Page 1 of 7
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-10105
MATLACK SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 51-0310173
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Rollins Plaza, Wilmington, Delaware 19803
(Address of principal executive offices) (Zip Code)
(302) 426-2700
(Registrant's telephone number, including area code)
(Former name of registrant)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No _____
The number of shares of the registrant's common stock outstanding as
of March 31, 1997 was 8,758,846.
FORM 10-Q Page 2 of 7
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the quarter and six months ended March 31, 1997 are
not necessarily indicative of the results that may be expected for the year
ending September 30, 1997. These statements should be read in conjunction
with the financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the year ended September 30, 1996.
MATLACK SYSTEMS, INC.
CONSOLIDATED STATEMENT OF EARNINGS
($000 Omitted Except for Per Share Amounts)
Quarter Six Months Ended
March 31, March 31,
1997 1996 1997 1996
Revenues $56,538 $57,666 $111,095 $113,228
Operating expenses 47,895 48,161 94,490 94,981
Depreciation 3,286 2,978 6,498 5,913
Selling and administrative
expenses 4,142 4,617 8,499 9,157
Other (income) expense (30) (6) (44) 2
55,293 55,750 109,443 110,053
Operating earnings 1,245 1,916 1,652 3,175
Interest expense 814 752 1,554 1,542
Earnings before income taxes 431 1,164 98 1,633
Income taxes 108 535 47 730
Net earnings $ 323 $ 629 $ 51 $ 903
Earnings per share $ .04 $ .07 $ .01 $ .10
Average common shares and
equivalents outstanding (000) 8,811 8,880
Dividends paid per share None None None None
<PAGE>
FORM 10-Q Page 3 of 7
MATLACK SYSTEMS, INC.
CONSOLIDATED BALANCE SHEET
($000 Omitted)
March 31, September 30,
ASSETS 1997 1996
Current assets
Cash $ 2,631 $ 3,019
Accounts receivable, net of allowance for
doubtful accounts: March-$221;
September-$414 26,908 24,282
Inventories 5,630 5,439
Other current assets 4,032 2,907
Refundable income taxes 454 1,114
Deferred income taxes 1,135 1,885
Total current assets 40,790 38,646
Property and equipment, at cost, net of
accumulated depreciation of:
March-$125,028; September-$125,858 91,340 89,267
Other assets 243 214
Total assets $132,373 $128,127
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 9,680 $ 10,047
Accrued liabilities 8,298 10,174
Current maturities of long-term debt 7,303 6,213
Total current liabilities 25,281 26,434
Long-term debt 34,491 29,878
Insurance reserves 3,006 1,716
Other liabilities 2,477 2,023
Deferred income taxes 11,448 12,400
Commitments and contingent liabilities
See Part II Legal Proceedings
Shareholders' equity:
Preferred stock, $1 par value,
1,000,000 shares authorized; issued and
outstanding - None
Common stock, $1 par value,
24,000,000 shares authorized;
issued and outstanding:
March-8,758,846 and
September-8,762,116 8,759 8,762
Additional paid-in capital 10,499 10,553
Retained earnings 36,412 36,361
Total shareholders' equity 55,670 55,676
Total liabilities and
shareholders' equity $132,373 $128,127
<PAGE>
FORM 10-Q Page 4 of 7
MATLACK SYSTEMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
($000 Omitted)
Six Months Ended
March 31,
1997 1996
Cash flows from operating activities:
Net earnings $ 51 $ 903
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 6,509 5,913
Changes in assets and liabilities:
Accounts receivable (2,626) (839)
Inventories and other assets (1,346) (477)
Accounts payable and accrued liabilities (2,244) (202)
Current and deferred income taxes 458 188
Other, net 1,700 (351)
Net cash provided by operating activities 2,502 5,135
Cash flows from investing activities:
Purchase of property and equipment (9,310) (3,352)
Proceeds from sale of equipment 772 46
Net cash used in investing activities (8,538) (3,306)
Cash flows from financing activities:
Proceeds of long-term debt 27,400 18,125
Repayment of long-term debt (21,696) (18,832)
Exercise of stock options 20 9
Common stock acquired and retired (76) -
Net cash provided by (used in) financing activities 5,648 (698)
Net (decrease) increase in cash (388) 1,131
Cash beginning of period 3,019 2,845
Cash end of period $ 2,631 $ 3,976
Supplemental information:
Interest paid $ 1,417 $ 1,370
Income taxes (recovered) paid $ (411) $ 542
<PAGE>
FORM 10-Q Page 5 of 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations: Six Months Ended March 31, 1997 vs. Six Months
Ended March 31, 1996
Revenues for the first six months ended March 31, 1997 decreased by
$2,133,000 (1.9%) from $113,228,000 to $111,095,000. The number of loads
carried decreased 5.2% while average miles per load increased 3.7%.
Revenues from the Company's non-bulk trucking subsidiaries increased and
now represent more than 20% of revenues.
Operating expenses decreased by $491,000 (.5%) reflecting the decrease
in loads carried. Higher fuel prices caused an increase in fuel costs of
$1,029,000 compared with the same six months of last fiscal year. This
increase was offset in large part by decreased terminal expenses of
$980,000 with the remainder of the operating expense decrease resulting
from the lower level of business and cost containment efforts. Operating
expenses as a percentage of revenues increased to 85.1% in 1997 from 83.9%
in 1996.
