<PAGE> 1
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 period ended December 31, 1996.
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the period from to
Commission File Number: 0-20289
KEMET CORPORATION
Exact name of registrant as specified in its charter
DELAWARE 57-0923789
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2835 KEMET WAY, SIMPSONVILLE, SOUTH CAROLINA 29681
(Address of principal executive offices, zip code)
864-963-6300
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since last
report: N/A
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Common Stock Outstanding at: February 6, 1997
Title of Each Class Number of Shares Outstanding
Common Stock, $.01 Par Value 37,694,402
Non-Voting Common Stock, $.01 Par Value 1,096,610
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements
KEMET CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
Dollars in Thousands Except Per Share Data
<TABLE>
<CAPTION>
December 31, March 31,
1996 1996
(unaudited)
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash $4,470 $3,408
Accounts receivable (less allowances of $5,594 and $10,376 at
December 31, 1996 and March 31, 1996, respectively) 44,645 52,069
Inventories:
Raw materials and supplies 37,217 31,981
Work in process 40,104 27,748
Finished goods 17,813 23,992
------------ ------------
Total inventories 95,134 83,721
Prepaid expenses 2,292 2,077
Deferred income taxes 10,992 13,973
------------ ------------
Total current assets 157,534 155,248
Property and equipment (less accumulated depreciation of
$138,291 and $116,021 at December 31, 1996
and March 31, 1996, respectively) 307,108 267,541
Intangible assets (less accumulated amortization of
$11,874 and $10,566 at December 31, 1996
and March 31, 1996, respectively) 48,834 63,533
Other assets 3,383 3,506
------------ ------------
Total assets $516,859 $489,828
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments of long-term debt $142 $270
Accounts payable, trade 53,410 73,030
Accrued expenses 36,671 35,063
Income taxes 7,662 13,877
------------ ------------
Total current liabilities 97,885 122,240
Long-term debt, excluding current installments 103,000 78,072
Other non-current obligations 64,301 49,524
Deferred income taxes 15,249 28,052
------------ ------------
Total liabilities $280,435 $277,888
------------ ------------
Stockholders' equity:
Common stock, par value $.01, authorized 100,000,000 shares, issued
and outstanding 37,677,440 shares as of December 31, 1996 and
37,514,393 shares as of March 31, 1996 377 375
Non-voting common stock, par value $.01, authorized 12,000,000 shares
as of December 31, 1996. Issued and outstanding 1,096,610 shares as
of December 31, 1996 and March 31, 1996 11 11
Additional paid-in capital 138,740 136,344
Retained earnings 97,299 75,218
------------ ------------
236,426 211,948
Equity adjustments from foreign currency translation (3) (8)
------------ ------------
Total stockholders' equity 236,424 211,940
------------ ------------
Total liabilities and stockholders' equity $516,859 $489,828
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 3
ITEM 1 - Financial Statements
KEMET CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Dollars in Thousands Except Per Share Data
<TABLE>
<CAPTION>
Three months ended Nine months ended
December 31, December 31,
1996 1995 1996 1995
(unaudited) (unaudited) (unaudited) (unaudited)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net Sales $143,626 $160,126 $399,544 $473,344
Operating costs and expenses:
Cost of goods sold, exclusive of depreciation 99,076 106,641 271,072 321,464
Selling, general and administrative expenses 11,676 10,183 34,723 31,132
Research and development 4,986 4,864 15,445 13,958
Depreciation and amortization 8,565 7,879 24,764 23,936
Early retirement costs - - 15,407 -
----------- ----------- ----------- -----------
124,303 129,567 361,411 390,490
Operating income 19,323 30,559 38,133 82,854
Other expense:
Interest expense 1,407 1,175 4,205 3,696
Other 654 1,824 1,284 6,518
----------- ----------- ----------- -----------
Earnings before income taxes 17,262 27,560 32,644 72,640
Income tax expense 5,179 10,321 10,563 27,712
Net earnings available for common shareholders $12,083 $17,239 $22,081 $44,928
=========== =========== =========== ===========
Per Common Share Information:
Net earnings per common share $0.31 $0.44 $0.56 $1.15
=========== =========== =========== ===========
Weighted average shares outstanding 39,291,629 39,172,293 39,255,064 39,115,486
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 4
ITEM 1 - Financial Statements
KEMET CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in Thousands
<TABLE>
<CAPTION>
Nine months ended
December 31,
1996 1995
(unaudited) (unaudited)
------------- -------------
<S> <C> <C>
Sources (uses) of cash:
Net cash from operating activities $36,913 $86,795
Investing transactions:
Additions to property and equipment (63,124) (87,992)
Proceeds from sale of property and equipment 70 28
Other 5 (20)
------------- -------------
Net cash from (used by) investing transactions (63,049) (87,984)
Financing transactions:
Proceeds from sale of common stock to
Employee Savings Plan 967 638
Proceeds from exercise of stock options including
related tax benefit 1,431 2,888
Repayment of debt (200) (3,282)
Net proceeds from revolving/swingline loan 25,000 0
------------- -------------
Net cash from financing transactions 27,198 244
Net increase (decrease) in cash 1,062 (945)
Cash at beginning of period 3,408 4,181
------------- -------------
Cash at end of period $4,470 $3,236
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 5
Item 1. Financial Statements
Note 1. Basis of Financial Statement Preparation
The consolidated financial statements contained herein are unaudited and have
been prepared from the books and records of KEMET Corporation and Subsidiaries
(KEMET or the Company). In the opinion of management, the consolidated financial
statements reflect all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of the results for the interim
periods. The consolidated financial statements have been prepared in accordance
with the instructions to Form 10-Q and, therefore, do not include all
information and footnotes necessary for a complete presentation of financial
position, results of operations and cash flows in conformity with generally
accepted accounting principles. Although the Company believes that the
disclosures are adequate to make the information presented not misleading, it is
suggested that these consolidated financial statements be read in conjunction
with the audited financial statements and notes thereto included in the
Company's fiscal year ended March 31, 1996 Form 10-K. Net sales and operating
results for the nine months ended December 31, 1996 are not necessarily
indicative of the results to be expected for the full year.
