<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Mark One
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
- -------- OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997.
- -------- 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 1-2677
QUAKER STATE CORPORATION
-------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 25-0742820
(State or other jurisdiction of (IRS Employer
incorporation of organization) Identification No.)
225 East John Carpenter Freeway
Irving, Texas 75062
(Address of Principal Executive Offices)
(Zip Code)
(972)868-0400
(Registrant's telephone number, including area code)
Not applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------------- ------------
As of April 30, 1997, 35,107,339 shares of Capital Stock, par value
$1.00 per share, of the registrant were outstanding.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CONDENSED CONSOLIDATED STATEMENT OF INCOME
Quaker State Corporation and Subsidiaries
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------
3/31/97 3/31/96
- ------------------------------------------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE DATA, UNAUDITED)
<S> <C> <C>
REVENUES
Sales and operating revenues $ 323,023 $ 278,781
Other, net 1,830 2,026
------------ ------------
TOTAL REVENUES 324,853 280,807
COSTS AND EXPENSES
Cost of sales and operating costs 213,373 187,112
Selling, general and administrative 83,016 73,197
Depreciation and amortization 10,568 8,399
Interest 6,331 2,168
Unusual item -- 475
------------ ------------
TOTAL COSTS AND EXPENSES 313,288 271,351
------------ ------------
Pretax income 11,565 9,456
Provision for income taxes 4,700 3,750
------------ ------------
NET INCOME $ 6,865 $ 5,706
============ ============
PER SHARE:
NET INCOME PER SHARE $ 0.20 $ 0.17
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 34,970 32,896
============ ============
DIVIDENDS PAID PER SHARE $ 0.10 $ 0.10
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
1
<PAGE> 3
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Quaker State Corporation and Subsidiaries
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------
3/31/97 3/31/96
- ---------------------------------------------------------------------------------------
(IN THOUSANDS, UNAUDITED)
<S> <C> <C>
NET CASH USED IN OPERATING ACTIVITIES $ (7,657) $ (988)
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from disposal of property and equipment 295 37
Capital expenditures (9,412) (16,752)
Acquisition of businesses, net of cash acquired (14,033) --
Other, net (4,762) (1,827)
---------- ----------
NET CASH USED IN INVESTING ACTIVITIES (27,912) (18,542)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES
Dividends paid (3,466) (3,284)
Proceeds from debt 24,717 175
Payments on debt (668) (3,087)
---------- ----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 20,583 (6,196)
---------- ----------
Net decrease in cash and cash equivalents (14,986) (25,726)
Cash and cash equivalents at beginning of period 29,397 30,659
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 14,411 $ 4,933
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE> 4
CONDENSED CONSOLIDATED BALANCE SHEET
Quaker State Corporation and Subsidiaries
<TABLE>
<CAPTION>
3/31/97 12/31/96
- -------------------------------------------------------------------------------------------
(IN THOUSANDS EXCEPT SHARE DATA) (unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 14,411 $ 29,397
Accounts and notes receivable, net 189,777 171,346
Inventories 125,047 113,970
Other current assets 24,987 26,518
------------ ------------
TOTAL CURRENT ASSETS 354,222 341,231
------------ ------------
Property, plant and equipment, net of accumulated
depreciation of $251,005 and $244,055 233,186 227,876
Goodwill, brands and other assets 484,957 467,729
------------ ------------
TOTAL ASSETS $ 1,072,365 $ 1,036,836
============ ============
LIABILITIES
Current liabilities:
Accounts payable $ 78,375 $ 73,959
Accrued liabilities 84,151 87,559
Debt payable within one year 16,610 17,337
Debt to be refinanced 167,000 142,000
------------ ------------
TOTAL CURRENT LIABILITIES 346,136 320,855
------------ ------------
Long-term debt 242,047 242,271
Other long-term liabilities 175,275 175,041
------------ ------------
TOTAL LIABILITIES 763,458 738,167
------------ ------------
STOCKHOLDERS' EQUITY
Capital stock, $1.00 par value; authorized shares, 95,000,000;
issued shares, 36,791,828 at 3/31/97 and
36,322,312 at 12/31/96 36,792 36,322
Additional capital 193,868 187,560
Retained earnings 106,879 103,480
Treasury Stock, at cost, 1,690,059 shares in 1997
and 1,593,582 shares in 1996 (26,605) (25,433)
Other, net (2,027) (3,260)
------------ ------------
Total stockholders' equity 308,907 298,669
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,072,365 $ 1,036,836
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 5
SEGMENT INFORMATION
Quaker State Corporation and Subsidiaries
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
3/31/97 3/31/96
- -------------------------------------------------------------------------------------------
(IN THOUSANDS, UNAUDITED)
<S> <C> <C>
REVENUES
Lubricants and lubricant services $ 229,695 $ 231,643
Consumer products 71,475 24,284
Truck-Lite 23,514 23,530
Intersegment sales (1,661) (676)
------------ ------------
TOTAL OPERATING REVENUES $ 323,023 $ 278,781
============ ============
OPERATING PROFITS
Lubricants and lubricant services $ 8,668 $ 12,081
Consumer products 12,191 2,580
Truck-Lite 1,827 2,010
------------ ------------
TOTAL OPERATING PROFITS 22,686 16,671
------------ ------------
Interest expense (6,331) (2,168)
Corporate income 190 751
Corporate expense (4,980) (5,323)
Unusual item -- (475)
------------ ------------
Total corporate expenses (4,980) (5,798)
------------ ------------
PRETAX INCOME $ 11,565 $ 9,456
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Quaker State Corporation and Subsidiaries (unaudited)
1. In the opinion of management of Quaker State Corporation (the company),
the accompanying financial statements include all adjustments which are
necessary for a fair statement of the results for such periods. All of
these adjustments are of a normal recurring nature. The December 31, 1996
condensed consolidated balance sheet was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles. These statements should be read in
conjunction with the financial statements included as part of the 1996
Annual Report on Form 10-K. Certain items in 1996 periods have been
reclassified to conform to the 1997 presentation.
2. The effective tax rates of 40.6% and 39.7% for the three month periods
ended March 31, 1997 and 1996 are higher than the 35% federal rate due to
the added impact of state and foreign taxes and nondeductible
amortization.
3. The following schedule is prepared on a pro forma basis as though Blue
Coral, Inc. (Blue Coral) and Medo Industries, Inc. and its affiliated
companies (Medo) had been acquired as of the beginning of 1996, after
including the impact of adjustments, such as amortization of goodwill,
brands and other intangible assets, interest expense and related tax
effects.
<TABLE>
<CAPTION>
For the quarter ended March 31, 1996 (in thousands except per share data)
--------------------------------------------------------------------------
<S> <C>
Revenues $ 329,184
Income from continuing operations 7,225
Income per share from continuing operations .21
--------------------------------------------------------------------------
</TABLE>
The pro forma results are not necessarily indicative of what would have
occurred if the acquisitions had been in effect for the period presented.
In addition, they are not intended to be a projection of future results.
4. Inventories are stated at the lower of cost or market. Cost is determined
on the last-in, first-out (LIFO) basis for crude oil and manufactured
products. For other inventories, such as purchased finished lubricating
oils and purchased automotive aftermarket products, cost is determined on
the first-in, first-out (FIFO) basis. The reserve to reduce the carrying
value of inventories from FIFO basis to LIFO basis amounted to $18.9
million at March 31, 1997 and $21 million at December 31, 1996.
