UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 30, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 0-17955
SEARS DC CORP.
(Exact name of registrant as specified in its charter)
Delaware 36-3533346
(State of Incorporation) (I.R.S. Employer Identification No.)
3711 Kennett Pike, Greenville, Delaware 19807
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 302/888-3114
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock par value $1.00 per share
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
Disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [X]
As of February 29, 1996, the Registrant had 1,000 shares of
capital stock outstanding, all of which was held by Sears,
Roebuck and Co.
Registrant meets the conditions set forth in General Instruction
(J)(1)(a) and (b) of Form 10-K and is therefore filing this
report with a reduced disclosure format.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
None
<PAGE>
PART I
Item 1. Business.
Sears DC Corp. ("SDC"), a wholly-owned subsidiary of
Sears, Roebuck and Co. ("Sears") organized under the laws of
Delaware in January 1987, was formed to borrow in domestic and
foreign debt markets and lend the proceeds of such borrowings to
Sears and certain direct and indirect subsidiaries of Sears in
exchange for their unsecured notes. SDC raised funds through the
sale of its medium-term notes and direct placement of commercial
paper with corporate and institutional investors. Commercial
paper was sold by Sears Roebuck Acceptance Corp., an affiliate of
SDC, as agent, with expenses, but no fees, being paid by SDC.
Historically, the proceeds of SDC's borrowings were
loaned to Sears Consumer Financial Corporation of Delaware
("SCFCD"), a wholly-owned subsidiary of Dean Witter, Discover &
Co. ("DWDC"), to finance the accounts receivable generated by the
Discover Card and consumer installment notes receivable.
However, as a result of the strategic repositioning of Sears in
1993, the business of SDC changed significantly. In the last
quarter of 1992, SDC stopped issuing medium-term notes. In March
1993, SDC discontinued issuing commercial paper, and was repaid
by SCFCD the amounts outstanding and owing to SDC. In June of
1993, Sears spun-off its 80.1% ownership interest in DWDC to
Sears shareholders.
Under an agreement between SDC and Sears, the interest
rate paid by Sears is designed to produce earnings sufficient to
cover SDC's fixed charge coverage at least 1.005 times. Required
payments of principal and interest to SDC under the Sears
borrowing agreement are intended to be sufficient to allow SDC to make
timely payments of principal and interest to the holders of its
securities.
The Net Worth Maintenance Agreement between Sears and
SDC is still in effect for the benefit of holders of debt
securities issued by SDC. This agreement provides for Sears to
maintain ownership of and positive stockholder's equity in SDC.
At February 29, 1996, SDC had no employees on its
payroll and its officers and directors consisted of employees of
affiliated companies. Its offices are located at 3711 Kennett
Pike, Greenville, Delaware 19807.
Item 2. Properties.
None.
Item 3. Legal Proceedings.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
PART II
Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters.
There is no established public trading market for SDC's
common stock. As of February 29, 1996, Sears owned all
outstanding shares of SDC's common stock. During 1995, there
were no dividends declared or paid to Sears by SDC. The Board of
Directors of SDC declared a $167.4 million dividend on December
20, 1993 to Sears, payable on December 30, 1993. The Board also
approved payment to Sears on December 30, 1993 of $319.1 million
out of Capital in Excess of Par Value; such payment is
characterized as a dividend under the Delaware General
Corporation Law. Payment was effected by reducing SDC's
investment in the notes of Sears by $486.5 million.
Item 6. Selected Financial Data.
Not applicable.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Financial Condition
SDC has invested funds in the promissory notes of
Sears, which pay interest sufficient to cover SDC's fixed charges
at least 1.005 times, and in highly liquid short-term investments.
The $1.23 billion in outstanding medium-term notes as
of December 30, 1995 are not redeemable prior to their stated
maturity except for notes having a stated maturity at the time of
issue of more than seven years which may be redeemed under
certain circumstances in the event of declining Discover Card
receivables of Sears former subsidiary, Dean Witter, Discover &
Co.
The financial information appearing in this annual
report on Form 10-K is presented in historical dollars which do
not reflect the decline in purchasing power that results from
inflation. As is the case for most financial companies,
substantially all of SDC's assets and liabilities are monetary in
nature. Interest rates on SDC's investment in Sears notes are
set to provide for a ratio of earnings to fixed charges of at
least 1.005 times. This maintenance mechanism insulates SDC from
bearing the effects of inflation-based interest rate increases.
Results of Operations
Due to the significant reduction in SDC's outstanding
debt, interest and related expenses decreased 15.4% to $116.1
million in 1995 from $137.3 million in 1994 and $190.6 million in
1993. Earnings covered fixed charges 1.005 times in 1995 and
1994 and 1.32 times in 1993. The significant earnings decrease in
1994 from 1993 is due to the reduction in the interest rate on Sears
notes to produce earnings sufficient to cover SDC's fixed charges to
at least 1.005 from the 1993 amount of at least 1.25 times.
<PAGE>
Item 8. Financial Statements and Supplementary Data.
SEARS DC CORP.
STATEMENTS OF INCOME
millions 1995 1994 1993
------- ------- -------
Revenues
Earnings on notes of Sears $116.8 $138.3 $196.9
Earnings on notes of SCFCD - - 52.6
Earnings on invested cash - - 2.7
------- ------- -------
Total revenues 116.8 138.3 252.2
Expenses
Interest and related expense 116.1 137.3 190.6
Operating expenses 0.1 0.3 1.5
------- ------- -------
Total expenses 116.2 137.6 192.1
------- ------- -------
Income before income taxes 0.6 0.7 60.1
Income taxes 0.2 0.2 21.0
------- ------- -------
Net Income $ 0.4 $ 0.5 $ 39.1
======= ======= =======
Ratio of earnings to fixed charges 1.005 1.005 1.32
See notes to financial statements.
<PAGE>
SEARS DC CORP.