Depreciation expense increased by $585,000 (9.9%) principally due to the
capital expenditures made in fiscal 1996 and the first quarter of fiscal
1997.
Selling and administrative expenses decreased by $658,000 (7.2%) mainly
due to the lower level of business and the Company's continued efforts to
control costs. Selling and administrative expenses were 7.7% of revenues
in 1997 and 8.1% in 1996.
Interest expense for the six months ended March 31, 1997 was essentially
the same as last fiscal year.
The effective income tax rates for the six months ended March 31, 1997
and 1996 were 48.0% and 44.7%, respectively. Non-deductible expenses and
lower earnings caused the increase in the effective tax rate for fiscal
1997.
Net earnings decreased to $51,000 or $.01 per share from $903,000 or $.10
per share in the prior year. The decrease in earnings resulted principally
from lower revenues and higher depreciation expense.
Results of Operations: Quarter Ended March 31, 1997 vs. Quarter Ended
March 31, 1996
Revenues for the quarter ended March 31, 1997 were $56,538,000 compared
with $57,666,000 reported in the second quarter last year. The decrease of
$1,128,000 (2.0%) was primarily attributable to a 1.8% decrease in revenue
per mile. The number of loads carried decreased by 5.1% but was offset by
a 4.4% increase in the average miles per load. Non-bulk trucking revenues
continue to increase and were more than 20% of total revenues for the
quarter ended March 31, 1997.
Operating expenses decreased by $266,000 (.6%) reflecting the decrease
in loads carried. Operating expenses as a percentage of revenues increased
to 84.7% in 1997 from 83.5% in 1996.
Capital expenditures made in fiscal 1996 and the first quarter of fiscal
1997 resulted in increased depreciation expense of $308,000 (10.3%) for the
quarter ended March 31, 1997.
FORM 10-Q Page 6 of 7
Selling and administrative expenses decreased by $475,000 (10.3%) mainly
due to the lower level of business. Selling and administrative expenses
were 7.3% of revenues in 1997 and 8.0% in 1996.
Interest expense increased $62,000 (8.2%) primarily caused by a higher
level of borrowings during the current fiscal year compared with last year.
Higher cash flow from operations enabled the Company to reduce indebtedness
by $855,000 between December 31, 1996 and March 31, 1997.
The effective income tax rates for the quarters ended March 31, 1997 and
1996 were 25.1% and 46.0%, respectively. The low level of income tax
benefit recorded in the first fiscal quarter reduced the effective tax rate
for the second fiscal quarter of 1997.
Net earnings decreased to $323,000 or $.04 per share from $629,000 or
$.07 per share in the prior year. The decrease in earnings resulted
principally from the lower revenues and higher depreciation expense.
Liquidity and Capital Resources
During the first six months of fiscal 1997, the Company financed its net
capital additions of $8,538,000 through the use of new long-term debt of
$5,704,000, net cash provided by operating activities of $2,502,000 and
available cash. At March 31, 1997, a total of $2,274,000 was available to
the Company under its $30,000,000 revolving credit facility. Cash flow
from operations is expected to be in excess of capital expenditures during
the second half of the fiscal year.
Otherwise, there have been no material changes in the Company's financial
condition and its liquidity and capital resources since September 30, 1996.
For further details, see the Company's 1996 Annual Report to Shareholders
on Form 10-K for the year ended September 30, 1996.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
There are no material legal proceedings to which the Company or any of
its subsidiaries is a party. Certain subsidiaries of the Company are
involved in ordinary routine litigation incidental to the operation of its
business.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
FORM 10-Q Page 7 of 7
Item 4. Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Shareholders was held on January 30,
1997. With regard to Proposal No. 1 of the NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JANUARY 30, 1997 to elect two Class II Directors
to the Board of Directors, John W. Rollins, Jr. and William B. Philipbar,
Jr. were elected. At the meeting, 7,720,091 and 7,720,274 affirmative
votes were cast for John W. Rollins, Jr. and William B. Philipbar, Jr.,
respectively. There were no votes case against either nominee and 36,481
and 36,298 votes were withheld from John W. Rollins, Jr. and William B.
Philipbar, Jr., respectively.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 3(ii) By-Laws
By-Laws of Matlack Systems, Inc. as last amended on January 30,
1997.
(b) Reports on Form 8-K
None.
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.
DATE: April 24, 1997 MATLACK SYSTEMS, INC.
(Registrant)
/s/ G. J. Trippitelli
G. J. Trippitelli
President and Chief Executive Officer
/s/ Patrick J. Bagley
Patrick J. Bagley
Vice President-Finance and Treasurer
Chief Financial Officer
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,631
<SECURITIES> 0
<RECEIVABLES> 27,129
<ALLOWANCES> 221
<INVENTORY> 5,630
<CURRENT-ASSETS> 40,790
<PP&E> 216,368
<DEPRECIATION> 125,028
<TOTAL-ASSETS> 132,373
<CURRENT-LIABILITIES> 25,281
<BONDS> 34,491
0
0
<COMMON> 8,759
<OTHER-SE> 46,911
<TOTAL-LIABILITY-AND-EQUITY> 132,373
<SALES> 111,095
<TOTAL-REVENUES> 111,095
<CGS> 0
<TOTAL-COSTS> 100,988
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,554
<INCOME-PRETAX> 98
<INCOME-TAX> 47
<INCOME-CONTINUING> 51
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
BY-LAWS
OF
MATLACK SYSTEMS, INC.