<TABLE>
<CAPTION>
Inventories consist of:
------------------------------------------------------------------------
(in thousands) 3/31/97 12/31/96
------------------------------------------------------------------------
<S> <C> <C>
Crude oil, lubricants and related materials $ 85,524 $ 76,462
Consumer products 23,392 21,060
Vehicular lighting products 16,131 16,448
------------------------------------------------------------------------
Total $ 125,047 $ 113,970
------------------------------------------------------------------------
</TABLE>
5
<PAGE> 7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. In 1996, the Federal Trade Commission (FTC) filed an administrative
proceeding seeking an order that the company's subsidiary, Slick 50, cease
from making certain product claims and refrain from making other product
claims without adequate substantiation. In addition, class action suits
were filed against Slick 50 alleging false, misleading, deceptive and/or
unsubstantiated claims relating to Slick 50(R) engine treatment. These
actions seek damages on behalf of the purported consumer classes. The
company is vigorously defending the FTC proceeding and the lawsuits.
The company has received notices from the EPA and others that it is a
"potentially responsible party" relative to certain waste disposal sites
identified by the EPA and may be required to share in the cost of cleanup.
The company has accrued for all matters which are probable and can be
reasonably estimated.
Contingent liabilities of an indeterminate amount exist in connection with
suits and claims arising in the ordinary course of business.
In the opinion of management, all matters discussed above are adequately
accrued for or covered by insurance, or, if not so provided for, are
without merit or the disposition is not anticipated to have a material
effect on the company's financial position; however, one or more of these
matters could have a material effect on future quarterly or annual results
of operations when resolved.
6. In April 1997, the company announced that it had signed a letter of intent
to sell its Newell, West Virginia refinery to Ergon, Inc. Included in the
sale are the company's oil gathering and pipeline facilities in Ohio and
Pennsylvania. The transaction is subject to the execution of a definitive
agreement and completion of customary closing conditions including normal
regulatory approvals.
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
The condensed consolidated financial statements, segment information and
related notes for Quaker State Corporation (the company) included in this Form
10-Q, should be read as an integral part of this analysis.
The company reported net income of $6.9 million or $.20 per share for the
quarter ended March 31, 1997, compared to net income of $5.7 million or $.17
per share for the quarter ended March 31, 1996. Sales and operating revenues
were $323 million for the quarter ended March 31, 1997 and $278.8 million for
the quarter ended March 31, 1996. These increases are due to the inclusion of
Blue Coral, Inc. (Blue Coral) and Medo Industries, Inc. and its affiliated
companies (Medo), which were acquired in 1996. The increases were offset by
lower revenues in the lubricants business due to soft retail market conditions.
Operating profit for the quarter ended March 31, 1997, increased 36% to $22.7
million from $16.7 million for the quarter ended March 31, 1996.
6
<PAGE> 8
Management's Discussion and Analysis of Results of Operations and Financial
Condition, continued
Lubricants and lubricant services operating profit was $8.7 million for the
quarter ended March 31, 1997, compared to $12.1 million for the quarter ended
March 31, 1996. This decrease is primarily due to poor refining margins, which
resulted in a $2.8 million decline in operating profit. Revenues for the
quarter ended March 31, 1997 were $229.7 million, down 1% from $231.6 million
for the quarter ended March 31, 1996. This decline reflects a 4% decrease in
motor oil volume partially offset by 1% increases in car counts and average
ticket prices at the company's Q Lube operations.
Consumer Products operating profit was $12.2 million for the quarter ended
March 31, 1997, compared to $2.6 million for the quarter ended March 31, 1996.
Revenues for the quarter ended March 31, 1997 were $71.5 million, compared to
$24.3 million for the quarter ended March 31, 1996. These increases are due to
the inclusion of Blue Coral and Medo in 1997.
Truck-Lite operating profit for the quarter ended March 31, 1997 was $1.8
million compared to $2 million for the quarter ended March 31, 1996. Revenues
were flat at $23.5 million for the quarter ended March 31, 1997. The decrease
in operating profits is due to planned additional sales and marketing costs
associated with the aftermarket business.
For the quarter ended March 31, 1997, corporate income was $190,000 compared to
$751,000 for the quarter ended March 31, 1996. The decrease is due to royalties
and interest received on the long-term receivable settled in December 1996.
Interest expense increased for the quarter ended March 31, 1997 as a result of
utilizing debt in recent acquisitions. Corporate expenses decreased to $5
million from $5.3 million for the quarter ended March 31, 1996.
The effective tax rate of 40.6% for continuing operations is higher than the
35% federal rate due to the added impact of state and foreign taxes and
nondeductible amortization.
In April 1997, the company announced that it had signed a letter of intent to
sell its Newell, West Virginia refinery to Ergon, Inc. Included in the sale are
the company's oil gathering and pipeline facilities in Ohio and Pennsylvania.
The company plans to continue to operate the blending and packaging facility
adjacent to the refinery. The transaction is subject to the execution of a
definitive agreement and completion of customary closing conditions including
normal regulatory approvals.
Cash and cash equivalents decreased by $15 million from December 31, 1996. The
decrease was comprised of $7.7 million of net cash used in operations, $27.9
million net cash used in investing activities and $20.6 million net cash
provided by financing activities. Cash used in operations was impacted by
additional working capital requirements, specifically increases in accounts
receivable and inventory.
Cash used in investing activities of $27.9 million was primarily due to $9.4
million in capital expenditures and $14 million used in acquisitions. Cash
provided by financing activities of $20.6 million was primarily due to working
capital needs and acquisitions made in the quarter.
The company expects to refinance a portion of its debt in 1997 through a
capital stock offering or long-term financing. This forward looking statement
is contingent upon the market price of the company's stock, obtaining an
underwriter and/or the negotiation of a favorable financing agreement.
7
<PAGE> 9
Management's Discussion and Analysis of Results of Operations and Financial
Condition, continued
On April 24, 1997 the Board of Directors of the company authorized a quarterly
dividend of $.10 per share, payable to shareholders of record as of May 15,
1997.
In February 1997, the Financial Accounting Standards Board issued Standard No.
128, "Earnings Per Share," which will require the company to calculate and
disclose earnings per share using the guidance set forth in the Standard. The
new Standard is effective for financial statements issued after December 15,
1997. The company does not expect the adoption of the new standard to have a
material impact on earnings per share.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Federal Trade Commission filed an administrative proceeding on July 16,
1996 seeking an order that Quaker State Slick 50, Inc. ("Slick 50"), a
subsidiary of the company, and several Slick 50 subsidiaries cease and desist
from making certain product claims and refrain from making other product claims
without adequate substantiation. The respondents in the FTC proceeding and
Quaker State in some instances were later named as defendants in ten lawsuits
filed on behalf of purported classes of purchasers of Slick 50(R) engine
treatment alleging that false, misleading, deceptive and /or unsubstantiated
advertising claims were made for Slick 50(R) engine treatment. The
representative plaintiffs in such actions, the date of filing and the court in
which each suit is pending are, respectively:
a) Torres, July 18, 1996, the District Court for Harris County, Texas;
b) Lombardi, July 19, 1996, U.S. District Court for the Eastern District
of New York;
c) Weiss, July 23, 1996, U.S. District Court for the Southern District
of New York;
d) Hargett, September 24, 1996, U.S. District Court for the Northern
District of Alabama;
e) Kerksieck, October 11, 1996, the Superior Court for San Francisco
County, California;
f) Davis, November 18, 1996, U.S. District Court for the Northern
District of Alabama;
g) Raysik, December 5, 1996, filed in the District Court of Dallas
County, Texas;
h) Hammack, December 19, 1996, the Circuit Court of Franklin County,
Alabama;
i) Mayo, February 5, 1997, Circuit Court of Cook County, Illinois; and
j) Garza, March 14, 1997, District Court of Hidalgo County, Texas.