STATEMENTS OF FINANCIAL POSITION
millions 1995 1994
-------- --------
Assets
Notes of Sears $1,258.1 $1,552.6
Cash and invested cash 0.1 0.1
Accrued interest and other assets 2.2 3.6
-------- --------
Total assets $1,260.4 $1,556.3
======== ========
Liabilities
Medium-term notes $1,228.7 $1,521.4
Accrued interest and other liabilities 27.0 30.6
-------- --------
Total liabilities 1,255.7 1,552.0
-------- --------
Stockholder's Equity
Capital stock, par value $1.00 per share
1,000 shares authorized and
outstanding - -
Retained income 4.7 4.3
-------- --------
Total stockholder's equity 4.7 4.3
-------- --------
Total liabilities and stockholder's
equity $1,260.4 $1,556.3
======== ========
See notes to financial statements.
<PAGE>
SEARS DC CORP.
STATEMENTS OF STOCKHOLDER'S EQUITY
millions 1995 1994 1993
-------- -------- --------
Capital stock $ - $ - $ -
-------- -------- --------
Capital in excess of par value
Beginning of year - - 319.1
Return of capital paid to Sears - - (319.1)
-------- -------- --------
End of year - - -
-------- -------- --------
Retained income
Beginning of year 4.3 3.8 132.1
Net income 0.4 0.5 39.1
Dividend paid to Sears - - (167.4)
-------- -------- --------
End of year 4.7 4.3 3.8
-------- -------- --------
Total stockholder's equity $ 4.7 $ 4.3 $ 3.8
======== ======== ========
See notes to financial statements.
<PAGE>
STATEMENTS OF CASH FLOWS
millions 1995 1994 1993
-------- -------- --------
Cash Flows From Operating
Activities
Net income $ 0.4 $ 0.5 $ 39.1
Adjustments to reconcile net
income to net cash provided by
(used in) operating activities:
Net change in accrued interest
income and other assets and
accrued interest expense and
other liabilities (2.2) (15.9) 31.7
-------- -------- --------
Net cash provided by (used in)
operating activities (1.8) (15.4) 70.8
Cash Flows From Investing
Activities
Decrease in notes of SCFCD - - 4,622.4
Decrease (increase) in notes of
Sears 294.5 641.8 (2,680.9)
-------- -------- ---------
Net cash provided by (used in)
investing activities 294.5 641.8 1,941.5
-------- -------- ---------
Cash Flows From Financing
Activities
Decrease in commercial paper,
primarily 90 days or less - - (1,840.0)
Repayments of medium-term notes (292.7) (626.4) (257.6)
--------- --------- --------
Net cash provided by (used in)
financing activities (292.7) (626.4) (2,097.6)
--------- --------- --------
Net (decrease) in cash and
invested cash - - (85.3)
Cash and invested cash,
beginning of year 0.1 0.1 85.4
--------- --------- ---------
Cash and invested cash,
end of year $ 0.1 $ 0.1 $ 0.1
--------- --------- ---------
Supplemental Disclosure of Cash Flow Information
Cash paid during the year
Interest $117.6 $141.9 $181.7
Income taxes 0.2 11.8 32.1
See notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Sears DC Corp. ("SDC"), a wholly-owned subsidiary of Sears,
Roebuck and Co. ("Sears"), was principally engaged in the
borrowing in domestic and foreign debt markets and lending the
proceeds of such borrowings to Sears and certain direct and
indirect subsidiaries of Sears in exchange for their unsecured
notes.
Historically, the proceeds of SDC's borrowings were loaned to
Sears Consumer Financial Corporation of Delaware ("SCFCD"), a
wholly-owned subsidiary of Dean Witter, Discover & Co. ("DWDC"),
to finance the accounts receivable generated by the Discover Card
and consumer installment notes receivable. However, as a result
of the strategic repositioning of Sears, the business of SDC
changed significantly. In the last quarter of 1992, SDC stopped
selling medium-term notes. Sears spun-off its 80.1% ownership
interest in DWDC to Sears shareholders in June 1993. In March
1993, SDC discontinued issuing commercial paper, and was repaid
by SCFCD the amounts outstanding and owing to SDC.
Under an agreement between SDC and Sears, the interest rate paid
by Sears is designed to produce earnings sufficient to cover
SDC's fixed charge coverage at least 1.005 times. Required
payments of principal and interest to SDC under the Sears
borrowing agreement are intended to be sufficient to allow SDC to
make timely payments of principal and interest to the holders of
its securities.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
For 1995, SDC changed its fiscal year to a 52 or 53 week year
ending on the Saturday closest to December 31. Fiscal year 1995
ended on December 30, while fiscal years 1994 and 1993 ended on
December 31.
Cash and invested cash is defined to include all highly liquid
investments with maturities of three months or less. The return
of capital and dividend totaling $486.5 million paid to Sears in
1993 were effected through a non-cash transaction as a reduction
in SDC's investment in Sears Notes.
The results of operations of SDC are included in the consolidated
federal income tax return of Sears. Tax liabilities and benefits
are allocated as generated by SDC, whether or not such benefits
would be currently available on a separate return basis. Taxes
are provided based on the statutory federal income tax rate.
2. BORROWINGS
The medium-term notes are not redeemable except for notes having
a stated maturity at the time of issue of more than seven years
which may be redeemed under certain circumstances in the event of
declining Discover Card receivables. The fair market value of
medium-term notes approximated $1,328.2 million and $1,533.8
million at December 30, 1995 and December 31, 1994, respectively,
based on discounted cash flows using interest rates of comparable
borrowings. Selected details of SDC's borrowings are shown
below.
millions 1995 1994
-------- --------
7.57% to 9.26% medium-term notes
due 1995-2012 $1,228.7 $1,521.4
======== ========
At December 30, 1995, medium-term note maturities for the next
five years were as follows:
1996 449.8
1997 335.1
1998 111.3
1999 119.5
2001 135.5
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
Not applicable.