The accompanying Consolidated Financial Statements include the accounts of the
Company and its wholly owned subsidiaries. In consolidation all significant
intercompany amounts and transactions have been eliminated.
Item 2. Management's Discussion And Analysis of Results of Operations And
Financial Condition
Results of Operations
Net sales for the quarter and nine months ended December 31, 1996, were $143.6
million and $399.5 million, a decrease of $16.5 million or 10% and $73.8 million
or 16%, respectively, from the comparable periods of the prior year. The
decrease in net sales was primarily attributable to the favorable average
selling price experienced in fiscal year 1996 as compared to fiscal year 1997
during which prices returned to the historical rate of decline and the reduced
sales volume due to the industry-wide inventory correction. Sales of surface-
mount capacitors for the quarter and nine months ended December 31, 1996, were
$107.4 million and $285.7 million, a decline of 8% and 13%, respectively, from
comparable prior year periods and sales of leaded capacitors declined 16% and
22% to $36.2 million and $113.8 million. The sales decline was experienced in
both domestic and export markets for the quarter and nine months ended December
31, 1996, compared to the comparable prior years periods with domestic sales
declining 11% and 16% to $83.3 million and $233.3 million, respectively, and
export sales declining 9% and 16% to $60.3 million and $166.2 million.
Sales of $143.6 million were up sequentially for the quarter ended December 31,
1996, as compared to $130.2 million for the prior quarter ended September 30,
1996. Sales of surface-mount capacitors were $107.4 million for the third
quarter of fiscal year 1997, up 17% from $91.6 million reported for the second
quarter of fiscal year 1997, while sales of leaded capacitors were $36.2 million
versus $38.6 million for the prior quarter. Sales did increase sequentially in
both the domestic and export markets with domestic sales improving 9% to $83.3
million and export sales increasing 12% to $60.3 million for the quarter ended
December 31, 1996 as compared with the quarter ended September 30, 1996.
<PAGE> 6
Cost of sales, exclusive of depreciation for the quarter and nine months ended
December 31, 1996, were $99.1 million and $271.1 million, respectively, as
compared to $106.6 million and $321.5 million for the quarter and nine months
ended December 31, 1995. As a percentage of net sales, cost of sales, exclusive
of depreciation was 69% and 68% for the quarter and nine months ended December
31, 1996, respectively, as compared to 67% and 68% for the comparable periods of
the prior year. The increase in cost of sales as a percentage of sales was
attributable to a decline in average selling price from fiscal year 1996 to
fiscal year 1997 as discussed above and production inefficiencies associated
with reduced capacity utilization rates. The effect of the decline in prices
and production inefficiencies was partially offset by the benefits realized from
the movement of certain production operations to lower cost manufacturing
facilities in Mexico and cost containment actions implemented in the prior
quarters, including the savings associated with the early retirement incentive
program which was effective August 1, 1996.
Selling, general and administrative expenses for the quarter and nine months
ended December 31, 1996 were $11.7 million and $34.7 million (8% and 9% of net
sales), respectively, as compared to $10.2 million and $31.1 million (7% and 6%
of net sales) for the comparable periods of the prior year. The increase in
selling, general and administrative expenses is primarily due to increased
marketing expenses.
Research, development and engineering expenses for the quarter and nine months
ended December 31, 1996, were $5.0 million and $15.4 million, respectively, as
compared to $4.9 million and $14.0 million for the prior comparable periods.
The increase reflects the Company's continued development of new products and
processes and the continued enhancement of manufacturing systems.
Depreciation and amortization expense for the quarter and nine months ended
December 31, 1996, were $8.6 million and $24.8 million as compared to $7.9
million and $23.9 million for the comparable periods of the prior year. The
slight increase is due to additional capital expenditures in the current year.
The Company recorded a pretax charge of $15.4 million ($9.9 million after tax)
in the quarter ended September 30, 1996, in connection with an early retirement
incentive program which is included in the nine month period ended December 31,
1996. The program reduced the U.S. hourly and salaried workforce by 409 people,
which is expected to result in an annualized cost savings of approximately $15.0
million.
Operating income for the quarter and nine months ended December 31, 1996, was
$19.3 million and $53.5 million, respectively, compared to $30.6 million and
$82.7 million for the comparable periods in the prior year. The decline
resulted primarily from the decrease in sales and the early retirement incentive
program as discussed above.
Operating income for the quarter ended December 31, 1996, of $19.3 million was
up sequentially from $17.3 million (excluding the early retirement incentive
program costs) reported in the quarter ended September 30, 1996.
Income tax expense totaled $5.2 million and $10.6 million for the quarter and
nine months ended December 31, 1996 (30% and 32% of earnings), respectively,
compared to income tax expense of $10.3 million and $27.7 million (37% and 38%
of earnings) for the quarter and nine months ended
<PAGE> 7
December 31, 1995. The decrease in the effective rate for the quarter and nine
months ended December 31, 1996, was primarily the result of increased foreign
sales corporation benefits and lower effective state tax rates.
Liquidity and Capital Resources
The Company's liquidity needs arise primarily from working capital requirements,
capital expenditures and interest payments on its indebtedness. The Company
intends to satisfy its liquidity requirements primarily with funds provided by
operations, borrowings under its credit facilities and amounts advanced under
its foreign accounts receivable discounting arrangements.
Cash flows from operating activities for the nine months ended December 31,
1996, were $36.9 million compared with a $86.8 million for the nine months ended
December 31, 1995. The decline in cash flows was primarily a result of lower
net income and the timing of cash flows from current assets and liabilities such
as accounts receivables, inventories, accounts payables, accrued liabilities and
income taxes payable.
Capital expenditures were $63.1 million for the nine months ended December 31,
1996 compared to $88.0 million for the nine months ended December 31, 1995.
Expenditures were primarily used for expanding production capabilities of the
tantalum and ceramic surface-mount product lines.