The complaints allege claims in various combinations for fraud, deceit,
negligent misrepresentation, and violation of certain state consumer protection
laws and seek compensatory and punitive damages, imposition of a constructive
trust, restitution and injunctive relief, attorneys' fees, court costs and
interest on behalf of the purported classes. Another proceeding, filed by Henri
Carnal on December 20, 1996 in the Superior Court for San Francisco County,
California, pursuant to the California Business and Professions Code was
dismissed without prejudice on April 9, 1997. The company is vigorously
defending all of these lawsuits.
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<PAGE> 10
Item 5. Other information
On April 3, 1997, the company announced that it had signed a letter of intent
to sell its Newell, West Virginia refinery to Ergon, Inc. of Jackson,
Mississippi. Included in the sale are the company's oil gathering and pipeline
facilities in Ohio and Pennsylvania. The company plans to continue to operate
the blending and packaging facility adjacent to the refinery. The transaction
is subject to the execution of a definitive agreement and completion of
customary closing conditions, including normal regulatory approvals.
Item 6. Exhibits and Reports on Form 8-K
(a) 3 Bylaws of the Company, as amended and restated on March 27, 1997,
filed herewith.
11 Computation of Net Income per Share for the three month periods
ended March 31, 1997 and 1996, filed herewith.
27 Financial Data Schedule, filed herewith.
(b) No current reports on Form 8-K were filed by the company during the
quarter ending March 31, 1997.
9
<PAGE> 11
QUAKER STATE CORPORATION AND SUBSIDIARIES
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.
QUAKER STATE CORPORATION
(Registrant)
Date 5/13/97 By /s/ Herbert M. Baum
------------ ------------------------------------
Herbert M. Baum
Chairman of the Board and
Chief Executive Officer
Date 5/13/97 By /s/ Conrad A. Conrad
------------- -----------------------------------
Conrad A. Conrad
Vice Chairman and
Chief Financial Officer
10
<PAGE> 12
QUAKER STATE CORPORATION
EXHIBIT LIST
The following Exhibits are required to be filed with this quarterly
report on Form 10-Q.
Exhibit No. and Document
3. Bylaws of the Company, as amended and restated on March 27, 1997,
filed herewith.
11. Computation of Net Income Per Share for the three month periods
ended March 31, 1997 and 1996, filed herewith.
27. Financial Data Schedule, filed herewith.
11
<PAGE> 1
EXHIBIT 3
QUAKER STATE CORPORATION
BYLAWS
As amended and restated on March 27, 1997
ARTICLE I
STOCKHOLDERS
Section 1.1. Time and Place of Meetings. All meetings of the
stockholders for the election of directors or for any other purpose shall be
held at such time and place, within or without the State of Delaware, as may be
designated by the Board of Directors, or in the absence of a designation by the
Board of Directors, by the Chairman of the Board, the Chief Executive Officer,
the President or the Secretary, and as may be stated in the notice of the
meeting or in a duly executed waiver of notice thereof.
Section 1.2. Annual Meetings. The annual meeting of the stockholders
of the Corporation for the election of directors and for the transaction of
such other business as properly may come before such meeting shall be held at
such place, either within or without the State of Delaware, and at 1:00 p.m.
local time on the last Thursday of May (or, if such day is a legal holiday,
then on the next succeeding business day), or at such other date and time as
may be fixed from time to time by resolution of the Board of Directors and set
forth in the notice of meeting or a duly executed waiver of notice thereof. At
the annual meeting, the stockholders shall elect by a plurality vote the
directors to succeed those whose terms expire at that meeting and shall
transact such other business as may properly be brought before the meeting.
Section 1.3. Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may only be called by the Chairman of the Board,
by the Board of Directors pursuant to a resolution adopted by a majority of the
total number of authorized directors, by the President or by the Secretary.
Section 1.4. Notice of Meetings; Waiver. The Secretary or any
Assistant Secretary shall cause written notice of the place, date and hour of
each meeting of the stockholders, and, in the case of a special meeting, the
purpose or purposes for which such meeting is called, to be given personally or
by mail, not less than ten nor more than sixty days prior to the meeting, to
each stockholder of record entitled to vote at such meeting.
<PAGE> 2
Section 1.5. Quorum. Except as otherwise required by law or by the
Certificate of Incorporation, the presence in person or by proxy of the holders
of record of a majority of the shares entitled to vote at a meeting of
stockholders shall constitute a quorum for the transaction of business at such
meeting.
Section 1.6. Voting. Every holder of record of shares entitled to vote
at a meeting of stockholders shall be entitled to one vote for each share
outstanding in the name of such stockholder on the books of the Corporation
at the close of business on the record date for the meeting. Except as
otherwise required by law or by the Certificate of Incorporation, the vote of a
majority of the shares represented in person or by proxy at any meeting at
which a quorum is present shall be sufficient for the transaction of any
business at such meeting. No vote of the stockholders need be taken by written
ballot unless otherwise required by law.
Section 1.7. Adjournment. If a quorum is not present at any meeting of
the stockholders, the stockholders present in person or by proxy shall have the
power to adjourn any such meeting from time to time until a quorum is present.
Notice of any adjourned meeting of the stockholders of the Corporation need not
be given if the place, date and hour thereof are announced at the meeting at
which the adjournment is taken, provided, however, that if the adjournment is
for more than thirty days, or if after the adjournment a new record date for
the adjourned meeting is fixed, a notice of the adjourned meeting, conforming
to the requirements of Section 1.4 hereof, shall be given to each stockholder
of record entitled to vote at such meeting. At any adjourned meeting at which a
quorum is present, any business may be transacted that might have been
transacted on the original date of the meeting.
Section 1.8. Proxies. Any stockholder entitled to vote at any meeting
of the stockholders or to express consent to or dissent from corporate action
without a meeting may authorize another person or persons to vote at any such
meeting and express such consent or dissent for him by proxy. No such proxy
shall be voted or acted upon after the expiration of three years from the date
of such proxy, unless it provides for a longer period. Every proxy shall be
revocable at the pleasure of the stockholder executing it, except in those
cases where applicable law provides that a proxy shall be irrevocable. A
stockholder may revoke any proxy that is not irrevocable by attending the
meeting and voting in person, by filing an instrument in writing revoking the
proxy or by filing another duly executed proxy bearing a later date with the
Secretary.
Section 1.9. Nomination of Directors. Only persons who are
nominated in accordance with the procedures set forth in this Section 1.9 shall
be eligible for election as directors of the Corporation.