Item 11. Executive Compensation.
Not applicable.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
Not applicable.
Item 13. Certain Relationships and Related Transactions.
Not applicable.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.
(a) The following documents are filed as a part of
this report:
1. An "Index to Financial Statements" has been filed
as a part of this report on page S-1 hereof.
2. No financial statement schedules are included
herein because they are not required or because the information
is contained in the financial statements and notes thereto, as
noted in the "Index to Financial Statements" filed as part of
this report.
3. An "Exhibit Index" has been filed as part of this
report beginning on page E-1 hereof.
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed by the
Registrant during the 4th Quarter of 1995.
SIGNATURES
----------
Pursuant to the requirements of Section 13 or 15(d) 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.
SEARS DC CORP.
(Registrant)
By /s/ PAUL D. MELANCON
Vice President and Controller
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the date indicated.
Signature Title Date
- --------- ----- ----
Alice M. Peterson* Director, President and )
Chief Executive Officer )
(Principal Executive )
Officer) )
)
)
Paul D. Melancon* Vice President and )
Controller ) March 29, 1996
(Principal Accounting )
Officer) )
)
)
Larry R. Raymond* Vice President and )
Treasurer (Principal )
Financial Officer) )
)
James A. Blanda* Director )
)
)
James D. Constantine* Director )
)
*By /s/ PAUL D. MELANCON Individually and as Attorney-in-Fact
Paul D. Melancon
<PAGE>
SEARS DC CORP.
INDEX TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 30, 1995, DECEMBER 31, 1994 AND 1993
PAGE
----
STATEMENTS OF INCOME 4
STATEMENTS OF FINANCIAL POSITION 5
STATEMENTS OF STOCKHOLDER'S EQUITY 6
STATEMENTS OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8-9
INDEPENDENT AUDITORS' REPORT S-2
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Stockholder and Board of Directors
Greenville, DE
We have audited the accompanying Statements of Financial Position
of Sears DC Corp. (formerly Discover Credit Corp.) (a wholly-owned
subsidiary of Sears, Roebuck and Co.) as of December 30, 1995 and
December 31, 1994, and the related Statements of Income, Stockholder's
Equity and Cash Flows for each of the three years in the period ended
December 30, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the financial position of Sears DC Corp. as of
December 30, 1995 and December 31, 1994, and the results of its
operations and its cash flows for each of the three years in the
period ended December 30, 1995, in conformity with generally
accepted accounting principles.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Chicago, Illinois
March 11, 1996
<PAGE>
EXHIBIT INDEX
-------------
3(a) Certificate of Incorporation of Discover Credit Corp. dated
January 9, 1987 [Incorporated by reference to Exhibit 3(a)
to Form 10 of the Registrant (Form 10)*]
3(b) Amendment to Certificate of Incorporation of Discover Credit
Corp. dated April 9, 1987 [Incorporated by reference to
Exhibit 3(b) to Form 10*]
3(c) By-laws of Discover Credit Corp., as amended to February 6,
1996**
4(a) Net Worth Maintenance Agreement between Discover Credit
Corp. and Sears, Roebuck and Co., dated as of November 13,
1987 [Incorporated by reference to Exhibit 4 to Form 10*]
4(b) $1,850,000,000 Credit Agreement dated as of June 23, 1992,
among Discover Credit Corp., the Banks Listed therein, The
Lead Managers Referred to therein, The Co-Agents Referred to
therein, and Chemical Bank, as Agent [Incorporated by
reference to Exhibit 4(b) to Quarterly Report of the
Registrant on Form 10-Q for the quarter ended June 30,
1992*]
4(c) Forms of fixed rate Medium-Term Note and floating rate
Medium-Term Note [Incorporated by reference to Exhibits
4.1 and 4.2 to Current Report on Form 8-K of the Registrant
dated February 9, 1990*]
4(d) Indenture, dated as of June 1, 1991 between Discover Credit
Corp. and Bank of Delaware as Trustee [Incorporated by
reference to Exhibit 4 to Registration Statement No.
33-40056]
4(e) Forms of fixed rate Medium-Term Note Series II and floating
rate Medium-Term Note Series II [Incorporated by reference
to Exhibits 4.2 and 4.3 to Current Report on Form 8-K of the
Registrant dated June 20, 1991*]
4(f) Indenture, dated as of February 15, 1992, between Discover
Credit Corp. and Harris Trust Company of New York
[Incorporated by reference to Exhibit 4.1 to Current Report
on Form 8-K of the Registrant dated February 28, 1992*]
4(g) Forms of fixed rate Medium-Term Note Series III and floating
rate Medium-Term Note Series III [Incorporated by
reference to Exhibits 4.2 and 4.3 to Current Report on Form
8-K of the Registrant dated February 28, 1992*]
4(h) The Registrant hereby agrees to furnish the Commission, upon
request, with each instrument defining the rights of holders
of long-term debt of the Registrant with respect to which
the total amount of securities authorized does not exceed
10% of the total assets of the Registrant.
_________________________________________
* SEC File No. 0-17955
** Filed herewith
10(a) Letter Agreement dated March 9, 1993 between Sears,
Roebuck and Co. and Discover Credit Corp. [Incorporated by
reference to Exhibit 10(g) to Annual Report on Form 10-K of
the Registrant for the year ended December 31, 1992*]
10(b) Amendment dated March 22, 1994 to letter Agreement dated
March 9, 1993 between Sears, Roebuck and Co. and Discover
Credit Corp. [Incorporated by reference to Exhibit 10(b)
to Annual Report on Form 10-K of the Registrant for the
year ended December 31, 1994*]
12 Calculation of ratio of earnings to fixed charges**
23 Consent of Deloitte & Touche LLP**
24 Power of attorney**
27 Financial Data Schedule**
99(a) Current Report on Form 8-K of Sears, Roebuck and Co., for
February 7, 1996 [Incorporated by reference, File No.