During the nine months ended December 31, 1996, the Company increased its
indebtedness (long-term debt and current portion of long-term debt) by $24.8
million which consisted primarily of the financing of capital expenditures. The
Company had unused availability under its revolving credit facilities as of
December 31, 1996, of approximately $72.0 million.
On November 6, 1996, the Company and the Internal Revenue Service (IRS)
finalized a settlement involving adjustments on the Company's consolidated
income tax returns for fiscal years 1989 through 1992. The adjustments to the
consolidated income tax return primarily involved the partial disallowance of
amortization of a non-compete agreement. The total tax including interest
associated with the settlement amounted to approximately $1.7 million. Also, in
relation to the final settlement with the IRS, the Company reduced goodwill and
tax liabilities by approximately $13.4 million for income taxes it had reserved
pending resolution of the audit.
The Company believes its strong financial position will permit the financing of
its business needs and opportunities in an orderly manner. It is anticipated
that ongoing operations will be financed primarily by internally generated
funds. In addition, the Company has the flexibility to meet short-term working
capital and other temporary requirements through the utilization of borrowings
under its credit facilities.
From time to time, information provided by the Company, including but not
limited to statements in this report, or other statements made by or on behalf
of the Company, may contain "forward-looking" information within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Such statements involve a number of risks and
uncertainties. The Company's actual results could differ materially from those
discussed in the forward-looking statements. The cautionary statements set
forth in the Company's 1996 Annual Report under the heading Safe Harbor
Statement identify important factors that could cause actual results to differ
materially from those in any forward-looking statements made by or on behalf of
the Company.
<PAGE> 8
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Other than as reported in the Company's Form 10-K for the fiscal year ended
March 31, 1996 under the caption "Item 3. Legal Proceedings" and Form 10-Q for
the quarters ended June 30, 1996 and September 30, 1996, under the caption "Part
II - Other Information", the Company is not currently a party to any material
pending legal proceedings, other than routine litigation incidental to the
business of the Company.
Item 2. Change in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
On January 29, 1997, the Board of Directors of the Company adopted Restated By-
Laws effective January 29, 1997. A copy of the Restated By-Laws is filed as an
exhibit hereto and incorporated herein by reference.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
3.1 Restated By-Laws
11.1 Computation of Per Share Earnings.
(b) Reports on Form 8-K.
None.
<PAGE> 9
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February , 1997
KEMET Corporation
/S/ J.J. Jerozal
J.J. Jerozal
Chief Financial Officer and
Treasurer
(Principal Accounting and
Financial Officer)
<PAGE> 1
EXHIBIT 3.1
RESTATED BY-LAWS
OF
KEMET CORPORATION
(Effective January 29, 1997)
ARTICLE I
Offices
Section 1. Registered Office. The registered office of the Corporation in
the State of Delaware shall be at 32 Loockerman Square, Suite L-100, Dover,
Delaware 19901. The name of the Corporation's registered agent at such address
shall be The Prentice-Hall Corporation System, Inc. The registered office
and/or registered agent of the Corporation may be changed from time to time by
action of the Board of Directors.
Section 2. Other Offices. The Corporation may also have offices at such
other places, both within and without the State of Delaware, as the Board of
Directors may from time to time determine or the business of the Corporation
may require.
ARTICLE II
Meetings of Stockholders
Section 1. Date and Time of Annual Meetings. Unless the Board of Directors
determines otherwise, the annual meeting of the stockholders shall be held
each year on the fourth Wednesday in July at 1:00 p.m., unless such day should
fall on a legal holiday, in which event the meeting shall be held at the same
hour on the next succeeding business day that is not a legal holiday for the
purpose of electing directors and conducting such other proper business as may
come before the meeting.
Section 2. Special Meetings. Special meetings of stockholders may be called
for any purpose and may be held at such time and place, within or without the
State of Delaware, as shall be stated in a notice of meeting or in a duly
executed waiver of notice thereof. Such meetings may be called at any time
only by the affirmative vote of a majority of the Board of Directors, the
chairman of the Board of Directors or the chief executive officer of the
Corporation.
Section 3. Place of Meetings. The Board of Directors may designate any
place, either within or without the State of Delaware, as the place of meeting
for any annual meeting or for any special meeting called by the Board of
Directors. If no designation is made, or if a special meeting is otherwise
called, the place of meeting shall be the principal executive office of the
Corporation.
Section 4. Notice. Whenever stockholders are required or permitted to take
action at a meeting, written or printed notice stating the place, date, time,
and, in the case of special meetings, the purpose or purposes, of such
meeting, shall be given to each stockholder entitled to vote at such meeting
and to each director not less than 10 nor more than 60 days
<PAGE> 2
before the date of the meeting. All such notices shall be delivered, either
personally or by mail, by or at the direction of the Board of Directors, the
chairman, the chief executive officer or the secretary, and if mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail, postage prepaid, addressed to the stockholder at his, her or its address
as the same appears on the records of the Corporation. Attendance of a person
at a meeting shall constitute a waiver of notice of such meeting, except when
the person attends 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.
Section 5. Stockholders List. The officer having charge of the stock ledger
of the Corporation shall make, at least 10 days before every meeting of the
stockholders, a complete list of the stockholders entitled to vote at such
meeting arranged in alphabetical order, 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 10 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 6. Quorum. The holders of a majority of the outstanding shares of
capital stock, present in person or represented by proxy, shall constitute a
quorum at all meetings of the stockholders, except as otherwise provided by
statute or by the Certificate of Incorporation. If a quorum is not present,
the holders of a majority of the shares present in person or represented by
proxy at the meeting, and entitled to vote at the meeting, may adjourn the
meeting to another time and/or place. When a quorum is once present to
commence a meeting of stockholders, it is not broken by the subsequent
withdrawal of any stockholders or their proxies.