-----------------------------------------------------------------
ARTICLE I
The Corporation
Section 1.1 Name. The title of this Corporation is MATLACK
SYSTEMS, INC.
Section 1.2 Office. The registered office of this Corporation
shall be located at One Rollins Plaza, Wilmington, County of New
Castle, State of Delaware, or at such other place as the Board of
Directors may designate in accordance with Section 133 of the Delaware
Corporation Law.
Section 1.3 Seal. The corporate seal of the Corporation shall
have inscribed thereon the name of the Corporation and the year of its
creation (1988) and the words "Incorporated Delaware".
ARTICLE II
Stockholders
Section 2.1 Annual Meeting. The annual meeting of stockholders
shall be held at such place within or without the State of Delaware as
the Board of Directors from time to time determine.
A majority of the amount of the stock issued and outstanding and
entitled to vote shall constitute a quorum for the transaction of all
business, except as otherwise provided by law, the charter of the
corporation or these by-laws. Each stockholder shall be entitled to
one vote, either in person or by proxy, for each share of stock
standing registered in his or her name on the books of the Corporation
on the record date selected by the Board of Directors in accordance
with these by-laws, unless more or less than one vote per share is, by
the terms of the instrument creating special or preferred shares,
conferred upon the holders thereof.
Notice of the annual meeting shall be mailed by the Secretary to
each stockholder at his or her last known post office address no less
than ten days and no more than fifty days prior thereto.
Section 2.2 Special Meetings. Special meetings of stockholders
for any purpose or purposes may be called at any time by the Chairman
of the Board of Directors, the Vice Chairman of the Board of Directors,
the Chairman of the Executive Committee or the President and not by any
other person.
Section 2.3 Notice of Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice
of the meeting shall be given which 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. Unless otherwise provided
by law, the written notice of any meeting shall be given not less than
ten nor more than sixty days before the date of the meeting to each
stockholder entitled to vote at such meeting. If mailed, such notice
shall be deemed to be given when deposited in the mail, postage
prepaid, directed to the stockholder at his address as it appears on
the records of the Corporation.
Section 2.4 Adjournments. Any meeting of the stockholders,
annual or special, may adjourn from time to time to reconvene at the
same or some other place, and notice need not be given of any such
adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting
the Corporation may transact any business which might have been
transacted at the original meeting. 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 at the
meeting.
Section 2.5 Quorum. At each meeting of stockholders, except
where otherwise provided by law or the certificate of incorporation or
these by-laws, the holders of a majority of the outstanding shares of
stock entitled to vote at the meeting, present in person or by proxy,
shall constitute a quorum. In the absence of a quorum, the
stockholders so present may, by majority vote, adjourn the meeting from
time to time in the manner provided in Section 2.4 of these by-laws
until a quorum shall attend.
Section 2.6 Organization. Meetings of stockholders
shall be presided over by the Chairman of the Board, if any, or in his
absence by the Vice Chairman of the Board, if any, or in his absence by
the President, or in his absence by a Vice President, or in the absence
of the foregoing persons by a chairman designated by the Board of
Directors, or in the absence of such designation by a chairman chosen
at the meeting. The Secretary shall act as secretary of the meeting,
but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting.
Section 2.7 Voting; Proxies. Unless otherwise
provided in the certificate of incorporation, each stockholder entitled
to vote at any meeting of stockholders shall be entitled to one vote
for each share of stock held by him which has voting power upon the
matter in question. Each stockholder entitled to vote at a meeting of
stockholders may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years
from its date, unless the proxy provides for a longer period. A duly
executed proxy shall be irrevocable if it states that it is irrevocable
and if, and only as long as, it is coupled with an interest sufficient
in law to support an irrevocable power. A stockholder may revoke any
proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or
another duly executed proxy bearing a later date with the Secretary of
the Corporation. Voting at meetings of stockholders need not be by
written ballot and need not be conducted by inspectors unless the
holders of a majority of the outstanding shares of all classes of stock
entitled to vote thereon present in person or by proxy at such meeting
shall so determine. At all meetings of stockholders for the election
of directors a plurality of the votes cast shall be sufficient to
elect. All other elections and questions shall, unless otherwise
provided by law or by the certificate of incorporation or these
by-laws, be decided by the vote of the holders of a majority of the
outstanding shares of stock entitled to vote thereon present in person
or by proxy at the meeting, provided that (except as otherwise required
by law or by the certificate of incorporation or these by-laws) the
Board of Directors may require a larger vote upon any election or
question.
Section 2.8 Fixing Date for Determination of
Stockholders of Record. In order that the Corporation may determine
the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or 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 of
exchange or stock or for the purpose of any other lawful action, the
Board of Directors may fix, in advance, a record date, which shall not
be more than sixty nor less than ten days before the date of such
meeting, nor more than sixty days prior to any other action. If no
record date is fixed: (1) the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be
at the close of business on the day next preceding the day on which
notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; and (2)
the record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto. 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 2.9 List of Stockholders Entitled To Vote.
The Secretary 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. The stock ledger shall be the only
evidence as to who are the stockholders entitled to examine the stock
ledger, the list of stockholders or the books of the Corporation, or to
vote in person or by proxy at any meeting of stockholders.