(a) Nominations of persons for election to the Board of Directors of
the Corporation may be made at any annual meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder of the Corporation
entitled to vote for the election of directors at the meeting who was a
stockholder of record at the time of giving of notice provided for in this
Section 1.9(a) and who complies with the notice procedures set forth in this
Section 1.9(a). Any such nomination by a stockholder shall be made pursuant to
timely notice in writing to the Secretary of the Corporation. To be timely
notice for an annual meeting, a stockholder's notice shall be delivered to the
Secretary of the Corporation at the principal
2
<PAGE> 3
executive offices of the Corporation not less than 60 days nor more than 90
days prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the 90th day prior to such annual meeting and not later than
the close of business on the later of the 60th day prior to such annual meeting
or the 10th day following the day on which public announcement (as defined in
Article I, Section 1.10) of the date of such meeting is first made.
Notwithstanding anything in the foregoing sentence to the contrary, in the
event that the number of directors to be elected to the Board of Directors of
the Corporation is increased and there is no public announcement naming all of
the nominees for director or specifying the size of the increased Board of
Directors made by the Corporation at least 70 days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's notice
required by this Section 1.9(a) shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary of the Corporation at the principal executive
offices of the Corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by the
Corporation. Such stockholder's notice shall set forth in writing (i) as to
each person whom the stockholder proposes to nominate for election or
re-election as a director (A) the name, age, business address and residence of
such person, (B) the principal occupation or employment of such person, (C) the
number of shares of stock of the Corporation that are beneficially owned by
such person, and (D) any other information relating to such person that is
required to be disclosed in connection with the solicitation of proxies for the
election of directors, or as otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including, without limitation, such person's written consent
to being named in a proxy statement as a nominee and to serving as a director
if elected); and (ii) as to the stockholder giving the notice and the
beneficial owner, if any, on whose behalf the nomination is made (A) the name
and address of such stockholder, as they appear on the Corporation's books, and
of such beneficial owner and (B) the class and number of shares of the
Corporation which are owned beneficially and of record by such stockholder and
such beneficial owner.
(b) Nominations of persons for election to the Board of Directors of
the Corporation may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting (i)
by or at the direction of the Board of Directors or (ii) provided that the
Board of Directors has determined that one or more directors shall be elected
at such special meeting, by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice provided for in this
Section 1.9(b), who shall be entitled to vote at the meeting and who complies
with the notice procedures set forth in this Section 1.9(b). To be timely
notice for a special meeting, a stockholder's notice must be delivered to the
Secretary of the Corporation at the principal executive offices of the
Corporation not earlier than the 90th day prior to such special meeting and not
later than the close of business on the later of the 60th day prior to such
special meeting or the 10th day following the day on which public announcement
(as defined in Article I, Section 1.10) is first made of the date of the
special meeting and of the nominee(s) proposed by the Board of Directors to be
elected at such meeting.
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(c) At the request of the Board of Directors, any person nominated by
the Board of Directors for election as a director shall furnish to the
Secretary of the Corporation that information pertaining to the nominee which
is required to be set forth in a stockholder's notice of nomination. The
Chairman of the Board, or in his or her absence the Chief Executive Officer,
the President, any Vice President or the Secretary, shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by these Bylaws, and in that event
the defective nomination shall be disregarded.
Section 1.10. Transaction of Business. To be properly brought before
an annual meeting of stockholders, business must be (a) specified in the notice
of meeting (or any supplement thereto) given by or at the direction of the
Board of Directors, (b) otherwise properly brought before the meeting by or at
the direction of the Board of Directors, or (c) otherwise properly brought
before the meeting by a stockholder of the Corporation who was a stockholder of
record at the time of giving of notice provided for in this Section 1.10, who
is entitled to vote at the meeting and who complied with the notice procedures
set forth in this Section 1.10. For business to be properly brought before an
annual meeting by a stockholder, if such business is related to any matter
other than the election of directors of the Corporation, the stockholder must
have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be delivered in
accordance with the procedures in Section 1.9(a) applicable to a stockholder's
nomination of directors at an annual meeting. Such stockholder's notice shall
set forth in writing as to each matter the stockholder proposes to bring before
the annual meeting (i) a brief description of the business desired to be
brought before the annual meeting, the reasons for conducting such business at
the annual meeting, and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (ii) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the proposal is made (A) the name and address of
such stockholder, as they appear on the Corporation's books, and of such
beneficial owner and (B) the class and number of shares of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner. Notwithstanding anything in these Bylaws to the contrary, no
business shall be conducted at any annual meeting except in accordance with the
procedures set forth in this Section 1.10. The Chairman of the Board, or in his
or her absence the Chief Executive Officer, the President, any Vice President
or the Secretary, shall, if the facts warrant, determine and declare to the
meeting that business was not properly brought before the meeting in accordance
with the provisions of this Section 1.10, and in that event the business shall
not be transacted. For purposes of this Section 1.10 and Article I, Section
1.9, "public announcement" shall mean disclosure in a press release reported by
the Dow Jones News Service, Associated Press or comparable national news
service or in a document publicly filed by the Corporation with the Securities
and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act. In addition to the provisions of this Section 1.10, a stockholder also
shall comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth herein.
Nothing in these Bylaws shall be deemed to affect any rights of stockholders to
request inclusion of proposals in the Corporation's proxy statement pursuant to
Rule 14a-8 under the Exchange Act.
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Section 1.11. Inspectors of Elections. Prior to any meeting of the
stockholders, the Board of Directors shall appoint one or more persons to act
as inspectors of elections, and may designate one or more alternate inspectors.
In the event no inspector or alternate is able to act, the person presiding at
the meeting shall appoint one or more inspectors to act at the meeting. Each
inspector, before entering upon the discharge of the duties of an inspector,
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:
(a) ascertain the number of shares outstanding and the voting
power of each;
(b) determine the shares represented at a meeting and the
validity of proxies and ballots;
(c) count all votes and ballots;
(d) determine and retain for a reasonable period a record of the
disposition of any challenges made to any determination by the inspectors; and
(e) certify his or her determination of the number of shares
represented at the meeting, and his or her count of all votes and ballots.
The inspector may appoint or retain other persons or entities to assist in the
performance of the duties of inspector.
When determining the shares represented and the validity of proxies
and ballots, the inspector shall be limited to an examination of the proxies,
any envelopes submitted with those proxies, any information provided in
accordance with Section 1.8 of these Bylaws, ballots and the regular books and
records of the Corporation. The inspector may consider other reliable
information for the limited purpose of reconciling proxies and ballots
submitted by or on behalf of banks, brokers or their nominees or a similar
person which represent more votes than the holder of a proxy is authorized by
the record owner to cast or more votes than the stockholder holds of record. If
the inspector considers other reliable information as outlined in this section,
the inspector, at the time of his or her certification pursuant to paragraph
(e) of this section shall specify the precise information considered, the
person or persons from whom the information was obtained, when this information
was obtained, the means by which the information was obtained, and the basis
for the inspector's belief that such information is accurate and reliable.
Section 1.12. Opening and Closing of Polls. The date and time for the
opening and the closing of the polls for each matter to be voted upon at a
meeting of stockholders shall be announced at the meeting. The inspector of the
election shall be prohibited from accepting any ballots, proxies or votes or
any revocations thereof or changes thereto after the closing of the polls,
unless the Court of Chancery upon application by a stockholder shall determine
otherwise.