Section 7. Adjourned Meetings. When a meeting is adjourned to another time
and place, notice need not be given of the 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 8. Vote Required. When a quorum is present, the affirmative vote of
the majority of shares present in person or represented by proxy at the
meeting and entitled to vote on the subject matter shall be the act of the
stockholders, unless the question is one upon which by express provisions of
an applicable law or of the Certificate of Incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. When a separate vote by class is required, the
affirmative vote of the majority of shares of such class present in person or
represented by proxy at the meeting shall be the act of such class, unless the
question is one as to which by express provisions of applicable law or of the
Certificate of Incorporation a different vote is required, in which case such
express provision shall govern and control
<PAGE> 3
the decision of such question.
Section 9. Voting Rights. Except as otherwise provided by the General
Corporation Law of the State of Delaware or by the Certificate of
Incorporation of the Corporation or any amendments thereto and subject to
Section 3 of Article VI hereof, every stockholder shall at every meeting of
the stockholders be entitled to one vote in person or by proxy for each share
of common stock held by such stockholder.
Section 10. Proxies. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or
her 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.
Section 11.Proposed Business. Nominations of persons for election to the
Board of Directors and the proposal of business to be transacted by the
stockholders may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice with respect to such meeting, (b) by or at the
direction of the Board of Directors or (c) by any stockholder of record of the
Corporation who was a stockholder of record at the time of the giving of the
notice provided for in the following paragraph, who is entitled to vote at the
meeting and who has complied with the notice procedures set forth in this
Section 11.
For nominations or other business to be properly brought before an annual
meeting by a stockholder pursuant to clause (c) of the foregoing paragraph,
the stockholder must have given timely notice thereof in writing to the
Secretary of the Corporation, such business must be a proper matter for
stockholder action under the General Corporation Law of the State of Delaware
and, if the stockholder, or the beneficial owner on whose behalf any such
proposal or nomination is made, solicits or participates in the solicitation
of proxies in support of such proposal or nominees, the stockholder must have
timely indicated its, or such beneficial owner's intention to do so as
provided in subclause (c)(iii) of this paragraph. To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not less than 90 days prior to the first
anniversary of the preceding year's annual meeting of stockholders; provided,
however, that if the date of the annual meeting is advanced more than 30 days
prior to or delayed by more than 60 days after such anniversary date, notice
by the stockholder to be timely must be so delivered not later than the close
of business on the later of the 90th day prior to such annual meeting or the
10th day following the day on which public announcement of the date of such
meeting is first made. Such stockholder's notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or
relection as a director all information relating to such person as would be
required to be disclosed in solicitations of proxies for the election of such
nominees as directors pursuant to Regulation 14A under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and such person's written
consent to serving as a director if elected; (b) as to any other business that
the stockholder proposes to bring before the meeting, a brief description of
such business, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and the beneficial
owner, if any, on whose behalf the proposal is made; (c) as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the
nomination or proposal is made (i) the name and address of
<PAGE> 4
such stockholder, as they appear on the Corporation's books, and of such
beneficial owner, (ii) the class and number of shares of the Corporation which
are owned beneficially and of record by such stockholder and such beneficial
owner, and (iii) whether either such stockholder or beneficial owner intends
to solicit or participate in the solicitation of proxies in favor of such
proposal or nominee or nominees.
Notwithstanding anything in the second sentence of the second paragraph of
this Section 11 to the contrary, in the event that the number of directors to
be elected to the Board of Directors is increased and there is no public
announcement naming all of the nominees for director or specifying the size of
the increased Board of Directors made by the Corporation at least 100 days
prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by these By-laws shall also be considered
timely, but only with respect to nominees for any new positions created by
such increase, if it shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business on
the 10th day following the day on which such public announcement is first made
by the Corporation.
Only persons nominated in accordance with the procedures set forth in this
Section 11 shall be eligible to serve as directors and only such business
shall be conducted at an annual meeting of stockholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
Section 11. The chair of the meeting shall have the power and the duty to
determine whether a nomination or any business proposed to be brought before
the meeting has been made in accordance with the procedures set forth in these
By-laws and, if any proposed nomination or business is not in compliance with
these By-laws to declare that such defective proposed business or nomination
shall not be presented for stockholder action at the meeting and shall be
disregarded.
For purposes of this Section 11, "public announcement" shall mean disclosure
in a press release reported by the Dow Jones News Service, Associated Press or
a comparable national news services or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section
13, 14 or 15(d) of the Exchange Act.
Notwithstanding the foregoing provisions of this By-law, a stockholder shall
also comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to matters set forth in this Section
11. Nothing in this Section 11 shall be deemed to affect any rights of
stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
ARTICLE III
Directors
Section 1. General Powers. The business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors.
Section 2. Number, Election and Term of Office. The number of directors
which shall constitute the first Board of Directors shall be five.
Thereafter, the number of directors shall be established from time to time by
resolution of the Board of Directors. The directors shall be elected by a
plurality of the votes of the shares present in person or represented by
<PAGE> 5
proxy at the meeting and entitled to vote in the election of directors. The
directors shall be elected in this manner at the annual meeting of the
stockholders, except as provided in Section 4 of this Article III. If any
director who at the time of his or her most recent election or appointment to
a term on the Board of Directors was an officer of the Corporation ceases to
be an officer of the Corporation during such term as director, such director
shall no longer be qualified to be a director and shall immediately cease to
be a director without any further action and a successor who is an officer of
the Corporation shall be appointed as provided in Section 4 of this Article
III. Each director elected shall hold office until a successor is duly
elected and qualified or until his or her earlier death, resignation or
removal as hereinafter provided. The directors shall be divided into three
classes. In the event of such classification, the term of office of the first
class shall expire at the annual meeting next ensuing; of the second class,
one year thereafter; and of the third class, two years thereafter; and at each
annual election held after such classification and election, directors shall
be chosen for a full three-year term to succeed those whose terms expire.
Section 3. Removal and Resignation. Any director or the entire Board of
Directors may be removed at any time, for cause, by the holders of a majority
of the shares then entitled to vote at an election of directors. Whenever the
holders of any class or series are entitled to elect one or more directors by
the provisions of the Corporation's Certificate of Incorporation, the
provisions of this section shall apply, in respect to the removal for cause of
a director or directors so elected, to the vote of the holders of the
outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Any director may resign at any time upon
written notice to the Corporation.