Section 2.10 Action by Consent Of Stockholders. No
action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without
a meeting, and the power of stockholders to consent in writing, without
a meeting, to the taking of any action is specifically denied.
ARTICLE III
Board of Directors
Section 3.1 Number; Qualifications. The Board of Directors
shall consist of six members. Directors need not be stockholders.
Section 3.2 Election; Resignation; Removal; Vacancies. At
each annual meeting of stockholders, the stockholders shall elect
Directors to replace those Directors whose terms then expire. Any
Director may resign at any time upon written notice to the Corporation.
Stockholders may remove Directors only for cause. Any vacancy
occurring in the Board of Directors for any cause may be filled only by
the Board of Directors, acting by vote of a majority of the Directors
then in office, although less than quorum. Each Director so elected
shall hold office until the expiration of the term of office of the
Director whom he has replaced.
Section 3.3 Notice Of Nomination Of Directors. Nominations
for the election of directors may be made by the Board of Directors or
by any stockholder entitled to vote for the election of directors.
Such nominations shall be made by notice in writing, delivered or
mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than fourteen days nor more than
fifty days prior to any meeting of the stockholders called for the
election of directors; provided, however, that if less than twenty-one
days' notice of the meeting is given to stockholders, such written
notice shall be delivered or mailed, as prescribed, to the Secretary of
the Corporation not later than the close of the seventh day following
the day on which notice of the meeting was mailed to stockholders.
Notice of nominations which are proposed by the Board of Directors
shall be given by the Chairman on behalf of the Board. Each such
notice shall set forth (i) the name, age, business address and, if
known, residence address of each nominee proposed in such notice, (ii)
the principal occupation or employment of each such nominee and (iii)
the number of shares of stock of the Corporation which are beneficially
owned by each such nominee. The Chairman of the meeting may, if the
facts warrant, determine and declare to the meeting that a nomination
was not made in accordance with the foregoing procedure, and if he
should so determine, he shall so declare to the meeting and the
defective nomination shall be disregarded.
Section 3.4 Regular Meetings. Regular meetings of the
Board of Directors may be held at such places within or without the
State of Delaware and at such times as the Board of Directors may from
time to time determine, and if so determined notices thereof need not
be given.
Section 3.5 Special Meetings. Special meetings of the
Board of Directors may be held at any time or place within or without
the State of Delaware whenever called by the President, the Chairman of
the Board of Directors, the Vice Chairman of the Board of Directors, or
by the Chairman of the Executive Committee. Reasonable notice thereof
shall be given by the person calling the meeting, not later than the
second day before the date of the special meeting.
Section 3.6 Telephonic Meetings Permitted. Members of the
Board of Directors, or any committee designated by the Board, may
participate in any meeting of such Board or 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
participation in a meeting pursuant to this by-law shall constitute
presence in person at such meeting.
Section 3.7 Quorum; Vote Required For Action; Informal
Action. At all meetings of the Board of Directors a majority of the
whole Board shall constitute a quorum for the transaction of business.
Except in cases in which the certificate of incorporation or these
by-laws otherwise provide, the vote of a majority of the directors
present at a meeting at which a quorum is present shall be the act of
the Board of Directors. Unless otherwise restricted by the certificate
of incorporation or these by-laws, any action required or permitted to
be taken at any meeting of the Board of Directors, or of any committee
thereof, may be taken without a meeting if all members of the Board or
such committee, as the case may be, consent thereto in writing, and the
writing or writings are filed with the minutes of the proceedings of
the Board or committee.
Section 3.8 Organization. Meetings of the Board of
Directors shall be presided over by the Chairman of the Board, if any,
or in his absence by the Vice Chairman of the Board, if any, or in his
absence by the President, or in their absence by a chairman chosen at
the meeting. The Secretary shall act as a secretary of the meeting,
but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting.
Section 3.9 Compensation Of Directors. The Directors and
members of standing committees shall receive such fees or salaries as
fixed by resolution of the Executive Committee and in addition will
receive expenses in connection with attendance or participation in each
regular or special meeting.
ARTICLE IV
Committees
Section 4.1 Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or
more committees, each committee to consist of one or more of the
directors of the Corporation. The Board may designate one or more
directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. In the
absence or disqualification of a member of the committee, the member or
members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting
in place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of
the Corporation, and may authorize the seal of the Corporation to be
affixed to all papers which may require it; but no such committee shall
have power or authority in reference to amending the certificate of
incorporation of the Corporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange or all or substantially all of the Corporation's property and
assets, recommending to the stockholders a dissolution of the
Corporation or a revocation of dissolution, or amending these by-laws.
The Board of Directors shall, at the annual organization meeting
thereof, elect an Executive Committee which shall consist of not more
than four members, all of whom shall be members of the Board of
Directors. The Executive Committee shall have and may exercise all of
the powers and authority of the Board of Directors in the management of
business and affairs of the Corporation to the fullest extent permitted
by law (as presently allowed under Section 141 (c) to the Delaware
General Corporation Law as revised effective July 1, 1996, and as may
be allowed in the future pursuant to amendments or revisions to
applicable law).
Section 4.2 Committee Rules. Unless the Board of Directors
otherwise provides, each committee designated by the Board may make,
alter and repeal rules for the conduct of its business. In the absence
of such rules each committee shall conduct its business in the same
manner as the Board of Directors conducts its business pursuant to
Article III of these by-laws.