Section 1.13. Consent of Stockholders in Lieu of Meeting. (a) Unless
otherwise provided in the Certificate of Incorporation, any action required or
permitted to be taken at
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any annual or special meeting of the stockholders of the Corporation may,
subject to the provisions of this Section 1.13, be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing,
setting forth the actions so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted and shall be delivered to the
Corporation. Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
(b) Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within 60 days of the
earliest dated consent delivered to the Corporation, written consents signed by
a sufficient number of holders to take such action are delivered to the
Corporation.
(c) The record date for determining stockholders entitled to consent
to corporate action in writing without a meeting shall be fixed by the Board of
Directors. Any stockholder seeking to have the stockholders authorize or take
corporate action by written consent without a meeting shall, by written notice
to the Secretary of the Corporation, request the Board of Directors to fix a
record date. Upon receipt of such a request, the Secretary of the Corporation
shall, as promptly as practicable, direct the Chairman of the Board, the Chief
Executive Officer or the President to call a special meeting of the Board of
Directors to be held as promptly as practicable, but in any event not more than
10 days following the date of receipt of such a request. At such a meeting, the
Board of Directors shall fix a record date, which shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which shall not be more than 10 days after the date on which the
resolution fixing the record date is adopted by the Board of Directors. Notice
of the record date shall be published in accordance with the rules and policies
of any stock exchange on which securities of the Corporation are then listed
or, if the securities of the Corporation are not listed on a stock exchange,
then in accordance with the rules and policies of the National Association of
Securities Dealers Automatic Quotation National Market System. If no record
date has been so fixed by the Board of Directors, the record date for
determining the stockholders entitled to consent to corporate action in writing
without a meeting, where no prior action by the Board of Directors is required
by the Delaware General Corporation 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. If no date has been fixed by the Board of
Directors and prior action by the Board of Directors is required by the
Delaware General Corporation 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 day on which the Board of Directors adopts the
resolution taking such prior action.
(d) In the event of the delivery to the Corporation of a written
consent or consents purporting to represent the requisite voting power to
authorize or take corporate action and/or related revocations, the Secretary of
the Corporation shall provide for the safekeeping of such consents and
revocations and shall, as promptly as practicable, engage inspectors for the
purpose of promptly performing a ministerial review of the validity of the
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consents and revocations. No action by written consent without a meeting shall
be effective until such inspectors have completed their review, determined that
the requisite number of valid and unrevoked consents has been obtained to
authorize or take actions specified in the consents and certified such
determination for entry in the records of the Corporation for the purpose of
recording the proceedings of meetings of the stockholders.
(e) For purposes of this Section 1.13, delivery to the Corporation
shall be effected by delivery to its registered office in the State of
Delaware, its principal place of business, or an 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.
ARTICLE II
BOARD OF DIRECTORS
Section 2.1. General Powers. Except as may otherwise be provided by
law, by the Certificate of Incorporation or by these Bylaws, the property,
affairs and business of the Corporation shall be managed by or under the
direction of the Board of Directors, and the Board of Directors may exercise
all the powers of the Corporation.
Section 2.2. Number and Term of Office. The number of Directors
constituting the entire Board of Directors shall be fourteen, which number may
be modified from time to time by resolution of the Board of Directors, provided
that the number of Directors shall in no event be less than one. Each Director
(whenever elected) shall hold office until his or her successor has been duly
elected and qualified, or until his or her earlier death, resignation,
retirement or removal.
Section 2.3. Election of Directors. Except as otherwise provided in
Section 2.12 of these Bylaws, the Directors shall be elected at each annual
meeting of the stockholders. If the annual meeting for the election of
Directors is not held on the date designated therefor, the Directors shall
cause the meeting to be held as soon thereafter as convenient. At each meeting
of the stockholders for the election of Directors, provided a quorum is
present, the Directors shall be elected by a plurality of the votes validly
cast in such election.
Section 2.4. Annual and Regular Meetings. The annual meeting of the
Board of Directors for the purpose of electing officers and for the transaction
of such other business as may come before the meeting shall be held as soon as
practical following adjournment of the annual meeting of the stockholders at
the place of such annual meeting of the stockholders. Notice of such annual
meeting of the Board of Directors need not be given. The Board of Directors
from time to time may by resolution provide for the holding of regular meetings
and fix the place (which may be within or without the State of Delaware) and
the date and hour of such meetings. Notice of regular meetings need not be
given.
Section 2.5. Special Meetings; Notice. Special meetings of the Board
of Directors shall be held whenever called by the Chairman of the Board, the
Chief Executive Officer or
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the President or, in the event of their absence or disability, by any Vice
President or the Secretary, or by the Secretary upon the request of four
Directors, at such place (within or without the State of Delaware), date and
hour as may be specified in the respective notices or waivers of notice of such
meetings. Special meetings of the Board of Directors may be called on 24 hours'
notice, if notice is given to each Director personally, by telephone or by
electronic means, or on five days' notice, if notice is mailed to each
Director, addressed to the Director at his or her usual place of business.
Section 2.6. Quorum; Voting. At all meetings of the Board of
Directors, the presence of a majority of the total authorized number of
Directors shall constitute a quorum for the transaction of business. Except as
otherwise required by law, the Certificate of Incorporation or these Bylaws,
the vote of a majority of the Directors present at any meeting at which a
quorum is present shall be the act of the Board of Directors.
Section 2.7. Adjournment. A majority of the Directors present, whether
or not a quorum is present, may adjourn any meeting of the Board of Directors
to another time or place. No notice need be given of any adjourned meeting
unless the time and place of the adjourned meeting are not announced at the
time of adjournment, in which case notice conforming to the requirements of
Section 2.5 shall be given to each Director.
Section 2.8. Action Without a Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors may be taken
without a meeting if all members of the Board of Directors consent thereto in
writing, and such writing or writings are filed with the minutes of proceedings
of the Board of Directors.
Section 2.9. Regulations; Manner of Acting. To the extent consistent
with applicable law, the Certificate of Incorporation and these Bylaws, the
Board of Directors may adopt such rules and regulations for the conduct of
meetings of the Board of Directors and for the management of the property,
affairs and business of the Corporation as the Board of Directors may deem
appropriate. The Directors shall act only as a Board, and the individual
Directors shall have no power as such.
Section 2.10. Meeting by Telephonic Communications. Members of the
Board of Directors may participate in a meeting of the Board of Directors by
means of conference telephone or similar communications equipment through which
all persons participating in the meeting can hear each other. Participation in
a meeting pursuant to this provision shall constitute presence in person at
such meeting.
Section 2.11. Resignations; Retirement. Any Director may resign at any
time by delivering a written notice of resignation, signed by such Director, to
the Chairman of the Board, the Chief Executive Officer, the President or the
Secretary. Unless otherwise specified therein, such resignation shall take
effect upon delivery. A Director who is not and never has been an officer of
the Corporation, and any Director who has served as Chief Executive Officer of
the Corporation, and in each instance, who has served as a Director for at
least ten years as of his or her 70th birthday, shall retire from the Board of
Directors not later than the date of the annual meeting of stockholders next
following his or her 70th birthday. A Director who is not and never has been an
officer of the Corporation, and any
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Director who has served as Chief Executive Officer of the Corporation, and in
each instance, who has not served as a Director at least ten years as of his or
her 70th birthday, shall retire from the Board of Directors not later than the
date of the annual meeting of stockholders next following his or her 72nd
birthday. A Director who is or has been an officer of the Corporation other
than the Chief Executive Officer shall retire from the Board of Directors not
later than the earlier of the date of the annual meeting of stockholders next
following his or her 65th birthday or the date of his or her retirement as an
employee of the Corporation.