Section 4. Vacancies. Vacancies 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, though less than a quorum, or by a
sole remaining director. Each director so chosen shall hold office until a
successor is duly elected and qualified or until his or her earlier death,
resignation or removal as herein provided. If the Board of Directors is
divided into classes, any directors chosen under this section shall hold
office until the next election of the class for which such directors shall
have been chosen, and until their successors shall be duly elected and
qualified.
Section 5. Annual Meetings. Unless otherwise determined by resolution of the
Board of Directors, the annual meeting of each newly elected Board of
Directors shall be held without other notice than this by-law immediately
after, and at the same place as, the annual meeting of stockholders.
Section 6. Other Meetings and Notice. Regular meetings, other than the
annual meeting, of the Board of Directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution
of the Board of Directors. Special meetings of the Board of Directors may be
called by or at the request of the chairman, chief executive officer or a
majority of the directors on at least 24 hours notice to each director, either
personally, by telephone, by mail, by telecopy or by telegraph.
Section 7. Quorum, Required Vote and Adjournment. A majority of the total
number of directors shall constitute a quorum for the transaction of
business. The vote of a majority of directors present at a meeting at
<PAGE> 6
which a quorum is present shall be the act of the Board of Directors. 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 8. Committees. The Board of Directors may, by resolution passed by a
majority of the whole Board of Directors, designate one or more committees,
each committee to consist of one or more of the directors of the Corporation,
which to the extent provided in such resolution or these By-laws shall have
and may exercise the powers of the Board of Directors in the management and
affairs of the Corporation except as otherwise limited by law. The Board of
Directors 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. Such committee or committees shall have such name or names as
may be determined from time to time by resolution adopted by the Board of
Directors. Each committee shall keep regular minutes of its meetings and
report the same to the Board of Directors when required.
Section 9. Committee Rules. Each committee of the Board of Directors may fix
its own rules of procedure and shall hold its meetings as provided by such
rules, except as may otherwise be provided by a resolution of the Board of
Directors designating such committee. Unless otherwise provided in such a
resolution, the presence of at least a majority of the members of the
committee shall be necessary to constitute a quorum. In the event that a
member and that member's alternate, if alternates are designated by the Board
of Directors as provided in Section 8 of this Article III, of such committee
is or are absent or disqualified, the member or members thereof present at any
meeting and not disqualified from voting, whether or not such member or
members 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.
Section 10. Executive Committee. The executive committee shall consist of
not fewer than two members of the Board of Directors, as from time to time
appointed by resolution of the Board of Directors, one of whom shall be the
president. The Board of Directors shall also designate a member of the
executive committee to be the chairman of the executive committee. The
executive committee shall have, to the fullest extent permitted by law, but
subject to any specific limitation imposed by the Certificate of
Incorporation, these By-laws or a resolution of the Board of Directors, all
power and authority vested in or retained by the Board of Directors (whether
or not the executive committee is specifically mentioned in the statute, the
provision of the Certificate of Incorporation or these By-laws, the resolution
or any other instrument vesting or retaining any such power or authority), and
the executive committee may exercise such power and authority in such manner
as it shall deem for the best interest of the Corporation in all cases in
which specific directions shall not have been given by the Board of Directors.
Section 11. Compensation Committee. The compensation committee shall consist
of not fewer than two members of the Board of Directors as shall from time to
time be appointed by resolution of the Board of Directors. No member of the
Board of Directors who is an officer or an employee of the Corporation or any
subsidiary of the Corporation shall be eligible to serve on the compensation
committee. The compensation committee shall review and make recommendations
to the Board of Directors regarding salaries,
<PAGE> 7
compensation and benefits of executive officers and key employees of the
Corporation and shall grant all options to purchase common stock of the
Corporation.
Section 12. Audit Committee. The audit committee shall consist of not fewer
than two members of the Board of Directors as shall from time to time be
appointed by resolution of the Board of Directors. No member of the Board of
Directors who is an officer or an employee of the Corporation or any
subsidiary of the Corporation shall be eligible to serve on the audit
committee. The audit committee shall review and, as it shall deem
appropriate, recommend to the Board of Directors internal accounting and
financial controls for the Corporation and accounting principles and auditing
practices and procedures to be employed in the preparation and review of
financial statements of the Corporation. The audit committee shall make
recommendations to the Board of Directors concerning the engagement of
independent public accountants to audit the annual financial statements of the
Corporation and the scope of the audit to be undertaken by such accountants.
Section 13. Communications Equipment. Members of the Board of Directors or
any committee thereof may participate in and act at any meeting of such Board
of Directors or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
section shall constitute presence in person at the meeting.
Section 14. Waiver of Notice and Presumption of Assent. Any member of the
Board of Directors or any committee thereof who is present at a meeting shall
be conclusively presumed to have waived notice of such meeting except when
such member attends 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. Such member shall be conclusively presumed to
have assented to any action taken unless his or her dissent shall be entered
in the minutes of the meeting or unless his or her written dissent to such
action shall be filed with the person acting as the secretary of the meeting
before the adjournment thereof or shall be forwarded by registered mail to the
secretary of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to any member who voted in
favor of such action.
Section 15. Action by Written Consent. Unless otherwise restricted by the
Certificate of Incorporation, 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 such
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 such committee.
ARTICLE IV
Officers
Section 1. Number. The officers of the Corporation shall be elected by the
Board of Directors and shall consist of a chairman of the Board of Directors,
chief executive officer, president, one or more vice presidents, a secretary,
a treasurer and such other officers and assistant officers as
<PAGE> 8
may be deemed necessary or desirable by the Board of Directors. Any number of
offices may be held by the same person. In its discretion, the Board of
Directors may choose not to fill any office for any period as it may deem
advisable.