ARTICLE V
Officers
Section 5.1 Executive Officers; Election; Qualifications;
Term of Office; Resignation; Removal; Vacancies. The officers of the
Corporation shall consist of a Chairman, Vice Chairman, President, Vice
Presidents, Secretary, Assistant Secretaries, Treasurer, Assistant
Treasurers, General Counsel, and such other officers as may from time
to time be elected or appointed by the Board of Directors. The
President shall be elected from the Board of Directors. Any officer
may resign at any time upon written notice to the Corporation. The
Board of Directors may remove any officer with or without cause at any
time, but such removal shall be without prejudice to the contractual
rights of such officer, if any, with the Corporation. Any number of
offices may be held by the same person. Any vacancy occurring in any
office of the Corporation by death, resignation, removal or otherwise
may be filled for the unexpired portion of the term by the Board of
Directors at any regular or special meeting. In the absence of any
officer, the Board of Directors may delegate his power and duties to
any other officer or to any director for the time being.
Section 5.2 Duties Of The Chairman Of The Board And The
Chairman Of The Executive Committee. The Chairman shall preside at all
meetings of the Board, shall have general and active management of the
business of the Corporation and shall see that all orders and
resolutions of the Board are carried into effect. He shall submit a
complete report of the operations and condition of the Corporation for
the year to the stockholders at their annual meeting. In all cases,
where a Chairman of the Executive Committee is elected, the Chairman of
the Executive Committee shall, in the absence of the Chairman of the
Board of Directors, act in the latter's capacity.
Section 5.3 President. The President shall be the Chief
Executive Officer of the Corporation, shall execute in the name of the
Corporation all contracts and agreements authorized by the Board or the
Executive Committee, and shall affix the seal to any instrument
requiring the same, which shall always be attested by the signature of
the President, the Vice President or the Secretary or any Assistant
Secretary or the Treasurer. He may sign certificates of stock; he
shall have general supervision and direction of all the other officers
of the Corporation; he shall submit a complete report of the operations
and condition of the Corporation for the year to the Chairman and to
the directors at their regular meetings, and from time to time shall
report to the directors all matters which the interest of the
Corporation may require to be brought to their notice. He shall have
the general powers and duties usually vested in the office of a
President of a corporation.
Section 5.4 Vice President Finance. The Vice President
Finance shall be Chief Accounting and Chief Financial Officer of the
Corporation and shall be responsible to the Board of Directors, the
Executive Committee and the President for all financial control and
internal audit of the Corporation and its subsidiaries. He shall
perform such other duties as may be assigned to him by the Board of
Directors, the Executive Committee or the President.
Section 5.5 Vice Presidents. The Vice Presidents elected
or appointed by the Board of Directors shall perform such duties and
exercise such powers as may be assigned to them from time to time by
the Board of Directors, the Executive Committee or the President. In
the absence or disability of the President, the Vice President
designated by the Board of Directors, the Executive Committee, or the
President shall perform the duties and exercise the powers of the
President. A Vice President may sign and execute contracts and other
obligations pertaining to the regular course of his duties.
Section 5.6 Secretary. The Secretary shall be ex-officio
Secretary of the Board of Directors and of the standing committees. He
shall attend all sessions of the Board, act as clerk thereof, record
all votes and keep the minutes of all proceedings in a book to be kept
for that purpose. He shall perform like duties for the standing
committees when required. He shall see that the proper notices are
given of all meetings of stockholders and directors, and perform such
other duties as may be prescribed from time to time by the Board of
Directors, the Executive Committee, Chairman or President, and shall be
sworn to the faithful discharge of his duties.
He shall keep the accounts of stock registered and
transferred in such form and manner and under such regulations as the
Board of Directors or Executive Committee may prescribe.
Section 5.7 Treasurer. The Treasurer shall keep full and
accurate accounts of receipts and disbursements in books belonging to
the Corporation and shall deposit all monies 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 or Executive Committee.
He shall disburse the funds of the Corporation as may be ordered by the
Board, the Executive Committee or the President, taking proper vouchers
therefor, and shall render to the President and the Executive Committee
and Directors, whenever they may require it, an account of all his
transactions as Treasurer, and of the financial condition of the
Corporation, and at the annual organization meeting of the Board a like
report for the preceding year.
Section 5.8 General Counsel. The General Counsel shall be
the legal adviser of the Corporation and shall perform such services as
the Chairman, President, Board of Directors or Executive Committee may
require.
ARTICLE VI
Stock
Section 6.1 Certificates. Every holder of stock shall be
entitled to have a certificate signed by or in the name of the
Corporation by the Chairman or Vice Chairman of the Board of Directors,
if any, or the President of the Corporation, certifying the number of
shares owned by him in the Corporation. Any of or all the signatures
on the certificate may be a facsimile. In case any officer, transfer
agent, or registrar who has signed or whose facsimile signature has
been placed upon a certificate, shall have ceased to be such officer,
transfer agent, or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such
officer, transfer agent, or registrar at the date of issue.
Section 6.2 Lost, Stolen Or Destroyed Stock Certificates;
Issuance Of New Certificates. The Corporation may issue a new
certificate of stock in the place of any certificate theretofore issued
by it, alleged to have been lost, stolen or destroyed, and the
Corporation may require the owner of the lost, stolen or destroyed
certificate, or his 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 such new certificate.