1-416]
99(b) Annual Report on Form 10-K of Sears, Roebuck and Co. for
the year ended December 30, 1995 [Incorporated by
reference, File No. 1-416]
______________________________
* SEC File No. 0-17955
** Filed herewith
BY-LAWS OF
DISCOVER CREDIT CORP.
AS AMENDED TO
FEBRUARY 6, 1996
TABLE OF CONTENTS
Page
ARTICLE I
OFFICES
SectiSection 1. Registered Office.. . . . . . . . . . . . . . 1
SectiSection 2. Other Offices.. . . . . . . . . . . . . . . . 1
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings.. . . . . . . . . . . . . . 1
Section 2. Annual Meeting of Stockholders. . . . . . . . 1
Section 3. Quorum; Adjourned Meetings and Notice Thereof 1
Section 4. Voting. . . . . . . . . . . . . . . . . . . . 2
Section 5. Proxies.. . . . . . . . . . . . . . . . . . . 3
Section 6. Special Meetings. . . . . . . . . . . . . . . 3
Section 7. Notice of Stockholders' Meetings. . . . . . . 4
Section 8. Maintenance and Inspection of Stockholder
List. . . . . . . . . . . . . . . . . . . . . 4
Section 9. Stockholder Action by Written Consent
Without a Meeting.. . . . . . . . . . . . . . 5
ARTICLE III
DIRECTORS
Section 1. Number and Qualification of Directors.. . . . 5
Section 2. Vacancies.. . . . . . . . . . . . . . . . . . 6
Section 3. Powers. . . . . . . . . . . . . . . . . . . . 7
Section 4. Regular Meetings. . . . . . . . . . . . . . . 7
Section 5. Special Meetings. . . . . . . . . . . . . . . 7
Section 6. Quorum. . . . . . . . . . . . . . . . . . . . 7
Section 7. Action Without Meeting. . . . . . . . . . . . 8
Section 8. Telephone Meetings. . . . . . . . . . . . . . 8
Section 9. Committees of Directors.. . . . . . . . . . . 8
Section 10. Executive Committee.. . . . . . . . . . . . . 10
Section 12. Compensation of Directors.. . . . . . . . . . 12
Section 13. Indemnification.. . . . . . . . . . . . . . . 12
ARTICLE IV
OFFICERS
Section 1. Officers. . . . . . . . . . . . . . . . . . . 13
Section 2. Election of Officers. . . . . . . . . . . . . 14
Section 3. Subordinate Officers. . . . . . . . . . . . . 14
Section 4. Term of Office; Removal and Vacancies.. . . . 14
Section 5. President.. . . . . . . . . . . . . . . . . . 14
Section 6. Vice Presidents.. . . . . . . . . . . . . . . 15
Section 7. Executive Vice President. . . . . . . . . . . 15
Section 8. Secretary.. . . . . . . . . . . . . . . . . . 16
Section 9. Assistant Secretaries.. . . . . . . . . . . . 16
Section 10. Treasurer.. . . . . . . . . . . . . . . . . . 16
Section 11. Assistant Treasurers. . . . . . . . . . . . . 17
Section 12. Controller. . . . . . . . . . . . . . . . . . 18
Section 13. Assistant Controllers.. . . . . . . . . . . . 18
ARTICLE V
CERTIFICATES OF STOCK
Section 1. Certificates. . . . . . . . . . . . . . . . . 19
Section 2. Signatures on Certificates. . . . . . . . . . 19
Section 3. Statement of Stock Rights, Preferences,
Privileges. . . . . . . . . . . . . . . . . . 19
Section 4. Lost, Stolen or Destroyed Certificates. . . . 20
Section 5. Transfers of Stock. . . . . . . . . . . . . . 21
Section 6. Record Date.. . . . . . . . . . . . . . . . . 21
Section 7. Registered Stockholders.. . . . . . . . . . . 22
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends.. . . . . . . . . . . . . . . . . . 22
Section 2. Payment of Dividends; Directors; Duties.. . . 22
Section 3. Checks. . . . . . . . . . . . . . . . . . . . 23
Section 4. Fiscal Year.. . . . . . . . . . . . . . . . . 23
Section 5. Corporate Seal. . . . . . . . . . . . . . . . 23
Section 6. Manner of Giving Notice.. . . . . . . . . . . 23
Section 7. Waiver of Notice. . . . . . . . . . . . . . . 23
ARTICLE VII
AMENDMENTS
Section 1. Amendment by Directors of Stockholders. . . . 24
<PAGE>
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be in the
City of Wilmington, County of New Castle, State of Delaware.
Section 2. Other Offices. The Corporation may have offices at such
other places within the State of Delaware as the board of directors may
from time to time determine or the business of the Corporation may require;
however, at no time may the Corporation have offices outside the State of
Delaware.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders shall
be held at any place within or without the State of Delaware as shall be
designated from time to time by the board of directors. In the absence of
any such designation, stockholders' meetings shall be held at the principal
executive office of the Corporation.
Section 2. Annual Meeting of Stockholders. An annual meeting of
stockholders shall be held each year on a date and at a time designated by
the board of directors. At each annual meeting directors shall be elected
and any other proper business may be transacted.
Section 3. Quorum; Adjourned Meetings and Notice Thereof. A majority
of the stock issued and outstanding and entitled to vote at any meeting of
stockholders, the holders of which are present in person or represented by
proxy, shall constitute a quorum for the transaction of business except as
otherwise provided by law, by the Certificate of Incorporation or by these
By-Laws. A quorum, once established, shall not be broken by the withdrawal
of enough votes to leave less than a quorum and the votes present may
continue to transact business until adjournment. If, however, such quorum
shall not be present or represented at any meeting of the stockholders, a
majority of the voting stock represented in person or by proxy may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may
be transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record
entitled to vote thereat.