Section 2. Election and Term of Office. The officers of the Corporation
shall be elected annually by the Board of Directors at its first meeting held
after each annual meeting of stockholders or as soon thereafter as
conveniently may be. Vacancies may be filled or new offices created and
filled at any meeting of the Board of Directors. Each officer shall hold
office until a successor is duly elected and qualified or until his or her
earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the Board of Directors
may be removed by the Board of Directors whenever in its judgment the best
interests of the Corporation would be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so
removed.
Section 4. Vacancies. Any vacancy occurring in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term by the Board of
Directors then in office.
Section 5. Compensation. Compensation of all officers shall be fixed by the
Board of Directors, and no officer shall be prevented from receiving such
compensation by virtue of his or her also being a director of the
Corporation.
Section 6. Chairman of the Board of Directors. The chairman of the Board of
Directors shall preside at all meetings of the stockholders and Board of
Directors at which he or she is present and shall have the powers and perform
the duties incident to that position. The chairman of the board shall have
such other powers and perform such other duties as may be prescribed by the
Board of Directors or as may be provided in these By-laws. Whenever the chief
executive officer and president are both unable to serve, by reason of
sickness, absence or otherwise, the chairman of the board shall perform all
the duties and functions and exercise all the powers of the chief executive
officer and president.
Section 7. The Chief Executive Officer. The chief executive officer of the
Corporation, subject to the powers of the Board of Directors, shall have
general charge of the business, affairs and property of the Corporation, and
control over its officers, agents and employees; and shall see that all orders
and resolutions of the Board of Directors are carried into effect. The chief
executive officer shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the Corporation, except where required or permitted
by law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to
some other officer or agent of the Corporation. The chief executive officer
shall have such other powers and perform such other duties as may be
prescribed by the Board of Directors or as may be provided in these By-laws.
In the absence of the chairman, the chief executive officer shall preside at
meetings of the stockholders and directors.
Section 8. Vice Chairman. It shall be the duty of the vice chairman (if any)
to assist the chairman of the board with respect to such matters as may be
assigned to him by the chairman of the board or the Board of
<PAGE> 9
Directors. Whenever the chairman of the board, the chief executive officer or
the president are unable to serve by reason of sickness, absence or otherwise,
the regular powers and duties of their offices shall be exercised and
performed by the vice chairman (if any) designated by the Board of Directors.
Section 9. The President. The president shall be the chief operating officer
of the Corporation and shall have such authority and perform such duties
relative to the business and affairs of the Corporation as may be delegated to
him by the board or the chief executive officer. In the absence of the
chairman and the chief executive officer, the president shall preside at
meetings of the stockholders and directors.
Section 10. Executive Vice President. It shall be the duty of the executive
vice president (if any) to assist the chief executive officer and president in
the administration, general management and direction of the Corporation's
business and affairs with respect to such matters as may be assigned to him by
the chief executive officer, president or the Board of Directors. Whenever
the chairman of the board, the chief executive officer, the president and the
vice chairman (if any) all are unable to serve, by reason of sickness, absence
or otherwise, the regular powers and duties of their offices shall be
exercised and performed by the executive vice president (if any) designated by
the Board of Directors.
Section 11. Vice Presidents. The vice president, or if there shall be more
than one, the vice presidents in the order determined by the Board of
Directors, shall, in the absence or disability of both of the chief executive
officer and president, act with all of the powers and be subject to all the
restrictions of the chief executive officer and president. The vice
presidents shall also perform such other duties and have such other powers as
the Board of Directors, the chief executive officer or these By-laws may from
time to time prescribe.
Section 12. The Secretary and Assistant Secretaries. The secretary shall
attend all meetings of the Board of Directors, all meetings of the committees
thereof and all meetings of the stockholders and record all the proceedings of
the meetings in a book or books to be kept for that purpose. Under the
chairman and chief executive officer's supervision, the secretary shall give,
or cause to be given, all notices required to be given by these By-laws or by
law; shall have such powers and perform such duties as the Board of Directors,
the chairman, the chief executive officer or these By-laws may from time to
time prescribe; and shall have custody of the corporate seal of the
Corporation. The secretary, or an assistant secretary, shall have authority
to affix the corporate seal to any instrument requiring it and when so
affixed, it may be attested by his or her signature or by the signature of
such 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 or her signature. The assistant secretary, or if there be
more than one, the assistant secretaries in the order determined 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, the
chairman, the chief executive officer or secretary may from time to time
prescribe.
Section 13. The Treasurer and Assistant Treasurer. The treasurer shall have
the custody of the corporate funds and securities; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
<PAGE> 10
Corporation; shall deposit all moneys and other valuable effects in the name
and to the credit of the Corporation as may be ordered by the Board of
Directors; shall cause the funds of the Corporation to be disbursed when such
disbursements have been duly authorized, taking proper vouchers for such
disbursements; and shall render to the chairman, the chief executive officer
and the Board of Directors, at its regular meeting or when the Board of
Directors so requires, an account of the Corporation; shall have such powers
and perform such duties as the Board of Directors, the chairman, the chief
executive officer or these By-laws may from time to time prescribe. If
required by the Board of Directors, the treasurer shall give the Corporation a
bond (which shall be rendered every six years) in such sums and with such
surety or sureties as shall be satisfactory to the Board of Directors for the
faithful performance of the duties of the office of treasurer and for the
restoration to the Corporation, in case of death, resignation, retirement or
removal from office, of all books, papers, vouchers, money and other property
of whatever kind in the possession or under the control of the treasurer
belonging to the Corporation. The assistant treasurer, or if there shall be
more than one, the assistant treasurers in the order determined by the Board
of Directors, shall in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer. The assistant treasurers
shall perform such other duties and have such other powers as the Board of
Directors, the chairman, the chief executive officer or treasurer may, from
time to time, prescribe.
Section 14. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these By-laws, shall have such authority and perform such
duties as may from time to time be prescribed by resolution of the Board of
Directors.