ARTICLE VII
Indemnification
Section 7.1. General. The Company shall indemnify,
and advance Expenses (as hereinafter defined) to, Indemnitee (as
hereinafter defined) to the fullest extent permitted by applicable law
in effect on July 23, 1986, and to such greater extent as applicable
law may thereafter from time to time permit. The rights of Indemnitee
provided under the preceding sentence shall include, but shall not be
limited to, the rights set forth in the other Sections of this Article.
Section 7.2. Proceedings Other Than Proceedings By Or
In The Right Of The Company. Indemnitee shall be entitled to the
indemnification rights provided in this Section 7.2 if, by reason of
his Corporate Status (as hereinafter defined), he is, or is threatened
to be made, a party to any threatened, pending, or completed Proceeding
(as hereinafter defined), other than a Proceeding by or in the right of
the Company. Pursuant to this Section 7.2, Indemnitee shall be
indemnified against Expenses, judgments, penalties, fines and amounts
paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such Proceeding or any claim, issue or matter
therein, if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company,
and, with respect to any criminal Proceeding, had no reasonable cause
to believe his conduct was unlawful.
Section 7.3. Proceedings By Or In The Right Of The
Company. Indemnitee shall be entitled to the indemnification rights
provided in this Section 7.3 to the fullest extent permitted by law if,
by reason of his Corporate Status, he is, or is threatened to be made,
a party to any threatened, pending or completed Proceeding brought by
or in the right of the Company to procure a judgment in its favor.
Pursuant to this Section 7.3, Indemnitee shall be indemnified against
Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection
with such Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interest of the
Company.
Section 7.4. Indemnification For Expenses Of A Party
Who Is Wholly Or Partly Successful. Notwithstanding any other
provision of this Article, to the extent that Indemnitee is, by reason
of his Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, he shall be indemnified against all
Expenses actually and reasonably incurred by him or on his behalf in
connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or
more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee against all Expenses actually
and reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For purposes of this
Section and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue or
matter.
Section 7.5. Indemnification For Expenses Of A
Witness. Notwithstanding any other provision of this Article, to the
extent that Indemnitee is, by reason of his Corporate Status, a witness
in any Proceeding, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection
therewith.
Section 7.6. Advancement Of Expenses. The Company
shall advance all reasonable Expenses incurred by or on behalf of
Indemnitee in connection with any Proceeding within twenty days after
the receipt by the Company of a statement or statements from Indemnitee
requesting such advance or advances from time to time, whether prior to
or after final disposition of such proceeding. Such statement or
statements shall reasonably evidence the Expenses incurred by
Indemnitee and shall include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses.
Section 7.7. Procedure For Determination Of
Entitlement To Indemnification.
(a) To obtain indemnification under this Article,
Indemnitee shall submit to the Company a written request, including
therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to
determine whether and to what extent Indemnitee is entitled to
indemnification. The determination of Indemnitee's entitlement to
indemnification shall be made not later than 60 days after receipt by
the Company of the written request for indemnification. The Secretary
of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board of Directors in writing that
Indemnitee has requested indemnification.
(b) Indemnitee's entitlement to indemnification
under any of Sections 7.2, 7.3 or 7.4 of this Article shall be
determined in the specific case: (i) by the Board of Directors by a
majority vote of a quorum of the Board consisting of Disinterested
Directors (as hereinafter defined); or (ii) by Independent Counsel (as
hereinafter defined), in a written opinion, if (A) a Change of Control
(as hereinafter defined) shall have occurred and Indemnitee so
requests, or (B) if a quorum of the Board of Directors consisting of
Disinterested Directors is not obtainable or, even if obtainable, such
quorum of Disinterested Directors so directs; or (iii) by the
stockholders of the Company; or (iv) as provided in Section 7.8 of this
Article.
(c) In the event the determination of entitlement
to indemnification is to be made by Independent Counsel pursuant to
Section 7.7(b) of this Article, the Independent Counsel shall be
selected as provided in this Section 7.7(c). If a Change of Control
shall not have occurred, the Independent Counsel shall be selected by
the Board of Directors, and the Company shall give written notice to
Indemnitee advising him of the identity of the Independent Counsel so
selected. If a Change of Control shall have occurred, and if so
requested by Indemnitee in his written request for indemnification, the
Independent Counsel shall be selected by Indemnitee, and Indemnitee
shall give written notice to the Company advising it of the identity of
the Independent Counsel so selected. In either event, Indemnitee or
the Company, as the case may be, may, within 7 days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection.
Such objection may be asserted only on the ground that the Independent
Counsel so selected does not meet the requirements of "Independent
Counsel" as defined in Section 7.13 of this Article, and the objection
shall set forth with particularity the factual basis of such assertion.
If such written objection is made, the Independent Counsel so selected
shall be disqualified from acting as such. If, within 20 days after
submission by Indemnitee of a written request for indemnification
pursuant to Section 7.7(a) hereof, no Independent Counsel shall have
been selected, or if selected shall have been objected to, in
accordance with this Section 7.7(c), either the Company or Indemnitee
may petition the Court of Chancery of the State of Delaware for the
appointment as Independent Counsel of a person selected by the Court or
by such other person as the Court shall designate, and the person so
appointed shall act as Independent Counsel under Section 7.7(b) hereof.