Section 4. Voting. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of law, the
Certificate of Incorporation or these By-Laws, a different vote is required
in which case such express provision shall govern and control the decision
of such question.
Section 5. Proxies. At each meeting of the stockholders, each
stockholder having the right to vote may vote in person or may authorize
another person or persons to act for him or her by proxy appointed by an
instrument in writing subscribed by such stockholder and bearing a date not
more than three years prior to said meeting, unless said instrument provides
for a longer period. All proxies must be filed with the secretary of the
Corporation at the beginning of each meeting in order to be counted in any
vote at the meeting. Each stockholder shall have one vote for each share of
stock having voting power, registered in his or her name on the books of the
Corporation on the record date set by the board of directors as provided in
Article V, Section 6 hereof. All elections shall be had and all questions
decided by a plurality vote.
Section 6. Special Meetings. Special meetings of the stockholders, for
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the president and shall be
called by the president or the secretary at the request in writing of a
majority of the board of directors, or at the request in writing of
stockholders owning a majority in amount of the entire capital stock of the
Corporation issued and outstanding, and entitled to vote. Such request shall
state the purpose or purposes of the proposed meeting. Business transacted
at any special meeting of stockholders shall be limited to the purposes stated
in the notice.
Section 7. Notice of Stockholders' Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of
the meeting shall be given, which notice shall state the place, date and hour of
the meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. The written notice of any meeting shall be given
to each stockholder entitled to vote at such meeting not less than ten nor
more than sixty days before the date of the meeting. If mailed, notice is
given when deposited in the United States mail, postage prepaid, directed to
the stockholder at his or her address as it appears on the records of
the Corporation.
Section 8. Maintenance and Inspection of Stockholder List. The officer
who has charge of the stock ledger of the Corporation shall prepare and make,
at least ten days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at the meeting, arranged in alphabetical
order, and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting,
either at a place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also
be produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 9. Stockholder Action by Written Consent Without a Meeting.
Unless otherwise provided in the Certificate of Incorporation, any action
required to be taken at any annual or special meeting of stockholders of the
Corporation, or any action which may be taken at any annual or special meeting
of such stockholders, may be taken without a meeting, without prior notice
and without a vote, if a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were
present and voted. 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.
ARTICLE III
DIRECTORS
Section 1. Number and Qualification of Directors. The board of
directors shall consist of a minimum of two (2) and a maximum of fifteen (15)
directors. The number of directors shall be fixed or changed from time to
time, within the minimum and maximum, by the then appointed directors. The
number of directors which shall constitute the initial board shall be seven
(7). The directors need not be stockholders. The directors shall be elected
at the annual meeting of the stockholders, except as provided in Section 2 of
this Article III, and each director elected shall hold office until his or her
successor is elected and qualified; provided, however, that unless otherwise
restricted by the Certificate of Incorporation or by law, any director or the
entire board of directors may be removed, either with or without cause, from
the board of directors at any meeting of stockholders by a majority of the
stock represented and entitled to vote thereat.
Section 2. Vacancies. Vacancies on the board of directors by reason of
death, resignation, retirement, disqualification, removal from office, or
otherwise, and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors
then in office, although less than a quorum, or by a sole remaining director.
The directors so chosen shall hold office until the next annual election of
directors and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election
of directors may be held in the manner provided by statute. If, at the time
of filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent
of the total number of the shares at the time outstanding having the right to
vote for such directors, summarily order an election to be held to fill any
such vacancies or newly created directorships, or to replace the directors
chosen by the directors then in office.
Section 3. Powers. The property and business of the Corporation shall
be managed by or under the direction of its board of directors. In addition to
the powers and authorities by these By-Laws expressly conferred upon them, the
board of directors may exercise all such powers of the Corporation and do
all such lawful acts and things as are not by statute or by the Certificate
of Incorporation or by these By-Laws directed or required to be exercised or
done by the stockholders.
Section 4. Regular Meetings. Regular meetings of the board of
directors may be held without notice at such time and place as shall from
time to time be determined by the board.
Section 5. Special Meetings. Special meetings of the board of
directors may be called by the president on twenty-four hours' notice to each
director, either personally or by mail or by telegram; special meetings shall
be called by the president or the secretary in like manner and on like notice
on the written request of two directors.
Section 6. Quorum. At all meetings of the board of directors a
majority of the authorized number of directors shall be necessary and
sufficient to constitute a quorum for the transaction of business, and the
vote of a majority of the directors present at any meeting at which there is a
quorum, shall be the act of the board of directors, except as may be
otherwise specifically provided by statute, by the Certificate of
Incorporation or by these By-Laws. If a quorum shall not be present at any
meeting of the board of directors the directors present thereat may adjourn
the meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 7. Action Without Meeting. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the board of directors or of any
committee thereof may be taken without a meeting, if all members of the board
of directors or committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the
board of directors or committee.
Section 8. Telephone Meetings. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, members of the board of
directors, or any committee designated by the board of directors, may
participate in a meeting of the board of directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
Section 9. Committees of Directors. The board of directors, at its
annual meeting, or any adjournment thereof, shall elect from among its members,
by the vote of a majority of its members, an Executive Committee and an Audit
Committee, which shall be the standing committees of the Corporation. The
board of directors also shall designate the chairman of each such committee.
The board of directors, by the vote of a majority of its members, may
remove the chairman or any member of any committee, and may fill from among
the directors vacancies in any committee caused by the death, resignation or
removal of any person elected thereto.
Each standing committee may determine its own rules of procedure,
consistent with these By-Laws. Meetings of any standing committee may be
called upon direction of the president or the chairman of the committee.