Section 15. Absence or Disability of Officers. In the case of the absence or
disability of any officer of the Corporation and of any person hereby
authorized to act in such officer's place during such officer's absence or
disability, the Board of Directors may by resolution delegate the powers and
duties of such officer to any other officer or to any director, or to any
other person whom it may select.
ARTICLE V
Indemnification of Officers, Directors and Others
Section 1. Nature of Indemnity. Each person who was or is made a party or is
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she, or a
person of whom he or she is the legal representative, is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, fiduciary, or agent of another
Corporation or of a partnership, joint venture, trust or other enterprise,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the General Corporation Law of the State of Delaware, as
the same exists or may hereafter be amended (but, in the case of any such
amendment, only to the extent that such amendment permits the Corporation to
provide broader indemnification rights than such law permitted the Corporation
to provide prior to such amendment), against all cost, expense, liability and
loss (including attorneys' fees actually and
<PAGE> 11
reasonably incurred by such person in connection with such proceeding) and
such indemnification shall inure to the benefit of his or her heirs, executors
and administrators; provided, however, that, except as provided in Section 2
hereof, the Corporation shall indemnify any such person seeking
indemnification in connection with a proceeding initiated by such person only
if such proceeding was authorized by the Board of Directors of the
Corporation. The right to indemnification conferred in this Article V shall
be a contract right and, subject to Sections 2 and 5 hereof, shall include the
right to be paid by the Corporation the expenses incurred in defending any
such proceeding in advance of its final disposition. The Corporation may, by
action of its Board of Directors, provide indemnification to employees and
agents of the Corporation with the same scope and effect as the foregoing
indemnification of directors and officers.
Section 2. Procedure for Indemnification of Directors and Officers. Any
indemnification of a director or officer of the Corporation under Section 1 of
this Article V or advance of expenses under Section 5 of this Article V shall
be made promptly, and in any event within 30 days, upon the written request of
the director or officer. If a determination by the Corporation that the
director or officer is entitled to indemnification pursuant to this Article V
is required, and the Corporation fails to respond within sixty days to a
written request for indemnity, the Corporation shall be deemed to have
approved the request. If the Corporation denies a written request for
indemnification or advancing of expenses, in whole or in part, or if payment
in full pursuant to such request is not made within 30 days, the right to
indemnification or advances as granted by this Article V shall be enforceable
by the director or officer in any court of competent jurisdiction. Such
person's costs and expenses (including reasonable attorney's fees) incurred in
connection with successfully establishing his or her right to indemnification,
in whole or in part, in any such action shall also be indemnified by the
Corporation. It shall be a defense to any such action (other than an action
brought to enforce a claim for expenses incurred in defending any proceeding
in advance of its final disposition where the required undertaking, if any,
has been tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the General Corporation
Law of the State of Delaware for the Corporation to indemnify the claimant for
the amount claimed, but the burden of such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Delaware, nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel or its stockholders) that
the claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not met
the applicable standard of conduct.
Section 3. Article Not Exclusive. The rights to indemnification and the
payment of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this Article V shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, by-law, agreement, vote of
stockholders or disinterested directors or otherwise.
Section 4. Insurance. The Corporation may purchase and maintain insurance on
its own behalf and on behalf of any person who is or was a director,
<PAGE> 12
officer, employee, fiduciary, or agent of the Corporation or was serving at
the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him or her and incurred by him or her
in any such capacity, whether or not the Corporation would have the power to
indemnify such person against such liability under this Article V.
Section 5. Expenses. Expenses incurred by any person described in Section 1
of this Article V in defending a proceeding shall be paid by the Corporation
in advance of such proceeding's final disposition unless otherwise determined
by the Board of Directors in the specific case 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. Such expenses incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
Section 6. Employees and Agents. Persons who are not covered by the
foregoing provisions of this Article V and who are or were employees or agents
of the Corporation, or who are or were serving at the request of the
Corporation as employees or agents of another corporation, partnership, joint
venture, trust or other enterprise, may be indemnified to the extent
authorized at any time or from time to time by the Board of Directors.
Section 7. Contract Rights. The provisions of this Article V shall be deemed
to be a contract right between the Corporation and each director or officer
who serves in any such capacity at any time while this Article V and the
relevant provisions of the General Corporation Law of the State of Delaware or
other applicable law are in effect, and any repeal or modification of this
Article V or any such law shall not affect any rights or obligations then
existing with respect to any state of facts or proceeding then existing.
Section 8. Merger or Consolidation. For purposes of this Article V,
references to "the Corporation" shall include, in addition to the resulting
Corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was
a director, officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this Article
V with respect to the resulting or surviving corporation as he or she would
have with respect to such constituent corporation if its separate existence
had continued.
ARTICLE VI
Certificates of Stock
Section 1. Form. Every holder of stock in the Corporation shall be entitled
to have a certificate, signed by, or in the name of the Corporation by the
chairman, chief executive officer, president or a vice president and the
secretary or an assistant secretary of the Corporation, certifying the number
of shares owned by such holder in the Corporation. If such a certificate is
countersigned (1) by a transfer agent or an
<PAGE> 13
assistant transfer agent other than the Corporation or its employee or (2) by
a registrar, other than the Corporation or its employee, the signature of any
such chairman, chief executive officer, president, vice president, secretary,
or assistant secretary may be facsimiles. In case any officer or officers who
have signed, or whose facsimile signature or signatures have been used on, any
such certificate or certificates shall cease to be such officer or officers of
the Corporation whether because of death, resignation or otherwise before such
certificate or certificates have been delivered by the Corporation, such
certificate or certificates may nevertheless be issued and delivered as though
the person or persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon had not ceased to be
such officer or officers of the Corporation. All certificates for shares
shall be consecutively numbered or otherwise identified. The name of the
person to whom the shares represented thereby are issued, with the number of
shares and date of issue, shall be entered on the books of the Corporation.