Section 2.12. Vacancies and Newly Created Directorships. If any
vacancy shall occur in the Board of Directors, by reason of death, resignation,
retirement, removal or otherwise, or if the authorized number of Directors
shall be increased, the Directors then in office shall continue to act, and any
such vacancy or newly created directorship may be filled by a majority of the
Directors then in office, although less than a quorum. A Director elected to
fill a vacancy or a newly created directorship shall hold office until his
successor has been elected and qualified or until his or her earlier death,
resignation, retirement or removal. Any such vacancy or newly created
directorship may also be filled at any time by vote of the stockholders.
Section 2.13. Compensation and Stock Ownership. The Board of Directors
shall fix from time to time by resolution the compensation, if any, which each
Director shall be entitled to receive for service as such. Beginning no later
than three years following election to the Board of Directors, a Director shall
own at least 5,000 shares of the Corporation's capital stock at all times while
serving as a Director.
ARTICLE III
EXECUTIVE COMMITTEE AND OTHER COMMITTEES
Section 3.1. How Constituted. The Board of Directors may, by
resolution adopted by a majority of the whole Board, designate one or more
Committees, including an Executive Committee, each such Committee to consist of
such number of Directors as from time to time may be fixed by the Board of
Directors. The Board of Directors may designate one Director as Chairman of any
such Committee. Thereafter, members and Chairmen of each such Committee may be
designated at the annual meeting of the Board of Directors. Any such Committee
may be abolished or re-designated from time to time by the Board of Directors.
Each member of any such Committee (whether designated at an annual meeting of
the Board of Directors or to fill a vacancy or otherwise) shall hold office
until his or her successor shall have been designated or until he or she shall
cease to be a Director, or until his or her earlier death, resignation,
retirement or removal.
Section 3.2. Powers. During the intervals between the meetings of the
Board of Directors, the Executive Committee, except as otherwise provided in
this section, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the property, affairs and business of
the Corporation, including the power to declare dividends and to authorize the
issuance of stock. Each such other Committee, except as otherwise provided in
this section, shall have and may exercise such powers of the Board of
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Directors as may be provided by resolution or resolutions of the Board of
Directors. The power and authority of the Executive Committee and any such
other Committee shall be subject to the provisions of Section 141(c) of the
Delaware General Corporation Law and any successor provisions. The Executive
Committee shall have, and any such other Committee may be granted by the Board
of Directors, power to authorize the seal of the Corporation to be affixed to
any or all papers which may require it.
Section 3.3. Proceedings and Minutes. Each such Committee may fix its
own rules of procedure and may meet at such place (within or without the State
of Delaware), at such time and upon such notice, if any, as it shall determine
from time to time. Each such Committee shall keep minutes of its proceedings
and shall report such proceedings to the Board of Directors at the meeting of
the Board of Directors next following any such proceedings.
Section 3.4. Quorum and Manner of Acting. Except as may be otherwise
provided in the resolution creating such Committee, at all meetings of any
Committee the presence of members constituting a majority of the total
authorized membership of such Committee shall constitute a quorum for the
transaction of business. The act of the majority of the members present at any
meeting at which a quorum is present shall be the act of such Committee. Any
action required or permitted to be taken at any meeting of any such Committee
may be taken without a meeting, if all members of such Committee shall consent
to such action in writing and such writing or writings are filed with the
minutes of the proceedings of the Committee. The members of any such Committee
shall act only as a Committee, and the individual members of such Committee
shall have no power as such.
Section 3.5. Meeting by Telephonic Communications. Members of any
Committee designated by the Board of Directors may participate in a meeting of
such Committee by means of conference telephone or similar communications
equipment through which all persons participating in the meeting can hear each
other.
Participation in a meeting pursuant to this provision shall constitute presence
in person at such meeting.
Section 3.6. Absent or Disqualified Members. In the event of the
absence or disqualification of a member of any Committee, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member.
Section 3.7. Resignations. Any member (and any alternate member) of
any Committee may resign at any time by delivering a written notice of
resignation, signed by such member, to the Chairman of the Board, the Chief
Executive Officer, the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery.
Section 3.8. Removal. Any member (and any alternate member) of any
Committee may be removed at any time, either for or without cause, by
resolution adopted by a majority of the whole Board of Directors.
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Section 3.9. Vacancies. If any vacancy shall occur in any Committee,
by reason of disqualification, death, resignation, retirement, removal or
otherwise, the remaining members (and any alternate members) shall continue to
act, and any such vacancy may be filled by the Board of Directors.
Section 3.10. Compensation. The Board of Directors shall fix from time
to time by resolution the compensation, if any, which each Director shall be
entitled to receive for service as a member or as Chairman of any Committee.
ARTICLE IV
OFFICERS
Section 4.1. Number. The officers of the Corporation shall be chosen
by the Board of Directors and shall be a President, one or more Vice
Presidents, a Secretary and a Treasurer. The Board of Directors also may elect
a Chairman of the Board, a Chief Executive Officer and one or more Vice
Chairmen, Assistant Secretaries and Assistant Treasurers. Any number of offices
may be held by the same person. The President and the Chief Executive Officer,
if any, shall be chosen from the members of the Board of Directors, but no
other officer need be a Director of the Corporation.
Section 4.2. Election. Unless otherwise determined by the Board of
Directors, the officers of the Corporation shall be elected by the Board of
Directors at the annual meeting of the Board of Directors, and shall be elected
to hold office until the next succeeding annual meeting of the Board of
Directors. In the event of the failure to elect officers at such annual
meeting, officers may be elected at any regular or special meeting of the Board
of Directors. Each officer shall hold office until his or her successor has
been elected and qualified, or until his or her earlier death, resignation,
retirement or removal.
Section 4.3. Removal and Resignation; Vacancies. Any officer may be
removed for or without cause at any time by the Board of Directors. Any officer
may resign at any time by delivering a written notice of resignation, signed by
such officer, to the Board of Directors, the Chairman of the Board, the Chief
Executive Officer, the President or the Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery. Any vacancy
occurring in any office of the Corporation by death, resignation, retirement,
removal or otherwise, may be filled by the Board of Directors, by the Chief
Executive Officer or if there be none, by the President, subject to
ratification by the Board of Directors at its next regular meeting.
Section 4.4. Authority and Duties of Officers. The officers of the
Corporation shall have such authority and shall exercise such powers and
perform such duties as may be specified in these Bylaws, as may be specified
from time to time by the Board of Directors in a resolution that is not
inconsistent with these Bylaws, or as are customarily incident to the
respective officers' offices, except that in any event, each officer shall
exercise such powers and perform such duties as may be required by law.
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Section 4.5. Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors and
shall have such other duties and responsibilities as may be assigned by the
Board of Directors. The Chairman of the Board may delegate to any qualified
person authority to chair any meeting of the stockholders, either on a
temporary or a permanent basis.
Section 4.6. Chief Executive Officer. The Chief Executive Officer
shall be responsible for the active management and direction of the business
and affairs of the Corporation. In case of the inability or failure of the
Chairman of the Board to perform the duties of that office, the Chief Executive
Officer shall perform the duties of the Chairman of the Board, unless otherwise
determined by the Board of Directors.