Written or telegraphic notice of each committee meeting shall be given to each
member of the committee by personal delivery or by mail or telegram addressed
to him or her at such director's usual business address at least twenty-four
hours prior to the meeting in the case of notice by telephone, telegram or
personal delivery, and at least two days (excluding Saturdays, Sundays and
holidays) prior to the meeting in case of notice by mail. At meetings of each
standing committee, the presence of a majority of the members of such
committee shall be necessary to constitute a quorum for the transaction of
business, and, if a quorum is present at any meeting, the action taken by a
majority of the members present shall be the act of the committee. Each
standing committee shall keep a record of its acts and proceedings and all
action shall be reported to the board of directors at the next meeting of the
board of directors following such action.
Section 10. Executive Committee. The Executive Committee shall consist
of not less than two members as from time to time shall be prescribed by the
board of directors and shall hold office until their respective successors are
elected.
The Executive Committee, unless otherwise provided by resolution of the
board of directors, shall have and may exercise, during the time between
meetings of the board of directors, all the powers and perform all the duties of
the board of directors except that said Committee shall have no authority
as to the following matters: (i) the submission to stockholders of any action
that needs stockholders' authorization under the General Corporation Law of
the State of Delaware; (ii) the amendment of the Certificate of Incorporation
or the amendment or repeal of these By-Laws or the adoption of new By-Laws;
(iii) the amendment or repeal of any resolution of the board of directors
which by its terms shall not be so amendable or repealable; (iv) action in
respect of dividends to stockholders; (v) election of officers or the
designation of members of committees of the board of directors or the filling
of vacancies in the board of directors or in any committee of the board of
directors; and (vi) any action which the president shall by written instrument
filed with the secretary designate as a matter which should be considered by
the board of directors. Action taken by the Executive Committee shall be
subject to revision or alteration by the board of directors, provided that
rights or acts of third parties vested or taken in reliance on such action
prior to any such revision or alteration shall not be adversely affected by
such revision or alteration. The secretary of the Corporation, or in his
absence any person as may be designated by the chairman of the Executive
Committee, shall act as secretary of the Executive Committee and keep the
minutes of all meetings.
Section 11. Audit Committee. The Audit Committee shall consist of not
less than two directors who are not engaged in the day to day operations of
the Corporation, as from time to time shall be prescribed by the board of
directors, who shall hold office until their respective successors are elected.
The Audit Committee shall report annually to the board of directors and
recommend independent public accountants for appointment by the Board to audit
the books, records and accounts of the Corporation and to perform such other
duties as the board of directors may from time to time prescribe. The Committee
shall review all recommendations made by the Corporation's independent public
accountants to the board of directors with respect to the accounting methods
used by the Corporation, the system of internal control followed and non-audit
services, and shall advise the board of directors with respect thereto. The
Committee shall also have authority to examine and make recommendations to
the board of directors with respect to the scope of the audit conducted by the
Corporation's independent public accountants and with respect to non-audit
services.
The Audit Committee shall review the audit plans and results of the
Corporation's internal audit function and shall report to the board of
directors with respect thereto.
Section 12. Compensation of Directors. Unless otherwise restricted by
the Certificate of Incorporation or these By-Laws, the board of directors
shall have the authority to fix the compensation of directors. The directors
may be paid their expenses, if any, of attendance at each meeting of the board
of directors and may be paid a fixed sum for attendance at each meeting of
the board of directors or a stated salary as director. No such payment shall
preclude any director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
Section 13. Indemnification. The Corporation shall indemnify every
person who was or is a party or is or was threatened to be made a party to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director or
officer of the Corporation or, while a director or officer of the
Corporation, is or was serving at the request of the Corporation as a
director, officer, employee, agent or trustee of another Corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including counsel fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him or her in connection with
such action, suit or proceeding, to the full extent permitted by applicable
law. Expenses incurred by a person who is or was a director or officer of the
Corporation in appearing at, participating in or defending any such action,
suit or proceeding shall be paid by the Corporation upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount
if it shall ultimately be determined that he or she is not entitled to be
indemnified by the Corporation as authorized by this Section 13. The rights
to indemnification and to the advancement of expenses conferred in this Section
13 shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, the Corporation's Certificate of
Incorporation, any agreement, vote of stockholders or disinterested directors
or otherwise.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the Corporation shall be chosen
by the board of directors and shall include a president, a vice president, a
secretary, a treasurer and a controller. The Corporation may also have at the
discretion of the board of directors such other officers as are desired, one or
more executive vice presidents, additional vice presidents, one or more
assistant secretaries, one or more assistant treasurers, one or more
assistant controllers and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article IV. In the event
there are two or more vice presidents, then one or more may be designated as
executive vice president, senior vice president, vice president marketing, or
other similar or dissimilar title. At the time of the election of officers,
the directors may by resolution determine the order of their rank. Any
number of offices may be held by the same person, unless the Certificate of
Incorporation or these By-Laws otherwise provide.
Section 2. Election of Officers. The board of directors, at its first
meeting after each annual meeting of stockholders, shall choose the officers
of the Corporation.
Section 3. Subordinate Officers. The board of directors may appoint
such other officers and agents, as it shall deem necessary, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the board of directors.
Section 4. Term of Office; Removal and Vacancies. The officers of the
Corporation shall hold office until their successors are chosen and qualify
in their stead. Any officer elected or appointed by the board of directors may
be removed at any time, either with or without cause, by the board of
directors. If the office of any officer or officers becomes vacant for any
reason, the vacancy may be filled by the board of directors.
Section 5. President. The president shall be the chief executive
officer of the Corporation; shall preside at meetings of the stockholders
and of the board of directors; and shall, subject to the control of the board
of directors, have general supervision, direction and control of the business
and officers of the Corporation. He or she shall have the general powers and
duties of management usually vested in the office of president and chief
executive officer of corporations, and shall have such other powers and
duties as may be prescribed by the board of directors or these By-Laws.
Section 6. Vice Presidents. In the absence or disability of the
president, the vice presidents in order of their rank as fixed by the board
of directors, or if not ranked, the vice president designated by the board of
directors, shall perform all the duties of the president, and when so acting
shall have all the powers of and be subject to all the restrictions upon the
president. The vice presidents shall have such other duties as from time to
time may be prescribed for them, respectively, by the board of directors.