Shares of stock of the Corporation shall only be transferred on the books of
the Corporation by the holder of record thereof or by such holder's attorney
duly authorized in writing, upon surrender to the Corporation of the
certificate or certificates for such shares endorsed by the appropriate person
or persons, with such evidence of the authenticity of such endorsement,
transfer, authorization, and other matters as the Corporation may reasonably
require, and accompanied by all necessary stock transfer stamps. In that
event, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate or certificates, and
record the transaction on its books. The Board of Directors may appoint a
bank or trust company organized under the laws of the United States or any
state thereof to act as its transfer agent or registrar, or both, in
connection with the transfer of any class or series of securities of the
Corporation.
Section 2. Lost Certificates. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates previously 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 give the Corporation a
bond sufficient to indemnify the Corporation against any claim that may be
made against the Corporation on account of the loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Section 3. Fixing a Record Date for Stockholder Meetings. 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, the Board of Directors
may fix a record date, which record date shall not precede the date upon which
the resolution fixing the record date is adopted by the Board of Directors,
and which record date shall not be more than sixty nor less than ten days
before the date of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be the close of business on the
next day 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. A determination of stockholders of record entitled to notice
of or to vote at a meeting of
<PAGE> 14
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 4. Fixing a Record Date for Other Purposes. In order that the
Corporation may determine the stockholders entitled to receive payment of any
dividend or other distribution or allotment or any rights or the stockholders
entitled to exercise any rights in respect of any change, conversion or
exchange of stock, or for the purposes of any other lawful action, the Board
of Directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted, and which
record date shall be not more than sixty days prior to such action. If no
record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto.
Section 5. Registered Stockholders. Prior to the surrender to the
Corporation of the certificate or certificates for a share or shares of stock
with a request to record the transfer of such share or shares, the Corporation
may treat the registered owner as the person entitled to receive dividends, to
vote, to receive notifications and otherwise to exercise all the rights and
powers of an owner.
ARTICLE VII
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. 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 dir
ectors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or any other purpose
and the directors may modify or abolish any such reserve in the manner in
which it was created.
Section 2. Checks, Drafts or Orders. All checks, drafts or other orders for
the payment of money by or to the Corporation and all notes and other
evidences of indebtedness issued in the name of the Corporation shall be
signed by such officer or officers, agent or agents of the Corporation, and in
such manner, as shall be determined by resolution of the Board of Directors or
a duly authorized committee thereof.
Section 3. Contracts. The Board of Directors may authorize any officer or
officers, or any agent or agents, of the Corporation to enter into any
contract or to execute and deliver any instrument in the name of and on behalf
of the Corporation, and such authority may be general or confined to specific
instances.
Section 4. Loans. The Corporation may lend money to, or guarantee any
obligation of, or otherwise assist any officer or other employee of the
Corporation or of its subsidiary, including any officer or employee who is
<PAGE> 15
a director of the Corporation or its subsidiary, whenever, in the judgment of
the directors, such loan, guaranty or assistance may reasonably be expected to
benefit the Corporation. The loan, guaranty or other assistance may be with
or without interest, and may be unsecured, or secured in such manner as the
Board of Directors shall approve, including, without limitation, a pledge of
shares of stock of the Corporation. Nothing in this section contained shall
be deemed to deny, limit or restrict the powers of guaranty or warranty of the
Corporation at common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the Corporation shall be fixed by
resolution of the Board of Directors.
Section 6. Corporate Seal. The Board of Directors shall provide a corporate
seal which shall be in the form of a circle and shall have inscribed thereon
the name of the Corporation and the words "Corporate Seal, Delaware." The
seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned By Corporation. Voting securities in any
other Corporation held by the Corporation shall be voted by the chief
executive officer, unless the Board of Directors specifically confers
authority to vote with respect thereto, which authority may be general or
confined to specific instances, upon some other person or officer. Any person
authorized to vote securities shall have the power to appoint proxies, with
general power of substitution.
Section 8. Section Headings. Section headings in these By-laws are for
convenience of reference only and shall not be given any substantive effect in
limiting or otherwise construing any provision herein.
Section 9. Inconsistent Provisions. In the event that any provision of these
By-laws is or becomes inconsistent with any provision of the Certificate of
Incorporation, the General Corporation Law of the State of Delaware or any
other applicable law, the provision of these By-laws shall not be given any
effect to the extent of such inconsistency but shall otherwise be given full
force and effect.
ARTICLE VIII
Amendments
These By-laws may be amended, altered or repealed and new By-laws adopted at
any meeting of the Board of Directors by a majority vote. The fact that the
power to adopt, amend, alter or repeal the By-laws has been conferred upon the
Board of Directors shall not divest the stockholders of the same powers.
<PAGE>1
EXHIBIT 11.1
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA
<TABLE>
<CAPTION>
Nine months ended
December 31,
------------------
1996 1995
--------- ---------
<S> <C> <C>
Primary:
Net earnings available for common and
common equivalent shares $22,081 $44,928
----------- ----------
Weighted average common and common
equivalent shares outstanding 39,255,064 39,115,486
----------- ----------
Primary earnings per common share $0.56 $1.15
=========== ==========
Fully Diluted:
Net earnings available for common and
common equivalent shares $22,081 $44,928
----------- ----------
Weighted average common and common
equivalent shares outstanding assuming
ending market price 39,289,556 39,115,486
----------- ----------
Fully diluted earnings per common share $0.56 $1.15
=========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE>5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 4470
<SECURITIES> 0
<RECEIVABLES> 50239
<ALLOWANCES> 5594
<INVENTORY> 95134
<CURRENT-ASSETS> 157534
<PP&E> 445399
<DEPRECIATION> 138291
<TOTAL-ASSETS> 516860
<CURRENT-LIABILITIES> 97885
<BONDS> 0
0
0
<COMMON> 388
<OTHER-SE> 236036
<TOTAL-LIABILITY-AND-EQUITY> 516860
<SALES> 399544
<TOTAL-REVENUES> 399544
<CGS> 271072
<TOTAL-COSTS> 361411
<OTHER-EXPENSES> 1284
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4205
<INCOME-PRETAX> 32644
<INCOME-TAX> 10563
<INCOME-CONTINUING> 22081
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22081
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