Section 4.7. President. In the event that no Chief Executive Officer
has been elected by the Board of Directors, the President shall perform the
duties of the Chief Executive Officer, unless otherwise determined by the Board
of Directors.
Section 4.8. Vice Chairman. Any Vice Chairman shall perform such
duties and exercise such powers as may be assigned from time to time by the
Chairman of the Board or the Chief Executive Officer, or if there be no Chief
Executive Officer, by the President.
Section 4.9. Vice President. Each Vice President shall perform such
duties and exercise such powers as may be assigned from time to time by the
Chief Executive Officer, or if there be none, by the President.
Section 4.10. Secretary and Assistant Secretaries. The Secretary shall
have the following powers and duties:
(a) The Secretary shall attend all meetings of the stockholders and of
the Board of Directors, shall keep or cause to be kept a record of all
proceedings of such meetings and shall perform like duties for any Committee of
the Board of Directors upon the request of the Chairman of the Board, the Chief
Executive Officer or the President.
(b) The Secretary shall give, or cause to be given, notice of all
meetings of the stockholders and the Board of Directors in accordance with the
provisions of these Bylaws and as required by law.
(c) The Secretary shall be the custodian of the records and of the
seal of the Corporation and cause such seal (or a facsimile thereof) to be
affixed to all certificates representing shares of the Corporation prior to the
issuance thereof and to all instruments the execution of which on behalf of the
Corporation under its seal shall have been duly authorized in accordance with
these Bylaws, and when so affixed, the Secretary or any Assistant Secretary may
attest the same.
(d) The Secretary shall properly maintain all books, reports,
statements, certificates and all other documents and records of the Corporation
required by law, the Certificate of Incorporation or these Bylaws, except those
for which some other officer or agent of the Corporation has been made
responsible or is otherwise accountable.
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(e) The Secretary shall have charge of the stock books and records of
the Corporation and shall maintain or cause to be maintained the stock transfer
books for shares of stock of the Corporation of each class issued and
outstanding.
(f) The Secretary shall sign certificates representing shares of the
Corporation the issuance of which shall have been authorized by the Board of
Directors.
(g) Any Assistant Secretary shall assist the Secretary in performing
the duties and exercising the authority of the Secretary. In case of the
inability or failure of the Secretary to perform the duties of that office, an
Assistant Secretary shall perform the duties of the Secretary, unless otherwise
determined by the Board of Directors.
Section 4.11. Treasurer and Assistant Treasurers. The Treasurer shall
have the following powers and duties:
(a) The Treasurer shall have charge and supervision over and be
responsible for the moneys, securities, receipts and disbursements of the
Corporation, and shall keep or cause to be kept full and accurate records of
all receipts of the Corporation.
(b) The Treasurer shall cause the moneys and other valuable effects of
the Corporation to be deposited in the name and to the credit of the
Corporation in such banks or trust companies or with such bankers or other
depositories as shall be selected in accordance with Section 7.4 of these
Bylaws.
(c) The Treasurer shall cause the moneys of the Corporation to be
disbursed by checks or drafts (signed as provided in Section 7.2 of these
Bylaws) upon the authorized depositaries of the Corporation and cause to be
taken and preserved proper vouchers for all moneys disbursed.
(d) Any Assistant Treasurer shall assist the Treasurer in performing
the duties and exercising the authority of the Treasurer. In case of the
inability or failure of the Treasurer to perform the duties of that office, an
Assistant Treasurer shall perform the duties of the Treasurer, unless otherwise
determined by the Board of Directors.
Section 4.12. Additional Officers. The Board of Directors may appoint
such other officers as it may deem appropriate, and the Chief Executive Officer
or if there be none, the President, may appoint such other officers as he or
she may deem appropriate, subject to ratification by the Board of Directors at
its next regular meeting. Such other officers shall hold their offices for such
terms and shall exercise such powers and perform such duties as may be
determined from time to time by the Board of Directors, the Chief Executive
Officer, or if there be none, the President. The Board of Directors from time
to time may delegate to any officer the power to appoint subordinate officers
and to prescribe their respective rights, terms of office, authorities and
duties. Any such officer may remove any such subordinate officer appointed by
him or her, for or without cause.
Section 4.13. Security. The Board of Directors may require any
officer, agent or employee of the Corporation to provide security for the
faithful performance of his or her
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duties, in such amount and of such character as may be determined from time to
time by the Board of Directors.
ARTICLE V
CAPITAL STOCK
Section 5.1. Certificates of Stock; Uncertificated Shares. The shares
of the Corporation shall be represented by certificates, provided that the
Board of Directors may provide by resolution or resolutions that some or all of
any or all classes or series of the stock of the Corporation shall be
uncertificated shares. Any such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
Corporation. Notwithstanding the adoption of such a resolution by the Board of
Directors, every holder of stock in the Corporation represented by certificates
and upon request every holder of uncertificated shares shall be entitled to
have a certificate signed by, or in the name of the Corporation, by the Chief
Executive Officer or the President, and by the Secretary or an Assistant
Secretary, representing the number of shares registered in certificate form.
Such certificate shall be in such form as the Board of Directors may determine,
to the extent consistent with applicable law, the Certificate of Incorporation
and these Bylaws.
Section 5.2. Lost, Stolen or Destroyed Certificates. The Secretary may
direct that a new certificate be issued in place of any certificate theretofore
issued by the Corporation alleged to have been lost, stolen or destroyed, upon
delivery to the Secretary of an affidavit of the owner or owners of such
certificate, setting forth such allegation. The Secretary may require the owner
of such lost, stolen or destroyed certificate, or his or her legal
representative, to give the Corporation a bond sufficient to indemnify it
against any claim that may be made against it on account of the alleged loss,
theft or destruction of any such certificate or the issuance of any such new
certificate.
Section 5.3. Transfer of Stock. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares, duly
endorsed or accompanied by appropriate evidence of succession, assignment or
authority to transfer, the Corporation shall issue a new certificate to the
person entitled thereto, cancel the old certificate and record the transaction
upon its books. Within a reasonable time after the transfer of uncertificated
stock, the Corporation shall send to the registered owner thereof a written
notice containing the information required to be set forth or stated on
certificates pursuant to the General Corporation Law of the State of Delaware.
Subject to the provisions of the Certificate of Incorporation and these Bylaws,
the Board of Directors may prescribe such additional rules and regulations as
it may deem appropriate relating to the issue, transfer and registration of
shares of the Corporation.
Section 5.4. Record Date. In order to determine the stock-holders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board of Directors may fix, in advance, a record date,
which record date shall not precede the date on which the resolution fixing the
record date is adopted by the Board of Directors, and which shall not be more
than sixty nor less than ten days before the date of such meeting. A
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<PAGE> 15
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting,
provided, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
In order that the Corporation may determine the stockholders entitled
to receive payment of any dividend or other distribution or allotment of any
rights, or the stockholders entitled to exercise any rights in respect of any
change, conversion or exchange or stock, or for the purpose of any other lawful
action, the Board of Directors may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto.
Section 5.5. Transfer Agent and Registrar. The Board of Directors, the
Chief Executive Officer, the President or the Secretary may appoint one or more
transfer agents and one or more registrars, and may require all certificates
representing shares to bear the signature of any such transfer agents or
registrars.
ARTICLE VI
OFFICES
Section 6.1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be located at Corporation Trust
Center, 1209 Orange Street in the City of Wilmington, County of New Castle.