Section 7. Executive Vice President. The Executive Vice-President, if
appointed, shall be in charge of the Corporation's principal office in New
Castle, Delaware, and shall in the absence or disability of the president
perform the duties and exercise the powers of the president and shall have such
other authority as shall be prescribed by the president or by resolution of
the board of directors. Should no executive vice president be designated,
such powers as provided by this Section 7 shall be exercised by the president.
Section 8. Secretary. The secretary shall record the proceedings of
the meetings of the stockholders and directors in a book to be kept for that
purpose; and shall perform like duties for the standing committees when required
by the board of directors. He or she shall give, or cause to be given, notice
of all meetings of the stockholders and of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
these By-Laws. He or she shall keep in safe custody the seal of the
Corporation, and affix the same to any instrument requiring it, and when so
affixed it shall be attested by his or her signature or by the signature of an
assistant secretary. The board of directors may give general authority to any
other officer to affix the seal of the Corporation and to attest the affixing
by his signature.
Section 9. Assistant Secretaries. The assistant secretary, or if there
be more than one, the assistant secretaries in the order determined by the
board of directors, or if there be no such determination, the assistant
secretary designated by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as
the board of directors may from time to time prescribe.
Section 10. Treasurer. The treasurer, if such an officer is elected,
shall have the custody of the corporate funds and securities and shall keep
full and accurate accounts of receipts and disbursements in books belonging
to the Corporation and shall deposit all moneys, and other valuable effects in
the name and to the credit of the Corporation, in such depositories as may be
designated by the board of directors. He or she shall disburse the funds of
the Corporation as may be ordered by the board of directors, taking proper
vouchers for such disbursements, and shall render to the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his or her transactions as treasurer and of the financial condition of
the Corporation. If required by the board of directors, he or she shall give
the Corporation a bond (which shall be renewed every six years), in such sum
and with such surety or sureties as shall be satisfactory to the board of
directors, for the faithful performance of the duties of his or her office and
for the restoration to the Corporation, in case of his or her death,
resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his or her possession
or under his or her control belonging to the Corporation.
Section 11. Assistant Treasurers. The assistant treasurer, or if there
shall be more than one, the assistant treasurers in the order determined by
the board of directors, or if there be no such determination, the assistant
treasurer designated by the board of directors, shall, in the absence or
disability of the treasurer, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as
the board of directors may from time to time prescribe.
Section 12. Controller. The controller shall have general charge,
control and supervision over the accounting and auditing affairs of the
Corporation. He or she shall have the responsibility for the preparation and
maintenance of the books of account and of the accounting records and papers of
the Corporation; shall have responsibility for the custody and safekeeping
of all permanent records and papers of the Corporation; shall supervise the
preparation of all financial statements and reports on the operation and
condition of the business; shall have responsibility for the establishment of
financial procedures, records, and forms used by the Corporation; shall have
responsibility for the filing of all financial and tax reports and returns
required by law; shall render to the president, executive vice president, or
the board of directors, whenever they may require, an account of his or her
transactions as controller; and in general shall have such other powers and
perform such other duties as are incident to the office of controller and as
from time to time may be prescribed by the board of directors or the president.
Section 13. Assistant Controllers. The assistant controller, or if
there shall be more than one, the assistant controllers in the order determined
by the board of directors, or if there be no such determination, the assistant
controller designated by the board of directors, shall, in the absence or
disability of the controller, perform the duties and exercise the powers of
the controller and shall perform such other duties and have such other powers
as the board of directors may from time to time prescribe.
ARTICLE V
CERTIFICATES OF STOCK
Section 1. Certificates. Every holder of stock of the Corporation
shall be entitled to have a certificate signed by, or in the name of the
Corporation by, the president or a vice president, and by the secretary or
an assistant secretary, or the treasurer or an assistant treasurer of the
Corporation, certifying the number of shares represented by the certificate
owned by such stockholder in the Corporation.
Section 2. Signatures on Certificates. Any or all of the signatures
on the certificate may be a facsimile. In case any officer, transfer agent
or registrar who has signed or whose facsimile signature has been placed upon
a certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with
the same effect as if he or she were such officer, transfer agent or
registrar at the date of issue.
Section 3. Statement of Stock Rights, Preferences, Privileges. If the
Corporation shall be authorized to issue more than one class of stock or more
than one series of any class, the powers, designations, preferences and
relative, participating, optional or other special rights of each class of
stock or series thereof and the qualification, limitations or restrictions of
such preferences and/or rights shall be set forth in full or summarized on
the face or back of the certificate which the Corporation shall issue to
represent such class or series of stock, provided that, except as otherwise
provided in Section 202 of the General Corporation Law of the State of
Delaware, in lieu of the foregoing requirements, there may be set forth on the
face or back of the certificate which the Corporation shall issue to
represent such class or series of stock, a statement that the Corporation
will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative, participating, optional or other
special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 4. Lost, Stolen or Destroyed Certificates. The board of
directors may direct a new certificate or certificates to be issued in place
of any certificate or certificates theretofore issued by the Corporation
alleged to have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate
or certificates, the board of directors may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or his or her legal
representative, to advertise the same in such manner as it shall require and/or
to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to
the certificate alleged to have been lost, stolen or destroyed.
Section 5. Transfers of Stock. Upon surrender to the Corporation, or
the transfer agent of the Corporation, of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignation or
authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 6. Record Date. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of the
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of
stock or for the purpose of any other lawful action, the board of directors
may fix a record date which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of
or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
Section 7. Registered Stockholders. The Corporation shall be entitled
to treat the holder of record of any share or shares of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any equitable or
other claim or interest in such share on the part of any other person, whether
or not it shall have express or other notice thereof, save as expressly
provided by the laws of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation,
if any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
Section 2. Payment of Dividends; Directors; Duties. Before payment of
any dividend there may be set aside out of any funds of the Corporation
available for dividends such sum or sums as the directors from time to time,
in their absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or maintaining
any property of the Corporation, or for such other purpose as the
directors shall think conducive to the interests of the Corporation, and the
directors may abolish any such reserve.