The Company shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in acting
pursuant to Section 7.7(b) hereof, and the Company shall pay all
reasonable fees and expenses incident to the procedures of this Section
7.7(c), regardless of the manner in which such Independent Counsel was
selected or appointed.
Section 7.8. Presumptions And Effect Of Certain
Proceedings. If a Change of Control shall have occurred, Indemnitee
shall be presumed (except as otherwise expressly provided in this
Article) to be entitled to indemnification under this Article upon
submission of a request for indemnification in accordance with Section
7.7(a) of this Article, and thereafter the Company shall have the
burden of proof to overcome that presumption in reaching a
determination contrary to that presumption. Whether or not a Change of
Control shall have occurred, if the person or persons empowered under
Section 7.7 of this Article to determine entitlement to indemnification
shall not have made a determination within 60 days after receipt by the
Company of the request therefor, the requisite determination of
entitlement to indemnification shall be deemed to have been made and
Indemnitee shall be entitled to such indemnification unless (i)
Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification, or (ii) such indemnification is
prohibited by law. The termination of any Proceeding described in any
of Sections 7.2, 7.3, or 7.4 of this Article, or of any claim, issue or
matter therein, by judgment, order, settlement or conviction, or upon
a plea of nolo contendere or its equivalent, shall not (except as
otherwise expressly provided in this Article) of itself adversely
affect the right of Indemnitee to indemnification or create a
presumption that Indemnitee did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was
unlawful.
Section 7.9. Remedies Of Indemnitee.
(a) In the event that (i) a determination is made
pursuant to Section 7.7 of this Article that Indemnitee is not entitled
to indemnification under this Article, (ii) advancement of Expenses is
not timely made pursuant to Section 7.6 of this Article, or (iii)
payment of indemnification is not made within five (5) days after a
determination of entitlement to indemnification has been made or deemed
to have been made pursuant to Sections 7.7 or 7.8 of this Article,
Indemnitee shall be entitled to an adjudication in an appropriate court
of the State of Delaware, or in any other court of competent
jurisdiction, of his entitlement to such indemnification or advancement
of Expenses. Alternatively, Indemnitee, at his option, may seek an
award in arbitration to be conducted by a single arbitrator pursuant to
the rules of the American Arbitration Association. The Company shall
not oppose Indemnitee's right to seek any such adjudication or award in
arbitration.
(b) In the event that a determination shall have
been made pursuant to Section 7.7 of this Article that Indemnitee is
not entitled to indemnification, any judicial proceeding or arbitration
commenced pursuant to this Section 7.9 shall be conducted in all
respects as a de novo trial, or arbitration, on the merits and
Indemnitee shall not be prejudiced by reason of that adverse
determination. If a Change of Control shall have occurred, in any
judicial proceeding or arbitration commenced pursuant to this Section
7.9 the Company shall have the burden of proving that Indemnitee is not
entitled to indemnification or advancement of Expenses, as the case may
be.
(c) If a determination shall have been made or
deemed to have been made pursuant to Sections 7.7 or 7.8 of this
Article that Indemnitee is entitled to indemnification, the Company
shall be bound by such determination in any judicial proceeding or
arbitration commenced pursuant to this Section 7.9, unless (i)
Indemnitee misrepresented or failed to disclose a material fact in
making the request for indemnification, or (ii) such indemnification is
prohibited by law.
(d) The Company shall be precluded from asserting
in any judicial proceeding or arbitration commenced pursuant to this
Section 7.9 that the procedures and presumptions of this Article are
not valid, binding and enforceable and shall stipulate in any such
court or before any such arbitrator that the Company is bound by all
the provisions of this Article.
(e) In the event that Indemnitee, pursuant to this
Section 7.9, seeks a judicial adjudication of, or an award in
arbitration to enforce his rights under, or to recover damages for
breach of, this Article, Indemnitee shall be entitled to recover from
the Company, and shall be indemnified by the Company against, any and
all expenses (of the types described in the definition of Expenses in
Section 7.13 of this Article) actually and reasonably incurred by him
in such judicial adjudication or arbitration, but only if he prevails
therein. If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of
the indemnification or advancement of Expenses sought, the expenses
incurred by Indemnitee in connection with such judicial adjudication or
arbitration shall be appropriately prorated.
Section 7.10. Non-Exclusivity And Survival Of Rights.
The rights of indemnification and to receive advancement of Expenses as
provided by this Article shall not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under applicable
law, the Certificate of Incorporation, the By-Laws, any agreement, a
vote of stockholders or a resolution of directors, or otherwise.
Notwithstanding any amendment, alteration or repeal of any provision of
this Article, Indemnitee shall, unless otherwise prohibited by law,
have the rights of indemnification and to receive advancement of
Expenses as provided by this Article in respect of any action taken or
omitted by Indemnitee in his Corporate Status and in respect of any
claim asserted in respect thereof at any time when such provision of
this Article was in effect. The provisions of this Article shall
continue as to an Indemnitee whose Corporate Status has ceased and
shall inure to the benefit of his heirs, executors and administrators.
Section 7.11. Severability. If any provision or
provisions of this Article shall be held to be invalid, illegal or
unenforceable for any reason whatsoever:
(a) the validity, legality and enforceability of
the remaining provisions of this Article (including without limitation,
each portion of any Section of this Article containing any such
provision held to be invalid, illegal or unenforceable, that is not
itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; and
(b) to the fullest extent possible, the provisions
of this Article (including, without limitation, each portion of any
Section of this Article containing any such provision held to be
invalid, illegal or unenforceable, that is not itself invalid, illegal
or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable.