Section 6.2. Other Offices. The Corporation may maintain offices or
places of business at such other locations within or without the State of
Delaware as the Board of Directors may from time to time determine or as the
business of the Corporation may require.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1. Dividends. Subject to any applicable provisions of law
and the Certificate of Incorporation, dividends upon the outstanding shares of
capital stock of the Corporation may be declared by the Board of Directors at
any regular or special meeting of the Board of Directors, and any such dividend
may be paid in cash, property, or shares of the Corporation's capital stock.
Section 7.2. Execution of Instruments. The Chief Executive Officer,
the President, any Vice Chairman, any Vice President, the Secretary or the
Treasurer may enter into any contract or execute and deliver any instrument in
the name and on behalf of the Corporation. The Board of Directors, the Chief
Executive Officer or the President may authorize any other
15
<PAGE> 16
officer to enter into any contract or execute and deliver any instrument in the
name and on behalf of the Corporation. Any such authorization may be general or
limited to specific contracts or instruments.
Section 7.3. Corporate Indebtedness. No loan shall be contracted on
behalf of the Corporation, and no evidence of indebtedness shall be issued in
its name, unless authorized by the Board of Directors, the Chief Executive
Officer, the President or any Vice Chairman. Such authorization may be general
or confined to specific instances. Loans so authorized may be effected at any
time for the Corporation from any bank, trust company or other institution, or
from any firm, corporation or individual. All bonds, debentures, notes and
other obligations or evidences of indebtedness of the Corporation issued for
such loans shall be made, executed and delivered as the Board of Directors, the
Chief Executive Officer, the President or any Vice Chairman shall authorize.
When so authorized by the Board of Directors, the Chief Executive Officer, the
President or any Vice Chairman, any part of or all the properties, including
contract rights, assets, business or goodwill of the Corporation, whether then
owned or thereafter acquired, may be mortgaged, pledged, hypothecated or
conveyed or assigned in trust as security for the payment of such bonds,
debentures, notes and other obligations or evidences of indebtedness of the
Corporation, and of the interest thereon, by instruments executed and delivered
in the name of the Corporation.
Section 7.4. Deposits. Any funds of the Corporation may be deposited
from time to time in such banks, trust companies or other depositaries as may
be determined by the Board of Directors, the Chief Executive Officer, the
President or any Vice Chairman, or by such officers as may be authorized by the
Board of Directors, the Chief Executive Officer or the President to make such
determination.
Section 7.5. Sale, Transfer, etc. of Securities. To the extent
authorized by the Board of Directors, by the Chief Executive Officer or by the
President, any Vice President, the Secretary, the Treasurer or any other
officers designated by the Board of Directors, the Chief Executive Officer or
the President may sell, transfer, endorse, and assign any shares of stock,
bonds or other securities owned by or held in the name of the Corporation, and
may make, execute and deliver in the name of the Corporation, under its
corporate seal, any instruments that may be appropriate to effect any such
sale, transfer, endorsement or assignment.
Section 7.6. Voting as Stockholder. Unless otherwise determined by
resolution of the Board of Directors, the Chief Executive Officer, the
President, any Vice President or the Secretary shall have full power and
authority on behalf of the Corporation to attend any meeting of stockholders of
any corporation in which the Corporation may hold stock, and to act, vote (or
execute proxies to vote) and exercise in person or by proxy all other rights,
powers and privileges incident to the ownership of such stock. Such officers
acting on behalf of the Corporation shall have full power and authority to
execute any instrument expressing consent to or dissent from any action of any
such corporation without a meeting. The Board of Directors may by resolution
from time to time confer such power and authority upon any other person or
persons.
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<PAGE> 17
Section 7.7. Fiscal Year. The fiscal year of the Corporation shall
commence on January 1 of each year and shall terminate on December 31.
Section 7.8. Seal. The seal of the Corporation shall be circular in
form and shall contain the name of the Corporation, the year of its
incorporation and the words "Corporate Seal" and "Delaware." The form of such
seal shall be subject to alteration by the Board of Directors. The seal may be
used by causing it or a facsimile thereof to be impressed, affixed or
reproduced, or may be used in any other lawful manner.
ARTICLE VIII
AMENDMENT OF BYLAWS
Section 8.1. Amendment. These Bylaws may be amended, altered or
repealed:
(a) by resolution adopted by a majority of the Board of Directors at
any special or regular meeting of the Board if, in the case of such special
meeting only, notice of such amendment, alteration or repeal is contained in
the notice or waiver of notice of such meeting; or
(b) at any regular or special meeting of the stockholders if, in the
case of such special meeting only, notice of such amendment, alteration or
repeal is contained in the notice or waiver of notice of such meeting.
ARTICLE IX
BUSINESS COMBINATIONS
Section 9.1. Business Combinations. Pursuant to authority granted in
subsection (b)(2) of Section 203 of subchapter VI, Chapter 1, Title 8 of the
Delaware Code Relating to the General Corporate Law, the Board of Directors
elects not to be governed by the aforesaid Section 203 entitled "Business
Combinations with Interested Stockholders."
ARTICLE X
CONSTRUCTION
Section 10.1. Construction. In the event of any conflict between the
provisions of these Bylaws as in effect from time to time and the provisions of
the Certificate of Incorporation of the Corporation as in effect from time to
time, the provisions of such Certificate of Incorporation shall be controlling.
17
<PAGE> 1
COMPUTATION OF NET INCOME PER SHARE EXHIBIT 11
Quaker State Corporation and Subsidiaries
<TABLE>
<CAPTION>
Three Months Ended
3/31/97 3/31/96
- --------------------------------------------------------------------------------------
(in thousands except per share data, unaudited)
<S> <C> <C>
1. Net income $ 6,865 $ 5,706
========== ==========
2. Average number of shares of capital
stock outstanding 34,868 32,819
3. Shares issuable upon exercise of dilutive stock
options outstanding during the period, based on
average market prices 102 77
4. Shares issuable upon exercise of dilutive stock
options outstanding during the period, based on
higher of average or period-end market prices 187 98
5. Average number of capital and capital equivalent
shares outstanding (2 + 3) 34,970 32,896
6. Average number of capital shares outstanding,
assuming full dilution (2 + 4) 35,055 32,917
7. Net income per capital and capital equivalent share
(1 divided by 5) $ 0.20 $ 0.17
========== ==========
8. Net income per capital share assuming full dilution
(1 divided by 6) $ 0.20 $ 0.17
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 14,411
<SECURITIES> 0
<RECEIVABLES> 189,777
<ALLOWANCES> 4,252
<INVENTORY> 125,047
<CURRENT-ASSETS> 354,222
<PP&E> 484,191
<DEPRECIATION> (251,005)
<TOTAL-ASSETS> 1,072,365
<CURRENT-LIABILITIES> 346,136
<BONDS> 0
0
0
<COMMON> 36,792
<OTHER-SE> 272,115
<TOTAL-LIABILITY-AND-EQUITY> 1,072,365
<SALES> 323,023
<TOTAL-REVENUES> 324,853
<CGS> 151,379
<TOTAL-COSTS> 213,373
<OTHER-EXPENSES> 93,418
<LOSS-PROVISION> 166
<INTEREST-EXPENSE> 6,331
<INCOME-PRETAX> 11,565
<INCOME-TAX> 4,700
<INCOME-CONTINUING> 6,865
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,865
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