Section 3. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers as the board of
directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall begin
on January 1 in 1995, and thereafter shall begin on the day after the
Saturday closest to December 31 in each year, and shall end on the Saturday
closest to December 31 in 1995 each year thereafter.
Section 5. Corporate Seal. The corporate seal shall have inscribed
thereon the name of the Corporation and the words "Corporate Seal, Delaware".
Said seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 6. Manner of Giving Notice. Whenever, under the provisions of
the Certificate of Incorporation or of these By-Laws or as required by law,
notice is required to be given to any director or stockholder, it shall not be
construed to mean personal notice, but such notice may be given in writing, by
mail, addressed to such director or stockholder, at his or her address as it
appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail.
Section 7. Waiver of Notice. Whenever any notice is required to be
given by law or under the provisions of the Certificate of Incorporation or of
these By-Laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein,
shall be deemed equivalent thereto. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when the person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is not lawfully
called or convened.
ARTICLE VII
AMENDMENTS
Section 1. Amendment by Directors of Stockholders. These By-Laws may
be altered, amended or repealed or new By-Laws may be adopted by the
stockholders or by the board of directors, when such power is conferred upon
the board of directors by the Certificate of Incorporation, at any regular
meeting of the stockholders or of the board of directors or at any special
meeting of the stockholders or of the board of directors if notice of such
alteration, amendment, repeal or adoption of new By-Laws be contained in the
notice of such special meeting; provided, however, that the authority to alter,
amend or repeal these By-Laws or to adopt new By-Laws shall not extend to the
board of directors with respect to the provisions of Section 2 of Article I
(or any comparable provision relating to offices of the Corporation). If
the power to adopt, amend or repeal these By-Laws is conferred upon the
board of directors by the Certificate of Incorporation it shall not divest or
limit the power of the stockholders to adopt, amend or repeal these By-Laws.
Exhibit 12
SEARS DC CORP.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
millions
1995 1994 1993
---- ---- ----
NET INCOME $ 0.4 $ 0.5 $ 39.1
INCOME TAXES 0.2 0.2 21.0
FIXED CHARGES, INTEREST
AND RELATED CHARGES 116.1 137.3 190.6
(i) EARNINGS AVAILABLE FOR
FIXED CHARGES 116.7 138.1 250.7
(ii) FIXED CHARGES 116.1 137.3 190.6
RATIO OF EARNINGS TO
FIXED CHARGES (i/ii) 1.005 1.005 1.32
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in Registration
Statement No. 33-44671 of Sears DC Corp. (formerly Discover
Credit Corp.) of our report dated March 11, 1996 appearing in
this Annual Report on Form 10-K of Sears DC Corp. for the year
ended December 30, 1995.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Chicago, Illinois
March 25, 1996
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the
undersigned, being a director or officer, or both, of SEARS DC
CORP., a Delaware corporation (the "Corporation"), does hereby
constitute and appoint JAMES A. BLANDA, ALICE M. PETERSON, LARRY
R. RAYMOND, PAUL D. MELANCON, RICHARD F. KOTZ and KEITH E. TROST,
with full power to each of them to act alone, as the true and
lawful attorneys and agents of the undersigned, with full power
of substitution and resubstitution to each of said attorneys, to
execute, file and deliver any and all instruments and to do any
and all acts and things which said attorneys and agents, or any
of them, deem advisable to enable the Corporation to comply with
the Securities Exchange Act of 1934, as amended, and any
requirements of the Securities and Exchange Commission in respect
thereto, relating to annual reports on Form 10-K, including
specifically, but without limitation of the general authority
hereby granted, the power and authority to sign his or her name
in the name and on behalf of the Corporation or as a director or
officer, or both, of the Corporation, as indicated below opposite
his or her signature, to annual reports on Form 10-K or any
amendment or papers supplemental thereto; and each of the
undersigned does hereby fully ratify and confirm all that said
attorneys and agents, or any of them, or the substitute of any of
them, shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed
these presents, as of this 29th day of March, 1996.
NAME TITLE
/s/ Alice M. Peterson Director, President and
Alice M. Peterson Chief Executive Officer
(Principal Executive Officer)
/s/ Larry R. Raymond Vice President and Treasurer
Larry R. Raymond (Principal Financial Officer)
/s/ Paul D. Melancon Vice President and Controller
Paul D. Melancon (Principal Accounting Officer)
/s/ James A. Blanda Director
James A. Blanda
/s/ James D. Constantine Director
James D. Constantine
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF FINANCIAL POSITION, INCOME AND CASH FLOWS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000000
<CAPTION>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-30-1995
<PERIOD-END> DEC-30-1995
<CASH> 0
<SECURITIES> 0<F1>
<RECEIVABLES> 1,258
<ALLOWANCES> 0<F1>
<INVENTORY> 0<F1>
<CURRENT-ASSETS> 0<F1>
<PP&E> 0<F1>
<DEPRECIATION> 0<F1>
<TOTAL-ASSETS> 1,260
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1,229
0<F1>
0<F1>
<COMMON> 0<F1>
<OTHER-SE> 5
<TOTAL-LIABILITY-AND-EQUITY> 1,260
<SALES> 0<F1>
<TOTAL-REVENUES> 117
<CGS> 0<F1>
<TOTAL-COSTS> 0<F1>
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F1>
<INTEREST-EXPENSE> 116
<INCOME-PRETAX> 1
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0<F1>
<EXTRAORDINARY> 0<F1>
<CHANGES> 0<F1>
<NET-INCOME> 1
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>Not applicable
</FN>
</TABLE>