Section 7.12. Certain Persons Not Entitled To
Indemnification Or Advancement Of Expenses. Notwithstanding any other
provision of this Article, no person shall be entitled to
indemnification or advancement of Expenses under this Article with
respect to any Proceeding, or any claim therein, brought or made by him
against the Company.
Section 7.13. Definitions. For purposes of this
Article:
(a) "Change in Control" means a change in control
of the Company of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14A of Regulation 14A (or in response
to any similar item on any similar schedule or form) promulgated under
the Securities Exchange Act of 1934 (the "Act"), whether or not the
Company is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be
deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner") (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 20% or more of
the combined voting power of the Company's then outstanding securities
without the prior approval of at least two-thirds of the members of the
Board of Directors in office immediately prior to such person attaining
such percentage interest; (ii) the Company is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy
contest, as a consequence of which members of the Board of Directors in
office immediately prior to such transaction or event constitute less
than a majority of the Board of Directors thereafter; or (iii) during
any period of two consecutive years, individuals who at the beginning
of such period constituted the Board of Directors (including for this
purpose any new director whose election or nomination for election by
the Company's stockholders was approved by a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at
least a majority of the Board of Directors.
(b) "Corporate Status" describes the status of a
person who is or was a director, officer, employee, agent or fiduciary
of the Company or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise which such person is
or was serving at the request of the Company.
(c) "Disinterested Director" means a director of
the Company who is not and was not a party to the Proceeding in respect
of which indemnification is sought by Indemnitee.
(d) "Expenses" shall include all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees of
experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees, and
all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or
defend, investigating, or being or preparing to be a witness in a
Proceeding.
(e) "Indemnitee" includes any person who is, or is
threatened to be made, a witness in or a party to any Proceeding as
described in Sections 7.2, 7.3 or 7.4 of this Article by reason of his
Corporate Status.
(f) "Independent Counsel" means a law firm, or a
member of a law firm, that is experienced in matters of corporation law
and neither presently is, nor in the past five (5) years has been,
retained to represent: (i) the Company or Indemnitee in any matter
material to either such party, or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not
include any person who, under the applicable standards of professional
conduct then prevailing, would have a conflict of interest in
representing either the Company or Indemnitee in an action to determine
Indemnitee's rights under this Article.
(g) "Proceeding" includes any action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether civil, criminal,
administrative or investigative, except one initiated by an Indemnitee
pursuant to Section 7.9 of this Article to enforce his rights under
this Article.
Section 7.14. Miscellaneous. Use of the masculine
pronoun shall be deemed to include usage of the feminine pronoun where
appropriate.
ARTICLE VIII
Miscellaneous
Section 8.1 Fiscal Year. The fiscal year of the
Corporation shall be determined by resolution of the Board of
Directors.
Section 8.2 Waiver Of Notice Of Meetings Of Stockholders,
Directors, And Committees. Any written waiver of notice, signed by the
person entitled to notice, whether before or after the time stated
therein, shall be deemed equivalent to notice. 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.
Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the stockholders, directors, or members
of a committee of directors need be specified in any written waiver of
notice..
Section 8.3 Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of
its directors or officers are directors or officers, or have a
financial interest, shall be void or voidable solely for this reason,
or solely because the director or officer is present at or participates
in the meeting of the Board or committee thereof which authorizes the
contract or transaction, or solely because his or their votes are
counted for such purpose, if: (1) the material facts as to his
relationship or interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or the committee, and
the Board or the committee in good faith authorizes the contract or
transaction by the affirmative vote of a majority of the disinterested
directors, even though the disinterested directors be less than a
quorum; or (2) the material facts as to his relationship or interest
and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction
is specifically approved in good faith by vote of the stockholders; or
(3) the contract or transaction is fair as to the Corporation as of the
time it is authorized, approved or ratified, by the Board of Directors,
a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a
meeting of the Board of Directors or of a committee which authorizes
the contract or transaction.
Section 8.4 Form Of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock
ledger, books of account, and minute books, may be kept on, or be in
the form of, punch cards, magnetic tape, photographs, microphotographs,
or any other information storage device, provided that the records so
kept can be converted into clearly legible form within a reasonable
time. The Corporation shall so convert any records so kept upon the
request of any person entitled to inspect the same.
Section 8.5 Amendment Of By-Laws. The Board of Directors
of the Corporation is expressly authorized to adopt, amend or repeal
the by-laws of the Corporation by a vote of a majority of the entire
Board. The stockholders may make, alter or repeal any by-law whether
or not adopted by them, provided however, that any such additional
by-laws, alterations or repeal may be adopted only by the affirmative
vote of the holders of 75% or more of the outstanding shares of capital
stock of the Corporation entitled to vote generally in the election of
directors (considered for this purpose as one class), unless such
additional by-laws, alterations or repeal shall have been recommended
to the stockholders for adoption by a majority of the Board of
Directors, in which event such additional by-laws, alterations or
repeal may be adopted by the affirmative vote of the holders of a
majority of the outstanding shares of capital stock of the Corporation
entitled to vote generally in the election of directors (considered for
this purpose as one class).
