the corporation shall be in such
form as shall be determined by the Board of Directors.
Such certificates shall be signed by the Chief Executive
Officer, President, or any Vice President and by the
Treasurer or an Assistant Treasurer, or the Secretary or an
Assistant Secretary. 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 such
person were such officer, transfer agent, or registrar at
the date of issue. All certificates for shares shall be
consecutively numbered or otherwise identified. The name
and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of
issue, shall be entered on the stock ledger of the
corporation.
All certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except
that in the case of a lost, destroyed or mutilated
certificate, a new one may be issued therefor upon such
terms and indemnity to the corporation as the Board of
Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of
the corporation shall be made only on the stock ledger of
the corporation by the holder of record thereof or by such
person's legal representative, who shall, if so required,
furnish proper evidence of authority to transfer, or by
such person's attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the
corporation, and on surrender for cancellation of the
certificate for such shares. The person in whose name
shares stand on the books of the corporation shall be
deemed by the corporation to be the owner thereof for all
purposes.
ARTICLE VIII
FISCAL YEAR
------------------
The fiscal year of the corporation shall begin on the
first day of November and end on the thirty-first day of
October in each year.
ARTICLE IX
DIVIDENDS
-----------------
The Board of Directors may from time to time declare, and
the corporation may pay, dividends on its outstanding
shares in the manner and upon the terms and conditions
provided by law and by the Articles of Incorporation.
ARTICLE X
SEAL
-------
The Board of Directors shall provide a corporate seal
which shall be circular in form and shall have inscribed
thereon the name of the corporation and the state of
incorporation and the words "Corporate Seal".
ARTICLE XI
WAIVER OF NOTICE
-----------------------------
Whenever any notice is required to be given to any
stockholder or director of the corporation under the
provisions of these Bylaws or under the provisions of the
Articles of Incorporation or under the provisions of the
Delaware General Corporation Law, a waiver thereof in
writing, signed at any time by the person or persons
entitled to such notice of the meeting, shall be deemed
equivalent to the giving of such notice.
ARTICLE XII
AMENDMENTS
---------------------
These Bylaws may be amended or repealed and new Bylaws
may be adopted by the Board of Directors at any regular or
special meeting thereof only with the affirmative vote of
at least 80% of the total number of Directors.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-END> APR-30-1997
<CASH> 45,378
<SECURITIES> 0
<RECEIVABLES> 798,914
<ALLOWANCES> 7,588
<INVENTORY> 601,532
<CURRENT-ASSETS> 1,604,397
<PP&E> 1,171,146
<DEPRECIATION> 511,501
<TOTAL-ASSETS> 2,909,963
<CURRENT-LIABILITIES> 1,101,600
<BONDS> 765,155
0
0
<COMMON> 51,462
<OTHER-SE> 708,498
<TOTAL-LIABILITY-AND-EQUITY> 2,909,963
<SALES> 1,493,989
<TOTAL-REVENUES> 1,515,312
<CGS> 1,132,583
<TOTAL-COSTS> 1,356,439
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 34,168
<INCOME-PRETAX> 124,705
<INCOME-TAX> 43,625
<INCOME-CONTINUING> 81,080
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 75,829
<EPS-PRIMARY> 1.59
<EPS-DILUTED> 1.59
</TABLE>
